title-18•18 Del. Admin. Code — Insurance
100 Department of Insurance
101 Organization, Methods and Operations of the Delaware Insurance Commission [Formerly Regulation 25]
18 Del. Admin. Code § 101 Organization, Methods and Operations of the Delaware Insurance Commission [Formerly Regulation 25]
101 Organization, Methods and Operations of the Delaware Insurance Commission [Formerly Regulation 25]
1.0 Agent Licensing
1.1 The Department in licensing agents, brokers, consultants, adjusters and appraisers is charged with the responsibility of protecting the citizens of this State by approving for licensing and renewal only those applicants who possess the mental ability and the moral character that is needed to suppress misrepresentation of the product to be offered.
1.2 The Department endeavors to promote the dignity of career insurance representatives by strict enforcement of qualification requirements and by firm but fair disposition of violations of the Delaware Insurance Law, with no individual exceptions. Effort is also made to improve public acceptance of insurance by careful screening and testing of proposed representatives and by consistent elimination of those licensees who, through unethical, unfair or illegal practices, tend to destroy the confidence of the industry.
1.3 Administer qualifications prescribed by law and Departmental Regulations.
1.4 Issue interim licenses and examination permits to qualified, first-time applicants.
1.5 Provide for an examination study manual.
1.6 Provide for license examinations.
1.7 Issue permanent licenses.
1.8 Renewal licenses.
1.9 Collect all license and examination fees.
1.10 Work out reciprocal agreements with other states for nonresident applicants.
1.11 Provide Letters of Certifications for Delaware agents seeking licenses in other states.
1.12 Issue Service Representative Permits to qualified applicants.
1.13 Handle complaints involving misappropriation of funds filed by insurers against agents.
1.14 Investigate any other type of complaints filed by insurers against agents for the purpose of determining the facts and coordinating action.
1.15 Conduct such prehearing conferences with agents as may be necessary for determination if formal hearings are necessary.
1.16 Conduct formal hearings for license revocations; if in the opinion of the Commissioner, satisfactory evidence or answers were not given at the prehearing conference.
1.17 Advise all companies of any change in the status of their agents' licenses for the purpose of restricting or curtailing an agent's authority to act and/or termination of the agent's service if the discrepancy warrants such action.
2.0 Claims and Investigation
2.1 Through investigation, the Insurance Department attempts to assure fair and honest dealings between insurers, agents and policyholders in all insurance matters.
2.1.1 Receives all complaints by and against agents and policyholders.
2.1.2 An investigator obtains, through investigation, all available data necessary to properly evaluate a claim.
2.1.3 A review is made of the estimate of losses in all claims involving fire and casualty to determine if an offer is based on a legitimate estimate.
2.1.4 Frequently an informal conference is held between policyholders and company adjusters hoping that the conference will bring forth a meeting of minds.
2.1.5 The Department is constantly alert for violations of the Unfair Trade Practices Act (18 Del.C. Ch.23) and investigates any apparent violations of such Act. Results are submitted to the Commissioner for his determination.
2.1.6 The Department reviews advertising materials to determine if unauthorized insurers are soliciting business within this State, and if so, seeks voluntary discontinuance of such advertising and solicitation. The facts are presented to the Commissioner for his order, ordering the offending party to show cause why an order should not be issued ordering such party to cease and desist.
2.1.7 The Department promptly investigates all complaints of every kind and nature and takes such action within the law as the facts and the relationship of the parties dictate; investigation is made regardless of the amount involved and the policyholder is informed as to the Department's view and if the claim is deemed uncollectible, the file is closed.
2.1.8 The Department actively participates in third party claims only when it appears that the company or its representatives is acting in bad faith.
3.0 General Administration of Insurance Regulatory Laws
3.1 The Commissioner:
3.1.1 Shall grant or deny applications for Certificates of Authority in accordance with the requirements, information and instructions set forth in the Code.
3.1.2 Approve or disapprove all petitions filed with the Secretary of State for organizing domestic insurers.
3.1.3 Renew Certificates of Authority.
3.1.4 Examine each insurer, rating organization, advisory organization and joint underwriting or joint reinsurance group, association or organization authorized to do business in the State.
3.1.4.1 Whenever the Commissioner shall deem it expedient, he shall examine the affairs, transactions, accounts, records, documents, and assets of each insurer authorized to do business in this State and any other fact relative to its business methods, management and its dealings with policyholders.
3.1.4.2 At least once every five years he shall so examine each domestic insurer.
3.1.4.3 Whenever he shall deem it necessary and at least once in five years, the Commissioner shall fully examine each rating organization which is licensed in this State. As often as he shall deem it necessary, he may examine each advisory organization and each joint underwriting or joint reinsurance group, association or organization.
3.1.4.4 The Commissioner shall examine the affairs, transactions, accounts, records, documents and assets of each insurer or rating organization applying for authority to do business in this State, and any other fact relative to its business methods, management and its dealings with policyholders.
3.1.4.5 Determine when an insurer should be cited to show cause why his Certificate of Authority should not be suspended or revoked.
3.1.4.6 Determine when court action should be taken.
3.1.5 The Department may institute court proceedings when the Commissioner's order upon hearing has been ignored or defied.
3.1.5.1 Pass upon eligibility, soundness and the amount of securities to be deposited with the Treasurer by an insurer to qualify for a Certificate of Authority.
3.1.5.2 Determine when an insurer may be permitted to withdraw its securities.
3.1.5.3 Review and pass upon all proposals for merger or sale where a domestic insurer is a party.
4.0 Policy Forms
4.1 The Commissioner:
4.1.1 Is charged with the responsibility of disapproving policy forms or withdrawing any approval previously granted by him if he finds that such policies do not meet the requirements of the Insurance Code.
4.1.2 No basic insurance policy, annuity contract form, printed rider, endorsement form or form of renewal certificate, shall be delivered, or issued for delivery in this State, unless the form has been filed with the Commissioner.
4.1.3 All forms will be reviewed to determine that:
4.1.3.1 Coverage is not unduly restrictive;
4.1.3.2 Wording is not ambiguous;
4.1.3.3 Coverage is not contrary to public policy;
4.1.3.4 Coverage bears some relationship to the premium charged; and
4.1.3.5 The contract covers a legitimate insurable interest.
5.0 Rates and Rating Organizations
5.1 The purpose of 18 Del.C. Ch. 25 is to promote the public welfare by regulating insurance rates (in accordance with the intent of Congress as expressed in Public Law 15 — 79th Congress) and to the end that they shall not be excessive, inadequate or unfairly discriminatory, and to authorize and regulate cooperative action among insurers in rate making and in other matters within the scope of 18 Del.C. Ch. 25.
5.1.1 Every insurer shall file with the Commissioner, except as to inland marine risks, every manual, minimum, class rate, rating schedule or plan and every other rating rule, and every modification of any of the foregoing which it proposes to use.
5.2 The Commissioner:
5.2.1 Shall review all rate and deviation filings. Rates shall not be excessive, inadequate or unfairly discriminatory. Filings may be reviewed by the Commissioner for any reason not inconsistent with the provisions of the Delaware Insurance Code which the Commissioner shall deem necessary and appropriate to accomplish the purposes of said Code.
5.2.2 License all rating bureaus which meet the statutory requirements.
5.2.3 License all advisory organizations which meet statutory requirements.
5.2.4 Collect fees.
5.2.5 Administer rates and promulgate reasonable rules and statistical plans, reasonably adapted to each of the rating systems on file with him, which may be modified from time to time and which shall be used thereafter by each insurer in the recording and reporting of its loss and countrywide expense experience, in order that the experience of all insurers may be made available at least annually in such forms and details as may be necessary to aid him in determining whether rating systems comply with the standards set forth by law for making of rates.
6.0 Rehabilitation and Liquidation
6.1 Delinquency proceedings pursuant to the Insurance Code shall constitute the sole and exclusive method of liquidating, rehabilitating, reorganizing or conserving an insurer, and no court shall entertain a petition for the commencement of such proceedings unless the same has been filed in the name of the State on the relation of the Commissioner.
6.2 The Commissioner shall commence any delinquency proceedings by application to the court for an order directing the insurer to show cause why the Commissioner should not have the relief prayed for.
6.3 The Commissioner may apply to the court for an order:
6.3.1 Appointing him as Receiver of and directing him to rehabilitate a domestic insurer who has violated certain sections of the Code or is impaired or insolvent.
6.3.2 Appointing him as Receiver and directing him to liquidate the business of the domestic insurer of the United States branch of an alien insurer having trusteed assets in this State.
6.3.3 Appointing him as Receiver or Ancillary Receiver and directing him to conserve the assets of a foreign or alien insurer upon certain grounds as set forth in the Insurance Code.
6.3.4 Appointing him as Ancillary Receiver of and directing him to liquidate the business of a foreign insurer having assets, business or claims in the State.
6.4 The Department shall prepare for each case which it administers, as soon as possible, a summary of fact giving rise to the insolvency, a set of instructions to claimants and policyholders describing how they may assert and protect their rights in answering the principle question with respect to those rights and problems which are expected to recur and also a schedule setting out each of the major steps contemplated in the course of administration of each estate and the estimated time at which such occurrence will take place.
6.5 The Department will further prepare regular and frequent reports to the court having jurisdiction. All such reports and judicial proceedings shall be prepared in the name of the Commissioner as Receiver or Ancillary Receiver and shall be submitted to him for his approval and verification before being filed with the court.
7.0 Insurance for the Protection of the State of Delaware
7.1 Determination of coverage. The Governor, the State Auditor and the Insurance Commissioner shall from time to time determine the method, the amount of insurance, and the class of coverage covering any type of risk, included but not limited to property, fidelity and surety, life, accident and health, workmen's compensation, marine, to be effected and carried by the State or any subdivision thereof, including all school districts, but excepting, however, the municipal corporations, counties, and the authorities relating to the crossings of the Delaware River and the Delaware Bay.
7.2 The Insurance Commissioner shall establish an insurance purchasing and administrative office; the executive head of which shall be the Director of Insurance Coverage, who shall be appointed and serve at the pleasure of the Insurance Commissioner.
7.3 The Insurance Purchasing and Administrative Office shall provide:
7.3.1 The placement of all insurance as has been determined necessary by the Governor, the State Auditor and the Insurance Commissioner.
7.3.2 The preparation of reports as required by the Insurance Commissioner. Such reports shall present basic statistical-actuarial data pertaining to the experience of the program and its component parts, provide sufficient information about bidding procedures as required by the statutes of the State of Delaware so that any qualified insurance firm may have the opportunity to offer its service to the State, and such report shall be a public document.
7.3.3 Periodic comprehensive insurance surveys of program needs, and a continuing review of existing insurance contracts as well as analysis of rates in terms of changing economic conditions, and periodic studies of market conditions and developments.
7.3.4 Special investigation and reports as may be requested by the Insurance Commissioner.
8.0 Other Responsibilities
8.1 In addition to the regulatory and quasi-judicial functions of the Insurance Commissioner, the Insurance Code has charged the Commissioner with the duty of administering various other activities and subjects such as:
Collection of Fees and Taxes (18 Del.C. Ch. 7)
Review of Companies' Assets and Liabilities (18 Del.C. Ch. 11).
Company Investment Placement (18 Del.C. Ch. 13).
Administration of Deposits (18 Del.C. Ch. 15).
Authorization of Surplus Lines Insurers (18 Del.C. Ch. 19).
Unauthorized Insurers — Prohibitions, Process and Advertising (18 Del.C. Ch. 21).
Trade Practices and Frauds (18 Del.C. Ch. 23).
Life Insurance and Annuity Contracts (18 Del.C. Ch. 29).
Group Life Insurance Contracts (18 Del.C. Ch. 31).
Health Insurance Contracts (18 Del.C. Ch. 33).
Group and Blanket Health Insurance (18 Del.C. Ch. 35).
Credit Life and Credit Health Insurance (18 Del.C. Ch. 37).
Casualty Insurance Contracts (18 Del.C. Ch. 39).
Property Insurance Contracts (18 Del.C. Ch. 41).
Surety Insurance Contracts (18 Del.C. Ch. 43).
Title Insurance Contracts (18 Del.C. Ch. 45).
Financing of Insurers (18 Del.C. Ch. 47).
Premium Finance Companies (18 Del.C. Ch. 48).
Organization and Corporate Procedures., Powers of Domestic Stock and Mutual Insurers (18 Del.C. Ch. 49).
Insider Trading and Domestic Insurer Securities (18 Del.C. Ch. 51).
Mutual Assessment Property Insurers (18 Del.C. Ch. 53).
Mutual Benefit Associations (18 Del.C. Ch. 55).
Reciprocal Insurers (18 Del.C. Ch. 57).
Fraternal Benefit Societies (18 Del.C. Ch. 61).
Health Service Corporations, including Blue Cross and Blue Shield of DE, Inc. (18 Del.C. Ch. 63).
Suretyships (18 Del.C. Ch. 77).
Fair Plan. The Plan is administered pursuant to 19 Del.C. Ch. 41 and is purpose is to make basic property insurance available for qualified property.
Assigned Risk Plan (Delaware Automobile Insurance Plan). The Plan is administered by the Commissioner pursuant to 18 Del.C. §2527. The information contained in the Delaware manual published, and as amended from time to time, on the internet at https://www.aipso.com/DEManuals/ is incorporated herein by reference and made a part of this regulation. It provides for: (1) the equitable apportionment, among all the insurers writing automobile insurance in this State, of insurance which shall be afforded applicants who are in good faith entitled to, but are unable to procure insurance through ordinary methods and (2) reasonable rates for such insurance and (3) such other rules as are necessary to effect and maintain the Assigned Risk Plan.
Automobile Arbitration Panel. Pursuant to 21 Del.C., §2118(i), the Commissioner has established a panel of arbitrators consisting of licensed attorneys and insurance adjusters licensed in this State and promulgated Regulation No. 1401 (Formerly Regulation No. 10) to administer the panel. Each insurer is required to submit to arbitration for losses and damages to motor vehicles as covered under 21 Del.C. 2118(a)(2).
Delaware Insurance Guaranty Association (IGA). Pursuant to 18 Del.C. Ch. 42, the Commissioner has caused the IGA to be created. Its function is to assess each automobile insurer in this State an amount determined by the IGA Board of Directors and to pay covered claims against an insolvent insurer, less $100 deductible, from assessment fund.
Medical Malpractice Review Panel. Pursuant to 18 Del.C. Ch. 68, the Commissioner has compiled, subject to certain limitations, a list of 100 objective and judicious persons of appropriate education and experience residing in this State and list of all physicians and attorneys who have been licensed to practice in this State from which the Review Panel will be chosen by the parties thereto. The Commissioner has adopted and published such rules and regulations as necessary and shall convene the Panel upon proper request. The Commissioner shall forward the name of every health care provider against whom a settlement is made or judgment is rendered under the chapter to the appropriate agency for licensure or professional registration and examination for review of the fitness of the health care provider to practice his profession.
11 DE Reg. 218 (08/01/07)
200 Licensing
201 Insurance Certificate of Authority (Agency) [Formerly Regulation 16]
18 Del. Admin. Code § 201 Insurance Certificate of Authority (Agency) [Formerly Regulation 16]
201 Insurance Certificate of Authority (Agency) [Formerly Regulation 16]
1.0 References
1.1 18 Del.C. §§1702-1709 , describes the type of insurance Certificate of Authority (license) which may be issued by this department to "individuals, partnerships, or corporations." 18 Del.C. §1713 defines the Delaware Insurance Certificate of Authority and stipulates that certificates may be issued to "an individual, corporation, firm, or partnership." 18 Del.C. §1713(b) describes the requirement for a Delaware Insurance License before commissions may be paid and stipulates that assignments of commissions may be made only to "...a licensed partnership, firm, association, or corporation......"
2.0 Requirement
2.1 A Delaware Insurance Certificate of Authority (license) is required of any firm, corporation, partnership, association, or other business entity which conducts insurance transactions in the State of Delaware or which places insurance coverage on real or personal property located in this State provided one or more of the following conditions exist:
2.1.1 If commissions, including override commissions or assignments, are paid to the firm or agency;
2.1.2 If the firm or agency is the producer of record;
2.1.3 If policies or related papers issued to the insured contain instructions to contact the firm or agency for insurance service;
2.1.4 If insurance business is transacted or solicited under a trade name. (See definition; 18 Del.C. §103)
3.0 Exceptions
3.1 Agents who work for and place all business through a single insurance company or group may advertise and trade as the "agency" of that insurer without an agency Certificate of Authority provided:
3.1.1 Each individual holds a personal Certificate of Authority as an agent.
3.1.2 All business is placed through the sponsoring insurance company.
3.2 Insurers may use unlicensed adjuster firm in the event of a catastrophic loss (18 Del.C. §1708).
3.3 Agencies which previously held a Delaware Insurance Certificate of Authority may be paid commissions or other considerations on business transactions which occurred prior to the expiration or termination of a Certificate of Authority.
3.4 Corporations or firms which enroll employees in group life and/or group health plans where no commission or other consideration is paid are not required to obtain a Certificate of Authority.
4.0 Agency Certificate of Authority (Agency License)
4.1 A Delaware Certificate of Authority issued to a sole proprietor, partnership, association, corporation or other business entity shall be referred to as an agency license irrespective of the type of insurance transaction authorized under said license.
4.2 An agency license shall give full authority for the type insurance license defined and described by the appropriate sections of the Delaware Insurance Code, except that all insurance transactions completed in the name of the agency shall be accomplished by an individual registered with this department as to that agency and who has qualified in the same manner as required for an individual license.
5.0 Prohibitions
5.1 Effective May 7, 1975, no agency or organization not excepted in section 3.0 above, shall act as, or hold itself out to be an insurance agent, broker, surplus lines broker, limited representative, consultant, adjuster or motor vehicle damage appraiser, unless such agency or organization has been issued an Insurance Certificate of Authority by this department.
5.2 No agency or organization, unless excepted by section 3.0 above, shall make application for, procure, negotiate, arrange for settlement, or place for others insurance policies for any line or type insurance for which the agency or organization is not then licensed by this department.
5.3 No agency or organization may permit any person to conduct insurance transactions on its behalf unless such person is qualified for an appropriate insurance Certificate of Authority and is registered with the Insurance Department under that agent's license.
5.4 Unless an agency license is in effect, no insurer may pay, and no agency may accept, commissions, finder's fee, broker's fee, or other valuable consideration which proceeds from, or which may be attributed to an insurance transaction.
6.0 Penalties
In accordance with 18 Del.C. §1743, violations of this regulation may subject the individual licensee (agent/agency and/or insurer) to withdrawal of license or such other punitive action which the Commissioner deems to be appropriate.
7.0 Concurrent Licenses
Qualified individuals may concurrently hold an insurance Certificate of Authority for any line of insurance as an individual and as a registered member of one or more agencies. Such dual licensing is required only when the licensee transacts some portion of his insurance business through an agency and the remainder of his business as an individual (e.g., where the agency is not involved).
8.0 Procedure for Obtaining an Agency License
8.1 For a firm: A partner, officer, principal or the sole proprietor shall complete an application for agency license on forms provided by the Commissioner which shall include, but not be limited to, the following information:
8.1.1 Name and address of the business
8.1.2 Agency's Federal Employers' Identification Number (Federal Tax Number)
8.1.3 Type of insurance authority requested (type and line of insurance)
8.1.4 Type business organization (partnership, corporation, sole proprietorship, association)
8.1.5 Provide a certificate of good standing from the Office of Registration (resident State Corporation Department for corporations, county court clerk or prothonotary for partnerships and sole proprietorships).
8.2 For registered members: Submit an application for individual insurance license completed by each of the individuals who will represent the agency.
8.3 Fees: Provide fees for each individual to be licensed as listed 18 Del.C. §701 for each type of license. Non-resident fees are reciprocal and are set at those rates which the applicant's state of residence would charge a Delawarean for a similar license.
202 Responsibility for Delaware Insurance Licenses [Formerly Regulation 36]
18 Del. Admin. Code § 202 Responsibility for Delaware Insurance Licenses [Formerly Regulation 36]
202 Responsibility for Delaware Insurance Licenses [Formerly Regulation 36]
1.0 Reference
1.1 All references otherwise stated refer to passages of Title 18, Delaware Insurance Code (18 Del.C.).
1.1.1 18 Del.C. §§314, 317 grant the Commissioner the authority to make, after hearing, reasonable rules and regulations pertaining to the conduct of insurance transactions in this State and provide for penalties for violations of such rules and regulations.
1.1.2 18 Del.C. §1713 prohibits individuals from acting as Delaware brokers, agents, adjusters, appraisers, surplus lines brokers or consultants unless properly licensed.
1.1.3 18 Del.C. §1730 prohibits payment by insurers and receipt by individuals commissions or other valuable considerations unless there is in effect a valid license (renewal commissions exempt if agent was licensed at the time of the sale).
1.1.4 Delaware Insurance Bulletin No. 76-10 describes the procedures to be followed in appointing agents.
1.1.5 Delaware Insurance Bulletin No. 77-9 describes the procedures for licensing.
1.1.6 Delaware Insurance Circular Letter No. 81-2 describes the licensing requirements for adjusters and appraisers.
1.1.7 Delaware Insurance Bulletin No. 74-15 describes the requirement for agents' licenses for agency employees.
2.0 Authority
2.1 In accordance with section 1.1.1 above, the Insurance Commissioner of the State of Delaware does hereby make and promulgate the following rules and procedures applicable to the direct responsibility of insurers, independent adjusting firms and agencies for the proper licensing of agents, limited and fraternal representatives, interim agents, and those affiliated brokers, surplus lines brokers, adjusters or apprentice adjusters, appraisers or apprentice appraisers, whom they employ or contract for the purpose of Delaware insurance business.
3.0 Requirement
3.1 Each insurer shall be responsible for ensuring that all employee associates and affiliates who undertake to transact insurance business in Delaware on behalf of the insurer are duly and properly licensed as required by section 1.1.2 above.
3.2 Each insurer shall cause each application for insurance written in Delaware by its agents, limited and fraternal representatives or brokers to be examined on receipt to ensure that the producer is correctly licensed in Delaware for the kinds of insurance involved and shall immediately reject all such applications submitted by unlicensed individuals.
3.3 Each property and casualty application covering a Delaware risk shall be subject to the same restrictions without regard to the location at which the application was written. (Exception: Ocean Marine Insurance)
3.4 Applications rejected on the basis of this regulation shall be accompanied with a notice to the producer and local management explaining the license requirements.
3.5 Each insurer who employs or contracts for the services of individuals or claims firms who will function as adjusters or motor vehicle physical damage appraisers handling Delaware claims either within or without this State shall, before the individuals engage in claims work ascertain that the individuals so employed or contracted are correctly licensed in Delaware as adjusters, apprentice adjusters, appraisers or apprentice appraisers in accordance with section 1.1.6 above.
3.6 Each insurer who contracts for the services or otherwise employs a surplus lines broker or consultant regarding Delaware risks or insurance business transactions shall ensure, prior to the initiation of such service, that the surplus lines broker or consultant is properly licensed for that line of insurance transaction.
3.7 Each insurance agency, independent adjuster, appraisal firm, surplus lines agency or consulting firm who employs or otherwise contracts for the services of individuals who will function in the capacity of agents, brokers, limited or fraternal representatives, surplus lines brokers, adjusters or appraisers for business written in Delaware for Delaware risks or related to Delaware claims, shall have the same obligations regarding their employees or affiliates as are imposed above on insurers.
4.0 Penalties
4.1 Failure to comply with the requirements set forth in this regulation will subject the violators, whether insurers, agencies, independent adjuster or appraisal firms, surplus lines agencies or consulting firms, after hearing, to the penalties as described by 18 Del.C. §106 and 18 Del.C. §1733 as appropriate.
5.0 Effective Date
5.1 This regulation shall become effective on April 15, 1982.
203 Establishment of Domestic Headquarters by Delaware Banks or Trust Companies Engaging in the Business of Insurance [Formerly Regulation 66]
18 Del. Admin. Code § 203 Establishment of Domestic Headquarters by Delaware Banks or Trust Companies Engaging in the Business of Insurance [Formerly Regulation 66]
203 Establishment of Domestic Headquarters by Delaware Banks or Trust Companies Engaging in the Business of Insurance [Formerly Regulation 66]
1.0 Authority
1.1 This regulation is adopted in accordance with 5 Del.C. §761(a)(14) and 18 Del.C. §314 and promulgated after consultation with the Bank Commissioner and in accordance with 29 Del.C. Ch. 101.
2.0 Purpose
2.1 The purpose of this regulation is to provide the requirements for banks authorized under the Bank and Trust Company Insurance Act of 1989 to engage in the business of insurance in Delaware.
3.0 Corporate Domicile Requirements
3.1 No subsidiary of a bank or trust company intending to transact the business of insurance under the authority of 5 Del.C. §761(a)(14), whether within or without Delaware, may do so unless such subsidiary;
3.1.1 was initially incorporated and chartered under the laws of the State of Delaware and remains at all times a corporation validly existing, in good standing and duly chartered to transact the business of insurance under the laws of the State of Delaware; or
3.1.2 while incorporated under the laws of a state other than Delaware, has agreed to and has taken reasonable steps to transfer its domicile into the State of Delaware, and has submitted a plan to do so to the Delaware Insurance Department and to the insurance department of its state of domicile, which plan the subsidiary represents satisfies the requirements of both states; and further, while such transfer of domicile is pending, has submitted to regulatory control of the Delaware State Insurance Department which is equivalent to the regulatory control which the Commissioner would exercise if such subsidiary were presently domiciled in Delaware.
3.2 A subsidiary of a bank or trust company identified in section 3.1.2 may transact the business of insurance under the authority of 5 Del.C. §761(a)(14) for a period not to exceed 48 months, by which time such subsidiary shall have either completed the transfer of its domicile into the State of Delaware, or ceased doing business. Prior to the completion of such change in domicile, the Commissioner has the right to condition, limit or stop the activities authorized by a certificate of authority hereunder if the subsidiary's then—current state of domicile rejects such change of domicile or the Commissioner determines that the subsidiary is not proceeding in good faith to accomplish the plan consistent with this regulation.
Amended May 3, 1993, effective 30 days after Commissioner's signature.
4.0 Certificate of Authority Requirements
4.1 Initial operations
4.1.1 Except as provided in section 3.0 above, any division or subsidiary of a bank or trust company wishing to transact the business of insurance under the authority of 5 Del.C. §761(a)(14) must first apply for and obtain a certificate of authority or license to do so from the Delaware Insurance Department pursuant to the applicable provisions of the Delaware Insurance Code and the regulations promulgated thereunder. If such division or subsidiary has previously obtained a certificate of authority or license to transact the business of insurance in Delaware from this office, such division or subsidiary may continue to transact business consistent with the terms of such certificate of authority or license, unless further application to this office is otherwise required to so continue to transact business under the Delaware Insurance Code or the regulations promulgated thereunder. For purposes of these regulations, the term "certificate of authority" shall mean the original governmental or administrative authorization conferred upon any person to act as an insurer, and the term "license" shall mean the original governmental or administrative authorization conferred upon any person to act as a foreign insurer.
4.2 Changes in operations in Delaware
4.2.1 Any division or subsidiary of a bank or trust company transacting the business of insurance in Delaware pursuant to a certificate of authority or license issued by this office is prohibited from engaging in any activity not authorized by the terms of that certificate of authority or license, including but not limited to the sale or underwriting of any line or type of insurance not authorized by that certificate of authority or license, unless such division or subsidiary first applies for and obtains additional authority to engage in such activity from the Delaware Insurance Department pursuant to the applicable provisions of the Delaware Insurance Code and the regulations promulgated thereunder.
4.3 Sales activities in other states
4.3.1 Any division or subsidiary of a bank or trust company wishing to transact the business of selling insurance in any state other than Delaware under the authority of 5 Del.C. §761(a)(14) must comply with all licensure and other requirements of each such state in connection with the transaction of such business, and this office shall monitor the compliance of any such division or subsidiary of a bank or trust company with all such state laws. To this end, any division or subsidiary of a bank or trust company transacting the business of insurance in a state other than Delaware shall maintain, as part of its principal books and records required to be maintained in Delaware pursuant to 18 Del.C. §534, copies of all licenses required to be obtained in connection with the transaction of such insurance business in such state.
5.0 Notice Requirements
5.1 Notice required
5.1.1 Any division or subsidiary of a bank or trust company intending to exercise any powers under the authority of 5 Del.C. §761(a)(14), whether within or without the State of Delaware, must notify this office of its intention to do so, even if such division or subsidiary holds a license or certificate of authority from this office to transact the business of insurance in Delaware and the proposed activities under 5 Del.C. §761(a)(14) would be consistent with the terms of such license or certificate of authority.
5.2 Time of notice
5.2.1 The notice required by section 5.1 of these regulations must be filed with this office by a division or subsidiary of a bank or trust company prior to its transaction of any insurance activities pursuant to the authority conferred by 5 Del.C. §761(a)(14).
5.3 Form of notice
5.3.1 The notice required by section 5.1 of these regulations must contain the following information:
5.3.1.1 The name of the division or subsidiary, and all trade names under which it proposes to transact the business of insurance;
5.3.1.2 The date on which such division or subsidiary was formed or organized, the manner in which it was so formed or organized, and the state in which it was so formed or organized;
5.3.1.3 The nature of the affiliation between the division or subsidiary and the bank or trust company with which such division or subsidiary is affiliated;
5.3.1.4 The most recent Annual Statement and quarterly financial statement;
5.3.1.5 The names and home addresses of all senior officers or directors of such division or subsidiary, and of all persons or entities beneficially owning 10% or more of any class of the capital stock or other equity securities or interest of such division or subsidiary;
5.3.1.6 The address of every facility owned or used by such subsidiary or facility for the transaction of business, whether within or without the State of Delaware;
5.3.1.7 The location within the State of Delaware at which such division or subsidiary intends to maintain its principal books and records;
5.3.1.8 The exact nature of all activities in which such division or subsidiary intends to engage pursuant to the authority conferred by 5 Del.C. §761(a)(14), including but not limited to:
5.3.1.8.1 All types or lines of insurance, if any, that the division or subsidiary intends to underwrite or sell, and the extent to which the underwriting or sale of any such types or lines of insurance is authorized by an existing certificate of authority or license issued by this office; and
5.3.1.9 The mechanisms by and the personnel through which the division or subsidiary intends to sell insurance (if at all) to the Delaware public; and
5.3.1.10 If any such subsidiary is not incorporated in Delaware, a plan which the subsidiary believes satisfies the requirements of the subsidiary's then-current state of domicile in accordance with section 3.0 of these regulations, which plan shall include the procedures to be employed to accomplish the proposed redomestication of the insurance subsidiary to the State of Delaware, and the timetable therefor, and which plan shall thereafter be supplemented by quarterly and annual reports regarding the status of such redomestication plan, such status reports to be filed contemporaneously with any quarterly and annual financial statements of the insurance subsidiary.
6.0 Response to Notice
6.1 Within thirty (30) days following the filing of the notice required by section 5.1 of these regulations, the Insurance Commissioner shall determine whether the proposed activities described therein should be approved or disapproved in whole or in part. If approved in whole or in part, the Commissioner shall forthwith issue a certificate of authority to engage in those activities which have been approved to the insurance division or subsidiary filing such notice. If disapproved in whole or in part, the Commissioner shall, pursuant to 29 Del.C. §10131(c), give written notice to the insurance division or subsidiary of such disapproval and the reasons therefor. Such notice shall also:
6.1.1 Inform the insurance division or subsidiary that it has a right to demand a hearing on its previously filed notice at which hearing
6.1.2 the insurance division or subsidiary would have the right to present relevant evidence,
6.1.3 to be represented by counsel, and
6.1.4 to appear personally or by other representative; and that the Commissioner is obligated to reach his decision based upon substantial evidence of record; and
6.1.5 Inform the insurance subsidiary or division of the period, not less than ten (10) days from the date of such notice, during which it may request a hearing on its previously filed notice.
6.2 Should the insurance division or subsidiary request a hearing under this paragraph, the Commissioner shall fix a date for such hearing and shall provide at least twenty (20) days advance notice of hearing date to the insurance division or subsidiary.
7.0 Location of Headquarters
7.1 Timing
7.1.1 Within six months of the Commissioner's approval of any notice filed pursuant to section 5.3 of these regulations, the filing division or subsidiary shall establish a facility within the State of Delaware to serve as its headquarters of day-to-day corporate activity and management.
7.2 Definition
7.2.1 For purposes of this regulation, the term "headquarters of day-to-day corporate activity and management", as used in 18 Del.C. §534, shall mean a facility of a division or subsidiary of a bank or trust company engaged in insurance activities pursuant to the authority conferred by 5 Del.C. §761(a)(14) which satisfies the following:
7.2.1.1 Such facility is located within the State of Delaware;
7.2.1.2 The principal books and records of such division or subsidiary are located at such facility unless such insurance activities are conducted through a subsidiary domiciled in another state that requires such principal books and records to be located in its state of domicile, in which event a duplicate set of the principal books and records shall be located at the Delaware facility;
7.2.1.3 A majority of the senior officers of such division or subsidiary, as well as all employees of such division or subsidiary whose duties can reasonably be performed in the State of Delaware, shall maintain their offices or places of employment at such Delaware facility.
8.0 Effective Date
8.1 This regulation shall become effective 20 days after signature by the Commissioner.
204 Mandatory Disclosure of Certain Information by Persons Receiving the Name of a Borrower from a Delaware Bank or Trust Company Engaging in the Business of Insurance [Formerly Regulation 66, Part 2]
18 Del. Admin. Code § 204 Mandatory Disclosure of Certain Information by Persons Receiving the Name of a Borrower from a Delaware Bank or Trust Company Engaging in the Business of Insurance [Formerly Regulation 66, Part 2]
204 Mandatory Disclosure of Certain Information by Persons Receiving the Name of a Borrower from a Delaware Bank or Trust Company Engaging in the Business of Insurance [Formerly Regulation 66, Part 2]
1.0 Generally
1.1 All information required to be disclosed by this regulation shall be set out conspicuously and under appropriate captions of such prominence that it shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of other information so as to be confusing or misleading.
2.0 Specific Disclosures Required
2.1 Prohibitions on "tying"
2.1.1 Any person engaging in the business of insurance in Delaware who has received the name of any actual or potential borrower from any bank or trust company directly or indirectly engaging in any activity authorized by 5 Del.C. §761(1)(14) in Delaware shall make the following written disclosure (or a substantially equivalent written disclosure) simultaneously with every application for any product or service to be purchased or obtained in Delaware by such actual or potential borrower from such person:
2.1.1.1 ‘Prohibition on Tying'
2.1.2 What We Cannot Do
2.1.2.1 The insurance laws of this state provide that a lender may not require, directly or indirectly, the borrower to acquire insurance through any particular insurance agent or company.
2.1.2.2 The borrower, subject to the rules adopted by the Insurance Commissioner, has the right to have the insurance placed with an insurance agent or company of his choice. The lender, however, has the right to prescribe reasonable requirements regarding the financial structure and stability of the company, and the adequacy of coverage.
2.1.2.3 You have applied today to [insert name of entity to whom application submitted] for [describe product or service applied for]. We CANNOT condition our approval (if any) of your application upon:
2.1.2.3.1 Your agreement to obtain additional credits, products or services from us or from any company or person affiliated with us;
2.1.2.3.2 Your agreement to provide additional credits, products or services to us or to any company or person affiliated with us; or
2.1.2.3.3 Your agreement not to obtain credits, products or services from any person or company that competes with us or with any company or person affiliated with us."
2.2 Any person engaging in the business of insurance in Delaware who has received the name of any actual or potential borrower from a bank or trust company first authorized to transact the business of insurance in Delaware pursuant to 5 Del.C. §761(a)(14) shall make the following written disclosure (or a substantially equivalent written disclosure), immediately following that disclosure required by section 2.1.1 of this regulation, in every application for any insurance policy to be purchased or obtained in Delaware from such person by such actual or potential borrower:
2.2.1 "We have received your name from [insert name of bank or trust company]. If you have previously applied for a loan, credit, product or other service from [insert name of bank or trust company], and that application is still pending today, we cannot, until [insert bank or trust company] approves your pending application, accept an application from you for any insurance policy which directly relates to that applied-for loan, credit product or other service."
2.2.2 Notwithstanding the above, however, the Delaware Unfair Practices Act under certain circumstances prohibits use or disclosure of information resulting from any requirement that a borrower, mortgagor or purchaser furnish insurance of any kind on real property being conveyed or used as collateral security to a loan (18 Del.C. Sec. 2305).
3.0 Cancellation rights
3.1 Any person engaging in the business of insurance in Delaware who has received the name of an actual or potential "individual borrower" (as defined in 5 Del.C. §930(f)) from a bank or trust company first authorized to transact the business of insurance in Delaware pursuant to 5 Del.C. §761(a)(14) must deliver copies of the following written notice form to any such individual borrower who has purchased insurance in Delaware from such person under circumstances where the procurement of such insurance (whether from the person selling such insurance or from any other source) is lawfully made an express condition of any extension of credit to the individual borrower by the bank or trust company from whom the individual borrower's name was obtained. Such notice form shall be delivered to the individual borrower not later than the latter of the time the policy of insurance is delivered or the time he or she enters into an agreement for the purchase of insurance.
3.2 “Notice of Insurance Cancellation Rights"
3.2.1 You have purchased insurance from us for a total premium of per (mo/yr).
3.2.2 You may cancel the insurance you have purchased from us at any time until midnight of the 30th day following our delivery of this notice and the accompanying cancellation form to you (the "Cancellation Period"). If you exercise your right to cancel the insurance within the Cancellation Period, you are entitled to a refund of some or all of the premium you have paid for such insurance, as follows:
3.2.2.1 If, within the first ten (10) days of the Cancellation Period, you exercise your right to cancel the insurance, we will unconditionally refund all of the premium you have paid. IF YOU EXERCISE YOUR RIGHT TO CANCEL THE INSURANCE AND OBTAIN A REFUND OF ALL YOUR PREMIUM, WE WILL BE RELEASED FROM ALL LIABILITY WHICH WOULD OTHERWISE BE COVERED BY THAT INSURANCE.
3.2.2.2 If, at any time after the 10th day of the Cancellation Period and before the end of the Cancellation Period, you exercise your right to cancel the insurance you have purchased from us, we will, at your option:
3.2.2.2.1 refund the unearned portion of the premium you have paid (as computed in accordance with applicable law); or
3.2.2.2.2 issue you a credit for the unearned portion of the premium you have paid and, where we have financed the premium over time, with interest, issue you a credit for the unearned portion of the finance charge attributable to the insurance (as computed in accordance with your contract documents).
3.2.2.2.3 All refunds under this Paragraph 3.2.2 will be calculated as of the date of your cancellation of the insurance you have purchased from us. As set forth in Paragraph 3.2.3 of this notice, the date of your cancellation of this insurance depends upon the method you use to send the accompanying cancellation form to us.
3.2.3 You must exercise your right to cancel the insurance you have purchased from us by delivering the accompanying cancellation form to us (or our assignee) within the Cancellation Period. If you send the accompanying form to us by first-class mail, postage prepaid, at the address shown on such form, the form will be considered to have been delivered to us (and your insurance will be considered to have been cancelled) when you mailed it. The postmark on the envelope in which the cancellation form is mailed to us will be conclusive evidence of the date on which you mailed it. IF THE CANCELLATION FORM IS SENT TO US BY ANY OTHER MEANS, IT WILL BE CONSIDERED TO HAVE BEEN DELIVERED WHEN ACTUALLY RECEIVED BY US, AND YOUR INSURANCE WILL BE CONSIDERED TO HAVE BEEN CANCELLED AT THAT TIME.
3.2.4 You have the right to choose the person or company through which you wish to obtain the insurance you have purchased from us. In other words, you do not have to purchase this insurance from us. During the Cancellation Period, you may obtain price quotations on the insurance you have purchased from us from other sources.
3.2.5 If the insurance you have purchased from us is against loss of, damage to, or liability arising out of ownership or use of, property which you have pledged or otherwise used to secure an extension of credit from a bank or trust company or any of its affiliates, and that extension of credit was conditioned on your purchase of such insurance, that bank or trust company may refuse to allow you to cancel such insurance as provided in this notice unless, at the same time you deliver the accompanying cancellation form to us, you deliver evidence to the bank or trust company that you have obtained other adequate insurance against such risks. The bank or trust company may refuse to accept the insurance obtained by you, based upon the financial condition of the insurer or adequacy of the coverage provided.
3.2.6 Except as set forth in Paragraph 3.2.2 of this notice, you will not be subject to any fee, cancellation charge or penalty payment if you exercise your right to cancel the insurance you have purchased from us as specified herein.
3.2.7 You may have rights in addition to those described above under the terms of your insurance policy or applicable state law."
3.2.8 The foregoing notice form must be delivered to an "individual borrower" only upon his initial purchase of insurance, and not upon his subsequent renewal of that insurance.
3.3 Contemporaneously with the delivery of the notice form described in section 3.1 of this regulation, a person engaging in the business of insurance described in such Paragraph shall deliver the following written cancellation form to any "individual borrower" (as defined in 5 Del.C. §930(f)) who has purchased insurance in Delaware from such person under circumstances where the procurement of such insurance (whether from the person selling such insurance or from any other source) is lawfully made an express condition of any extension of credit to the individual borrower by the bank and trust company from whom the individual borrower's name was obtained:
3.4 "Cancelation Notice’’
3.4.1 The undersigned, pursuant to the provisions of 5 Del.C. Sec. 930, hereby cancels the purchase of insurance obtained from [insert name of selling person], and requests a refund or credit of the premium paid for such insurance, as follows (check only one of the following three alternatives):
3.4.1.1 ______ Unconditional Refund of Premium. YOU ARE ONLY ENTITLED TO SUCH A PREMIUM REFUND IF THIS CANCELLATION FORM IS DELIVERED TO [insert name of selling person] WITHIN THE FIRST TEN (10) DAYS OF THE CANCELLATION PERIOD (see Paragraph 3.2.2.1 of the "Notice of Insurance Cancellation Rights" provided to you with this Cancellation Form).
3.4.1.2 _______ Refund of Unearned Portion of Premium (see Paragraph 5(b)(i) of the "Notice of Insurance Cancellation Rights" provided to you with this Cancellation Form).
3.4.1.3 _______ Credit of Unearned Portions of Premium and Applicable Finance Charges (see Paragraph 3.2.5 of the "Notice of Insurance Cancellation Rights" provided to you with this Cancellation Form).
3.4.2 If the insurance I am canceling is against loss of, damage to, or liability arising out of the ownership or use of, property which I pledged or otherwise used to secure an extension of credit from [insert name of bank or trust company], I have enclosed with this Cancellation Form a certificate of insurance showing that I have obtained other adequate insurance against such risks, and I understand that [insert name of bank or trust company] has no obligation to honor this Cancellation Form if I have not enclosed such a certificate of insurance.
Purchaser Signature
Date of Signature
3.4.3 IMPORTANT NOTICE: THIS CANCELLATION FORM IS EFFECTIVE WHEN DELIVERED TO [insert name of selling person] AT THE FOLLOWING ADDRESS:
[insert address]
3.4.4 IF THIS CANCELLATION FORM IS SENT BY FIRST-CLASS MAIL, POSTAGE PREPAID, IT WILL BE DEEMED TO HAVE BEEN DELIVERED WHEN MAILED. THE POSTMARK ON THE ENVELOPE IN WHICH THIS FORM IS MAILED WILL BE CONCLUSIVE EVIDENCE OF THE DATE ON WHICH YOU MAILED IT. IF THE CANCELLATION FORM IS SENT BY ANY OTHER MEANS, IT WILL BE DEEMED TO HAVE BEEN DELIVERED WHEN RECEIVED BY [insert name of selling person]."
3.4.5 the foregoing cancellation form must be delivered to an "individual borrower" only upon his initial purchase of insurance, and not upon his subsequent renewal of that insurance. Such cancellation form may be appended to, incorporated in, or otherwise made a part of the notice form described in section 3.1of this regulation.
4.0 Separation of bank or trust company and its insurance operation
4.1 Where a person issuing policies of insurance has obtained the name of an actual or potential borrower from a bank or trust company engaging in any activity authorized by 5 Del.C. §761(a)(14), and such borrower applies to such person for insurance, such person shall make the following disclosure at the time of such borrower's application or as soon thereafter as possible:
4.2 "Your Right to Look to a Delaware Bank or Trust Company for Payment on Any Insurance Policy is Limited By Law” .
4.2.1 Delaware banks and trust companies are NOT liable for any insurance policies issued by their subsidiaries or divisions."
5.0 Effective Date
5.1 This regulation shall become effective 20 days after signature by the Commissioner.
5.2 The Bank and Trust Company Insurance Act of 1989 requires persons receiving the name of any actual or potential borrower from a Delaware bank or trust company engaging in the business of insurance pursuant to 5 Del.C. Sec. 761(a)(14) to disclose certain information to that borrower. This regulation, promulgated after consultation with the State Bank Commissioner, governs the disclosure of such information by that person to the borrower.
300 Financial Reporting
301 Audited Financial Reports [Formerly Regulation 50]
18 Del. Admin. Code § 301-1.0 Authority
This regulation is promulgated and adopted pursuant to 18 Del.C. §§311 and 526 and 29 Del.C. Ch. 101.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-2.0 Purpose and Scope
2.1 The purpose of this regulation is to improve the Delaware Insurance Department’s surveillance of the financial condition of insurers by requiring an annual audit of financial statements reporting the financial position and the results of operations of insurers by independent certified public accountants, Communication of Internal Control Related Matters Noted in an Audit, and Management’s Report of Internal Control over Financial Reporting.
2.2 Every insurer (as defined in Section 3.0) shall be subject to this regulation. Insurers, and their affiliates in the same group, having direct premiums written in this State of less than $1,000,000 in any calendar year and less than 1,000 policyholders or certificate holders of direct written policies nationwide at the end of the calendar year shall be exempt from this regulation for the year (unless the Commissioner makes a specific finding that compliance is necessary for the Commissioner to carry out statutory responsibilities) except that insurers having assumed premiums pursuant to contracts and/or treaties of reinsurance of $1,000,000 or more will not be so exempt.
2.3 Foreign or alien insurers filing the Audited Financial Report in another state, pursuant to that state’s requirement for filing of audited financial reports, which has been found by the Commissioner to be substantially similar to the requirements herein, are exempt from Sections 4.0 through 13.0 of this regulation if:
2.3.1 A copy of the audited financial report, Communication of Internal Control Related Matters Noted in an Audit, and the Accountant’s Letter of Qualifications that are filed with the other state are filed with the Commissioner in accordance with the filing dates specified in Sections 4.0, 11.0 and 12.0, respectively (Canadian insurers may submit accountants’ reports as filed with the Office of the Superintendent of Financial Institutions, Canada).
2.3.2 A copy of any Notification of Adverse Financial Condition Report filed with the other state is filed with the Commissioner within the time specified in Section 10.0.
2.4 Foreign or alien insurers required to file Management’s Report of Internal Control over Financial Reporting in another state are exempt from filing the Report in this state provided the other state has substantially similar reporting requirements and the Report is filed with the commissioner of the other state within the time specified.
2.5 This regulation shall not prohibit, preclude or in any way limit the Commissioner from ordering or conducting or performing examinations of insurers under the rules and regulations of the Delaware Department of Insurance and the practices and procedures of the Delaware Department of Insurance.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-3.0 Definitions
“Accountant” or “Independent Certified Public Accountant” means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which he or she is licensed to practice; for Canadian and British companies, it means a Canadian-chartered or British-chartered accountant.
An “Affiliate” of, or person “Affiliated” with, a specific person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
“Audit Committee” means a committee (or equivalent body) established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the Internal audit function of an insurer or Group of insurers (if applicable), and external audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of these controlled insurers solely for the purposes of this regulation at the election of the controlling person. Refer to subsection 14.1.5 for exercising this election. If an audit committee is not designated by the insurer, the insurer’s entire board of directors shall constitute the audit committee.
“Audited Financial Report” means and includes those items specified in Section 5.0 of this regulation.
“Commissioner” means the Commissioner of the Delaware Department of Insurance.
“Department” means the Delaware Department of Insurance.
“Group of Insurers” means those licensed insurers included in the reporting requirements of 18 Del.C. Ch. 50 or a set of insurers as identified by management, for the purpose of assessing the effectiveness of internal control over financial reporting.
“Indemnification” means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives.
“Independent Board Member” has the same meaning as described in subsection 14.1.4.
“Insurer” means a licensed insurer as defined in 18 Del.C. Ch. 5 of the Delaware insurance law or an authorized insurer as defined in 18 Del.C. Ch. 19 of the Delaware insurance law.
"Internal audit function" means a person or persons that provide independent, objective and reasonable assurance designed to add value and improve an organization's operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
“Internal Control Over Financial Reporting” means a process effected by an entity’s board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements, i.e., those items specified in subsections 5.2.2 through 5.2.7 of this regulation, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, i.e., those items specified in subsections 5.2.2 through 5.2.7 of this regulation and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements, i.e., those items specified in subsections 5.2.2 through 5.2.7 of this regulation.
“NAIC” means the National Association of Insurance Commissioners.
“SEC” means the United States Securities and Exchange Commission.
“Section 404” means Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC’s rules and regulations promulgated there in.
“Section 404 Report” means management’s report on internal control over financial reporting as required by the Section 404 and the related attestation report of the independent certified public accountant.
“SOX Compliant Entity” means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (Section 10A(i) of the Securities Exchange Act of 1934); (ii) the audit committee independence requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act of 1934), if applicable to the entity; and (iii) the internal control over financial reporting requirements of Section 404 (Item 308 of SEC Regulation S-K).
“Workpapers” means the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountant's audit of the financial statements of an insurer. Workpapers include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of his or her audit of the financial statements of an insurer and which support the accountant's opinion.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-4.0 General Requirements Related to Filing and Extensions for Filing of Annual Audited Financial Reports and Audit Committee Appointment
4.1 All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the Commissioner on or before June 1 for the year ended December 31 immediately preceding. The Commissioner may require an insurer to file an audited financial report earlier than June 1 with ninety (90) days advance notice to the insurer.
4.2 Extensions of the June 1 filing date may be granted by the Commissioner for thirty-day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting an extension and determination by the Commissioner of good cause for an extension. The request for extension must be submitted in writing not less than ten (10) days prior to the due date in sufficient detail to permit the Commissioner to make an informed decision with respect to the requested extension.
4.3 If an extension is granted in accordance with the provisions in subsection 4.2, a similar extension of thirty (30) days is granted to the filing of Management’s Report of Internal Control over Financial Reporting.
4.4 Every insurer required to file an annual audited financial report pursuant to this regulation shall designate a group of individuals as constituting its audit committee. The audit committee of an entity that controls an insurer may be deemed to be the insurer's audit committee for purposes of this regulation at the election of the controlling person.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-5.0 Contents of Annual Audited Financial Report
5.1 The annual audited financial report shall report the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the Department of Insurance of the state of domicile.
5.2 The annual audited financial report shall include the following:
5.2.1 Report of independent certified public accountant;
5.2.2 Balance sheet reporting admitted assets, liabilities, capital and surplus;
5.2.3 Statement of operations;
5.2.4 Statement of cash flow;
5.2.5 Statement of changes in capital and surplus; and
5.2.6 Notes to financial statements. These notes shall be those required by the appropriate NAIC Annual Statement Instructions and the NAIC Accounting Practices and Procedures Manual. The notes shall include a reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to 18 Del.C. §526 with a written description of the nature of these differences.
5.3 The financial statements included in the audited financial report shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Commissioner, and the financial statement shall be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31. However, in the first year in which an insurer is required to file an audited financial report, the comparative data may be omitted.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-6.0 Designation of Independent Certified Public Accountant
6.1 Each insurer required by this regulation to file an annual audited financial report must within sixty (60) days after becoming subject to the requirement, register with the Commissioner in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in this regulation. Insurers not retaining an independent certified public accountant on the effective date of this regulation shall register the name and address of their retained independent certified public accountant not less than six (6) months before the date when the first audited financial report is to be filed.
6.2 The insurer shall obtain a letter from the accountant, and file a copy with the Commissioner stating that the accountant is aware of the provisions of the insurance code and the regulations of the insurance department of the insurer’s state of domicile that relate to accounting and financial matters and affirming that the accountant will express his or her opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that insurance department, specifying such exceptions as he or she may believe appropriate.
6.3 If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer shall within five (5) business days notify the Commissioner of this event. The insurer shall also furnish the Commissioner with a separate letter within ten (10) business days of the above notification stating whether in the twenty-four (24) months preceding such event there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure; which disagreements, if not resolved to the satisfaction of the former accountant, would have caused him or her to make reference to the subject matter of the disagreement in connection with his or her opinion. The disagreements required to be reported in response to this section include both those resolved to the former accountant’s satisfaction and those not resolved to the former accountant’s satisfaction. Disagreements contemplated by this section are those that occur at the decision-making level, i.e., between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also in writing request the former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurer’s letter and, if not, stating the reasons for which he or she does not agree; and the insurer shall furnish the responsive letter from the former accountant to the Commissioner together with its own.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-7.0 Qualifications of Independent Certified Public Accountant
7.1 The Commissioner shall not recognize a person or firm as a qualified independent certified public accountant if the person or firm:
7.1.1 Is not in good standing with the AICPA and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or
7.1.2 Has either directly or indirectly entered into an agreement of indemnification with respect to the audit of the insurer.
7.2 Except as otherwise provided in this regulation, the Commissioner shall recognize an independent certified public accountant as qualified as long as he or she conforms to the standards of his or her profession, as contained in the Code of Professional Ethics of the AICPA and Rules and Regulations and Code of Ethics and Rules of Professional Conduct of the Delaware State Board of Accountancy, or similar code.
7.3 A qualified independent certified public accountant may enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, in the event of a delinquency proceeding commenced against the insurer under 18 Del.C. Ch 59, the mediation or arbitration provisions shall operate at the option of the statutory successor.
7.4 The lead (or coordinating) audit partner (having primary responsibility for the audit) may not act in that capacity for more than five (5) consecutive years. Thereafter, that person shall be disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five (5) consecutive years. An insurer may make application to the Commissioner for relief from the above rotation requirement on the basis of unusual circumstances. This application should be made at least thirty (30) days before the end of the calendar year. The Commissioner may consider the following factors in determining if the relief should be granted:
7.4.1 Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm;
7.4.2 Premium volume of the insurer; or
7.4.3 Number of jurisdictions in which the insurer transacts business.
7.5 The insurer shall file, with its annual statement filing, the approval for relief from subsection 7.4 with the states that it is licensed in or doing business in and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.
7.6 The Commissioner shall neither recognize as a qualified independent certified public accountant, nor accept an annual Audited financial report, prepared in whole or in part by, a natural person who:
7.6.1 Has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961 to 1968, or any dishonest conduct or practices under federal or state law;
7.6.2 Has been found to have violated the insurance laws or regulations of this state with respect to any previous reports submitted under this regulation; or
7.6.3 Has demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under the provisions of this regulation.
7.7 The Commissioner may, as provided in 18 Del.C. §323, hold a hearing to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing his or her opinion on the financial statements in the annual audited financial report made pursuant to this regulation and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this regulation.
7.8 The Commissioner shall not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following non-audit services:
7.8.1 Bookkeeping or other services related to the accounting records or financial statements of the insurer;
7.8.2 Financial information systems design and implementation;
7.8.3 Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
7.8.4 Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements. The accountant may assist an insurer in understanding the methods, assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurer’s financial statements. An accountant’s actuary may also issue an actuarial opinion or certification (“opinion”) on an insurer’s reserves if the following conditions have been met:
7.8.4.1 Neither the accountant nor the accountant’s actuary has performed any management functions or made any management decisions;
7.8.4.2 The insurer has competent personnel (or engages a third party actuary) to estimate the reserves for which management takes responsibility; and
7.8.4.3 The accountant’s actuary tests the reasonableness of the reserves after the insurer’s management has determined the amount of the reserves;
7.8.5 Internal audit outsourcing services;
7.8.6 Management functions or human resources;
7.8.7 Broker or dealer, investment adviser, or investment banking services;
7.8.8 Legal services or expert services unrelated to the audit; or
7.8.9 Any other services that the Commissioner determines, by regulation, are impermissible.
7.9 In general, the principles of independence with respect to services provided by the qualified independent certified public accountant are largely predicated on the following three basic principles, violations of which would impair the accountant's independence:
7.9.1 The accountant cannot function in the role of management;
7.9.2 The accountant cannot audit his or her own work; and
7.9.3 The accountant cannot serve in an advocacy role for the insurer.
7.10 Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request an exemption from subsection 7.8. The insurer shall file with the Commissioner a written statement discussing the reasons why the insurer should be exempt from these provisions. If the Commissioner finds, upon review of this statement, that compliance with this regulation would constitute a financial or organizational hardship upon the insurer, an exemption may be granted.
7.11 A qualified independent certified public accountant who performs the audit may engage in other non-audit services, including tax services, that are not described in subsection 7.8 or that do not conflict with subsection 7.9, only if the activity is approved in advance by the Audit committee, in accordance with subsection 7.12.
7.12 All auditing services and non-audit services provided to an insurer by the qualified independent certified public accountant of the insurer shall be pre-approved by the audit committee. The preapproval requirement is waived with respect to non-audit services if the insurer is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity or:
7.12.1 The aggregate amount of all such non-audit services provided to the insurer constitutes not more than five percent (5%) of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided;
7.12.2 The services were not recognized by the insurer at the time of the engagement to be non-audit services; and
7.12.3 The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the Audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.
7.13 The audit committee may delegate to one or more designated members of the Audit committee the authority to grant the preapprovals required by subsection 7.12. The decisions of any member to whom this authority is delegated shall be presented to the full audit committee at each of its scheduled meetings.
7.14 The Commissioner shall not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due. This section shall only apply to partners and senior managers involved in the audit. An insurer may make application to the Commissioner for relief from the above requirement on the basis of unusual circumstances.
7.14.1 The insurer shall file, with its annual statement filing, the approval for relief from subsection 7.14 with the states in which it is licensed or in which it is doing business and the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-8.0 Consolidated or Combined Audits
8.1 An insurer may make written application to the Commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies that utilizes a pooling or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer’s reserves and the insurer cedes all of its direct and assumed business to the pool. In such cases, a columnar consolidating or combining worksheet shall be filed with the report, as follows:
8.1.1 Amounts shown on the consolidated or combined audited financial report shall be shown on the worksheet;
8.1.2 Amounts for each insurer subject to this section shall be stated separately;
8.1.3 Noninsurance operations may be shown on the worksheet on a combined or individual basis;
8.1.4 Explanations of consolidating and eliminating entries shall be included; and
8.1.5 A reconciliation shall be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-9.0 Scope of Audit and Report of Independent Certified Public Accountant
Financial statements furnished pursuant to Section 5.0 shall be examined by the independent certified public accountant. The audit of the insurer’s financial statements shall be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 319 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant should obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file Management’s Report of Internal Control over Financial Reporting pursuant to Section 16.0, the independent certified public accountant should consider (as that term is defined in Statement on Auditing Standards No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement) the most recently available report in planning and performing the audit of the statutory financial statements. Consideration shall be given to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the NAIC as the independent certified public accountant deems necessary.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-10.0 Notification of Adverse Financial Condition
10.1 The insurer required to furnish the annual Audited financial report shall require the independent certified public accountant to report, in writing, within five (5) business days to the board of directors or its audit committee any determination by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the Commissioner as of the balance sheet date currently under audit or that the insurer does not meet the minimum capital and surplus requirement of the Delaware insurance code as of that date. An insurer that has received a report pursuant to this paragraph shall forward a copy of the report to the Commissioner within five (5) business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the Commissioner. If the independent certified public accountant fails to receive the evidence within the required five (5) business day period, the independent certified public accountant shall furnish to the Commissioner a copy of its report within the next five (5) business days.
10.2 No independent certified public accountant shall be liable in any manner to any person for any statement made in connection with the above paragraph if the statement is made in good faith in compliance with subsection 10.1.
10.3 If the accountant, subsequent to the date of the audited financial report filed pursuant to this regulation, becomes aware of facts that might have affected his or her report, the Commissioner notes the obligation of the accountant to take such action as prescribed in Volume 1, Section AU 561 of the Professional Standards of the AICPA.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-11.0 Communication of Internal Control Related Matters Noted in an Audit
11.1 In addition to the annual audited financial report, each insurer shall furnish the Commissioner with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit. Such communication shall be prepared by the accountant within sixty (60) days after the filing of the annual audited financial report, and shall contain a description of any unremediated material weakness (as the term material weakness is defined by Statement on Auditing Standard 60, Communication of Internal Control Related Matters Noted in an Audit, or its replacement) as of December 31 immediately preceding (so as to coincide with the audited financial report discussed in subsection 4.1 in the insurer’s internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication should so state.
11.2 The insurer is required to provide a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountant’s communication.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-12.0 Accountant’s Letter of Qualifications
12.1 The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual Audited financial report, a letter stating:
12.1.1 That the accountant is independent with respect to the insurer and conforms to the standards of his or her profession as contained in the Code of Professional Ethics and pronouncements of the AICPA and the Rules of Professional Conduct of the Delaware State Board of Accountancy, or similar code;
12.1.2 The background and experience in general, and the experience in audits of insurers of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this regulation shall be construed as prohibiting the accountant from utilizing such staff as he or she deems appropriate where use is consistent with the standards prescribed by generally accepted auditing standards;
12.1.3 That the accountant understands the annual audited financial report and his opinion thereon will be filed in compliance with this regulation and that the Commissioner will be relying on this information in the monitoring and regulation of the financial position of the insurers;
12.1.4 That the accountant consents to the requirements of Section 13.0 of this regulation and that the accountant consents and agrees to make available for review by the Commissioner, or the Commissioner’s designee or appointed agent, the workpapers;
12.1.5 A representation that the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the AICPA; and
12.1.6 A representation that the accountant is in compliance with the requirements of Section 7.0 of this regulation.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-13.0 Definition, Availability and Maintenance of Independent Certified Public Accountants Workpapers
13.1 Every insurer required to file an audited financial report pursuant to this regulation, shall require the accountant to make available for review by insurance department examiners, all workpapers prepared in the conduct of the accountant's audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the Department or at any other reasonable place designated by the Commissioner. The insurer shall require that the accountant retain the audit workpapers and communications until the Department has filed a report on examination covering the period of the audit but no longer than seven (7) years from the date of the audit report.
13.2 In the conduct of the aforementioned periodic review by the insurance department examiners, it shall be agreed that photocopies of pertinent audit workpapers may be made and retained by the Department. Such reviews by the Department examiners shall be considered investigations and all working papers and communications obtained during the course of such investigations shall be afforded the same confidentiality as other examination workpapers generated by the Department.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-14.0 Requirements for Audit Committees
14.1 This section shall not apply to foreign or alien insurers licensed in Delaware or to an insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity.
14.2 The audit committee shall be directly responsible for the appointment, compensation and oversight of the work of any accountant (including resolution of disagreements between management and the accountant regarding financial reporting) for the purpose of preparing or issuing the audited financial report or related work pursuant to this regulation. Each accountant shall report directly to the Audit committee.
14.3 The Audit committee of an insurer or Group of insurers shall be responsible for overseeing the insurer's Internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by Section 15.0 of this regulation.
14.3.1 Each member of the audit committee shall be a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to subsection 14.3.5 and Section 3.0.
14.3.2 In order to be considered independent for purposes of this section, a member of the audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee, accept any consulting, advisory or other compensatory fee from the entity or be an affiliated person of the entity or any subsidiary thereof. However, if law requires board participation by otherwise non-independent members, that law shall prevail and such members may participate in the audit committee and be designated as independent for audit committee purposes, unless they are an officer or employee of the insurer or one of its affiliates.
14.3.3 If a member of the audit committee ceases to be independent for reasons outside the member’s reasonable control, that person, with notice by the responsible entity to the Commissioner, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one year from the occurrence of the event that caused the member to be no longer independent.
14.3.4 To exercise the election of the controlling person to designate the Audit committee for purposes of this regulation, the ultimate controlling person shall provide written notice to the commissioners of the affected insurers. Notification shall be made timely prior to the issuance of the audited financial report and include a description of the basis for the election. The election can be changed through notice to the Commissioner by the insurer, which shall include a description of the basis for the change. The election shall remain in effect for perpetuity, until rescinded.
14.3.5 The audit committee shall require the accountant that performs for an insurer any audit required by this regulation to timely report to the Audit committee in accordance with the requirements of SAS 61, Communication with Audit Committees, or its replacement, including:
14.3.5.1 All significant accounting policies and material permitted practices;
14.3.5.2 All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and
14.3.5.3 Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences.
14.3.6 If an insurer is a member of an insurance holding company system, the reports required by subsection 14.3.5 may be provided to the audit committee on an aggregate basis for insurers in the holding company system, provided that any substantial differences among insurers in the system are identified to the audit committee.
14.3.7 The proportion of independent audit committee members shall meet or exceed the following criteria:
Prior Calendar Year Direct Written and Assumed Premiums
$0 - $300,000,000
Over $300,000,000 -$500,000,000
Over $500,000,000
No minimum requirements. See also Note A and B.
Majority (50% or more) of members shall be independent. See also Note A and B.
Supermajority of members (75% or more) shall be independent. See also Note A.
Note A: The Commissioner has authority afforded by state law to require the entity’s board to enact improvements to the independence of the audit committee membership if the insurer is in any RBC action level event, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer.
Note B: All insurers with less than $500,000,000 in prior year direct written and assumed premiums are encouraged to structure their audit committee with at least a supermajority of independent audit committee members.
Note C: Prior calendar year direct written and assumed premiums shall be the combined total of direct premiums and assumed premiums from non-affiliates for the reporting entitites.
14.3.8 An insurer with direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, that is in an amount less than $500,000,000 may make application to the Commissioner for a waiver from the Section 14.0 requirements based upon hardship. The insurer shall file, with its annual statement filing, the approval for relief from Section 14.0 with the states in which it is licensed or in which it is doing business and with the NAIC. If the non-domestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-15.0 Internal Audit Function Requirements
15.1 Exemption – An insurer is exempt from the requirements of this section if the insurer:
15.1.1 Has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, in an amount that is less than $500,000,000; and
15.1.2 Is a member of a group of insurers, the group has annual direct written and unaffiliated assumed premium including international direct an assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000.
15.2 Function - The insurer or group of insurers shall establish an internal audit function providing independent, objective and reasonable assurance to the Audit committee and insurer management regarding the insurer's governance, risk management and internal controls. This assurance shall be provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
15.3 Independence - In order to ensure that internal auditors remain objective, an insurer’s internal audit function must be organizationally independent. Specifically, the internal audit function shall not defer ultimate judgment on audit matters to others, and shall appoint an individual to head the internal audit function who shall have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.
15.4 Reporting - The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit function's independence or effectiveness, material finding from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings.
15.5 Additional Requirements - If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-16.0 Conduct of Insurer in Connection with the Preparation of Required Reports and Documents
16.1 No director or officer of an insurer shall, directly or indirectly:
16.1.1 Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this regulation; or
16.1.2 Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under this regulation.
16.2 No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any accountant engaged in the performance of an audit pursuant to this regulation if that person knew or should have known that the action, if successful, could result in rendering the insurer’s financial statements materially misleading.
16.3 For purposes of Subsection 16.2 of this section, actions that, “if successful, could result in rendering the insurer’s financial statements materially misleading” include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an accountant:
16.3.1 To issue or reissue a report on an insurer’s financial statements that is not warranted in the circumstances (due to material violations of statutory accounting principles prescribed by the Commissioner, generally accepted auditing standards, or other professional or regulatory standards);
16.3.2 Not to perform audit, review or other procedures required by generally accepted auditing standards or other professional standards;
16.3.3 Not to withdraw an issued report; or
16.3.4 Not to communicate matters to an insurer’s audit committee.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-17.0 Management’s Report of Internal Control over Financial Reporting
17.1 Every insurer required to file an Audited financial report pursuant to this regulation that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of $500,000,000 or more shall prepare a report of the insurer’s or group of insurers’ internal control over financial reporting, as these terms are defined in Section 3.0. The report shall be filed with the Commissioner along with the Communication of Internal Control Related Matters Noted in an audit described under Section 11.0. Management’s Report of Internal Control over Financial Reporting shall be as of December 31 immediately preceding.
17.2 Notwithstanding the premium threshold in subsection 17.1, the Commissioner may require an insurer to file Management’s Report of Internal Control over Financial Reporting if the insurer is in any RBC action level event, or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition.
17.3 An insurer or a group of insurers may file its or its parent’s Section 404 Report and an addendum in satisfaction of this Section 17.0 requirement provided that:
17.3.1 Internal controls of the insurer or group of insurers having a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements (those items included in subsections 5.2.2 through 5.2.7 of this regulation) were included in the scope of the Section 404 Report;
17.3.2 The addendum is a positive statement by management that there are no material processes with respect to the preparation of the insurer’s or group of insurers’ audited statutory financial statements (those items included in subsections 5.2.2 through 5.2.7 of this regulation) excluded from the Section 404 report;
17.3.3 If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements and those internal controls were not included in the scope of the Section 404 report, the insurer or group of insurers may either file:
17.3.3.1 A Section 17.0 report; or
17.3.3.2 The Section 404 report and a Section 17.0 report for those internal controls that have a material impact on the preparation of the insurer’s or group of insurers’ audited statutory financial statements not covered by the Section 404 report; and
17.3.4 The insurer or group of insurers is:
17.3.4.1 Directly subject to Section 404;
17.3.4.2 A part of a holding company system whose parent is directly subject to Section 404;
17.3.4.3 Not directly subject to Section 404 but is a SOX Compliant Entity; or
17.3.4.4 A member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant entity.
17.4 Management’s Report of Internal Control over Financial Reporting shall include:
17.4.1 A statement that management is responsible for establishing and maintaining adequate Internal control over financial reporting;
17.4.2 A statement that management has established internal control over financial reporting and an assertion, to the best of management’s knowledge and belief, after diligent inquiry, as to whether its Internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles;
17.4.3 A statement that briefly describes the approach or processes by which management evaluated the effectiveness of the insurer’s internal control over financial reporting;
17.4.4 A statement that briefly describes the scope of work that is included and whether any internal controls were excluded;
17.4.5 Disclosure of any unremediated material weaknesses in internal control over financial reporting identified by management as of December 31 immediately preceding. Management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting;
17.4.6 A statement regarding the inherent limitations of internal control systems; and
17.4.7 Signatures of the insurer’s chief executive officer and chief financial officer (or equivalent position/title).
17.5 Management shall document and make available upon financial condition examination the basis upon which its assertions, required in subsection 17.4 above, are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities; and shall be subject to the following:
17.5.1 Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation; and
17.5.2 The Department shall keep confidential Management’s Report on Internal Control over Financial Reporting, required by subsection 17.1, and any documentation provided in support thereof during the course of a financial condition examination.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-18.0 Exemptions and Effective Dates
18.1 Upon written application of any insurer, the Commissioner may grant an exemption from compliance with any and all provisions of this regulation if the Commissioner finds, upon review of the application, that compliance with this regulation would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for a specified period or periods. Within ten (10) days from a denial of an insurer’s written request for an exemption from this regulation, the insurer may request in writing a hearing on its application for an exemption. The hearing shall be held in accordance with the regulations of the Delaware Department of Insurance pertaining to administrative hearing procedures.
18.2 Domestic insurers retaining a certified public accountant on the effective date of this regulation who qualify as independent shall comply with this regulation for the year ending December 31, 2010 and each year thereafter unless the Commissioner permits otherwise.
18.3 Domestic insurers not retaining a certified public accountant on the effective date of this regulation who qualifies as independent may meet the following schedule for compliance unless the Commissioner permits otherwise.
18.3.1 As of December 31, 2010, file with the Commissioner an audited financial report; and
18.3.2 For the year ending December 31, 2010, such insurers shall file with the Commissioner all reports and communication required by this regulation.
18.4 Foreign insurers shall comply with this regulation for the year ending December 31, 2010 and each year thereafter, unless the Commissioner permits otherwise.
18.5 The requirements of subsections 7.1.2 and 7.3 shall be in effect for audits of the year beginning January 1, 2008.
18.6 The definition of “Indemnification” in Section 3.0 shall be effective December 31, 2008.
18.7 The requirements of subsection 7.4 shall be in effect for audits of the year beginning January 1, 2010 and thereafter.
18.8 The requirements of Section 14.0 are to be in effect January 1, 2010. An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members (as opposed to a supermajority) because the total written and assumed premium is below the threshold and subsequently becomes subject to one of the independence requirements due to changes in premium shall have one (1) year following the year the threshold is exceeded (but not earlier than January 1, 2010) to comply with the independence requirements. Likewise, an insurer that becomes subject to one of the independence requirements as a result of a business combination shall have one (1) calendar year following the date of acquisition or combination to comply with the independence requirements.
18.9 The requirements of Section 17.0 and other modified sections, except for Section 14.0 covered above, are effective beginning with the reporting period ending December 31, 2010 and each year thereafter. An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements shall have two (2) years following the year the threshold is exceeded (but not earlier than December 31, 2010) to file a report. An insurer acquired in a business combination shall have two (2) calendar years following the date of acquisition or combination to comply with the reporting requirements.
18.10 The requirements of Section 15.0 are effective January 1, 2018. If an insurer or Group of insurers that is exempt from the Section 15.0 requirements no longer qualifies for that exemption, it shall have one year after the year the threshold is exceeded to comply with the requirements of this article.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-19.0 Canadian and British Companies
19.1 In the case of Canadian and British insurers, the annual audited financial report shall be defined as the annual statement of total business on the form filed by such companies with their supervision authority duly audited by an independent chartered accountant.
19.2 For such insurers, the letter required in subsection 6.2 shall state that the accountant is aware of the requirements relating to the annual audited financial report filed with the Commissioner pursuant to Section 4.0 and shall affirm that the opinion expressed is in conformity with those requirements.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
18 Del. Admin. Code § 301-20.0 Severability Provision
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of the regulation or the applicability of the provision to other persons or circumstances shall not be affected.
History
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 21 DE Reg. 441 (11/01/17)
- 12 DE Reg. 480 (10/01/08)
- 21 DE Reg. 441 (11/01/17)
302 Captive Insurance Financial Regulation
18 Del. Admin. Code § 302-1.0 Purpose and Authority.
1.1 The purpose of this regulation is to set forth the financial, reporting and other requirements which the Commissioner deems necessary to the regulation of captive insurance companies, as authorized by the Delaware Revised Captive Insurance Company Act, 18 Del.C. Ch. 69. Reference hereinunder to "company" shall mean captive insurance company or companies, unless otherwise specified.
1.2 The provisions of this regulation shall apply unless the Commissioner directs otherwise.
1.3 Risk Retention Groups shall be subject to the requirements set forth in 18 DE Admin. Code 301. If a Risk Retention Group is exempt from the reporting requirements of 18 DE Admin. Code 301 pursuant to section 2.2 of that regulation, then this regulation shall apply to such Risk Retention Group in its entirety. If such Risk Retention Group is not exempt from Regulation 301, then only sections 1.0, 2.0, and 9.0 through 14.0 of this regulation shall apply.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-2.0 Annual Reporting Requirements.
2.1 Except as provided in 18 Del.C. §6907(c), a company doing business in this State shall annually prior to April 15, submit to the Commissioner a report of its financial condition, verified by oath of two of its executive officers or other authorized persons. The annual report shall comply with the requirements of 18 Del.C. §6907 and the provisions of this regulation.
2.2 A company that elects to file its annual report on a fiscal year basis pursuant to 18 Del.C. §6907(c), shall file such report no later than 60 days following the close of such fiscal year.
2.3 A company that elects to file its annual report on a fiscal year basis pursuant to 18 Del.C. §6907(c) shall submit, concurrently with each premium tax return required in connection with premium taxes due under 18 Del.C. §6914, a schedule detailing the net direct written and assumed premium for the fiscal year in question.
2.4 In order to verify results reported in the company's annual report, each company shall cause its books and records to be audited annually by an independent certified public accounting firm approved in accordance with section 4.0 hereof.
2.5 In order to further verify results reported in the company's annual report, in accordance with Section 8.0 hereof each company shall cause to be prepared an opinion certifying the accuracy of the company's life, health, or annuity insurance reserves, or its loss reserves and loss expense reserves, as reported in the annual report.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-3.0 Annual Audit.
3.1 Each company shall have an annual audit by an Independent Certified Public Accounting Firm and shall file the annual audit with the Commissioner on or before June 30 for the year ending December 31 immediately preceding.
3.1.1 A company that elects to file its annual report on a fiscal year basis pursuant to 18 Del.C. §6907(c), shall submit its annual audit report to the Commissioner no later than 180 days following the close of its fiscal year.
3.1.2 A company shall not file an annual audit in which a partner or other person responsible for rendering such annual audit has acted in that capacity for more than seven (7) consecutive years. Each company filing an annual audit shall disqualify such person from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of two (2) years. A company may make application to the Commissioner for relief from the above rotation requirement on the basis of unusual circumstances. The Commissioner may consider the following factors in determining if the relief should be granted:
3.1.2.1 Number of partners, expertise of the partners or the number of insurance clients in the company's current independent certified public accounting firm.
3.1.2.2 Premium volume of the company; or
3.1.2.3 Any other factor.
3.2 The annual audit shall consist of the following:
3.2.1 Report of independent certified public accounting firm.
3.2.2 Balance sheet reporting assets (including, as applicable, admitted assets), liabilities, capital and surplus.
3.2.3 Statement of operations.
3.2.4 Statement of cash flows.
3.2.5 Statement of changes in capital and surplus.
3.2.6 Notes to financial statements. These notes shall be those required under generally accepted accounting principles, statutory accounting principles or international financial reporting standards, as applicable, and shall include:
3.2.6.1 A reconciliation of differences, if any, between the audited financial statements and the annual report required hereunder with a written description of the nature of these differences.
3.2.6.2 A summary of ownership and relationships of the company and all affiliated companies.
3.2.7 The financial statements included in the annual audit shall be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual report of the company filed with the Commissioner, and the financial statement shall be comparative, presenting the amounts as of the end of the current fiscal year and the amounts as of the end of the immediately preceding fiscal year. However, in the first year in which a company is required to file an annual audit, the comparative data may be omitted.
3.3 Report on Significant Deficiencies and Material Weaknesses in Internal Controls
3.3.1 In addition to the annual audit, each company shall furnish the Commissioner with a written report, prepared in accordance with SAS No. 112, or any successor thereto, by the independent certified public accounting firm describing significant deficiencies and material weaknesses in the company's internal control structure noted by the independent certified public accounting firm during the audit. SAS No. 112, Communication of Internal Control Related Matters Identified in an Audit (AU Section 325 of the Professional Standards of the American Institute of Certified Public Accountants), requires an independent certified public accounting firm to communicate significant deficiencies and material weaknesses noted during a financial statement audit to the appropriate parties within an entity.
3.3.2 The company is required to provide a description of remedial actions taken or proposed to correct material weaknesses and, at the Commissioner's discretion, significant deficiencies, if such actions are not described in the independent certified public accounting firm's report.
3.4 Accountant's Letter
3.4.1 The independent certified public accounting firm shall furnish the company, for inclusion in the filing of the annual audit, a letter stating:
3.4.1.1 That it is independent with respect to the company and conforms to the standards of its profession as contained in the Code of Professional Ethics and pronouncements of the American Institute of Certified Public Accountants or applicable standards of the International Federation of Accountants or its member organizations.
3.4.1.2 The general background and experience of the staff engaged in the audit, and the length of time the person responsible for preparing the annual audit has served in that capacity.
3.4.1.3 That the independent certified public accounting firm understands that the audited annual report and its opinions thereon will be filed, in compliance with this regulation, with the Commissioner, and that the Commissioner will be relying on this information in the monitoring and regulation of the financial position of the company.
3.4.1.4 That the independent certified public accounting firm consents to the requirements of Section 7.0 of this regulation and that the independent certified public accounting firm consents and agrees to make available for review by the Commissioner, his designee or his appointed agent, the work papers as defined in Section 7.0.
3.4.1.5 That the partner or person in charge of the annual audit is properly licensed by an appropriate licensing authority and that he is a member in good standing in the American Institute of Certified Public Accountants or other member organization of the International Federation of Accountants.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-4.0 Designation of Independent Certified Public Accounting Firm.
4.1 Each company shall provide to the Commissioner the name and address of the independent certified public accounting firm retained to conduct the annual audit required under this regulation not less than six months before the date on which the first annual audit conducted by such firm is to be filed with the Commissioner in accordance with Section 3.1 hereof.
4.2 For the purposes of conducting the annual audit required under this regulation, a company shall retain only those independent certified public accounting firms approved for such purpose by the Commissioner.
4.3 A company seeking approval to extend the Commissioner's examination cycle from three years to five years in accordance with 18 Del.C. §6908 shall retain, for its annual audit, an independent certified public accounting firm approved by the Commissioner specifically for the purpose of such extension.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-5.0 Consolidated or Combined Audits.
5.1 A company may make written application to the Commissioner for approval to submit a consolidated annual audit in lieu of separate annual audits if the company is part of a group of entities that consolidates its annual audit. In such cases, a consolidating or combining worksheet shall be prepared with the annual audit as follows:
5.1.1 Amounts for each company subject to this section shall be stated separately.
5.1.2 Noninsurance operations may be shown on the worksheet on a combined or individual basis.
5.1.3 Explanations of consolidating and eliminating entries shall be included.
5.1.4 A reconciliation shall be included of any differences between the amounts shown in the individual company columns of the worksheet and comparable amounts shown on the annual reports of such companies.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-6.0 Notification of Adverse Financial Condition.
A company shall require the independent certified public accounting firm to immediately notify in writing an executive officer and the governing body of the company of any determination by the independent certified public accounting firm that the company has materially misstated its financial condition in its annual report to the Commissioner. The company shall furnish such notification to the Commissioner within five working days of receipt thereof.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-7.0 Availability and Maintenance of Working Papers of the Independent Certified Public Accounting Firm.
7.1 Each company shall require the independent certified public accounting firm to make available for review by the Commissioner the work papers prepared in the conduct of the annual audit of the company. The company shall require that the independent certified public accounting firm retain the audit work papers for a period of not less than seven years after the period reported upon.
7.2 The Commissioner's review, and all working papers obtained during the course of such review, shall be confidential pursuant to 18 Del.C. §6920. The company shall require that the independent certified public accounting firm provide copies of any of the working papers which the Commissioner requests. Such working papers may be retained by the Commissioner.
7.3 "Working Papers" shall mean the records kept by the independent certified public accounting firm of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to its audit of the financial statements of a company. Working papers, accordingly, may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accounting firm in the course of the audit of the financial statements of a company and which support its opinion.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-8.0 Certification of Life, Health and Annuity Insurance Reserves, Loss Reserves and Loss Expense Reserves.
8.1 The annual report shall include an opinion certifying as to the adequacy of the company's life, health, or annuity insurance reserves, or its loss reserves and loss expense reserves.
8.2 The individual who certifies as to the adequacy of reserves shall be approved by the Commissioner and shall be a Fellow of the Casualty Actuarial Society, a Fellow of the Society of Actuaries, a member in good standing of the American Academy of Actuaries, a member of any other member organization of the International Actuarial Association, or an individual who has demonstrated to the Commissioner his competence in loss reserve evaluation.
8.3 Certification shall be in such form as the Commissioner deems appropriate.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-9.0 Organizational Review.
In connection with the issuance of a certificate of authority to a company, the Commissioner shall conduct an organizational review of such company. This review shall consist of a review of such factors as the Commissioner deems necessary. Such factors may include a general survey of the company's organizational documents and records, verification of capital and surplus, and a verification of the company's principal place of business.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-10.0 Reinsurance.
10.1 Any company may take credit for reinsurance ceded subject to the following limitations:
10.1.1 No credit for reinsurance shall be allowed where the reinsurance contract does not result in an actual transfer of risk or liability to the reinsurer.
10.1.2 No credit for reinsurance shall be allowed unless the assuming insurer is obligated as to such reinsurance without diminution because of the insolvency of the ceding insurer.
10.1.3 No credit for reinsurance shall be allowed unless the reinsurance complies with the requirements of 18 Del.C. §§911 through 914, or the reinsurer and amount of reinsurance has otherwise been approved by the Commissioner.
10.1.4 Reinsurance under this section shall be effected through a written agreement of reinsurance setting forth the terms, provisions and conditions governing such reinsurance.
10.1.5 The Commissioner in his discretion may require that complete copies of all reinsurance treaties and contracts be filed with and/or approved by him.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-11.0 Members of Governing Body and Executive Management.
11.1 Every company shall report to the Commissioner within thirty days after any change in its executive officers, directors, trustees, members, partners, executive managers, or other persons comprising the governing body of the company (hereinafter "Executive Persons"), including in its report a statement of the business and professional affiliations of any new Executive Person.
11.2 Except as otherwise permitted under the company's plan of operation, no Executive Person, officer or employee of a company shall, except on behalf of the company, accept, or be the beneficiary of, any fee, brokerage, gift, or other emolument because of any investment, loan, deposit, purchase, sale, payment or exchange made by or for the company.
11.3 Any amounts received by or on behalf of any person in violation of this section shall inure to and be recoverable by the company.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-12.0 Conflict of Interest.
Each company shall adopt a conflict of interest policy for its Executive Persons and key employees. Such policy shall require that each Executive Person and key employee disclose to the company's governing body, at least annually, any outside commitments that have the potential to create a conflict of interest with respect to the duty of such person to further the interests of the company.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-13.0 Suspension or revocation of Certificate of Authority.
13.1 Subject to the provisions of this section, the Commissioner may suspend or revoke the certificate of authority issued to a company in the following circumstances:
13.1.1 if the company has not commenced business within two years of receiving a certificate of authority, unless specifically provided for in the company's plan of operation;
13.1.2 if the company ceases to carry on insurance business, unless specifically provided for in its plan of operation;
13.1.3 at the request of the company; or
13.1.4 for any reason provided in 18 Del.C. §6909.
13.2 Suspension or revocation of a certificate of authority shall be subject to relevant provisions of the Administrative Procedures Act, 29 Del.C. §10101, et seq.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-14.0 Acquisition of Control of or Merger with a Company.
No person shall make a tender offer for, or enter into any agreement to exchange securities for, or seek to acquire, or acquire in the open market or otherwise, any interest in a company if, after the consummation thereof, such person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of such company as defined under 18 Del.C. §5001(3), and no person shall enter into an agreement to merge with or otherwise to acquire control of a company, without the prior written approval of the Commissioner. In considering any application for acquisition of control or merger with a company, the Commissioner shall consider all of the facts and circumstances surrounding the application as well as the criteria for establishment of a company set out in Chapter 69 of Title 18.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-15.0 Variable Contracts
Any company that issues variable life or annuity contracts shall establish separate accounts subject to the requirements of 18 Del.C. §2932.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
18 Del. Admin. Code § 302-16.0 Effective Date
This Regulation shall become effective 10 days after being published as a final regulation.
History
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
- 11 DE Reg. 1658 (06/01/08)
- 11 DE Reg. 1658 (06/01/08)
- 17 DE Reg. 532 (11/01/13)
- 22 DE Reg. 862 (04/01/19)
303 Supplement to Annual Statement of Property or Casualty Insurers (Repealed)
18 Del. Admin. Code § 303 Supplement to Annual Statement of Property or Casualty Insurers (Repealed)
Repealed, effective May 11, 2018
History
- 21 DE Reg. 881 (05/01/18)
304 Define Standards and Commissioner’s Authority for Companies Deemed to be in Hazardous Financial Condition
18 Del. Admin. Code § 304-1.0 Authority
This Regulation is adopted and promulgated by 18 Del.C. §§519, 520, 5901 and 5905 and 29 Del.C. Ch. 101.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
18 Del. Admin. Code § 304-2.0 Purpose
2.1 The purpose of this Regulation is to set forth the standards which the Commissioner may use for identifying insurers found to be in such condition as to render the continuance of their business hazardous to the public, their creditors or to holders of their policies or certificates of insurance.
2.2 This Regulation shall not be interpreted to limit the powers granted the Commissioner by any laws or parts of laws of this state, nor shall this Regulation be interpreted to supersede any laws or parts of laws of this state.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
18 Del. Admin. Code § 304-3.0 Standards
3.1 The following standards, either singly or a combination of two or more, may be considered by the Commissioner to determine whether the continued operation of any insurer transacting an insurance business in this state might be deemed to be hazardous to its policyholders, creditors or the general public. The Commissioner may consider:
3.1.1 adverse findings reported in financial condition and market conduct examination reports, audit reports, and actuarial opinions, reports or summaries;
3.1.2 the National Association of Insurance Commissioners Insurance Regulatory Information System and its other financial analysis solvency tools and reports;
3.1.3 whether the insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on such assets, and the considerations anticipated to be received and retained under such policies and contracts;
3.1.4 the ability of an assuming reinsurer to perform and whether the insurer's reinsurance program provides sufficient protection for the insurer’s remaining surplus after taking into account the insurer's cash flow and the classes of business written as well as the financial condition of the assuming reinsurer;
3.1.5 whether the insurer's operating loss in the last twelve-month period or any shorter period of time, including but not limited to net capital gain or loss, change in non‑admitted assets, and cash dividends paid to shareholders, is greater than 50% of such insurer's remaining surplus as regards policyholders in excess of the minimum required;
3.1.6 whether the insurer’s operating loss in the last twelve-month period or any shorter period of time, excluding net capital gains, is greater than twenty percent (20%) of the insurer’s remaining surplus as regards policyholders in excess of the minimum required;
3.1.7 whether a reinsurer, obligor or any entity within the insurer’s insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations, and which in the opinion of the Commissioner may affect the solvency of the insurer;
3.1.8 contingent liabilities, pledges or guaranties which either individually or collectively involve a total amount which in the opinion of the Commissioner may affect the solvency of the insurer;
3.1.9 whether any "controlling person" of an insurer is delinquent in the transmitting to, or payment of, net premiums to such insurer;
3.1.10 the age and collectibility of receivables;
3.1.11 whether the management of an insurer, including officers, directors, or any other person who directly or indirectly controls the operation of the insurer, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the insurer in such position;
3.1.12 whether management of an insurer has failed to respond to inquiries relative to the condition of the insurer or has furnished false and misleading information concerning an inquiry;
3.1.13 whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the Commissioner;
3.1.14 whether management of an insurer either has filed any false or misleading sworn financial statement, or has released false or misleading financial statement to lending institutions or to the general public, or has made a false or misleading entry, or has omitted an entry of material amount in the books of the insurer;
3.1.15 whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner;
3.1.16 whether the company has experienced or will experience in the foreseeable future cash flow and/or liability problems;
3.1.17 whether management has established reserves that do not comply with minimum standards established by state insurance laws, regulations, statutory accounting standards, sound actuarial principles and standards of practice;
3.1.18 whether management persistently engages in material under reserving that results in adverse development;
3.1.19 whether transactions among affiliates, subsidiaries or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the insurer’s ability to meet its outstanding obligations as they mature; or
3.1.20 any other finding determined by the Commissioner to be hazardous to the insurer’s policyholders, creditors or general public.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
18 Del. Admin. Code § 304-4.0 Commissioner's Authority
4.1 For the purposes of making a determination of an insurer's financial condition under this Regulation, the Commissioner may:
4.1.1 disregard any credit or amount receivable resulting from transactions with a reinsurer which is insolvent, impaired or otherwise subject to a delinquency proceeding;
4.1.2 make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries, or affiliates consistent with the NAIC Accounting Practices And Procedures Manual, state laws and regulations;
4.1.3 refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; or
4.1.4 increase the insurer's liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next 12‑month period.
4.2 If the Commissioner determines that the continued operation of the insurer licensed to transact business in this state may be hazardous to the policyholders, creditors or the general public, then the Commissioner may, upon a determination, issue an order requiring the insurer to:
4.2.1 reduce the total amount of present and potential liability for policy benefits by reinsurance;
4.2.2 reduce, suspend or limit the volume of business being accepted or renewed;
4.2.3 reduce general insurance and commission expenses by specified methods;
4.2.4 increase the insurer's capital and surplus;
4.2.5 suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders;
4.2.6 file reports in a form acceptable to the Commissioner concerning the market value of an insurer's assets;
4.2.7 limit or withdraw from certain investments or discontinue certain investment practices to the extent the Commissioner deems necessary;
4.2.8 document the adequacy of premium rates in relation to the risks insured;
4.2.9 file, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or in such format as promulgated by the Commissioner;
4.2.10 correct corporate governance practice deficiencies, and adopt and utilize governance practices acceptable to the Commissioner;
4.2.11 provide a business plan to the Commissioner in order to continue to transact business in the State; or
4.2.12 notwithstanding any other provisions of law limiting the frequency or amount of premium rate adjustments, adjust rates for any non-life insurance product written by the insurer that the Commissioner considers necessary to improve the financial condition of the insurer.
4.3 If the insurer is a foreign insurer, the Commissioner's order may be limited to the extent provided by statute.
4.4 Any insurer subject to an order under subsection 4.2 may request a hearing to review that order. The notice of hearing shall be served upon the insurer pursuant to the Delaware Administrative Procedures Act. The notice of hearing shall state the time and place of hearing, and the conduct, condition or ground upon which the Commissioner based the order. Unless mutually agreed between the Commissioner and the insurer, the hearing shall occur not less than 10 days nor more than 30 days after notice is served. The Commissioner shall hold all hearings under this subsection privately, unless the insurer requests a public hearing, in which case the hearing shall be public.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
18 Del. Admin. Code § 304-5.0 Judicial Review
Any order or decision of the Commissioner shall be subject to review in accordance with the Administrative Procedures Act at the instance of nay party to the proceedings whose interests are substantially affected.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
18 Del. Admin. Code § 304-6.0 Separability
If any provisions of this Regulation be held invalid, the remainder shall not be affected.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
18 Del. Admin. Code § 304-7.0 Effective Date
This Regulation shall become effective 10 days after being published as final.
History
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
- 20 DE Reg. 371 (11/01/16)
305 Actuarial Opinion and Memorandum Regulation
18 Del. Admin. Code § 305 Actuarial Opinion and Memorandum Regulation
305 Actuarial Opinion and Memorandum Regulation
1.0 Purpose
1.1 The purpose of this regulation is to prescribe:
1.1.1 Requirements for statements of actuarial opinion that are to be submitted in accordance with 18 Del.C. §1111(c), and for memoranda in support thereof;
1.1.2 Rules applicable to the appointment of an appointed actuary; and
1.1.3 Guidance as to the meaning of "adequacy of reserves."
2.0 Authority
This regulation is issued pursuant to the authority vested in the Commissioner of Insurance of the State of Delaware under 18 Del.C. §§314 and 1111. This regulation will take effect for annual statements for the year 2009.
3.0 Scope
3.1 This regulation shall apply to all life insurance companies and fraternal benefit societies doing business in this State and to all life insurance companies and fraternal benefit societies that are authorized to reinsure life insurance, annuities or accident and health insurance business in this State. This regulation shall be applied in a manner that allows the appointed actuary to utilize his or her professional judgment in performing the asset analysis and developing the actuarial opinion and supporting memoranda, consistent with relevant actuarial standards of practice. However, the commissioner shall have the authority to specify specific methods of actuarial analysis and actuarial assumptions when, in the commissioner's judgment, these specifications are necessary for an acceptable opinion to be rendered relative to the adequacy of reserves and related items.
3.2 This regulation shall be applicable to all annual statements filed with the office of the commissioner after the effective date of this regulation. A statement of opinion on the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with 6.0 of this regulation, and a memorandum in support thereof in accordance with 7.0 of this regulation, shall be required each year.
4.0 Definitions
"Actuarial Opinion" means the opinion of an appointed actuary regarding the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with this regulation and with applicable Actuarial Standards of Practice.
"Actuarial Standards Board" means the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice.
"Annual statement" means that statement required by 18 Del.C. §526 to be filed by the company with the office of the commissioner annually.
"Appointed actuary" means an individual who is appointed or retained in accordance with the requirements set forth in 5.3 of this regulation to provide the actuarial opinion and supporting memorandum as required by 18 Del.C. §1111(c).
"Asset adequacy analysis" means an analysis that meets the standards and other requirements referred to in 5.4 of this regulation.
"Commissioner" means the Insurance Commissioner of the State of Delaware.
"Company" means a life insurance company, fraternal benefit society or reinsurer subject to the provisions of this regulation.
"Qualified actuary" means an individual who meets the requirements set forth in Section 5.2 of this regulation.
5.0 General Requirements
5.1 Submission of Statement of Actuarial Opinion
5.1.1 There is to be included on or attached to Page 1 of the annual statement for each year beginning with the year in which this regulation becomes effective the statement of an appointed actuary, entitled "Statement of Actuarial Opinion," setting forth an opinion relating to reserves and related actuarial items held in support of policies and contracts, in accordance with 6.0 of this regulation.
5.1.2 Upon written request by the company, the Commissioner may grant an extension of the date for submission of the statement of actuarial opinion.
5.2 Qualified Actuary. A "qualified actuary" is an individual who:
5.2.1 Is a member in good standing of the American Academy of Actuaries;
5.2.2 Is qualified to sign statements of actuarial opinion for life and health insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements;
5.2.3 Is familiar with the valuation requirements applicable to life and health insurance companies;
5.2.4 Has not been found by the Commissioner, or if so found has subsequently been reinstated as a qualified actuary, following appropriate notice and hearing to have:
5.2.4.1 Violated any provision of, or any obligation imposed by, the Insurance Law or other law in the course of his or her dealings as a qualified actuary;
5.2.4.2 Been found guilty of fraudulent or dishonest practices;
5.2.4.3 Demonstrated his or her incompetency, lack of cooperation, or untrustworthiness to act as a qualified actuary;
5.2.4.4 Submitted to the Commissioner during the past five (5) years, pursuant to this regulation, an actuarial opinion or memorandum that the Commissioner rejected because it did not meet the provisions of this regulation including standards set by the Actuarial Standards Board; or
5.2.4.5 Resigned or been removed as an actuary within the past five (5) years as a result of acts or omissions indicated in any adverse report on examination or as a result of failure to adhere to generally acceptable actuarial standards; and
5.2.5 Has not failed to notify the Commissioner of any action taken by any commissioner of any other state similar to that under Paragraph 5.2.4 above.
5.3 Appointed Actuary. An "appointed actuary" is a qualified actuary who is appointed or retained to prepare the Statement of Actuarial Opinion required by this regulation, either directly by or by the authority of the board of directors through an executive officer of the company other than the qualified actuary. The company shall give the Commissioner timely written notice of the name, title (and, in the case of a consulting actuary, the name of the firm) and manner of appointment or retention of each person appointed or retained by the company as an appointed actuary and shall state in the notice that the person meets the requirements set forth in 5.2. Once notice is furnished, no further notice is required with respect to this person, provided that the company shall give the Commissioner timely written notice in the event the actuary ceases to be appointed or retained as an appointed actuary or to meet the requirements set forth in 5.2. If any person appointed or retained as an appointed actuary replaces a previously appointed actuary, the notice shall so state and give the reasons for replacement.
5.4 Standards for Asset Adequacy Analysis. The asset adequacy analysis required by this regulation:
5.4.1 Shall conform to the Standards of Practice as promulgated from time to time by the Actuarial Standards Board and on any additional standards under this regulation, which standards are to form the basis of the statement of actuarial opinion in accordance with this regulation; and
5.4.2 Shall be based on methods of analysis as are deemed appropriate for such purposes by the Actuarial Standards Board.
5.5 Liabilities to be Covered.
5.5.1 Under authority of 18 Del.C. §1111(c), the statement of actuarial opinion shall apply to all in force business on the statement date, whether directly issued or assumed, regardless of when or where issued, e.g., reserves of Exhibits 5, 6 and 7, and claim liabilities in Exhibit 8, Part 1 and equivalent items in the separate account statement or statements.
5.5.2 If the appointed actuary determines as the result of asset adequacy analysis that a reserve should be held in addition to the aggregate reserve held by the company and calculated in accordance with methods set forth in the Standard Valuation Law, the company shall establish the additional reserve.
5.5.3 Additional reserves established under 5.5.2 above and deemed not necessary in subsequent years may be released. Any amounts released shall be disclosed in the actuarial opinion for the applicable year. The release of such reserves would not be deemed an adoption of a lower standard of valuation.
6.0 Statement of Actuarial Opinion Based On an Asset Adequacy Analysis
6.1 General Description. The statement of actuarial opinion submitted in accordance with this section shall consist of:
6.1.1 A paragraph identifying the appointed actuary and his or her qualifications as further detailed in 6.2.1 below
6.1.2 A scope paragraph identifying the subjects on which an opinion is to be expressed and describing the scope of the appointed actuary's work, including a tabulation delineating the reserves and related actuarial items that have been analyzed for asset adequacy and the method of analysis, as detailed in 6.2.2, and identifying the reserves and related actuarial items covered by the opinion that have not been so analyzed;
6.1.3 A reliance paragraph describing those areas, if any, where the appointed actuary has deferred to other experts in developing data, procedures or assumptions, including anticipated cash flows from currently owned assets, including variation of cash flows according to economic scenarios as described in 6.2.3, and supported by a statement of each such expert in the form prescribed by 6.5; and
6.1.4 An opinion paragraph expressing the appointed actuary's opinion with respect to the adequacy of the supporting assets to mature the liabilities.
6.1.5 One or more additional paragraphs will be needed in individual company cases as follows:
6.1.5.1 If the appointed actuary considers it necessary to state a qualification of his or her opinion;
6.1.5.2 If the appointed actuary must disclose an inconsistency in the method of analysis or basis of asset allocation used at the prior opinion date with that used for this opinion;
6.1.5.3 If the appointed actuary must disclose whether additional reserves as of the prior opinion date are released as of this opinion date, and the extent of the release;
6.1.5.4 If the appointed actuary chooses to add a paragraph briefly describing the assumptions that form the basis for the actuarial opinion.
6.2 Recommended Language. The following paragraphs are to be included in the statement of actuarial opinion in accordance with this section. Language is that which in typical circumstances should be included in a statement of actuarial opinion. The language may be modified as needed to meet the circumstances of a particular case, but the appointed actuary should use language that clearly expresses his or her professional judgment. However, in any event the opinion shall retain all pertinent aspects of the language provided in this section.
6.2.1 The opening paragraph should generally indicate the appointed actuary's relationship to the company and his or her qualifications to sign the opinion. For a company actuary, the opening paragraph of the actuarial opinion should include a statement such as:
"I, [name], am [title] of [insurance company name] and a member of the American Academy of Actuaries. I was appointed by, or by the authority of, the Board of Directors of said insurer to render this opinion as stated in the letter to the commissioner dated [insert date]. I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies."
For a consulting actuary, the opening paragraph should include a statement such as:
"I, [name], a member of the American Academy of Actuaries, am associated with the firm of [name of consulting firm]. I have been appointed by, or by the authority of, the Board of Directors of [name of company] to render this opinion as stated in the letter to the commissioner dated [insert date]. I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies."
6.2.2 The scope paragraph should include a statement such as:
"I have examined the actuarial assumptions and actuarial methods used in determining reserves and related actuarial items listed below, as shown in the annual statement of the company, as prepared for filing with state regulatory officials, as of December 31, 20[ ]. Tabulated below are those reserves and related actuarial items which have been subjected to asset adequacy analysis.
Asset Adequacy Tested Amounts—Reserves and Liabilities
Statement Item
Formula Reserves (1)
Additional Actuarial Reserves (a) (2)
Analysis Method (b)
Other Amount (3)
Total Amount (1)+(2)+(3)
(4)
Exhibit 5
A Life Insurance
B Annuities
C Supplementary
Contracts Involving
Life Contingencies
D Accidental Death
Benefit
E Disability—Active
F Disability—Disabled
G Miscellaneous
Total (Exhibit 5
Item 1, Page 3)
Exhibit 6
A Active Life Reserve
B Claim Reserve
Total (Exhibit 6
Item 2, Page 3)
Exhibit 7
Premium and Other
Deposit Funds
(Column 5, Line 14)
Guaranteed Interest
Contracts
(Column 2, Line 14)
Other
(Column 6, Line 14)
Supplemental Contracts and Annuities Certain
(Column 3, Line 14)
Dividend Accumulations
or Refunds
(Column 4, Line 14)
Total Exhibit 7
(Column 1, Line 14)
Exhibit 8 Part 1
1 Life (Page 3,
Line 4.1)
2 Health (Page 3,
Line 4.2)
Total Exhibit 8,
Part 1
Separate Accounts
(Page 3 of the Annual Statement of the Separate Accounts, Lines 1, 2, 3.1, 3.2, 3.3)
TOTAL RESERVES
IMR (General Account, Page ___ Line ___)
(Separate Accounts, Page ___ Line ___)
AVR (Page ___ Line ___)
(c)
Net Deferred and Uncollected Premium
Notes:
(a) The additional actuarial reserves are the reserves established under 5.5.1.
(b) The appointed actuary should indicate the method of analysis, determined in accordance with the standards for asset adequacy analysis referred to in 6.0 of this regulation, by means of symbols that should be defined in footnotes to the table.
(c) Allocated amount of Asset Valuation Reserve (AVR).
6.2.3 If the appointed actuary has relied on other experts to develop certain portions of the analysis, the reliance paragraph should include a statement such as:
"I have relied on [name], [title] for [e.g., "anticipated cash flows from currently owned assets, including variations in cash flows according to economic scenarios" or "certain critical aspects of the analysis performed in conjunction with forming my opinion"], as certified in the attached statement. I have reviewed the information relied upon for reasonableness."
A statement of reliance on other experts should be accompanied by a statement by each of the experts in the form prescribed by 6.1.3.
6.2.4 If the appointed actuary has examined the underlying asset and liability records, the reliance paragraph should include a statement such as:
"My examination included such review of the actuarial assumptions and actuarial methods and of the underlying basic asset and liability records and such tests of the actuarial calculations as I considered necessary. I also reconciled the underlying basic asset and liability records to [exhibits and schedules listed as applicable] of the company's current annual statement."
6.2.5 If the appointed actuary has not examined the underlying records, but has relied upon data (e.g., listings and summaries of policies in force or asset records) prepared by the company, the reliance paragraph should include a statement such as:
"In forming my opinion on [specify types of reserves] I relied upon data prepared by [name and title of company officer certifying in force records or other data] as certified in the attached statements. I evaluated that data for reasonableness and consistency. I also reconciled that data to [exhibits and schedules to be listed as applicable] of the company's current annual statement. In other respects, my examination included review of the actuarial assumptions and actuarial methods used and tests of the calculations I considered necessary."
The section shall be accompanied by a statement by each person relied upon in the form prescribed by 6.1.3.
6.2.6 The opinion paragraph should include a statement such as:
"In my opinion the reserves and related actuarial values concerning the statement items identified above:
(a) Are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles;
(b) Are based on actuarial assumptions that produce reserves at least as great as those called for in any contract provision as to reserve basis and method, and are in accordance with all other contract provisions;
(c) Meet the requirements of the Insurance Law and regulation of the state of Delaware; and are at least as great as the minimum aggregate amounts required by the state in which this statement is filed;
(d) Are computed on the basis of assumptions consistent with those used in computing the corresponding items in the annual statement of the preceding year-end (with any exceptions noted below); and
(e) Include provision for all actuarial reserves and related statement items which ought to be established.
The reserves and related items, when considered in light of the assets held by the company with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on the assets, and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the company. (At the discretion of the commissioner, this language may be omitted for an opinion filed on behalf of a company doing business only in this state and in no other state.)
The actuarial methods, considerations and analyses used in forming my opinion conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis of this statement of opinion.
This opinion is updated annually as required by statute. To the best of my knowledge, there have been no material changes from the applicable date of the annual statement to the date of the rendering of this opinion which should be considered in reviewing this opinion.
or
The following material changes which occurred between the date of the statement for which this opinion is applicable and the date of this opinion should be considered in reviewing this opinion: (Describe the change or changes.)
Note: Choose one of the above two paragraphs, whichever is applicable.
The impact of unanticipated events subsequent to the date of this opinion is beyond the scope of this opinion. The analysis of asset adequacy portion of this opinion should be viewed recognizing that the company's future experience may not follow all the assumptions used in the analysis.
Signature of Appointed Actuary
Address of Appointed Actuary
Telephone Number of Appointed Actuary
Date"
6.3 Assumptions for New Issues
The adoption for new issues or new claims or other new liabilities of an actuarial assumption that differs from a corresponding assumption used for prior new issues or new claims or other new liabilities is not a change in actuarial assumptions within the meaning of this 5.0.
6.4 Adverse Opinions
If the appointed actuary is unable to form an opinion, then he or she shall refuse to issue a statement of actuarial opinion. If the appointed actuary's opinion is adverse or qualified, then he or she shall issue an adverse or qualified actuarial opinion explicitly stating the reasons for the opinion. This statement should follow the scope paragraph and precede the opinion paragraph.
6.5 Reliance on Information Furnished by Other Persons
If the appointed actuary relies on the certification of others on matters concerning the accuracy or completeness of any data underlying the actuarial opinion, or the appropriateness of any other information used by the appointed actuary in forming the actuarial opinion, the actuarial opinion should so indicate the persons the actuary is relying upon and a precise identification of the items subject to reliance. In addition, the persons on whom the appointed actuary relies shall provide a certification that precisely identifies the items on which the person is providing information and a statement as to the accuracy, completeness or reasonableness, as applicable, of the items. This certification shall include the signature, title, company, address and telephone number of the person rendering the certification, as well as the date on which it is signed.
6.6 Alternate Option
6.6.1 The Standard Valuation Law gives the Commissioner broad authority to accept the valuation of a foreign insurer when that valuation meets the requirements applicable to a company domiciled in this state in the aggregate. As an alternative to the requirements of 6.0, the Commissioner may make one or more of the following additional approaches available to the opining actuary:
6.6.1.1 A statement that the reserves "meet the requirements of the insurance laws and regulations of the State of (domicile) and the formal written standards and conditions of this state for filing an opinion based on the law of the state of domicile." If the commissioner chooses to allow this alternative, a formal written list of standards and conditions shall be made available. If a company chooses to use this alternative, the standards and conditions in effect on July 1 of a calendar year shall apply to statements for that calendar year, and they shall remain in effect until they are revised or revoked. If no list is available, this alternative is not available.
6.6.1.2 A statement that the reserves "meet the requirements of the insurance laws and regulations of the State of (domicile) and I have verified that the company's request to file an opinion based on the law of the state of domicile has been approved and that any conditions required by the Commissioner for approval of that request have been met." If the Commissioner chooses to allow this alternative, a formal written statement of such allowance shall be issued no later than March 31 of the year it is first effective. It shall remain valid until rescinded or modified by the Commissioner. The rescission or modifications shall be issued no later than March 31 of the year they are first effective. Subsequent to that statement being issued, if a company chooses to use this alternative, the company shall file a request to do so, along with justification for its use, no later than April 30 of the year of the opinion to be filed. The request shall be deemed approved on October 1 of that year if the commissioner has not denied the request by that date.
6.6.1.3 A statement that the reserves "meet the requirements of the insurance laws and regulations of the State of (domicile) and I have submitted the required comparison as specified by this state."
6.6.1.3.1 If the Commissioner chooses to allow this alternative, a formal written list of products (to be added to the table in Item (ii) below) for which the required comparison shall be provided will be published. If a company chooses to use this alternative, the list in effect on July 1 of a calendar year shall apply to statements for that calendar year, and it shall remain in effect until it is revised or revoked. If no list is available, this alternative is not available.
6.6.1.3.2 If a company desires to use this alternative, the appointed actuary shall provide a comparison of the gross nationwide reserves held to the gross nationwide reserves that would be held under NAIC codification standards. Gross nationwide reserves are the total reserves calculated for the total company in force business directly sold and assumed, indifferent to the state in which the risk resides, without reduction for reinsurance ceded. The information provided shall be at least:
(1)
Product Type
(2)
Death Benefit or Account Value
(3)
Reserves Held
(4)
Codification Reserves
(5)
Codification Standard
6.6.1.3.3 The information listed shall include all products identified by either the state of filing or any other states subscribing to this alternative.
6.6.1.3.4 If there is no codification standard for the type of product or risk in force or if the codification standard does not directly address the type of product or risk in force, the appointed actuary shall provide detailed disclosure of the specific method and assumptions used in determining the reserves held.
6.6.1.3.5 The comparison provided by the company is to be kept confidential to the same extent and under the same conditions as the actuarial memorandum.
6.6.2 Notwithstanding the above, the Commissioner may reject an opinion based on the laws and regulations of the state of domicile and require an opinion based on the laws of this state. If a company is unable to provide the opinion within sixty (60) days of the request or such other period of time determined by the Commissioner after consultation with the company, the Commissioner may contract an independent actuary at the company's expense to prepare and file the opinion.
7.0 Description of Actuarial Memorandum Including an Asset Adequacy Analysis and Regulatory Asset Adequacy Issues Summary
7.1 General
7.1.1 In accordance with 18 Del.C. §1111 (c), the appointed actuary shall prepare a memorandum to the company describing the analysis done in support of his or her opinion regarding the reserves. The memorandum shall be made available for examination by the Commissioner upon his or her request but shall be returned to the company after such examination and shall not be considered a record of the insurance department or subject to automatic filing with the Commissioner.
7.1.2 In preparing the memorandum, the appointed actuary may rely on, and include as a part of his or her own memorandum, memoranda prepared and signed by other actuaries who are qualified within the meaning of Section 5B of this regulation, with respect to the areas covered in such memoranda, and so state in their memoranda.
7.1.3 If the Commissioner requests a memorandum and no such memorandum exists or if the Commissioner finds that the analysis described in the memorandum fails to meet the standards of the Actuarial Standards Board or the standards and requirements of this regulation, the Commissioner may designate a qualified actuary to review the opinion and prepare such supporting memorandum as is required for review. The reasonable and necessary expense of the independent review shall be paid by the company but shall be directed and controlled by the Commissioner.
7.1.4 The reviewing actuary shall have the same status as an examiner for purposes of obtaining data from the company and the work papers and documentation of the reviewing actuary shall be retained by the Commissioner; provided, however, that any information provided by the company to the reviewing actuary and included in the work papers shall be considered as material provided by the company to the Commissioner and shall be kept confidential to the same extent as is prescribed by law with respect to other material provided by the company to the Commissioner pursuant to the statute governing this regulation. The reviewing actuary shall not be an employee of a consulting firm involved with the preparation of any prior memorandum or opinion for the insurer pursuant to this regulation for any one of the current year or the preceding three (3) years.
7.1.5 In accordance with 18 Del.C. §1111 (c), the appointed actuary shall prepare a regulatory asset adequacy issues summary, the contents of which are specified in 7.3. The regulatory asset adequacy issues summary will be submitted no later than March 15 of the year following the year for which a statement of actuarial opinion based on asset adequacy is required. The regulatory asset adequacy issues summary is to be kept confidential to the same extent and under the same conditions as the actuarial memorandum.
7.2 Details of the Memorandum Section Documenting Asset Adequacy Analysis
When an actuarial opinion is provided, the memorandum shall demonstrate that the analysis has been done in accordance with the standards for asset adequacy referred to in this regulation and any additional standards under this regulation. It shall specify:
7.2.1 For reserves:
7.2.1.1 Product descriptions including market description, underwriting and other aspects of a risk profile and the specific risks the appointed actuary deems significant;
7.2.1.2 Source of liability in force;
7.2.1.3 Reserve method and basis;
7.2.1.4 Investment reserves;
7.2.1.5 Reinsurance arrangements;
7.2.1.6 Identification of any explicit or implied guarantees made by the general account in support of benefits provided through a separate account or under a separate account policy or contract and the methods used by the appointed actuary to provide for the guarantees in the asset adequacy analysis;
7.2.1.7 Documentation of assumptions to test reserves for the following:
7.2.1.7.1 Lapse rates (both base and excess);
7.2.1.7.2 Interest crediting rate strategy;
7.2.1.7.3 Mortality;
7.2.1.7.4 Policyholder dividend strategy;
7.2.1.7.5 Competitor or market interest rate;
7.2.1.7.6 Annuitization rates;
7.2.1.7.7 Commissions and expenses; and
7.2.1.7.8 Morbidity.
The documentation of the assumptions shall be such that an actuary reviewing the actuarial memorandum could form a conclusion as to the reasonableness of the assumptions.
7.2.2 For assets:
7.2.2.1 Portfolio descriptions, including a risk profile disclosing the quality, distribution and types of assets used for each analysis basis;
7.2.2.2 Investment and disinvestment assumptions;
7.2.2.3 Source of asset data;
7.2.2.4 Asset valuation bases; and
7.2.2.5 Documentation of assumptions made for:
7.2.2.5.1 Default costs;
7.2.2.5.2 Bond call function;
7.2.2.5.3 Mortgage prepayment function;
7.2.2.5.4 Determining market value for assets sold due to disinvestment strategy; and
7.2.2.5.5 Determining yield on assets acquired through the investment strategy.
The documentation of the assumptions shall be such that an actuary reviewing the actuarial memorandum could form a conclusion as to the reasonableness of the assumptions.
7.2.3 For each analysis basis:
7.2.3.1 Methodology;
7.2.3.2 Rationale for inclusion or exclusion of different blocks of business and how pertinent risks were analyzed;
7.2.3.3 Rationale for degree of rigor in analyzing different blocks of business (include in the rationale the level of "materiality" that was used in determining how rigorously to analyze different blocks of business);
7.2.3.4 Criteria for determining asset adequacy (include in the criteria the precise basis for determining if assets are adequate to cover reserves under "moderately adverse conditions" or other conditions as specified in relevant actuarial standards of practice); and
7.2.3.5 Whether the impact of federal income taxes was considered and the method of treating reinsurance in the asset adequacy analysis; and
7.2.3.6 Suitability of assets used in support of the liabilities included in the analysis basis.
7.2.4 Summary of material changes in methods, procedures, or assumptions from prior year's asset adequacy analysis;
7.2.5 Summary of results; and
7.2.6 Conclusions.
7.3 Details of the Regulatory Asset Adequacy Issues Summary
7.3.1 The regulatory asset adequacy issues summary shall include:
7.3.1.1 Descriptions of the scenarios tested (including whether those scenarios are stochastic or deterministic) and the sensitivity testing done relative to those scenarios. If negative ending surplus results under certain tests in the aggregate, the actuary should describe those tests and the amount of additional reserve as of the valuation date which, if held, would eliminate the negative aggregate surplus values. Ending surplus values shall be determined by either extending the projection period until the in force and associated assets and liabilities at the end of the projection period are immaterial or by adjusting the surplus amount at the end of the projection period by an amount that appropriately estimates the value that can reasonably be expected to arise from the assets and liabilities remaining in force.
7.3.1.2 The extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis;
7.3.1.3 The amount of reserves and the identity of the product lines that had been subjected to asset adequacy analysis in the prior opinion but were not subject to analysis for the current opinion;
7.3.1.4 Comments on any interim results that may be of significant concern to the appointed actuary; Under the level interest rate scenario, the appointed actuary should specify the amount of additional reserve as of the valuation date which, if held, would eliminate all negative interim surplus values.
7.3.1.5 The methods used by the actuary to recognize the impact of reinsurance on the company's cash flows, including both assets and liabilities, under each of the scenarios tested; and
7.3.1.6 Whether the actuary has been satisfied that all options whether explicit or embedded, in any asset or liability (including but not limited to those affecting cash flows embedded in fixed income securities) and equity-like features in any investments have been appropriately considered in the asset adequacy analysis.
7.3.2 The regulatory asset adequacy issues summary shall contain the name of the company for which the regulatory asset adequacy issues summary is being supplied and shall be signed and dated by the appointed actuary rendering the actuarial opinion.
7.4 Conformity to Standards of Practice. The memorandum shall include a statement:
"Actuarial methods, considerations and analyses used in the preparation of this memorandum conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis for this memorandum."
7.5 Use of Assets Supporting the Interest Maintenance Reserve and the Asset Valuation Reserve
An appropriate allocation of assets in the amount of the interest maintenance reserve (IMR), whether positive or negative, shall be used in any asset adequacy analysis. Analysis of risks regarding asset default may include an appropriate allocation of assets supporting the asset valuation reserve (AVR); these AVR assets may not be applied for any other risks with respect to reserve adequacy. Analysis of these and other risks may include assets supporting other mandatory or voluntary reserves available to the extent not used for risk analysis and reserve support.
The amount of the assets used for the AVR shall be disclosed in the table of reserves and liabilities of the opinion and in the memorandum. The method used for selecting particular assets or allocated portions of assets shall be disclosed in the memorandum.
7.6 Required Interest Scenarios
7.6.1 For the purpose of performing the asset adequacy analysis required by this regulation, the qualified actuary is expected to follow standards adopted by the Actuarial Standards Board; nevertheless, the appointed actuary must consider in the analysis the effect of at least the following interest rate scenarios:
7.6.1.1 Level with no deviation;
7.6.1.2 Uniformly increasing over ten (10) years at a half percent per year and then level;
7.6.1.3 Uniformly increasing at one percent per year over five (5) years and then uniformly decreasing at one percent per year to the original level at the end of ten (10) years and then level;
7.6.1.4 An immediate increase of three percent (3%) and then level;
7.6.1.5 Uniformly decreasing over ten (10) years at a half percent per year and then level;
7.6.1.6 Uniformly decreasing at one percent per year over five (5) years and then uniformly increasing at one percent per year to the original level at the end of ten (10) years and then level; and
7.6.1.7 An immediate decrease of three percent (3%) and then level.
7.6.2 For these and other scenarios which may be used, projected interest rates for a five (5) year Treasury Note need not be reduced beyond the point where the five (5) year Treasury Note yield should be at fifty percent (50%) of its initial level.
7.6.3 The beginning interest rates may be based on interest rates for new investments as of the valuation date similar to recent investments allocated to support the product being tested or be based on an outside index, such as Treasury yields, of assets of the appropriate length on a date close to the valuation date. Whatever method is used to determine the beginning yield curve and associated interest rates should be specifically defined. The beginning yield curve and associated interest rates should be consistent for all interest rate scenarios.
7.7 Documentation
7.7.1 Documentation. The appointed actuary shall retain on file, for at least seven (7) years, sufficient documentation so that it will be possible to determine the procedures followed, the analyses performed, the bases for assumptions and the results obtained.
8.0 Effective Date
This Regulation is effective July 11, 2009.
13 DE Reg. 102 (07/01/09)
306 Disclosure of Material Transactions [Formerly Regulation 77]
18 Del. Admin. Code § 306 Disclosure of Material Transactions [Formerly Regulation 77]
306 Disclosure of Material Transactions [Formerly Regulation 77]
1.0 Authority
1.1 This regulation is adopted under the authority of 18 Del.C. §314, Ch. 50 and promulgated in accord with 29 Del.C. Ch.101.
2.0 Report
2.1 Every insurer domiciled in this state shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the commissioner for review, approval or information purposes pursuant to other provisions of the insurance code, laws, regulations, or other requirements.
2.2 The report required in section 2.1 is due within fifteen (15) days after the end of the calendar month in which any of the foregoing transactions occur.
2.3 One complete copy of the report, including any exhibits or other attachments, shall be filed with:
2.3.1 The Delaware Insurance Department; and
2.3.2 The National Association of Insurance Commissioners.
2.4 All reports obtained by or disclosed to the commissioner pursuant to this Act, shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the commissioner, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer who would be affected notice and an opportunity to be heard, determines that the interest of policyholders, shareholders or the public will be served by publication, in which event the commissioner may publish all or any part in the manner the commissioner may deem appropriate.
3.0 Acquisitions and Dispositions of Assets
3.1 Materiality.
3.1.1 No acquisitions or dispositions of assets need be reported pursuant to section 1.0 if the acquisitions or dispositions are not material. For purposes of this Act, a material acquisition (or the aggregate of any series of related acquisitions during any thirty-day period) or disposition (or the aggregate of any series of related dispositions during any thirty-day period) is one that is non-recurring and not in the ordinary course of business and involves more than five percent (5%) of the reporting insurers total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurers state of domicile.
3.2 Scope.
3.2.1 Asset acquisitions subject to this Act include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.
3.2.2 Asset dispositions subject to this Act include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction or other disposition.
3.3 Information to be Reported.
3.3.1 The following information is required to be disclosed in any report of a material acquisition or disposition of assets:
3.3.1.1 Date of the transaction;
3.3.1.2 Manner of acquisition or disposition;
3.3.1.3 Description of the assets involved;
3.3.1.4 Nature and amount of the consideration given or received;
3.3.1.5 Purpose of, or reason for, the transaction;
3.3.1.6 Manner by which the amount of consideration was determined;
3.3.1.7 Gain or loss recognized or realized as a result of the transaction;
3.3.1.8 Name(s) of the person(s) from whom the assets were acquired or to whom they were disposed; and
3.3.1.9 A statement regarding whether the acquisition or disposition was to an affiliated or controlling person.
3.3.2 Insurers are required to report material acquisitions and dispositions on a non-consolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurers capital and surplus.
4.0 Nonrenewals, Cancellations or Revisions of Ceded Reinsurance Agreements
4.1 Materiality and Scope.
4.1.1 No renewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to Section 1 if the nonrenewals, cancellations or revisions are not material. For purposes of this Act, a material nonrenewal, cancellation or revision is one that affects:
4.1.1.1 As respects property and casualty business, including accident and health business written by a property and casualty insurer.
4.1.1.1.1 More than fifty percent (50%) of the insurers total ceded written premium; or
4.1.1.1.2 More than fifty percent (50%) of the insurers total ceded indemnity and loss adjustment reserves.
4.1.1.2 As respects life, annuity, and accident and health business: more than fifty percent (50%) of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurers most recent annual statement.
4.1.1.3 As respects either property and casualty or life, annuity, and accident and health business, either of the following events shall constitute a material revision which must be reported:
4.1.1.3.1 An authorized reinsurer representing more than ten percent (10%) of a total cession is replaced by one or more unauthorized reinsurers; or
4.1.1.3.2 Previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurers representing collectively more than ten percent (10%) of a total cession.
4.1.2 However, no filing shall be required if:
4.1.2.1 As respects property and casualty business, including accident and health business written by a property and casualty insurer: the insurers total ceded written premium represents, on an annualized basis, less than ten percent (10%) of its total written premium for direct and assumed business, or
4.1.2.2 As respects life, annuity, and accident and health business: the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent (10%) of the statutory reserve requirement prior to any cession.
4.2 Information to be reported.
4.2.1 The following information is required to be disclosed in any report of a material nonrenewal, cancellation or revision of ceded reinsurance agreements:
4.2.1.1 Effective date of the nonrenewal, cancellation or revision;
4.2.1.2 The description of the transaction with an identification of the initiator thereof;
4.2.1.3 Purpose of, or reason for, the transaction; and
4.2.1.4 If applicable, the identity of the replacement reinsurers.
4.2.2 Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance agreements on a non-consolidated basis unless the insurer is part of a consolidated group of insurers which utilizes a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurers has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurers capital and surplus.
5.0 Effective Date
5.1 This Act shall take effect 30 days after the Commissioner's signature.
307 Corporate Governance Annual Disclosure Regulation
18 Del. Admin. Code § 307-1.0 Authority
This regulation is promulgated and adopted pursuant to 18 Del.C. §311 and 18 Del.C. Chapter 85.
History
- 21 DE Reg. 578 (01/01/18)
18 Del. Admin. Code § 307-2.0 Purpose
The purpose of this regulation is to set forth the procedures for filing a Corporate Governance Annual Disclosure (CGAD), and the required contents of the CGAD deemed necessary by the Commissioner to carry out the provisions of the Corporate Governance Annual Disclosure Act, 18 Del.C. Chapter 85.
History
- 21 DE Reg. 578 (01/01/18)
18 Del. Admin. Code § 307-3.0 Definitions
"Board" means the Board of Directors of an insurer or an insurance group.
"Commissioner" means the Commissioner of the Delaware Department of Insurance.
"Corporate Governance Annual Disclosure" or "CGAD" means a confidential report filed by an insurer or an insurance group made in accordance with the Corporate Governance Annual Disclosure Act, 18 Del.C. Chapter 85 and this regulation.
"Insurance group" means those insurers and affiliates included within an insurance holding company system as defined in the Insurance Holding Company System Registration Act, 18 Del.C. Chapter 50.
"Insurer" shall have the same meaning as set forth in 18 Del.C. §102(10), except that it shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.
"NAIC" means National Association of Insurance Commissioners.
"Senior Management" means any corporate officer responsible for reporting information to the board of directors at regular intervals or providing this information to shareholders or regulators and shall include, by way of example by not by limitation, the Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operations Officer (COO), Chief Procurement Officer (CPO), Chief Legal Officer (CLO), Chief Information Officer (CIO), Chief Technology Officer (CTO), Chief Revenue Officer (CRO), Chief Visionary Officer (CVO), or any other "C" level executive.
History
- 21 DE Reg. 578 (01/01/18)
18 Del. Admin. Code § 307-4.0 Filing Procedures
4.1 An insurer, or the insurance group of which the insurer is a member, that is required to file a CGAD under 18 Del.C. §8504, shall, no later than June 1 of each calendar year, submit to the Commissioner a CGAD that contains the information described in Section 5.0 of these regulations, according to the following:
4.1.1 The CGAD shall include the signature of the insurer's or insurance group's chief executive officer or corporate secretary attesting that, to the best of that individual's belief and knowledge, the insurer or insurance group has implemented the corporate governance practices required under 18 Del.C. §8504 and this regulation, and that a copy of the CGAD has been provided to the insurer's or insurance group's Board or appropriate Board committee.
4.2 The insurer or insurance group may:
4.2.1 Determine the appropriate format in which to provide the information required by this regulation; and
4.2.2 Customize the CGAD to provide the most relevant information necessary to permit the Commissioner to gain an understanding of the corporate governance structure, policies and practices utilized by the insurer or insurance group.
4.3 For purposes of completing the CGAD, the insurer or insurance group may choose to provide information on governance activities that conforms with the structure of the insurer's or insurance group's system of corporate governance, whether at the ultimate controlling parent level, an intermediate holding company level, or at the individual legal entity level, depending upon how the insurer or insurance group has structured its system of corporate governance.
4.4 The insurer or insurance group is encouraged to make the CGAD disclosures at any of the following levels, and if the insurer or insurance group determines the level of reporting based on the criteria in subsections 4.4.2 or 4.4.3, it shall indicate the three dominant criteria that were used to determine the level of reporting and explain any subsequent changes in level of reporting:
4.4.1 The level at which the insurer's or insurance group's risk appetite is determined;
4.4.2 The level at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised, or
4.4.3 The level at which legal liability for failure of general corporate governance duties would be placed.
4.5 Notwithstanding subsection 4.1.1, if the CGAD is completed at the insurance group level, then it must be filed with the lead state of the group as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC. In these instances, a copy of the CGAD must also be provided to the chief regulatory official of any state in which the insurance group has a domestic insurer, upon request.
4.6 An insurer or insurance group may comply with this section by cross-referencing other existing documents such as ORSA Summary Report, Holding Company Form B or F Filings, Securities and Exchange Commission (SEC) Proxy Statements, and foreign regulatory reporting requirements, if the documents provide information that is comparable to the information described in Section 5.0 of this regulation. The insurer or insurance group shall clearly reference the location of the relevant information within the CGAD and attach the referenced document if it is not already filed or available to the Commissioner.
4.7 Each year following the initial filing of the CGAD, the insurer or insurance group shall file an amended version of the previously filed CGAD indicating where changes have been made. If no changes were made in the information or activities reported by the insurer or insurance group in the prior year, the filing should so state.
History
- 21 DE Reg. 578 (01/01/18)
18 Del. Admin. Code § 307-5.0 Contents of Corporate Governance Annual Disclosure
5.1 The insurer or insurance group shall complete the CGAD with such specificity and shall include attachments or example documents that are used in the governance process, so as to provide the Commissioner with sufficient evidence with which to evaluate the strength of the insurer's or insurance group's governance framework and practices.
5.2 The CGAD shall describe the insurer's or insurance group's corporate governance framework and structure, including a description of each of the following:
5.2.1 The Board and various Board committees that are ultimately responsible for overseeing the insurer or insurance group and the level(s) at which that oversight occurs (by way of example, but not by limitation, ultimate control level, intermediate holding company, or legal entity). The insurer or insurance group shall describe and discuss the rationale for the current Board size and structure; and
5.2.2 The duties of the Board and each of its significant committees and how they are governed (by way of example, but not by limitation, bylaws, charters, and informal mandates), how the Board's leadership is structured, and the roles of the Chief Executive Officer (CEO) and Chairperson of the Board within the organization.
5.3 The insurer or insurance group shall describe the policies and practices of its most senior governing entity and that governing entity's significant committees, including a discussion of each of the following factors:
5.3.1 How the qualifications, expertise and experience of each Board member meet the needs of the insurer or insurance group;
5.3.2 How an appropriate amount of independence is maintained on the Board and its significant committees;
5.3.3 The number of meetings held by the Board and its significant committees over the reporting year, including information on director attendance;
5.3.4 How the insurer or insurance group identifies, nominates and elects members to the Board and its committees, including, by way of example but not limitation:
5.3.4.1 Whether a nomination committee is in place to identify and select individuals for consideration;
5.3.4.2 Whether term limits are placed on directors;
5.3.4.3 How the election and re-election processes function; and
5.3.4.4 Whether a Board diversity policy is in place and if so, how it functions; and
5.3.5 The processes in place for the Board to evaluate its performance and the performance of its committees, and any recent measures taken to improve performance, including a description of any relevant training provided to the Board or committee members.
5.4 The insurer or insurance group shall describe the policies and practices for directing Senior Management, including a description of the following factors:
5.4.1 Any processes or practices, such as suitability standards, to determine whether officers and key persons in control functions have the appropriate background, experience and integrity to fulfill their prospective roles, including:
5.4.1.1 Identification of the specific positions for which suitability standards have been developed and a description of the standards employed; and
5.4.1.2 Any changes in an officer's or key person's suitability as outlined by the insurer's or insurance group's standards and procedures to monitor and evaluate such changes;
5.4.2 The insurer's or insurance group's code of business conduct and ethics, the discussion of which considers, by way of example but not limitation:
5.4.2.1 Compliance with laws, rules, and regulations; and
5.4.2.2 Proactive reporting of any illegal or unethical behavior;
5.4.3 The insurer's or insurance group's processes for performance evaluation, compensation and corrective action to ensure effective senior management throughout the organization, including a description of the general objectives of significant compensation programs and what the programs are designed to reward. The description shall include sufficient detail to allow the Commissioner to understand how the organization ensures that compensation programs do not encourage or reward excessive risk taking. Elements to be discussed may include, by way of example but not limitation:
5.4.3.1 The Board's role in overseeing management compensation programs and practices;
5.4.3.2 The various elements of compensation awarded in the insurer's or insurance group's compensation programs and how the insurer or insurance group determines and calculates the amount of each element of compensation paid;
5.4.3.3 How compensation programs are related to both company and individual performance over time;
5.4.3.4 Whether compensation programs include risk adjustments and how those adjustments are incorporated into the programs for employees at different levels;
5.4.3.5 Any clawback provisions built into the programs to recover awards or payments if the performance measures upon which they are based are restated or otherwise adjusted; and
5.4.3.6 Any other factors relevant in understanding how the insurer or insurance group monitors its compensation policies to determine whether its risk management objectives are met by incentivizing its employees; and
5.4.4 The insurer's or insurance group's plans for CEO and Senior Management succession.
5.5 The insurer or insurance group shall describe the processes by which the Board, its committees and Senior Management ensure an appropriate amount of oversight to the critical risk areas impacting the insurer's business activities, including a discussion of:
5.5.1 How oversight and management responsibilities are delegated between the Board, its committees and Senior Management;
5.5.2 How the Board is kept informed of the insurer's strategic plans, the associated risks, and steps that Senior Management is taking to monitor and manage those risks; and
5.5.3 How reporting responsibilities are organized for each critical risk area. The description should allow the Commissioner to understand the frequency at which information on each critical risk area is reported to and reviewed by Senior Management and the Board. This description may include, by way of example but not by limitation, the following critical risk areas of the insurer:
5.5.3.1 Risk management processes (an ORSA Summary Report filer may refer to its ORSA Summary Report pursuant to the Risk Management and Own Risk and Solvency Assessment Model Act);
5.5.3.2 Actuarial function;
5.5.3.3 Investment decision-making processes;
5.5.3.4 Reinsurance decision-making processes;
5.5.3.5 Business strategy and finance decision-making processes;
5.5.3.6 Compliance function;
5.5.3.7 Financial reporting and internal auditing; and
5.5.3.8 Market conduct decision-making processes.
History
- 21 DE Reg. 578 (01/01/18)
18 Del. Admin. Code § 307-6.0 Severability Clause
If any provision of these regulations, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect other provisions or applications of these regulations which can be given effect without the invalid provision or application, and to that end the provisions of these regulations are severable.
History
- 21 DE Reg. 578 (01/01/18)
400 Domestic Insurers
401 Proxies, Consents and Authorizations of Domestic Stock Insurers
18 Del. Admin. Code § 401 Proxies, Consents and Authorizations of Domestic Stock Insurers
401 Proxies, Consents and Authorizations of Domestic Stock Insurers [Formerly Regulation 6]
1.0 Application of Regulation
1.1 This regulation is applicable to each domestic stock insurer which has any class of equity security held of record by one hundred or more persons; provided, however, that this regulation shall not apply to any insurer if ninety-five per cent or more of its equity securities are owned or controlled by a parent, or an affiliated insurer and the remaining securities are held of record by less than five hundred persons. A domestic stock insurer which files with the Securities and Exchange Commission forms of proxies, consents and authorizations complying with the requirements of the Securities Exchange Act of 1934, as amended and the applicable regulations promulgated thereunder, shall be exempt from the provisions of this regulation with respect to any class of securities subject to SEC jurisdiction.
2.0 Proxies, Consents and Authorizations
2.1 No domestic stock insurer, or any director, officer or employee of such insurer subject to section one hereof, or any other person, shall solicit, or permit the use of his name to solicit, by mail or otherwise, any proxy, consent or authorization in respect of any class of equity security of such insurer held of record by one hundred or more persons in contravention of this regulation and Schedules A and B hereto annexed and hereby made a part of this regulation.
3.0 Disclosure of Equivalent Information
3.1 Unless proxies, consents or authorizations in respect of any class of equity security of a domestic insurer subject to section one hereof are solicited by or on behalf of the management of such insurer from the holders of record of such security prior to any annual or other meeting of such security holders, such insurer shall, in accordance with this regulation and such further regulations as the Commissioner may adopt, file with the Commissioner and transmit to all security holders of record information substantially equivalent to the information which would be required to be transmitted if a solicitation were made. Such insurer shall transmit a written information statement containing the information specified section 5.4 to every security holder who is entitled to vote in regard to any matter to be acted upon at the meeting and from whom a proxy is not solicited on behalf of the management of the insurer provided, that in the case of a class of securities in unregistered or bearer form such statement need be transmitted only to those security holders whose names and addresses are known to the insurer.
4.0 Definitions
4.1 The definitions and instructions set out in Schedule SIS, as promulgated by the National Association of Insurance Commissioners, shall be applicable for purposes of this regulation.
4.2 The terms "solicit" and "solicitation" for purposes of this regulation shall include:
4.2.1 any request for a proxy, whether or not accompanied by or included in a form of proxy; or
4.2.2 any request to execute or not to execute, or to revoke, a proxy; or
4.2.3 the furnishing of a proxy or other communication to stockholders under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy.
4.3 The terms "solicit" and "solicitation" shall not include:
4.3.1 any solicitation by a person in respect of stock of which he is the beneficial owner;
4.3.2 action by a broker or other person in respect to stock carried in his name or in the name of his nominee in forwarding to the beneficial owner of such stock soliciting material received from the company, or impartially instructing such beneficial owner to forward a proxy to the person, if any, to whom the beneficial owner desires to give a proxy, or impartially requesting instructions from the beneficial owner with respect to the authority to be conferred by the proxy and stating that a proxy will be given if the instructions are received by a certain date;
4.3.3 the furnishing of a form of proxy to a stockholder upon the unsolicited request of such stockholder, or the performance by any person of ministerial acts on behalf of a person soliciting a proxy.
5.0 Information to Be Furnished to Security Holders
5.1 No solicitation subject to this regulation shall be made unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the information specified in Schedule A.
5.2 If the solicitation is made on behalf of the management of the insurer and relates to an annual meeting of stockholders at which directors are to be elected, each proxy statement furnished pursuant to subsection one hereof shall be accompanied or preceded by an annual report (in preliminary or final form) to such stockholders containing such financial statements for the last fiscal year as are referred to in Schedule SIS under the heading "Financial Reporting to Stockholders." Subject to the foregoing requirements with respect to financial statements, the annual report to stockholders may be in any form deemed suitable by the management.
5.3 Two copies of each report sent to the stockholders pursuant to this section shall be mailed to the Commissioner, not later than the date on which such report is first sent or given to stockholders or the date on which preliminary copies of solicitation material are filed with the Commissioner, pursuant to subsection one of the section seven, whichever date is later.
5.4 If no solicitation is being made by management of the insurer with respect to any annual or other meeting, such insurer shall mail to every security holder of record at least twenty days prior to the meeting date, an information statement as required by section 3.0, containing the information called for by all of the Items of Schedule A, other than Items 1, 3 and 4 thereof, which would be applicable to any matter to be acted upon at the meeting if proxies were to be solicited in connection with the meeting. If such information statement relates to an annual meeting at which directors are to be elected, it shall be accompanied by an annual report to such security holders in the form provided in section 5.2 hereof.
6.0 Requirements as to Proxy and Information Statement
6.1 The form of proxy
6.1.1 shall indicate in boldface type whether or not the proxy is solicited on behalf of the management,
6.1.2 shall provide a specifically designated blank space for dating the proxy and (c) shall identify clearly and impartially each matter or group of related matters intended to be acted upon, whether proposed by the management, or stockholders. No reference need be made to proposals as to which discretionary authority is conferred pursuant to subsection three hereof.
6.2
6.2.1 Means shall be provided in the proxy for the person solicited to specify by ballot a choice between approval or disapproval of each matter or group of related matters referred to therein, other than elections to office. A proxy may confer discretionary authority with respect to matters as to which a choice is not so specified if the form of proxy states in boldface type how it is intended to vote the shares or authorization represented by the proxy in each such case.
6.2.2 A form of proxy which provides both for elections to office and for action on other specified matters shall be prepared so as to clearly provide, by a box or otherwise, means by which the security holder may withhold authority to vote for elections to office. Any such form of proxy which is executed by the security holder in such manner as not to withhold authority to vote for elections to office shall be deemed to grant such authority, provided the form of proxy so states in bold type.
6.3 A proxy may confer discretionary authority with respect to other matters which may come before the meeting, provided the persons on whose behalf the solicitation is made are not aware a reasonable time prior to the time the solicitation is made that any other matters are to be presented for action at the meeting and provided further that a specific statement to that effect is made in the proxy statement or in the form of proxy. (A proxy may also confer discretionary authority with respect to any proposal omitted from the proxy statement and form of proxy pursuant to subsection three of section eight.)
6.4 No proxy shall confer authority
6.4.1 to vote for the election of any person to any office for which a bona fide nominee is not named in the proxy statement, or
6.4.2 to vote at any annual meeting other than the next annual meeting (or any adjournment thereof) to be held after the date on which the proxy statement and form of proxy are first sent or given to stockholders.
6.5 The proxy statement or form of proxy shall provide, subject to reasonable specified conditions, that the proxy will be voted and that where the person solicited specifies by means of ballot provided pursuant to subsection two hereof a choice with respect to any matter to be acted upon, the vote will be in accordance with the specifications so made.
6.6 The information included in the proxy statement or information statement shall be clearly presented and the statements made shall be divided into groups according to subject matter, with appropriate headings. All printed proxy statements or information statements shall be clearly and legibly presented.
7.0 Material Required to be Filed
7.1 Two preliminary copies of the proxy statement and form of proxy and any other soliciting material to be furnished to stockholders concurrently therewith shall be filed with the Commissioner at least ten days prior to the date definitive copies of such material are first sent or given to stockholders, or such shorter period prior to that date as the Commissioner may authorize upon a showing of good cause therefor.
7.2 Two preliminary copies of any additional soliciting material relating to the same meeting or subject matter to be furnished to stockholders subsequent to the proxy statements shall be filed with the Commissioner at least two days (exclusive of Saturdays, Sundays or holidays) prior to the date copies of this material are first sent or given to stockholders or a shorter period prior to such date as the Commissioner may authorize upon a showing of good cause therefor.
7.3 Two definitive copies of the proxy statement, form of proxy and all other soliciting material, in the form in which this material is furnished to stockholders, shall be filed with, or mailed for filing to, the Commissioner not later than the date such material is first sent or given to the stockholders.
7.4 There any proxy statement, form of proxy or other material filed pursuant to these rules is amended or revised, two of the copies shall be marked to clearly show such changes.
7.5 Copies of replies to inquiries from stockholders requesting further information and copies of communications which do no more than request that forms of proxy theretofore solicited be signed and returned need not be filed pursuant to this section.
7.6 Notwithstanding the provisions of subsections one and two hereof and of subsection five of section eleven, copies of soliciting material in the form of speeches, press releases and radio or television scripts may, but need not be filed with the Commissioner prior to use or publication. Definitive copies, however, shall be filed with or mailed for filing to the Commissioner as required by subsection three hereof not later than the date such material is used or published. The provisions of sections 7.1 and 7.2 hereof and subsection five of section eleven shall apply, however, to any reprints or reproductions of all or any part of such material.
8.0 False or Misleading Statements
8.1 No proxy statement, form of proxy, notice of meeting, information statement, or other communication, written or oral, subject to this regulation, shall contain any statement which at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the same meeting or subject matter which has become false or misleading.
9.0 Prohibition of Certain Solicitations
No person making a solicitation which is subject to this regulation shall solicit any undated or postdated proxy or any proxy which provides that it shall be deemed to be dated as of any date subsequent to the date on which it is signed by the stockholder.
10.0 Special Provisions Applicable to Election Contests
10.1 Applicability. This section shall apply to any solicitation subject to this regulation by any person or group for the purpose of opposing a solicitation subject to this regulation by any other person or group with respect to the election or removal of directors at any annual or special meeting of stockholders.
10.2 Participant or Participant in a Solicitation.
10.2.1 For purposes of this section the terms "participant" and "participant in a solicitation" include:
10.2.1.1 the insurer;
10.2.1.2 any director of the insurer, and any nominee for whose election as a director proxies are solicited;
10.2.1.3 any other person, acting alone or with one or more other persons, committees or groups, in organizing, directing or financing the solicitation.
10.2.2 For the purposes of this section the terms "participant" and "participant in a solicitation" do not include:
10.2.2.1 a bank, broker or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of stock and who is not otherwise a participant;
10.2.2.2 any person or organization retained or employed by a participant to solicit stockholders or any person who merely transmits proxy soliciting material or performs ministerial or clerical duties;
10.2.2.3 any person employed in the capacity of attorney, accountant, or advertising, public relations or financial adviser, and whose activities are limited to the performance of his duties in the course of such employment;
10.2.2.4 any person regularly employed as an officer or employee of the insurer or any of its subsidiaries or affiliates who is not otherwise a participant; or (v) any officer or director of, or any person regularly employed by any other participant, if such officer, director, or employee is not otherwise a participant.
10.3 Filing of Information Required by Schedule B.
10.3.1 No solicitation subject to this section shall be made by any person other than the management of an insurer unless at least five business days prior thereto, or such shorter period as the Commissioner may authorize upon a showing of good cause therefor, there has been filed, with the Commissioner, by or on behalf of each participant in such solicitation, a statement in duplicate containing the information specified by Schedule B and a copy of any material proposed to be distributed to stockholders in furtherance of such solicitation. Where preliminary copies of any materials are filed, distribution to stockholders should be deferred until the Commissioner's comments have been received and complied with.
10.3.2 Within five business days after a solicitation subject to this section is made by the management of an insurer, or such longer period as the Commissioner may authorize upon a showing of good cause therefor, there shall be filed with the Commissioner by or on behalf of each participant in such solicitation, other than the insurer, and by or on behalf of each management nominee for director, a statement in duplicate containing the information specified by Schedule B.
10.3.3 If any solicitation on behalf of management or any other person has been made, or if proxy material is ready for distribution, prior to a solicitation subject to this section in opposition thereto, a statement in duplicate containing the information specified in Schedule B shall be filed with the Commissioner, by or on behalf of each participant in such prior solicitation, other than the insurer, as soon as reasonably practicable after the commencement of the solicitation in opposition thereto.
10.3.4 If, subsequent to the filing of the statements required by sections 10.3.1, 10.3.2 and 10.3.3, additional persons become participants in a solicitation subject to this rule, there shall be filed with the Commissioner, by or on behalf of each person, a statement in duplicate containing the information specified by Schedule B, within three business days after such person becomes a participant, or such longer period as the Commissioner may authorize upon a showing of good cause therefor.
10.3.5 If any material change occurs in the facts reported in any statement filed by or on behalf of any participant, an appropriate amendment to such statement shall be filed promptly with the Commissioner.
10.3.6 Each statement and amendment thereto filed pursuant to this paragraph shall be part of the public files of the Commissioner.
10.4 Solicitations Prior to Furnishing Required Written Proxy Statement.
10.4.1 Notwithstanding the provisions of section 5.1, a solicitation subject to this section may be made prior to furnishing stockholders a written proxy statement containing the information specified in Schedule A with respect to such solicitation, provided that:
10.4.1.1 The statements required by subsection three hereof are filed by or on behalf of each participant in such solicitation.
10.4.1.2 No form of proxy is furnished to stockholders prior to the time the written proxy statement required by subsection one of section five is furnished to such persons: Provided, however, that section 10.4.1.2 shall not apply where a proxy statement then meeting the requirements of Schedule A has been furnished to stockholders.
10.4.1.3 At least the information specified in sections 10.3.2 and 10.3.3 of the statements required hereof to be filed by each participant, or an appropriate summary thereof, are included in each communication sent or given to stockholders in connection with the solicitation.
10.4.1.4 A written proxy statement containing the information specified in Schedule A with respect to a solicitation is sent or given stockholders at the earliest practicable date.
10.4.1.5 Solicitations Prior to Furnishing Required Written Proxy Statement-Filing Requirements.
10.5 Two copies of any soliciting material proposed to be sent or given to stockholders prior to the furnishing of the written proxy statement required by subsection one of section five shall be filed with the Commissioner in preliminary form at least five business days prior to the date definitive copies of such material are first sent or given to such persons, or shorter period as the Commissioner may authorize upon a showing of good cause therefor.
10.6 Application of This Section to Report.
10.6.1 Notwithstanding the provisions of section 5.2 and 5.3, two copies of any portion of the report referred to in section 5.2 which comments upon or refers to any solicitation subject to this section, or to any participant in any such solicitation, other than the solicitation by the management, shall be filed with the Commissioner as proxy material subject to this regulation. Such portion of the report shall be filed with the Commissioner in preliminary form at least five business days prior to the date copies of the report are first sent or given to stockholders.
SCHEDULE A
Information Required in Proxy Statement
11.0 Item 1. Revocability of Proxy.
State whether or not the person giving the proxy has the power to revoke it. If the right of revocation before the proxy is exercised is limited or is subject to compliance with any formal procedure, briefly describe such limitation or procedure.
12.0 Item 2. Dissenters' Rights of Appraisal.
Outline briefly the rights of appraisal or similar rights of dissenting stockholders with respect to any matter to be acted upon and indicate any statutory procedure required to be followed by such stockholders in order to perfect their rights. Where such rights may be exercised only within a limited time after the date of the adoption of a proposal, the filing of a charter amendment, or other similar act, state whether the person solicited will be notified of such date.
13.0 Item 3. Persons Making Solicitations Not Subject to Section 11.
13.1 If the solicitation is made by the management of the insurer, so state. Give the name of any director of the insurer who has informed the management in writing that he intends to oppose any action intended to be taken by the management and indicate the action which he intends to oppose.
13.2 If the solicitation is made otherwise than by the management of the insurer, state the names and addresses of the persons by whom and on whose behalf it is made and the names and addresses of the persons by whom the cost of solicitation has been or will be borne, directly or indirectly.
13.3 If the solicitation is to be made by specially engaged employees or paid solicitors, state (i) the material features of any contract or arrangement for such solicitation and identify the parties, and (ii) the cost or anticipated cost thereof.
14.0 Item 4. Interest of Certain Persons in Matters to Be Acted Upon.
Describe briefly any substantial interest, direct or indirect, by stockholdings or otherwise, of any director, nominee for election for director, officer and, if the solicitation is made otherwise than on behalf of management, each person on whose behalf the solicitation is made, in any matter to be acted upon other than elections to office.
15.0 Item 5. Stocks and Principal Stockholders.
15.1 State, as to each class of voting stock of the insurer entitled to be voted at the meeting, the number of shares outstanding and the number of votes to which each class is entitled.
15.2 Give the date as of which the record list of stockholders entitled to vote at the meeting will be determined. If the right to vote is not limited to stockholders of record on that date, indicate the conditions under which other stockholders may be entitled to vote.
15.3 If action is to be taken with respect to the election of directors and if the persons solicited have cumulative voting rights, make a statement that they have such rights and state briefly the conditions precedent to the exercise thereof.
16.0 Item 6. Nominees and Directors.
16.1 If action is to be taken with respect to the election of directors furnish the following information, in tabular form to the extent practicable, with respect to each person nominated for election as a director and each person whose term of office as a director will continue after the meeting:
16.1.1 Name each such person, state when his term of office or the term of office for which he is a nominee will expire, and all other positions and offices with the insurer presently held by him, and indicate which persons are nominees for election as directors at the meeting.
16.1.2 State his present principal occupation or employment and give the name and principal business of any corporation or other organization in which such employment is carried on. Furnish similar information as to all of his principal occupations or employments during the last five years, unless he is now a director and was elected to his present term of office by a vote of stockholders at a meeting for which proxies were solicited under this regulation.
16.1.3 If he is or has previously been a director of the insurer, state the period or periods during which he has served as such.
16.1.4 State, as of the most recent practicable date, the approximate amount of each class of stock of the insurer or any of its parents, subsidiaries or affiliates other than directors' qualifying shares, beneficially owned directly or indirectly by him. If he is not the beneficial owner of any such stocks make a statement to that effect.
17.0 Item 7. Remuneration and Other Transactions with Management and Others.
Furnish the information reported or required in Item One of Schedule SIS under the heading "Information Regarding Management and Directors" if action is to be taken with respect to (a) the election of directors, (b) any remuneration plan, contract or arrangement in which any director, nominee for election as a director, or officer of the insurer will participate, (c) any pension or retirement plan in which any such person will participate, or (d) the granting or extension to any such person of any options, warrants or rights to purchase any stocks, other than warrants or rights issued to stockholders, as such, on a pro rata basis. If the solicitation is made on behalf of persons other than the management information shall be furnished only as to Item One-A of the aforesaid heading of Schedule SIS.
18.0 Item 8. Bonus, Profit Sharing and Other Remuneration Plans.
18.1 If action is to be taken with respect to any bonus, profit sharing, or other remuneration plan, of the insurer furnish the following information:
18.1.1 A brief description of the material features of the plan, each class of persons who will participate therein, the approximate, number of persons in each such class, and the basis of such participation.
18.1.2 The amounts which would have been distributable under the plan during the last calendar year to (1) each person named in item seven of this schedule, (2) directors and officers as a group, and (3) to all other employees as a group, if the plan had been in effect.
18.1.3 If the plan to be acted upon may be amended (other than by a vote of stockholders) in a manner which would materially increase the cost thereof to the insurer or to materially alter the allocation of the benefits as between the groups specified in paragraph 18.1.2 of this item, the nature of such amendments should be specified.
19.0 Item 9. Pension and Retirement Plan.
19.1 If action is to be taken with respect to any pension or retirement plan of the insurer, furnish the following information:
19.1.1 A brief description of the material features of the plan, each class of persons who will participate therein, the approximate number of persons in each such class, and the basis of such participation.
19.1.2 State (1) the approximate total amount necessary to fund the plan with respect to past services, the period over which such amount is to be paid, and the estimated annual payments necessary to pay the total amount over such period; (2) the estimated annual payment to be made with respect to current services; and (3) the amount of such annual payments to be made for the benefit of (i) each person named in item seven of this schedule, (ii) directors and officers as a group, and (iii) employees as a group.
19.1.3 If the plan to be acted upon may be amended (other than by a vote of stockholders) in a manner which would materially increase the cost thereof to the insurer or to materially alter the allocation of the benefits as between the groups specified in sub-paragraph19.1.2(3) of this item, the nature of such amendments should be specified.
20.0 Item 10. Options, Warrants, or Rights.
20.1 If action is to be taken with respect to the granting or extension of any options, warrants or rights (all referred to herein as "warrants") to purchase stock of the insurer or any subsidiary or affiliate, other than warrants issued to all stockholders on a pro rata basis, furnish the following information:
20.1.1 The title and amount of stock called for or to be called for, the prices, expiration dates and other material conditions upon which the warrants may be exercised, the consideration received or to be received by the insurer, subsidiary or affiliate for the granting or extension of the warrants and the market value of the stock called for or to be called for by the warrants, as of the latest practicable date.
20.1.2 If known, state separately the amount of stock called for or to be called for by warrants received or to be received by the following persons, naming each such person: (1) Each person named in item seven of this schedule, and (2) each other person who will be entitled to acquire five per cent or more of the stock called for or to be called for by such warrants.
20.1.3 If known, state also the total amount of stock called for or to be called for by such warrants, received or to be received by all directors and officers of the company as a group and all employees, without naming them.
21.0 Item 11. Authorization or Issuance of Stock.
21.1 If action is to be taken with respect to the authorization or issuance of any stock of the insurer furnish the title, amount and description of the stock to be authorized or issued.
21.2 If the shares of stock are other than additional shares of common stock of a class outstanding, furnish a brief summary of the following, if applicable: dividend, voting, liquidation, preemptive, and conversion rights, redemption and sinking fund provisions, interest rate and date of maturity.
21.3 If the shares of stock to be authorized or issued are other than additional shares of common stock of a class outstanding, the Commissioner may require financial statements comparable to those contained in the annual report.
22.0 Item 12. Mergers, Consolidations, Acquisitions and Similar Matters.
22.1 If action is to be taken with respect to a merger, consolidation, acquisition, or similar matter, furnish in brief outline the following information:
22.1.1 The rights of appraisal or similar rights of dissenters with respect to any procedure required to be followed by dissenting stockholders in order to perfect such rights.
22.1.2 The material features of the plan or agreement.
22.1.3 The business done by the company to be acquired or whose assets are being acquired.
22.1.4 If available, the high and low sales prices for each quarterly period within two years.
22.1.5 The percentage of outstanding shares which must approve the transaction before it is consummated.
22.2 For each company involved in a merger, consolidation or acquisition, the following financial statements should be furnished:
22.2.1 A comparative balance sheet as of the close of the last two fiscal years.
22.2.2 A comparative statement of operating income and expenses for each of the last two fiscal years and, as a continuation of each statement, a statement of earnings per share after related taxes and cash dividends paid per share.
22.2.3 A pro forma combined balance sheet and income and expenses statement for the last fiscal year giving effect to the necessary adjustments with respect to the resulting company.
23.0 Item 13. Restatement of Accounts.
23.1 If action is to be taken with respect to the restatement of any asset, capital, or surplus of the insurer, furnish the following information:
23.1.1 State the nature of the restatement and the date as of which it is to be effective.
23.1.2 Outline briefly the reasons for the restatement and for the selection of the particular effective date.
23.1.3 State the name and amount of each account affected by the restatement and the effect of the restatement thereon.
24.0 Item 14. Matters Not Required to Be Submitted.
24.1 If action is to be taken with respect to any matter which is not required to be submitted to a vote of stockholders, state the nature of such matter, the reason for submitting it to a vote of stockholders and what action is intended to be taken by the management in the event of a negative vote on the matter by the stockholders.
25.0 Item 15. Amendment of Charter, By-Laws, or Other Documents
25.1 If action is to be taken with respect to any amendment of the insurer's charter, by-laws or other documents as to which information is not required above, state briefly the reasons for and general effect of such amendment and the vote needed for its approval.
SCHEDULE B
Information to Be Included in Statements Filed by or on Behalf of a Participant (Other Than the Insurer) in a Proxy Solicitation in an Election Contest
26.0 Item 1. Insurer.
State the name and address of the insurer.
27.0 Item 2.
27.1 Identity and Background.
27.1.1 State the following:
27.1.1.1 Your name and business address.
27.1.1.2 Your present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is carried on.
27.1.2 State the following:
27.1.2.1 Your residence address.
27.1.2.2 Information as to all material occupations, positions, offices or employments during the last ten years, giving starting and ending dates of each and the name, principal business and address of any business corporation or other business organization in which each such occupation, position, office or employment was carried on.
27.1.2.3 State whether or not you are or have been a participant in any other proxy contest involving this company or other companies within the past ten years. If so, identify the principals, the subject matter and your relationship to the parties and the outcome.
27.1.2.4 State whether or not, during the past ten years, you have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give dates, nature of conviction, name and location of court, and penalty imposed or other disposition of the case. A negative answer to this sub-item need not be included in the proxy statement or other proxy soliciting material.
28.0 Item 3. Interest in Securities of the Insurer.
28.1 State the amount of each class of stock of the insurer which you own beneficially, directly or indirectly.
28.2 State the amount of each class of stock of the insurer which you own of record but not beneficially.
28.3 State with respect to all securities of the insurer purchased or sold within the past two years, the dates on which they were purchased or sold and the amount purchased or sold on each such date.
28.4 If any part of the purchase price or market value of any of the stock specified in paragraph 28.3 is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such stock, so state and indicate the amount of the indebtedness as of the latest practicable date. If such funds were borrowed or obtained otherwise than pursuant to a margin account or bank loan in the regular course of business of a bank, broker or dealer, briefly describe the transaction, and state the names of the parties.
28.5 State whether or not you are a party to any contracts, arrangements or understandings with any person with respect to any stock of the insurer, including but not limited to joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. If so name the persons with whom such contracts, arrangements, or understandings exist and give the details thereof.
28.6 State the amount of stock of the insurer owned beneficially, directly or indirectly, by each of your associates and the name and address of each such associate.
28.7 State the amount of each class of stock of any parent, subsidiary or affiliate of the insurer which you own beneficially, directly or indirectly.
29.0 Item 4. Further Matters.
29.1 Describe the time and circumstances under which you became a participant in the solicitation and state the nature and extent of your activities or proposed activities as a participant.
29.2 Describe briefly, and where practicable state the approximate amount of, any material interest, direct or indirect, of yourself and of each of your associates in any material transactions since the beginning of the company's last fiscal year, or in any material proposed transactions, to which the company or any of its subsidiaries or affiliates was or is to be a party.
29.3 State whether or not you or any of your associates have any arrangement or understanding with any personz:
29.3.1 with respect to any future employment by the insurer or its subsidiaries or affiliates; or
29.3.2 with respect to any future transactions to which the insurer or any of its subsidiaries or affiliates will or may be a party.
29.3.3 If so, describe such arrangement or understanding and state the names of the parties thereto.
30.0 Item 5. Signature.
30.1 The statement shall be dated and signed in the following manner:
30.1.1 I certify that the statements made in this statement are true, complete, and correct, to the best of my knowledge and belief.
(Date) (Signature of participant or authorized representative)
402 Trading of Equity Securities of a Domestic Stock Insurance Company
18 Del. Admin. Code § 402 Trading of Equity Securities of a Domestic Stock Insurance Company
402 Trading of Equity Securities of a Domestic Stock Insurance Company [Formerly Regulation 7]
1.0 General Application
1.1 Definition of Certain Terms.
"Act" means 18 Del.C. Sub-Chapter IV, as enacted by the 1965 General Assembly.*
"Class" means all securities of an insurer which are of substantially similar character and the holders of which enjoy substantially similar rights and privileges.
"Officer" means a president, vice president, treasurer, actuary, secretary, controller and any other person who performs for the insurer functions corresponding to those performed by the foregoing officers.
"Equity security" means any stock or similar security; or any voting trust certificates or certificate of deposit for such a security; or any security convertible, with or without consideration into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right.
Securities "held of record"
• For the purpose of determining whether the equity securities of an insurer are held of record by one hundred or more persons, securities shall be deemed to be "held of record" by each person who is identified as the owner of such securities on records of security holders maintained by or on behalf of the insurer, subject to the following:
• In any case where the records of security holders have not been maintained in accordance with accepted practice, any additional person who would be identified as such an owner on such records if they had been maintained in accordance with accepted practice shall be included as a holder of record.
• Securities identified as held of record by a corporation, a partnership, a trust whether or not the trustees are named, or other organization shall be included as so held by one person.
• Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians or in other fiduciary capacities with respect to a single trust, estate or account shall be included as held of record by one person.
• Securities held by two or more persons as co-owners shall be included as held by one person.
• Each outstanding unregistered or bearer certificate shall be included as held of record by a separate person, except to the extent that the insurer can establish that, if such securities were registered, they would be held of record, under the provisions of this rule, by a lesser number of persons.
• Securities registered in substantially similar names where the insurer has reason to believe because of the address or other indications that such names represent the same person, may be included as held of record by one person.
• Notwithstanding section 1.1.5.1 of this paragraph:
• Securities held, to the knowledge of the insurer, subject to a voting trust, deposit agreement or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts or similar evidences of interest in such securities; provided, however, that the insurer may rely in good faith on such information as is received in response to its request from a non-affiliated insurer of the certificates or evidences of interest.
• If the insurer knows or has reason to know that the form of holding securities of record is used primarily to circumvent the provisions of the Act, the beneficial owners of such securities shall be deemed to be the record owners thereof.
"Insurer" means any domestic stock insurance company, with an equity security subject to the provisions of an act and not exempt thereunder.
2.0 Transactions Exempted From the Operation of 18 Del.C. §562(c).
2.1 Any acquisition or disposition of any equity security by a director or officer of an insurer within six months prior to the date on which the Act shall first become applicable with respect to the equity securities of such insurer shall not be subject to the operation of 18 Del.C. §562(c).
3.0 Regulations Under 18 Del.C. §561
3.1 Section 561-1 Filing of Statements.
3.1.1 Initial Statements of beneficial ownership of equity securities required by §561 shall be filed on Form 3, attached hereto. Statements of changes in such beneficial ownership required by Section 561 shall be filed on Form 4, attached hereto. All such statements shall be prepared and filed in accordance with the requirements of the applicable form.
3.1.2 Any director or officer who is required to file a statement on Form 4 with respect to any change in his beneficial ownership of equity securities which occurs within 6 months after he became a director or officer of the insurer or within 6 months after equity securities of such insurer first became registered pursuant to Section 1 of the Act, shall include in the first such statement the information called for by Form 4 with respect to all changes in his beneficial ownership of equity securities of such insurer which occurred within 6 months prior to the date of the changes which requires the filing of such statements.
3.1.3 Any person who has ceased to be a director or officer of an insurer which has equity securities registered pursuant to Section 1 of the Act, or who is a director or officer of an insurer at the time it ceased to have any equity securities so registered, shall file a statement on Form 4 with respect to any change in his beneficial ownership of equity securities of such insurer which shall occur on or after the date on which he ceased to be such director or officer or the date on which the insurer ceased to have any equity securities so registered, as the case may be, if such change shall occur within 6 months after any change in his beneficial ownership of such securities prior to such date. The statement on Form 4 shall be filed within 10 days after the end of the month in which the reported change in beneficial ownership occurs.
3.2 Section 561-2 Ownership of More Than 10 Per Cent of an Equity Security.
3.2.1 In determining, for the purpose of § 561 whether a person is the beneficial owner, directly or indirectly, of more than 10 per cent of any class of any equity security, such class shall be deemed to consist of the total amount of such class outstanding, exclusive of any securities of such class held by or for the account of the insurer or a subsidiary of the insurer; except that for the purpose of determining percentage ownership of voting trust certificates or certificates of deposit for equity securities, the class of voting trust certificates or certificates of deposit shall be deemed to consist of the amount of voting trust certificates or certificates of deposit issuable with respect to the total amount of outstanding equity securities of the class which may be deposited under the voting trust agreement or deposit agreement in question, whether or not all of such outstanding securities have been so deposited. For the purpose of this section a person acting in good faith may rely on the information contained in the latest Convention Form Statement filed with the Commissioner with respect to the amount of securities of a class outstanding or in the case of voting trust certificates or certificates of deposit the amount thereof issuable.
3.3 Section 561-3 Disclaimer of Beneficial Ownership.
3.3.1 Any person filing a statement may expressly declare therein that the filing of such statement shall not be construed as an admission that such person is, for the purpose of the Act, the beneficial owner of any equity securities covered by the statement.
3.4 Section 561-4 Exemptions From 18 Del.C. §§561, 562.
3.4.1 During the period of 12 months following their appointment and qualification, securities held by the following persons shall be exempt from 18 Del.C. §§561, 562:
3.4.1.1 Executors or administrators of the estate of a decedent;
3.4.1.2 Guardians or committees for an incompetent; and
3.4.1.3 Receivers, trustees in bankruptcy, assignees for the benefit of creditors, conservators, liquidating agents, and other similar person duly authorized by law to administer the estate or assets of other persons.
3.4.2 After the 12-month period following their appointment or qualification the foregoing persons shall be required to file reports with respect to the securities held by the estates which they administer under 18 Del.C. §561 and shall be liable for profits realized from trading in such securities pursuant to 18 Del.C. §562 only when the estate being administered is a beneficial owner of more than 10 per cent of any class of equity security of an insurer subject to Sub-Chapter IV.
3.4.3 Securities reacquired by or for the account of an insurer and held by it for its account shall be exempt from 18 Del.C. §§561, 562 during the time they are held by the insurer.
3.5 Section 561-5 Exemption From the Act of Securities Purchased or Sold by Odd-Lot Dealers.
3.5.1 Securities purchased or sold by an odd-lot dealer (1) in odd lots so far as reasonably necessary to carry on odd-lot transactions or (2) in round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business, shall be exempt from the provisions of Sub-Chapter IV with respect to participation by such odd-lot dealer in such transactions.
3.6 Section 561-6 Certain Transactions Subject to 18 Del.C. §561.
3.6.1 The acquisition or disposition of any transferable option, put, call, spread or straddle shall be deemed such a change in the beneficial ownership of the security to which such privilege relates as to require the filing of a statement reflecting the acquisition or disposition of such privilege. Nothing in this section, however, shall exempt any person from filing the statements required upon the exercise of such option, put, call, spread or straddle.
3.7 Section 561-7 Ownership of Securities Held in Trust.
3.7.1 Beneficial ownership of a security for the purpose of Section I shall include:
3.7.1.1 the ownership of securities as a trustee where either the trustee or members of his immediate family have a vested interest in the income or corpus of the trust,
3.7.1.2 the ownership of a vested beneficial interest in a trust, and
3.7.1.3 the ownership of securities as a settlor of a trust in which the settlor has the power to revoke the trust without obtaining the consent of all the beneficiaries.
3.7.2 Except as provided in paragraph (3.7.1.3) hereof, beneficial ownership of securities solely as a settlor or beneficiary of a trust shall be exempt from the provisions of Section 1 where less than twenty per cent in market value of the securities having a readily ascertainable market value held by such trust, determined as of the end of the preceding fiscal year of the trust, consists of equity securities with respect to which reports would otherwise be required. Exemption is likewise accorded from Section 1.0 with respect to any obligation which would otherwise be imposed solely by reason of ownership as settlor or beneficiary of securities held in trust, where the ownership, acquisition, or disposition of such securities by the trust is made without prior approval by the settlor or beneficiary. No exemption pursuant to this subsection shall, however, be acquired or lost solely as a result of changes in the value of the trust assets during any fiscal year or during any time when there is no transaction by the trust in the securities otherwise subject to the reporting requirements of 18 Del.C. §§ 561.
3.7.3 In the event that 10 per cent of any class of any equity security of an insurer is held in a trust, that trust and the trustees thereof as shall be deemed a person required to file the reports specified in 18 Del.C. §§ 561.
3.7.4 Not more than one report need be filed to report any holdings or with respect to any transaction in securities held by a trust, regardless of the number of officers, directors or ten per cent stockholders who are either trustees, settlors, or beneficiaries of a trust, provided that the report filed shall disclose the names of all trustees, settlors and beneficiaries who are officers, directors or ten per cent stockholders. A person having an interest only as a beneficiary of a trust shall not be required to file any such report so long as he relies in good faith upon an understanding that the trustee of such trust will file whatever reports might otherwise be required of such beneficiary.
3.7.5 used in this section the "immediate family" of a trustee means:
3.7.5.1 a son or daughter of the trustee, or a descendant of either,
3.7.5.2 a stepson or stepdaughter of the trustee,
3.7.5.3 the father or mother of the trustee, or an ancestor of either,
3.7.5.4 a stepfather or stepmother of the trustee,
3.7.5.5 a spouse of the trustee.
3.7.6 For the purpose of determining whether any of the foregoing relations exists, a legally adopted child of a person shall be considered a child of such person by blood.
3.7.7 In determining, for the purposes of 18 Del.C. §§ 561, whether a person is the beneficial owner, directly or indirectly, of more than 10 per cent of any class of any equity security, the interest of such person in the remainder of a trust shall be excluded from the computation.
3.7.8 No report shall be required by any person, whether or not otherwise subject to the requirement of filing reports under Section 1.0, with respect to his indirect interest in portfolio securities held by:
3.7.8.1 a pension or retirement plan holding securities of an insurer whose employees generally are the beneficiaries of the plan,
3.7.8.2 a business trust with over 25 beneficiaries.
3.7.9 Nothing in this section shall be deemed to impose any duties or liabilities with respect to reporting any transaction or holding prior to its effective date.
3.8 Section 561-8 Exemption for Small Transactions.
3.8.1 Any acquisition of securities shall be exempt from § 561 where
3.8.1.1 The person effecting the acquisition does not within six months thereafter effect any disposition, otherwise than by way of gift, of securities of the same class, and
3.8.1.2 The person effecting such acquisition does not participate in acquisitions or in dispositions of securities of the same class having a total market value in excess of $3,000 for any six months' period during which the acquisition occurs.
3.8.2 Any acquisition or disposition of securities by way of gift, where the total amount of such gifts does not exceed $3,000 in market value for any six months' period, shall be exempt from § 561 and may be excluded from the computations prescribed in 3.8.1.2.
3.8.3 Any person exempted by paragraph 3.8.1 or 3.8.2 of this section shall include in the first report filed by him after a transaction within the exemption a statement showing his acquisitions and dispositions for each six months' period or portion thereof which has elapsed since his last filing.
3.9 Section 561-9 Exemption From 18 Del.C. §562 of Transactions Which Need Not Be Reported Under 18 Del.C. §561.
3.9.1 Any transaction which has been or shall be exempted from the requirements of 18 Del.C. §561 shall, insofar as it is otherwise subject to the provisions of 18 Del.C. §562, be likewise exempted from 18 Del.C. §562.
Form 3
INSTRUCTIONS
- Persons Required to File Statements.
A statement on this form is required to be filed by every person who is directly or indirectly the beneficial owner of more than 10 per cent of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such a company.
- When Statements Are to Be Filed.
(a) Persons who hold any of the relationships specified in Instruction 1 are required to file a statement by January 31, 1966 or within 10 days after assuming such relationship, whichever date is later.
(b) Statements are not deemed to have been filed with the Commissioner until they have actually been received by him.
- Where Statements Are to Be Filed.
One signed copy of each statement shall be filed with the Commissioner of Insurance, Dover, Del.
- Separate Statement for Each Company.
A separate statement shall be filed with respect to the securities of each company.
- Relationship of Reporting Person to Company.
Indicate clearly the relationship of the reporting person to the company; for example, "Director and Vice President," "Beneficial owner of more than 10 per cent of the company's common stock," etc.
- Date as of Which Beneficial Ownership Is to Be Given.
The information as to beneficial ownership of securities shall be given as of January 31, 1966, or, in the case of persons who subsequently assume any of the relationships specified in Instruction 1, as of the date that relationship was assumed.
- Title of Security.
The statement of the title of a security shall be such as clearly to identify the security even though there may be only one class; for example, "Class A Common Stock," "$6 Convertible Preferred Stock," "5% Debentures Due 1965," etc.
- Nature of Ownership.
Under "Nature of ownership," state whether ownership of the securities is "direct" or "indirect." If the ownership is indirect, i.e., through a partnership, corporation, trust or other entity, indicate, in a footnote or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and also from those owned through a different type of indirect ownership.
- Statement of Amount Owned.
In stating the amount of securities beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, the entire amount of securities owned by the partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he so desires, also indicate in a footnote, or other appropriate manner, the extent of his interest in the partnership, corporation, trust or other entity.
- Inclusion of Additional Information.
A statement may include any additional information or explanation deemed relevant by the person filing the statement.
- Signature.
If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or specifically on his behalf by a person authorized to sign for him.
Form 4
INSTRUCTIONS
- Persons Required to File Statements.
Statements on this form are required to be filed by every person who at any time during any calendar month was directly or indirectly the beneficial owner of more than 10 per cent of any class of equity security of a domestic stock insurance company, or a director or officer of the company which is the issuer of such securities, and who during such month had any change in his beneficial ownership of any class of equity security of such company.
- When Statements Are to Be Filed.
Statements are required to be filed on or before the 10th day after the end of each month in which any change in beneficial ownership has occurred. Statements are not deemed to have been filed with the Commissioner until they have actually been received by him.
- Where Statements Are to Be Filed.
One signed copy of each statement shall be filed with the Commissioner of Insurance, Dover, Del.
- Separate Statement for Each Company.
A separate statement shall be filed with respect to the securities of each company.
- Relationship of Reporting Person to Company.
Indicate clearly the relationship of the reporting person to the company; for example, "Director," "Director and Vice President," "Beneficial owner of more than 10 per cent of the company's common stock," etc.
- Transactions and Holdings to Be Reported.
Every transaction shall be reported even though purchases and sales during the month are equal or the change involves only the nature of ownership; for example, from direct to indirect ownership. Beneficial ownership at the end of the month of all classes of securities required to be reported shall be shown even though there has been no change during the month in the ownership of securities of one or more classes.
- Title of Security.
The statement of the title of the security shall be such as clearly to identify the security even though there may be only one class; for example, "Class A Common Stock," "$6 Convertible Preferred Stock," "5% Debentures Due 1965," etc.
- Date of Transaction.
The exact date (month, day and year) of each transaction shall be stated opposite the amount involved in the transaction.
- Statement of Amounts of Securities.
In stating the amount of the securities acquired, disposed of, or beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, i.e., through a partnership, corporation, trust or other entity, the entire amount of securities involved in the transaction or owned by the partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he so desires, also indicate in a footnote, or other appropriate manner, the extent of his interest in the transaction or holdings of the partnership, corporation, trust or other entity.
- Nature of Ownership.
Under "Nature of ownership," state whether ownership of the securities is "direct" or "indirect." If the ownership is indirect, i.e., through a partnership, corporation, trust or other entity, indicate in a footnote, or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and from those owned through a different type of indirect ownership.
- Character of Transaction.
If the transaction was with the issuer of the securities, so state. If it involved the purchase of securities through the exercise of options, so state and give the exercise price per share. If any other purchase or sale was effected otherwise than in the open market, that fact shall be indicated. If the transaction was not a purchase or sale, indicate its character; for example, gift, 5% stock dividend, etc., as the case may be. The foregoing information may be appropriately set forth in the table or under "Remarks" at the end of the table.
- Inclusion of Additional Information.
A statement may include any additional information or explanation deemed relevant by the person filing the statement.
- Signature.
If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or specifically on his behalf by a person authorized to sign for him.
4.0 Regulations Under 18 Del.C., §562
4.1 Section 562-1 Exemption From 18 Del.C. §562 of Certain Transactions Effected in Connection With a Distribution.
4.1.1 Any transaction of purchase and sale, or sale and purchase, of a security which is effected in connection with the distribution of a substantial block of securities shall be exempt from the provisions of 18 Del.C. §562, to the extent specified in this section as not comprehended within the purpose of said 18 Del.C. §562, upon the following conditions:
4.1.1.1 The person effecting the transaction is engaged in the business of distributing securities and is participating in good faith, in the ordinary course of such business, in the distribution of such block of securities;
4.1.1.2 The security involved in the transaction is (A) a part of such block of securities and is acquired by the person effecting the transaction, with a view to the distribution thereof, from the insurer or other person on whose behalf such securities are being distributed or from a person who is participating in good faith in the distribution of such block of securities or (B) a security purchased in good faith by or for the account of the person effecting the transaction for the purpose of stabilizing the market price of securities of the class being distributed or to cover an over-allotment or other short position created in connection with such distribution; and
4.1.1.3 Other persons not within the purview of 18 Del.C. §562 are participating in the distribution of such block of securities on terms at least as favorable -as those on which such person is participating and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of 18 Del.C. §562 by this section. However, the performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing such functions shall not preclude an exemption which would otherwise be available under this section.
4.1.2 The exemption of a transaction pursuant to this section with respect to the participation therein of one party thereto shall not render such transaction exempt with respect to participation of any other party therein unless such other party also meets the conditions of this section.
4.2 Section 562-2 Exemption From 18 Del.C. §562 of Acquisition of Shares of Stock and Stock Options Under Certain Stock Bonus, Stock Option or Similar Plans.
4.2.1 Any acquisition of shares of stock (other than stock acquired upon the exercise of an option, warrant or right) pursuant to a stock bonus, profit sharing, retirement, incentive, thrift, savings or similar plan, or any acquisition of a qualified or a restricted stock option pursuant to a qualified or a restricted stock option plan, or a stock option pursuant to an employee stock purchase plan, by a director or officer of an insurer issuing such stock or stock option shall be exempt from the operation of §562 if the plan meets the following conditions:
4.2.1.1 The plan has been approved, directly or indirectly, (1) by the affirmative votes of the holders of a majority of the securities of such insurer present, or represented, and entitled to vote at a meeting duly held in accordance with the applicable laws of the State of Delaware, or (2) by the written consent of the holders of a majority of the securities of such insurer entitled to vote: provided, however, that if such vote or written consent was not solicited substantially in accordance with the proxy rules and regulations prescribed by the National Association of Insurance Commissioners, if any, in effect at the time of such vote or written consent, the insurer shall furnish in writing to the holders of record of the securities entitled to vote for the plan substantially the same information concerning the plan which would be required by any such rules and regulations so prescribed and in effect at the time such information is furnished, if proxies to be voted with respect to the approval or disapproval of the plan were then being solicited, on or prior to the date of the first annual meeting of security holders held subsequent to the later of (a) the date Subchapter IV first applies to such insurer, or (b) the acquisition of an equity security for which exemption is claimed. Such written information may be furnished by mail to the last known address of the security holders of record within 30 days prior to the date of mailing. Four copies of such written information shall be filed with, or mailed for filing to, the Commissioner not later than the date on which it is first sent or given to security holders of the insurer. For the purposes of this paragraph, the term "insurer" includes a predecessor corporation if the plan or obligations to participate thereunder were assumed by the insurer in connection with the succession.
4.2.1.2 If the selection of any director or officer of the insurer to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan, or the determination of the number or maximum number of shares of stock which may be allocated to any such director or officer or which may be covered by qualified, restricted or employee stock purchase plan stock options granted to any such director or officer, is subject to the discretion of any person, then such discretion shall be exercised only as follows:
4.2.1.2.1 With respect to the participation of directors
4.2.1.2.1.1 by the board of directors of the insurer, a majority of which board and a majority of the directors acting in the matter are disinterested persons;
4.2.1.2.1.2 by, or only in accordance with the recommendations of, a committee of three or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons; or
4.2.1.2.1.3 otherwise in accordance with the plan, if the plan (i) specifies the number or maximum number of shares of stock which directors may acquire or which may be subject to qualified, restricted or employee stock purchase plan stock options granted to directors and the terms upon which, and the times at which, or the periods within which, such stock may be acquired or such options may be acquired and exercised; or (ii) sets forth, by formula or otherwise, effective and determinable limitations with respect to the foregoing based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors.
4.2.1.2.2 With respect to the participation of officers who are not directors.
4.2.1.2.2.1 by the board of directors of the insurer or a committee of three or more directors; or
4.2.1.2.2.2 by, or only in accordance with the recommendations of, a committee of three or more persons having full authority to act in the matter, all of the members of which committees are disinterested persons.
For the purpose of this paragraph, a director or committee member shall be deemed to be a disinterested person only if such person is not at the time such discretion is exercised eligible and has not at any time within one year prior thereto been eligible for selection as a person to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan or any other plan of the insurer or any of its affiliates entitling the participants therein to acquire stock or qualified, restricted or employee stock purchase plan stock options of the insurer or any of its affiliates.
4.2.1.2.3 The provisions of this paragraph shall not apply with respect to any option granted, or other equity security acquired, prior to the date that 18 Del.C. §§561, 562, 563 first become applicable with respect to any class of equity securities of any insurer.
4.2.1.2.3.1 As to each participant or as to all participants the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock which may be allocated, or which may be subject to qualified, restricted, or employee stock purchase plan stock options granted, pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date; and may be determined either by fixed or maximum dollar amounts or fixed or maximum numbers of shares or by formulas based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors which will result in an effective and determinable limitation. Such limitations may be subject to any provisions for adjustment of the plan or of stock allocable or options outstanding thereunder to prevent dilution or enlargement of rights.
4.2.1.2.3.2 Unless the context otherwise requires, all terms used in this section shall have the same meaning as in Subchapter IV elsewhere in these regulations. In addition, the following definitions apply:
4.2.1.2.3.2.1 The term "plan" includes any plan, whether or not set forth in any formal written document or documents and whether or not approved in its entirety at one time.
4.2.1.2.3.2.2 The definition of the terms "qualified stock option" and "employee stock purchase plan" that are set forth in Sections 422 and 423 of the Internal Revenue Code of 1954, as amended, are to be applied to those terms where used in this section. The term "restricted stock option" as defined in Section 424(b) of the Internal Revenue Code of 1954, as amended, shall be applied to that term as used in this section, provided, however, that for the purposes of this section an option which meets all of the conditions of that Section, other than the date of issuance shall be deemed to be a "restricted stock option."
4.3 Section 562-3 Exemption From 18 Del.C. §562 of Certain Transactions in Which Securities Are Received by Redeeming Other Securities.
4.3.1 Any acquisition of an equity security (other than a convertible security or right to purchase a security) by a director or officer of the insurer issuing such security shall be exempt from the operation of Section 2 of the Act upon condition that
4.3.1.1 the equity security is acquired by way of redemption of another security of an insurer substantially all of whose assets other than cash (or Government bonds) consist of securities of the insurer issuing the equity security, so acquired, and which
4.3.1.1.1 represented substantially and in practical effect a stated or readily ascertainable amount of such equity security,
4.3.1.1.2 had a value which was substantially determined by the value of such equity security, and
4.3.1.1.3 conferred upon the holder the right to receive such equity security without the payment of any consideration other than the security redeemed;
4.3.1.2 no security of the same class as the security redeemed was acquired by the director or officer within six months prior to such redemption or is acquired within six months after such redemption;
4.3.1.3 the insurer issuing the equity security acquired has recognized the applicability of paragraph (a) of this section by appropriate corporate action.
4.4 Section 562-4 Exemption of Long Term Profits Incident to Sales Within Six Months of the Exercises of an Option.
4.4.1 To the extent specified in paragraph (b) of this section, the Commissioner hereby exempts as not comprehended within the purposes of 18 Del.C. §562 any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security where such purchase is pursuant to the exercise of an option or similar right either (1) acquired more than six months before its exercise, or (2) acquired pursuant to the terms of an employment contract entered into more than six months before its exercise.
4.4.2 In respect of transactions specified in paragraph (a) the profits inuring to the insurer shall not exceed the difference between the proceeds of sale and the lowest market price of any security of the same class within six months before or after the date of sale. Nothing in this section shall be deemed to enlarge the amount of profit which would inure to such insurer in the absence of this section.
4.4.3 The Commissioner also hereby exempts, as not comprehended within the purposes of 18 Del.C. §562, the disposition of a security, purchased in a transaction specified in paragraph (a) of this section, pursuant to a plan or agreement for merger or consolidation, or reclassification of the insurer's securities, or for the exchange of its securities for the securities of another person which has acquired its assets, or which is in control, as defined in Section 368(c) of the Internal Revenue Code of 1954, of a person which has acquired its assets, where the terms of such plan or agreement are binding upon all stockholders of the insurer except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings.
4.4.4 The exemptions proved by this section shall not apply to any transaction made unlawful by 18 Del.C. §563 or by any rules and regulations thereunder.
4.4.5 The burden of establishing market price of a security for the purpose of this section shall rest upon the person claiming the exemption.
4.5 Section 562-5 Exemption From 18 Del.C. §562 of Certain Acquisitions and Dispositions of Securities Pursuant to Merger or Consolidations.
4.5.1 The following transactions shall be exempt from the provisions of § 562 as not comprehended within the purpose of said Section:
4.5.1.1 The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to said merger or consolidation, owned 85 per cent or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company;
4.5.1.2 The disposition of a security, pursuant to a merger or consolidation of an insurer which, prior to said merger or consolidation, owned 85 per cent or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company;
4.5.1.3 The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to said merger or consolidation, held over 85 per cent of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to the merger or consolidation as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation;
4.5.1.4 The disposition of a security, pursuant to a merger or consolidation, of an insurer which, prior to said merger or consolidation, held over 85 per cent of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to merger or consolidation, as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.
4.5.2 A merger within the meaning of this section shall include the sale or purchase of substantially all the assets of one insurer by another in exchange for stock which is then distributed to the security holders of the insurer which sold its assets.
4.5.3 Notwithstanding the foregoing, if an officer, director or stockholder shall make any purchase (other than a purchase exempted by this section) of a security in any company involved in the merger or consolidation and any sale (other than a sale exempted by this section)of a security in any other company involved in the merger or consolidation within any period of less than six months during which the merger or consolidation took place, the exemption provided by this section shall be unavailable to such officer, director, or stockholder.
4.6 Section 562-6 Exemption From 18 Del.C. §562 of Certain Securities Received Upon Surrender of Similar Equity Securities.
4.6.1 Any receipt by a person from an insurer of shares of stock of a class having general voting power, upon the surrender by such person of an equal number of shares of stock of the insurer of a class which does not have general voting power, pursuant to provisions of the insurer's certificate of incorporation, for the purpose of an accompanied simultaneously or followed immediately by the sale of the shares so received, shall be exempt from the operation of 18 Del.C. §562 as a transaction not comprehended within the purpose of said Section, if the following conditions exist:
4.6.1.1 The person so receiving such shares is not an officer or director, or the beneficial owner, directly or indirectly, immediately prior to such receipt, of more than 10 per cent of an equity security of the insurer;
4.6.1.2 The shares surrendered and the shares issued upon such surrender shall be of classes which are freely transferable and entitle the holders thereof to participate equally per share in all distributions of earnings and assets;
4.6.1.3 The surrender and issuance are made pursuant to provisions of a certificate of incorporation which require that the shares issued upon such surrender shall be registered upon issuance in the name of a person or persons other than the holder of the shares surrendered and may be required to be issued as of right only in connection with the public offering, sale and distribution of such shares and the immediate sale by such holder of such shares for that purpose, or in connection with a gift of such shares;
4.6.1.4 Neither the shares so surrendered nor any shares of the same class, nor other shares of the same class as those issued upon such surrender, have been or are purchased (otherwise than in a transaction exempted by this section), by the person surrendering such shares, within six months before or after such surrender or issuance.
4.7 Section 562-7 Exemption From 18 Del.C. §562 of Certain Transactions Involving an Exchange of Similar Securities.
4.7.1 Any acquisition or disposition of securities made in an exchange of shares of a class (or series thereof) of stock of an insurer for an equivalent number of shares of another class (or series thereof) of stock of the same insurer, pursuant to a right of conversion under the terms of the insurer's charter or other governing instruments shall be exempt from the operation of 18 Del.C. §562 if:
4.7.1.1 The shares surrendered and those acquired in exchange therefor evidence substantially the same rights and privileges except that, pursuant to the provisions of the insurer's charter or other governing instruments, the board of directors may declare and pay a lesser dividend per share on shares of the class surrendered than on shares of the class acquired in exchange therefor, or may declare and pay no dividend on shares of the class surrendered; and
4.7.1.2 The transaction was affected in contemplation of a public sale of the shares acquired in the exchange; Provided, that this section shall not be construed to exempt from the operation of 18 Del.C. §562 any purchase or sale of shares of the class surrendered and any sale or purchase of shares of the class acquired in the exchange (otherwise than in the transaction of exchange exempted by this section) within a period of less than six months.
5.0 Regulations Under 18 Del.C. §563
5.1 Section 563-1 Exemption of Certain Securities From 18 Del.C. §563.
5.1.1 Any security shall be exempt from the operation of 18 Del.C. §563 to the extent necessary to render lawful under such Section the execution by a broker of an order for an account in which he has no direct or indirect interest.
5.2 Section 563-2 Exemption From 18 Del.C. §563 of Certain Transactions Effected in Connection With a Distribution.
5.2.1 Any security shall be exempt from the operation of 18 Del.C. §563 to the extent necessary to render lawful under such Section any sale made by or on behalf of a dealer in connection with a distribution of a substantial block of securities, upon the following conditions:
5.2.1.1 The sale is represented by an over-allotment in which the dealer is participating as a member of an underwriting group, or the dealer or a person acting on his behalf intends in good faith to offset such sale with a security to be acquired by or on behalf of the dealer as a participant in an underwriting, selling or soliciting-dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders or some other class of persons; and
5.2.1.2 Other persons not within the purview of 18 Del.C. §563 are participating in the distribution of such block of securities on terms at least as favorable as those on which such dealer is participating and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of 18 Del.C. §563 by this section. However, the performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing such functions shall not preclude an exemption which would otherwise be available under this section.
5.3 Section 563-3 Exemption From 18 Del.C. §563 of Sales of Securities to Be Acquired.
5.3.1 Whenever any person is entitled, as an incident to this ownership of an issued security and without the payment of consideration, to receive another security "when issued" or "when distributed," the security to be acquired shall be exempt from the operation of 18 Del.C. §563, provided that:
5.3.1.1 The sale is made subject to the same conditions as those attaching to the right of acquisition, and
5.3.1.2 such person exercises reasonable diligence to deliver such security to the purchaser promptly after his right of acquisition matures, and
5.3.1.3 such person reports the sale on the appropriate form for reporting transactions by persons subject to 18 Del.C. §561.
5.3.2 This section shall not be construed as exempting transactions involving both a sale of a security "when issued" or "when distributed" and a sale of the security by virtue of which the seller expects to receive the "when-issued" or "when-distributed" security, if the two transactions combined result in a sale of more units than the aggregate of those owned by the seller plus those to be received by him pursuant to his right of acquisition.
6.0 Regulation Under 18 Del.C. §565
6.1 Section 565-1 Arbitrage Transactions Under 18 Del.C. §565.
6.1.1 It shall be unlawful for any director or officer of an insurer to effect any foreign or domestic arbitrage transaction in any equity security of such insurer, unless he shall include such transaction in the statements required by 18 Del.C. §561 and shall account to such insurer for the profits arising from such transaction, as provided in 18 Del.C. §562 thereof. The provisions of 18 Del.C. §563 shall not apply to such arbitrage transactions. The provisions of Subchapter IV shall not apply to any bona fide foreign or domestic arbitrage transaction insofar as it is effected by any person other than such director or officer of the insurer.
403 Sale and Purchase of Options (Repealed 12/11/14)
18 Del. Admin. Code § 403 Sale and Purchase of Options (Repealed 12/11/14)
This regulation was repealed, effective 12/11/14.
History
- 18 DE Reg. 467 (12/01/14)
404 Derivative Instruments
18 Del. Admin. Code § 404-1.0 Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311 and 1333 and is promulgated in accordance with 29 Del.C. Ch. 101.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-2.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
"Aggregate statement value" means the sum of the statement values of individual derivative instruments. In calculating this sum, an insurer shall assign absolute values to negative values.
"Cap" means an agreement obligating the seller to make payments to the buyer with each payment based on the amount by which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price.
"Collar" means an agreement to receive payments as the buyer of an option, cap or floor and to make payments as the seller of a different option, cap or floor.
"Counterparty exposure" means the net amount of credit risk attributable to an over-the-counter derivative instrument determined as follows:
(1) For an over-the-counter derivative instrument not entered into under or subject to a written master agreement which provides for netting of payments owed by the respective parties: (i) the market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or (ii) zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer.
(2) For over-the-counter derivative instruments entered into under or subject to a written master agreement which provides for netting of payments owed by the respective parties, and the domiciliary jurisdiction of the counterparty is either within the United States or if not within the United States, within a foreign (not United States) jurisdiction deemed by the SVO as eligible for netting, the greater of zero or the net sum payable to the insurer in connection with all derivative instruments subject to the written master agreement upon their liquidation in the event of default by the counterparty under the master agreement (assuming no conditions precedent to the obligations of the counterparty to make such a payment and assuming no setoff of amounts payable under any other instrument or agreement).
(3) For the purposes of this definition, market value or the net sum payable, as the case may be, shall be determined at the end of the most recent quarter of the insurer's fiscal year and will be reduced by the market value of acceptable collateral held by the insurer or a custodian on the insurer's behalf.
"Credit rating" means with respect to a party or entity, the rating currently assigned to its unsecured and unsubordinated long-term debt, an issuer rating, financial strength rating or other similar rating which assesses the creditworthiness of a party to meet its financial or deposit obligations.
"Derivative instrument" means an agreement, instrument or a series or combination thereof: (a) to make or take delivery of, or assume or relinquish, a specified amount of one or more underlying interests, or to make a cash settlement in lieu thereof; or (b) that has a price, performance, value or cash flow based primarily upon the actual or expected price, level, performance, value or cash flow of one or more underlying interests or is dependent on the occurrence or nonoccurrence of any event associated with one or more potential financial, economic, or commercial consequences. The term "derivative instrument" includes, without limitation, options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, swaptions, forwards, futures and any other agreements or instruments substantially similar thereto or any series or combination thereof. The term "derivative instrument" does not include other categories of investments specifically authorized under 18 Del.C. Chapter 13.
"Derivative transaction" means a transaction involving the use of one or more derivative instruments.
"Derivatives clearinghouse" means a derivatives clearing organization registered with the Commodity Futures Trading Commission or the Securities Exchange Commission or regulated, supervised and examined by a foreign regulatory authority.
"Floor" means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance or value of one or more underlying interests.
"Foreign regulatory authority" means any foreign (non-United States) government, or any department, agency, governmental body, or regulatory organization empowered by a foreign government to administer or enforce a law, rule, or regulation as it relates to a derivative instrument matter, or any department or agency of a political subdivision of a foreign government empowered to administer or enforce a law, rule, or regulation as it relates to a derivative instrument matter.
"Forward" means an agreement (other than a future) to make or take delivery in the future of one or more underlying interests, or effect a cash settlement, based on the actual or expected price, level, performance or value of such underlying interests, but shall not mean or include spot transactions effected within customary settlement periods, when-issued purchases, or other similar cash market transactions.
"Future" means an agreement traded on a futures exchange, to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one or more underlying interests.
"Hedging transaction" is a derivative transaction which is entered into and maintained to manage or reduce:
(1) The risk of change in the value, yield, price, cash flow or quantity of assets or liabilities which the insurer has acquired or incurred or anticipates acquiring or incurring, or;
(2) The currency exchange rate risk or the degree of exposure as to assets or liabilities which an insurer has acquired or incurred or anticipates acquiring or incurring.
"Income generation transaction" is a transaction involving a derivative instrument set forth in Section 6.0 of this regulation that is intended to generate income or enhance return. Other types of derivative instruments may not be used in income generation transactions.
"Option" means an agreement giving the buyer the right but not the obligation to buy or receive (a "call option"), sell or deliver (a "put option"), enter into, extend or terminate or effect a cash settlement based on the actual or expected price, spread, level, performance or value of one or more underlying interests.
"Over-the-counter derivative instrument" means a derivative instrument the use of which is authorized under this regulation other than a derivative instrument (i) cleared through a U.S. or foreign derivatives clearinghouse or (ii) traded on or through a U.S. or foreign exchange.
"Potential exposure" means a statistically derived measure of the potential increase in derivative instrument credit risk exposure, for derivative instruments which generally do not have an initial cost paid or consideration received, resulting from future fluctuations in the underlying interests upon which derivative instruments are based. For collars, swaps and forwards, the potential exposure = 0.5% x notional amount x square root of (remaining years to maturity). For futures, the potential exposure = (initial margin per contract on the valuation date, set by the exchange on which contract trades) x (the number of contracts open on the valuation date).
"Qualified counterparty" means a counterparty:
(1) Which has a designation of "1" or "2" by the SVO, or an investment grade credit rating from at least one nationally recognized statistical rating organization; and
(2) With which the insurer has entered into a master agreement, together with a credit support annex or other documentation providing for the collateralization of the counterparty's obligations to the insurer under the master agreement, if that collateral documentation provides for (i) daily margin and collateral settlement, (ii) a minimum transfer amount of no more than one million dollars, and (iii) a requirement that collateral be provided by the counterparty from the first dollar of exposure, subject to the minimum transfer amount. For this purpose "minimum transfer amount" means an amount below which a daily margin and collateral settlement is not required.
"Replication (synthetic asset) transaction" means a derivative transaction entered into in conjunction with other permissible investments under 18 Del.C. Chapter 13 in order to reproduce the investment characteristics of investments otherwise permissible under 18 Del.C. Chapter 13. A derivative transaction entered into by an insurer as a hedging transaction or income generation transaction shall not be considered a replication (synthetic asset) transaction.
"SVO" means the Securities Valuation Office of the National Association of Insurance Commissioners or any successor office established by the National Association of Insurance Commissioners.
"Swap" means an agreement to exchange or to net payments at one or more times based on the actual or expected price, yield, level, performance or value of one or more underlying interests.
"Swaption" means an option to purchase or sell a swap at a given price and time or at a series of prices and times. A swaption does not mean a swap with an embedded option.
"Underlying interest" means the assets, liabilities, other interests or a combination thereof underlying a derivative instrument, such as any one or more securities, currencies, rates, indices, commodities or derivative instruments.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-3.0 Purpose
The purpose of this regulation is to set standards for the prudent use of derivative instruments by domestic insurers under 18 Del.C. Chapter 13.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-4.0 Permitted Usage
4.1 Insurers may utilize derivative instruments for the following purposes:
4.1.1 Hedging transactions, as defined in Section 2.0 and to the extent permitted by Section 5.0 of this regulation;
4.1.2 Income generation transactions, as defined in Section 2.0 and to the extent permitted by Section 6.0 of this regulation; and
4.1.3 Replication (synthetic asset) transactions, as defined in Section 2.0 and to the extent permitted by Section 7.0 of this regulation.
4.2 A derivative instrument that complies with this regulation is an eligible investment and does not need to otherwise qualify under another provision of 18 Del.C. Chapter 13. Derivative instruments shall not be included as miscellaneous investments for purposes of 18 Del.C. §1320.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-5.0 Limitations on Hedging Transactions
5.1 An insurer may use derivative instruments for hedging transactions under this regulation if, as a result of and after giving effect to the transaction:
5.1.1 The aggregate statement value of options, swaptions, caps, floors and warrants not attached to another financial instrument purchased and used in hedging transactions does not exceed seven and one half percent (7.5%) of its admitted assets;
5.1.2 The aggregate statement value of options, swaptions, caps and floors written in hedging transactions does not exceed three percent (3%) of its admitted assets; and
5.1.3 The aggregate potential exposure of collars, swaps, forwards and futures used in hedging transactions does not exceed six and one-half percent (6.5%) of its admitted assets.
5.2 Hedging transactions entered into to hedge currency risk of investments denominated in a currency other than United States dollars shall not be included in the above limits.
5.3 An insurer may purchase or sell one or more derivative instruments to offset, in whole or in part, any derivative instrument previously purchased or sold without regard to the above limits.
5.4 If an insurer holds one or more derivative instruments used for hedging transactions that complied with the applicable limit set forth in Section 5.1 of this regulation at the time that they were acquired, but that have subsequently exceeded such limit, the insurer shall provide written notice to the Department, (i) if such limit is exceeded by an amount greater than 1% of admitted assets, within 10 days of exceeding such limit, or (ii) if such limit is exceeded by an amount less than or equal to 1% of admitted assets, within 30 days of exceeding such limit. Derivative instruments used for hedging purposes that were acquired in compliance with this regulation need not be divested by an insurer if they exceed the limits set forth in Section 5.1 of this regulation. In the event that such insurer desires to engage in additional hedging transactions while such limit has been exceeded, the insurer may request a waiver in accordance with Section 12.1 of this regulation. No further hedging transactions subject to such exceeded limit may be entered into without such waiver.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-6.0 Limitations on Income Generation Transactions
6.1 An insurer may enter into the following types of income generation transactions:
6.1.1 Sales of covered call options on (i) non-callable fixed income securities, (ii) callable fixed income securities if the option expires by its terms prior to the end of the non-callable period, (iii) derivative instruments based on fixed income securities, or (iv) equity securities;
6.1.2 Sales of covered put options on investments that the insurer is permitted to acquire under 18 Del.C. Chapter 13; and
6.1.3 Sales of covered caps or floors.
6.2 For purposes of this Section 6.0, the term "covered" means that an insurer (i) owns or can immediately acquire, through the exercise of options, warrants or conversion rights already owned, the underlying interest in order to fulfill or secure its obligations under a call option it has sold, (ii) holds cash equivalents or segregated cash with a market value equal to the amount required to fulfill its obligations under a put option it has sold, or (iii) holds in its portfolio (A) investments generating the cash flow, or (B) cash equivalents or segregated cash with a market value, in each case, sufficient to make the required payments under a cap or floor it has sold.
6.3 In connection with an insurer's income generation transactions under Section 6.1, the sum total of the following items shall not exceed ten percent (10%) of an insurer's admitted assets: (i) the aggregate statement value of the equity or fixed income securities that are subject to covered call options, plus (ii) the aggregate statement value of the assets that generate the cash flows or are sufficient to make the required payments under covered caps and floors, plus (iii) the face value of fixed income securities underlying a derivative instrument subject to a covered call option, plus (iv) the aggregate amount of the purchase obligation under covered put options.
6.4 An insurer utilizing income generation transactions must at all times (i) be able to identify on its books and records, without duplication, its ownership of, or right to acquire, the investments, cash or cash equivalents required under Section 6.2 to be held in connection with the income generation transactions authorized under Section 6.1, and (ii) maintain a separate record that (A) lists all of the insurer's outstanding income generation transactions under Section 6.1, and (B) demonstrates how those transactions are "covered" as required under Section 6.2, by the insurer's ownership of, or right to acquire, underlying interests, designated investments, cash or cash equivalents. Such record shall be submitted to the Department upon its request.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-7.0 Limitations on Replication (Synthetic Asset) Transactions
7.1 Any asset being replicated is subject to all of the provisions and limitations on the making thereof specified in 18 Del.C. Chapter 13 with respect to investments by the insurer as if the replication (synthetic asset) transaction constituted a direct investment by the insurer in the replicated asset.
7.2 The aggregate statement value of all assets being replicated shall not exceed ten percent (10%) of the insurer's admitted assets.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-8.0 Counterparty Exposure
8.1 Counterparty exposure with respect to over-the-counter derivative instruments, other than with respect to a counterparty that is an affiliate of the insurer approved by the Commissioner in accordance with Section 8.2.3 of this regulation, shall be included in determining compliance with any single or aggregate quantitative limitation on investments made by an insurer under 18 Del.C. Chapter 13.
8.2 An insurer may enter into a transaction for any over-the-counter derivative instrument only with:
8.2.1 A qualified counterparty;
8.2.2 A counterparty, other than a qualified counterparty, provided that (1) the aggregate counterparty exposure of the insurer to any single counterparty, other than a qualified counterparty, shall be limited to one percent (1%) of the insurer's admitted assets, and (2) the aggregate counterparty exposure of the insurer to all counterparties, other than qualified counterparties, shall be limited to three percent (3%) of the insurer's admitted assets; or
8.2.3 A counterparty that is an affiliate of the insurer, if (a) the Commissioner has approved of the application of 18 Del.C. §5933 to such affiliate, in accordance with subsection (h) thereof, or (b) the Commissioner has approved of over-the-counter transactions with such affiliate in accordance with 18 Del.C. §5005.
8.3 If (i) a counterparty that met the definition of "qualified counterparty" (set forth in Section 2.0 of this regulation) at the time that an insurer entered into a derivative instrument with such counterparty subsequently ceases to satisfy the definition of "qualified counterparty" while such derivative instrument remains in effect, and (ii) as a result of such change in the status of the counterparty, such insurer will exceed the limits set forth in Section 8.2.2 of this regulation, such insurer shall, within 30 days of such change in the status of the counterparty, provide written notice to the Department. Derivative instruments entered into with such counterparty that were acquired in compliance with this regulation need not be divested by an insurer if they exceed the limits set forth in Section 8.2.2 of this regulation. In the event that such insurer desires to enter into additional derivative instruments with such counterparty while such limit has been exceeded, the insurer may request a waiver in accordance with Section 12.1 of this regulation. No further derivative instruments subject to such exceeded limit may be entered into without such waiver.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-9.0 Guidelines
9.1 Each insurer utilizing derivative instruments shall establish written guidelines stating the policy objectives of management, applicable risk constraints and investment limitations, permissible strategies, the relationship of those strategies to the insurer's operations and how such strategies reduce or control the insurer's market risk or otherwise save transaction costs or substitute for investments or liabilities. The insurer's board of directors, or committee thereof charged with the responsibility of overseeing investments, shall approve the written guidelines and any amendment thereto and shall establish a procedure to determine, at least annually, that all derivative transactions were made in accordance with policy objectives, permissible strategies, the insurer's overall investment goals as outlined in its written guidelines, as well as adherence to and compliance with this regulation. The insurer's written guidelines shall address these requirements of the board or investment committee.
9.2 Insurers utilizing derivative instruments on or after the effective date of this regulation and prior to April 1, 2015 shall file a copy of such guidelines for informational purposes with the Department no later than April 1, 2015. Each other insurer shall file a copy of such guidelines for informational purposes with the Department prior to the use of any derivative instruments by such insurer. Any subsequent revisions to an insurer's written guidelines shall be filed with the Department as they become effective.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-10.0 Documentation Requirements
10.1 An insurance company shall maintain documentation and records relating to each derivative transaction, such as:
10.1.1 The purpose or purposes of the transaction;
10.1.2 The assets or liabilities to which the transaction relates;
10.1.3 The specific derivative instrument used in the transaction;
10.1.4 For over-the-counter derivative instrument transactions, the name of the counterparty and the counterparty exposure; and
10.1.5 For derivative instruments traded on or through an exchange or derivative clearinghouse, the name of the exchange or derivative clearinghouse and the name of the relevant execution and clearing firms.
10.2 An insurer utilizing hedging transactions shall have a written methodology for determining whether derivative instruments used for hedging have been effective.
10.3 All guidelines and notices submitted by an insurer pursuant to Sections 5.4, 8.3 or 9.0 of this regulation that are in the possession of or control of the Department shall be confidential by law and privileged, shall not be subject to this State's Freedom of Information Act, 29 Del.C. §§10001, et. seq., shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-11.0 Accounting and Reporting
Derivative transactions permitted by this regulation shall be accounted for and reported in accordance with the NAIC manuals, including the National Association of Insurance Commissioners Accounting Practices and Procedures Manual and the Annual Statement Instructions Manuals.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-12.0 Waiver
The Department may, in its discretion, from time to time waive one or more of the requirements contained in this regulation upon the written request of an insurer and a reasonable showing of the need for such waiver.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-13.0 Existing Derivative Instruments
13.1 Notwithstanding any other requirement of this regulation, any particular derivative instrument held by an insurer on the effective date of this regulation which was a legal investment at the time it was made, and which the insurer was legally entitled to possess immediately prior to such date, shall be deemed to be an eligible investment for so long as it is held by such insurer.
13.2 Each insurer shall be permitted to use derivative instruments during the period from the effective date of this regulation until the date it is required to make its first informational filing pursuant to Section 9.2 of this regulation, provided that such insurer reasonably believes that such derivatives use is consistent with this regulation. Thereafter, insurers shall use derivative instruments in accordance with the guidelines filed with the Department pursuant to Section 9.2.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-14.0 Severability
If any provision of this regulation or the application of any such provision to any person or circumstance shall be held invalid, the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected.
History
- 18 DE Reg. 393 (11/01/14)
18 Del. Admin. Code § 404-15.0 Effective Date
This regulation shall become effective on November 12, 2014.
History
- 18 DE Reg. 393 (11/01/14)
500 Agents, Brokers, Solicitors, and Consultants
501 Insurance Solicitor
18 Del. Admin. Code § 501 Insurance Solicitor
501 Insurance Solicitor [Regulation 14]
Effective after November 30, 1975 existing licenses of solicitors were converted to agents' licenses and issuing of new solicitors' licenses was discontinued. See Bulletin No. 75-23. Page 2103.
502 Insurance Consultants
18 Del. Admin. Code § 502 Insurance Consultants
502 Insurance Consultants [Formerly Regulation 15]
1.0 Authority
1.1 In accordance with the authority granted by 18 Del.C. §1737, the Insurance Commissioner of the State of Delaware does hereby make and promulgate the following rules and procedures applicable to insurance consultants as established by 18 Del.C. §1705. These regulations shall apply to all insurance consultants doing business in this State and who undertake to consult with clients for a fee on insurance matters pertaining to real or personal property located in this State. The rules and procedures herein described shall become effective May 7, 1975.
2.0 Prohibition
2.1 Effective May 7, 1975, no person, firm or corporation shall, for a fee or other valuable consideration, hold himself or itself out to the public as being engaged in the business of offering advice, counsel, opinion or service with respect to the benefits, advantages, or disadvantages to be obtained under any contract of insurance that is to be purchased, or is being considered for purchase, unless such person, firm or corporation has been duly licensed by this department as a consultant, an agent or broker.
2.2 No insurance consultant, agent or broker licensed by this department shall, for a fee or other valuable consideration, consult with or for a client until a written agreement has been prepared and signed by both parties as required by 18 Del.C. §1705(e).
2.2.1 Agreements shall include, but not be limited to date, client's name, address, a brief, general statement of the work to be undertaken, the fee agreed upon and signature of both parties.
2.2.2 Records of the consultant and of the agent's or broker's transactions as a consultant shall be maintained at the principal business address of the licensee for a period of not less than 3 years and shall be made available to the commissioner on request.
2.3 Fees
2.3.1 Consultant: No consultant may, in this State, accept commissions or any valuable consideration, by whatever name called, from any insurer, insurance agent or insurance broker when such fee proceeds from or which may be attributed to the sale of insurance.
2.3.2 Agent or broker: No insurance agent or insurance broker may, in this State, accept commissions or any valuable consideration by whatever name called, from any insurer, insurance agent, or insurance broker when such fee proceeds from or which may be attributed to the sale of insurance contracts for which, or related to which, the agent has previously received a consultant's fee. This prohibition specifically includes so called "override" commissions paid to management based on the production of agents under their supervision or direction. In instances where the manager/supervisor has received a consultant's fee and, subsequently, an agent under his supervision places the insurance, the entire commission, to include the customary "override," shall pass to the Producer of Record, the writing agent.
2.3.3 Waiver of fee: Consultation agreements may be written by the agent or broker to reflect a stated consultation fee which will be waived on the condition the client actually purchases the subject insurance from or through the agent or broker serving as consultants.
3.0 Penalties
3.1 Violations of this regulation which have been verified by hearing or otherwise acknowledged, shall subject the offending consultant, agent or broker to the penalties authorized by 18 Del.C. §§1732, 1733, and as determined by the Commissioner.
4.0 Consultant's Duties
4.1 In accordance with 18 Del.C. §§1705 and 1717, a consultant and an agent or broker serving in the capacity of a consultant shall be bound to serve with complete objectivity and with sole loyalty to the client and shall, to the best of his ability, provide the client with-such advice, counsel, opinion or service, which in his best judgment, meets with the needs and interests of the client.
5.0 Qualifications for a Consultant's Certificate of Authority
5.1 Type license
5.1.1 Consultant's license shall be issued for the lines of life, general lines, or a combination of the two types.
A life consultant's authority shall include life, health, credit life, credit health, and variable annuity authority as defined 18 Del.C. §1715(a)(1), (2), (3).
5.1.2 A general lines consultant's authority shall include all lines of insurance except life, variable annuity and title as defined in 18 Del.C. §1715.
5.1.3 The combination life and general lines consultant's authority shall include all lines of insurance except title.
5.2 Qualifications for a Delaware consultant's license
5.2.1 The applicant shall:
5.2.1.1 Meet the general licensing requirements as stated 18 Del.C. §§1720 and 1721.
5.2.1.2 Have been licensed as an insurance broker for the lines applied for at least two years or shall furnish evidence of special training and experience which is acceptable to the Commissioner in lieu of this requirement.
5.2.1.3 Be required to surrender any current insurance Certificate of Authority issued by this Department.
5.2.1.4 If non-resident, provide a Certificate of Qualification as a consultant from the Insurance Department of the applicant's State of Residence.
5.2.1.5 Provide a letter from an insurer or broker licensed in this State, attesting to the applicant's ability to serve as a consultant for the lines requested.
5.2.1.6 Complete an application on forms provided by the Commissioner (Application form 2A, 213 with fee of $50.00 per license).
5.2.1.7 At the Commissioner's discretion, sit for an examination conducted by the Qualification Review Board.
5.2.1.8 Applicants for consultant's license who present evidence of membership in the American College of Life Underwriters, the American College of Property and Liability Underwriters, the Society of Actuaries, the Casualty Actuarial Society, the American Academy of Actuaries or any similar organization which administers professional examinations shall be exempt from examination and/or prior license qualifications.
6.0 Exemptions
6.1 An actuary or a certified public accountant who provides information recommendations, advice or services in his professional capacity, if neither he nor his employer receives any compensation directly or indirectly on account of any insurance, bond, annuity or pension contract that results in whole or part from such information, recommendation, advice or services, shall not be required to obtain a Certificate of Authority as an insurance consultant.
7.0 Insurer's Responsibility
7.1 Each insurer transacting business in this State shall communicate the requirements of this regulation to their personnel doing business in Delaware and to take such action as is required to insure such persons are in compliance.
503 Licensing Procedure for Limited Representatives for Fixed or Guaranteed Annuities
18 Del. Admin. Code § 503 Licensing Procedure for Limited Representatives for Fixed or Guaranteed Annuities
503 Licensing Procedure for Limited Representatives for Fixed or Guaranteed Annuities [Formerly Regulation 35]
- Section 1 was index.*
2.0 Definitions.
2.1 The definitions below are summarized for convenience. For complete definitions see cited reference as applicable.
“Agent of New York Stock Exchange Broker-Dealer” In general, the representative of a broker-dealer, registered with the New York Stock Exchange, who is engaged in the business of transaction of securities for the account of others. The agent acts for and on behalf of the broker-dealer and not on his own account. [6 Del.C. §7302(a)(2)]
“Agency or Firm License” A license or certificate of authority issued to a corporation, firm, sole proprietorship, partnership or other business entity authorizing the conduct of insurance business in the firm's name. Such license is issued to the corporation or firm on the basis of the qualification of its specific members who are registered with the Department. The certificate of authority is valid only for those lines of insurance for which the registered member is qualified and licensed. The insurance transactions of the licensed firm may only be conducted by the licensed registered members. (Regulation 201 Formerly Insurance Regulation No. 16)
“Annuity” An insurance contract under which obligations are assumed as to periodic payments for specific term or terms, or where the making or continuance of all or some such payments, or the amount of such payments, is dependent upon continuance of human life. (18 Del.C. §2902)
“Fixed or Guaranteed Annuity” An insurance contract which provides for an annuity payment of a stipulated amount commencing either immediately or at some future date. The amount of the insurer's payments are guaranteed and cannot be changed according to specific investment experience.
“Insurer's Appointment” Written authorization by an insurer conveying to specific individuals and firms to act as agent and/or limited representative for that insurer in the solicitation of insurance contracts. Such appointments must be filed with and approved by the Department. (18 Del.C. §1714)
“Limited Representatives” A certificate of authority issued to individuals and/or agencies conveying authority for the transaction of insurance business. The authority of the limited representative is limited to the specific lines of insurance described on the certificate. The limited representative certificate is issued for those lines of insurance which the Commissioner deems essential for the transaction of insurance business in Delaware and which do not require the level of qualification required for a full agent's or broker's license. Such certificates are normally issued where insurance is a peripheral activity associated with the licensee's primary business. (18 Del.C. §1706)
3.0 License Qualification.
3.1 Each applicant for license as a limited representative for the line of fixed or guaranteed annuity, whether as an individual or as a registered member of a licensed firm, shall meet the requirements of 18 Del.C. §1720 except that:
3.1.1 the applicant shall not be required to satisfy 18 Del.C. §1720(a)(3) (principal occupation, insurance, fifty percent of income from insurance).
3.1.2 18 Del.C. §1720(a)(4) (written examination) shall not apply.
3.2 Each applicant shall have demonstrated his qualification for license by successfully completing the National Association of Security Dealers (NASD) examination and shall include as a part of the application evidence of such successful completion. No license shall be issued unless this criterion is fulfilled.
4.0 License Application.
4.1 License application for a certificate of authority as a limited representative for fixed or guaranteed annuity may be submitted for a firm, registered firm member, or an individual. The principal determinate for the type of license requested will be the manner in which business is written and commissions paid. Regulation 201 (Formerly Insurance Regulation No. 16) provides a more comprehensive definition of the requirement. In general, if the firm is the producer of record and the recipient of commissions, then the firm or agency should be licensed and those who conduct insurance transactions on behalf of the firm should be licensed as registered members of the firm.
4.2 Firm or agency application: Procedure is described in Delaware Insurance Department Bulletin 75-5. Submit insurance application Form 2B describing the firm, Form 2A describing the member(s) who will conduct business on behalf of the firm and insurer's appointment Form 1A completed by the insurer and fees as required in 18 Del.C. §1701.
Note that a firm license may not be issued or continued unless there is at least one qualified member registered as to the firm. The insurer sponsoring the initial license is required to provide a statement that a background investigation has been conducted and the applicant meets the requirements for license. [See 18 Del.C. §1720(a)(2)] with insurer's appointment Form 1A and fee as described in 18 Del.C. §701. When adding a new registered member to an existing agency or firm license, complete Form 2C. As noted above, the sponsoring insurer is required to provide the statement of background investigation on each initial applicant for license.
5.0 Fee (18 Del.C. §701)
5.1 Currently the fees are:
5.1.1 Firm, no fee.
5.1.2 Individuals and registered firm members, $13.00 for initial license with authority to represent one insurer; $3.00 for each additional insurer.
5.1.3 Annual renewal fee per individual and each registered member, due March 1 annually, as prescribed in 18 Del.C. §701; currently $10.00.
5.1.3.1 Nonresidents: Fees for firms and individuals are subject to the retaliatory provisions and are based upon the fee the applicant's state of residence would charge a Delaware applicant for a similar license. Minimum license and renewal fees are as shown above.
6.0 Responsibility of Licensee; Penalties.
6.1 Those licensed as limited representatives for fixed and guaranteed annuity shall have the same obligations and duties as are imposed on other licensees by statute and regulation. These include, but are not limited to:
6.1.1 the requirement to maintain records of insurance transactions. [18 Del.C. §1727(b)]
6.1.2 the representative's obligation to his client. (18 Del.C. §1717)
6.1.3 restrictions on commissions. (18 Del.C. §1730)
6.1.4 controlled business. (18 Del.C. §1729)
6.2 The sanctions described by 18 Del.C. §§1731 and 1732 will be applied as appropriate.
6.3 Brokers-dealers sponsoring an applicant for license as a limited representative for fixed or guaranteed annuity, and each such limited representative, shall have the obligation to report to the Insurance Commissioner immediately upon receipt of knowledge of the following:
6.3.1 imposition of any disciplinary sanction imposed upon him by the New York Stock Exchange.
6.3.2 any judgment or injunction entered against him on the basis of conduct deemed to have involved fraud, deceit, misrepresentation, or violation of any insurance or securities law or regulation.
7.0 Severability.
7.1 If any provision or clause of this Regulation or the application hereof to any person or situation is held invalid, such invalidity shall not affect any other provision or application of the Regulation which can be given effect without the invalid provision or application and to this end the provisions of this Regulation are declared to be severable.
8.0 Effective Date.
8.1 This Regulation shall become effective on July 10, 1981.
504 Continuing Education for Insurance Agents, Brokers, Surplus Lines Brokers and Consultants
18 Del. Admin. Code § 504-1.0 Statutory Authority and Purpose
This Regulation is established and promulgated pursuant to 18 Del.C. §§314, 1718 and 29 Del.C. Ch.101. The purpose of this Regulation is to establish requirements for insurance education and ethics for resident insurance adjusters, public adjusters, producers, surplus lines brokers and for standards for education providers and instructors in order to ensure a high level of professionalism for the benefit of Delaware consumers.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-2.0 Definitions
"Administrative record" means any document relating to course approval, course offerings, attendance, course completions or credits, and any other records required to be kept by the Delaware Insurance Code, and any rule or order of the Department.
"Audit" means Insurance Department activity to monitor the offering of courses or examinations, including visits to classrooms, test sites, and administrative offices where documentation of individual attendance and completion records and documentation of instructor credentials is maintained. Audit may include re-evaluating approved classroom course outlines, self-study programs and distance learning programs based on current guidelines.
"Authorized representative" or “provider representative” means the person designated by the entity as responsible for the timely filing of all required Department forms and documentation for courses and for the maintenance of necessary administrative records including but not limited to classes held, examinations monitored, instructor qualifications, and attendance records. Where this regulation provides for an act by an entity sponsor or provider, such act shall be performed by an authorized representative.
“Commissioner” means the Insurance Commissioner of the State of Delaware and/or such designee appointed by the Commissioner.
"Completion" when used in the context of:
Class means attendance for the full amount of time approved for each course.
Self-Study means a passing grade of 70% or better on the examination.
Seminar means attendance for the full amount of time assigned for each workshop or break-out session selected.
"Compliance date" means the last day of February of even numbered years. Each biennial license shall commence on March 1st and end on the last day of February of even numbered years.
"Contact person" means the person at the entity level with authority to transact business for the entity through contracts, licenses, or other means, usually as the owner or corporate officer, and who designates the school official to represent the entity.
"Continuously licensed" means an uninterrupted license without lapse due to suspension, revocation, voluntary surrender, cancellation or non-renewal for a period of 12 months or greater.
"Course" mean any class, self-study, seminar or distance learning course for insurance producers, surplus lines brokers, adjuster and public adjustor licensees or other insurance professionals that has been approved by the Department for the purpose of complying with continuing education requirements.
"Credit hour (CEUs)” means one (1) unit of credit based on a classroom hour or approved hour of credit for a seminar or self-study program.
"Department" means the Delaware Department of Insurance.
"Disciplinary action" means administrative action that has been taken against an individual or entity as a licensee or approved course provider, instructor, or school official for which probation, suspension, or revocation of any license (issued by this or any other state, country, or territory) or approved status has been ordered or consented to or for which a fine has been entered for a wrongdoing against a consumer or a licensee.
“Distance learning” or “Distance education” means instructional delivery that does not constrain the student to be physically present in the same location as the instructor. Distance education includes but is not limited to: audio, instructional television, videotape, teleconferencing, audio/video conferencing, and computer conferencing, web based instruction, traditional self-study course(s) including CDs and DVDs as supplied materials and any other planned learning that normally occurs in a different place from teaching and as a result requires special techniques of course design, special instructional techniques, special methods of communication by electronic and other technology, as well as special organizational and administrative arrangements approved by the Department.
"Entity sponsor" or “sponsor” means a natural person, firm, institution, partnership, company, corporation, or association offering, sponsoring, or providing courses approved by the Department in eligible continuing education subjects.
"Ethics credits" means the study of fiduciary responsibility, commingling of funds, payment and acceptance of commissions, unfair claims practices, professionalism, policy replacement consideration, handling or supervising the affairs or funds of another, conflicts of interest and matters that deal with individual character and personal characteristics such as honesty, integrity and professionalism in the insurance industry.
"Hour" means sixty (60) minutes of class or seminar time, of which at least fifty (50) minutes must be instruction, with a maximum of ten minutes of break per hour all of which must be accounted for on the agenda or syllabus. For self-study courses, "hour" means sixty (60) minutes of time including reading and studying which would be necessary to successfully complete the final examination (actual exam time not included).
"Initially Licensed" means the first insurance license issued an individual by this Department authorizing the transaction of insurance business in this state to which the continuing education requirement applies.
"Recognized association" means an insurance industry association established for at least 5 years.
"School official" means the person designated by the entity as responsible for the timely filing of all required Department forms and documentation for courses and for the maintenance of necessary administrative records including but not limited to classes held, examinations monitored, instructor qualifications, and attendance records.
"Syllabus" means an agenda showing the schedule of how a continuing education course is to be presented including time allotment to subject matter and including any meals and break times.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-3.0 Course Providers
3.1 A provider who sponsors a continuing education course must be approved by the Department and shall be operated by, including but not limited to, an authorized insurance company, a recognized insurance agents’ association, an insurance trade association, a self-insurance fund, a non-profit educational institute, national provider, a member of a state Bar Association, an independent program of instruction, or an institution of higher learning. Application for entity approval shall be concurrent with application for course approval and shall be submitted on written forms or in an electronic format approved by the Department. The Department may approve of or participate in reciprocal agreements relating to continuing education with the NAIC and/or its members. In assessing a provider’s application for approval, the Department may consider, among other factors, whether the management of a provider, including officers, directors, or any other person who directly or indirectly controls the operation of the provider, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the provider in such position.
3.2 General Requirements and Responsibilities.
3.2.1 Providers shall maintain the records of each individual completing a course for three (3) years from the date of completion and shall send the Department a roster of those in attendance within thirty (30) days of the course completion date on forms or in electronic format prescribed by the Department.
3.2.2 Providers shall notify the Producer Licensing Education Section, within thirty (30) days of a change in their mailing address or administrative office address.
3.2.3 Course providers will provide each licensee successfully completing their program a Certificate of Completion for attendees’ records only after successful completion of the entire approved education course/activity. Entity Sponsors are required to distribute a Certificate of Completion to each licensee successfully completing the educational activity within thirty (30) calendar days.
3.2.4 Course providers shall obtain the Department’s approval for each course offered. No prior approval shall be required for any course offered through any NAIC sponsored reciprocal agreement but course credit under this regulation shall only be allowed for those subjects eligible for course credit in Delaware.
3.2.5 No partial credit may be granted for any course unless an emergency arises. In case of an emergency, a written explanation shall be provided to the Department upon request.
3.2.6 Self-study courses shall contain an exam that shall be graded by the sponsor or an approved third party. No credit shall be given for a failing grade.
3.2.7 One Continuing Education Credit shall consist of fifty (50) minutes of qualifying classroom instruction.
3.2.8 Course Providers are responsible for the actions of their school officials, instructors, speakers and monitors.
3.2.9 Entity sponsors and instructors shall conduct themselves in a professional manner and may not misrepresent any course material or other information.
3.2.10 Course approvals, once granted by the Department, shall remain valid until modified or terminated by the entity sponsor or Department. Any changes or modifications to one or more courses by an entity sponsor shall not be valid until submitted to and approved by the Department in writing. All courses approved for credit as of November 1, 2004 shall not be subject to re-approval under the provisions of this section.
3.2.11 No activity may be advertised as having been approved until the sponsor receives written notification from the Department.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-4.0 Instructors
4.1 An entity sponsor shall certify to the Department that the instructor shall possess one or more of the following qualifications:
4.1.1 A minimum of 3 years working experience in the subject matter being taught.
4.1.2 An approved professional designation in accordance with Section 9.3 from a recognized association.
4.1.3 A degree from an accredited school in the subject matter being taught.
4.1.4 Special expertise, such as employment with a governmental entity; or a documented history of research or study in the area.
4.1.5 An instructor who is a licensee shall receive the same number of continuing education credits granted to participants. The instructor may not receive additional credit for teaching the same course more than once in a biennium reporting period.
4.1.6 Instructors shall have the authority and responsibility to deny credit to anyone who disrupts the class or is inattentive. Based on the course provider’s policies, refunds may be given. It will be a violation of this regulation for an instructor or school official to knowingly allow during the class, the activities of sleeping, reading of books, newspapers, or other non-course materials, use of a cellular phone, or to allow absence from class other than authorized breaks. Penalties will be assessed against participant, instructor, and school, as provided in this regulation. Approval of a course will constitute approval of submitted instructors.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-5.0 Department’s Action upon Violation or Non-conformity by Course Provider or Instructor
If the Department determines that a course provider or instructor has violated any provisions of this regulation, the Department may withdraw approval of the entity sponsor or instructor or may order a refund of course fees to licensees who attended the course, or both. The Department may also refuse to approve courses conducted by specific sponsors or instructors if the Department determines that past offerings by those entity sponsors or instructors have not been in compliance with insurance education laws, rules and regulations. The Department or his/her designee(s) may perform course provider audits on all educational activity proposed to be available to licensees of this State.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-6.0 Appeals
6.1 Appeals shall be conducted in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch.101 and 18 Del.C. §§323-28.
6.2 Providers may appeal to the Commissioner or Commissioner’s designee, from any adverse decision on their request concerning continuing education activity. Appeals shall be in writing and minimally contain:
6.2.1 A synopsis of the issue,
6.2.2 The basis for the appeal,
6.2.3 The name, address, and telephone number of a contact person,
6.2.4 A copy of the original course submission and supporting documents, and
6.2.5 A copy of any correspondence from the Continuing Education Advisory Council or the Insurance Department.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-7.0 Required Forms
7.1 Requests for entity sponsor approval shall be made to the Department on such forms as shall be authorized by the Department.
7.2 Requests for entity sponsor course approval shall be made to the Department on such forms as shall be authorized by the Department.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-8.0 Licensee’s Responsibility
8.1 Each licensee shall retain each original course completion certificate for a period of three (3) years. The course completion certificate may be required in the event of a discrepancy between the licensee’s records and the Department’s records. Each licensee may be subjected to a Department audit of continuing education requirements. Failure to comply with a Department audit may result in suspension of a licensee’s license. Each licensee will have thirty (30) days to produce such records upon request or audit by the Department.
8.2 General Requirements. Resident licensees and producers not otherwise exempted shall earn, at a minimum, the number of education credits described below.
8.2.1 Resident licensees required to fulfill continuing education requirements shall complete twenty-four (24) credit hours of Department approved education subjects, three (3) of which shall be in ethics subjects during each biennium reporting period. If the resident producer holds a health license and solicits long term care policies, as part of his/her biennial requirement, the producer must complete at least three (3) hours of training in Delaware long term care insurance that consists of product knowledge, laws, rules and regulations. Any resident licensee who writes flood insurance under the National Flood Insurance Program shall be required to complete a two (2) hour continuing education course related to flood insurance under the National Flood Insurance Program as part of the twenty-one (21) general credit hours necessary to maintain a Delaware resident license.
8.2.2 Resident adjusters, public adjusters and Fraternal Agents shall be required to fulfill twelve (12) credit hours of Department approved education subjects, three (3) of which shall be in ethics subjects during each biennial reporting period.
8.2.3 Resident licensees will receive a continuing education transcript at least ninety (90) days prior to the end of a license biennium by mail or by electronic access as the Department deems appropriate. The licensee is responsible for reviewing the transcript for accuracy. To dispute the Department’s accounting, the licensee must submit a written exception thereto prior to the biennium deadline and include a copy of the providers course completion certificate.
8.2.4 The maximum number of carryover credits shall not exceed five (5) credits in a biennium reporting period. Carryover shall not apply to ethics credit requirements. Credits in excess of the mandatory requirements set forth in section 8.2.1 may be applied to the licensee’s general course requirements
8.2.5 No continuing education requirement shall apply to newly licensed individuals during the biennium in which such individuals are licensed.
8.3 Automatic credit. An individual required to complete continuing education requirements as specified in section 8.2.1 that has been continuously licensed for twenty-five (25) years or longer prior to the start of a biennium reporting period or who holds a professional designation shall receive an automatic credit of twelve (12) credits in each biennium. An individual required to complete continuing education requirements as specified in section 8.2.2 that has been continuously licensed for twenty-five (25) years or longer prior to the start of a biennium reporting period or who holds a professional designation shall receive an automatic credit of six (6) credits in each biennium. The Department shall maintain a list of approved professional designations. Automatic credits may not be applied to satisfy (i) the mandatory continuing education courses set forth in section 8.2.1, or (ii) the required ethics credits set forth in section 8.2.2.
8.4 License reinstatement after suspension, revocation or cancellation. All resident licensees whose licenses were canceled, suspended or revoked for a period of twelve (12) months or more shall first complete all licensing requirements under 18 Del.C. §1706 including the retaking of exams for all lines of authority under which the individual proposes to transact insurance. Any licensee who is reinstated under the provisions of this subsection shall not be entitled to the waiver provided for in section 8.2.5.
8.5 Extension of time. For good cause shown, the Department may grant an extension of time during which the requirements imposed by this regulation may be completed. The extension shall not exceed twelve (12) months. The extension will not alter the requirements or due date of the succeeding biennium period. "Good cause" includes disability, natural disaster, or other extenuating circumstances. Each request for extension of time shall be in writing from the licensee and shall include details and any documentation to support the request. Each request must be received by the Department no less than thirty (30) days before the expiration of the biennium period.
8.6 Waiver of Continuing Education Requirements. The requirements of this regulation may be waived in writing by the Department for good cause shown. "Good cause" includes long-term illness or incapacity and any other emergency situations deemed appropriate by the Department. Request for waivers of continuing education requirements shall be made in writing and shall be submitted to the Department no later than thirty (30) days prior to the end of the biennium for which such waiver is requested. Those individuals serving full time in the armed forces of the United States of America on active duty outside of the State of Delaware shall notify the Department upon their return by supplying a copy of their activation orders as part of their application for a waiver. Any waiver granted pursuant to this regulation shall be valid only for the biennium for which waiver application was made.
8.7 Sixty (60) days prior to the start of each biennium, the Department shall prepare and publish a list of those lines of insurance for which the producers are exempt from the requirements of section 8.0.
8.8 Resident adjusters licensed for the lines of Fidelity and Surety and/or Marine and Transportation are exempt from the provisions of section 8.2.2 of this regulation. Nonresident adjusters and public adjusters must meet the license requirements of their home state.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-9.0 Penalty for Noncompliance
9.1 Pursuant to 18 Del.C. §§329, 1712, and 1718, any licensee who fails to complete the minimum requirements of this regulation, and who has not been granted an extension of time to comply under section 8.5 of this regulation shall be subject to an administrative penalty up to and including a $2000.00 fine and suspension of license(s) for one year. Submission of false or fraudulent information shall result in an administrative penalty up to and including a $15,000.00 fine and permanent revocation of license.
9.2 Any appointment(s) of such licensee suspended for failure to comply with this regulation shall likewise be suspended by operation of law. Upon satisfactory completion of education requirements in arrears and payment of any administrative fine imposed within a period of twelve (12) months, all license(s) and appointments shall be reinstated unless or until the insurer notifies the Department and licensee in writing of the insurer’s intent to terminate such appointment. If suspension is for a period of twelve (12) months or greater, the licensee is subject to compliance with 18 Del.C. §1706 including the retaking of examinations for all line(s) of authority for which the individual licensee seeks a license.
9.3 The Commissioner may, by Order based upon a reasonable belief that a violation of Title 18 occurred, require any individual licensed under 18 Del.C. Ch. 17 to complete in addition to biennium insurance education requirements, approved continuing education course work to ensure the maintenance and improvement of a licensee’s insurance skills and knowledge.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-10.0 Continuing Education Advisory Council
10.1 The Council shall consist of fourteen (14) licensees drawn from the professional organizations and the insurance industry in the State, 5 from the life and health field, 5 from the property and casualty field and four (4) from the claims settlement field.
10.2 One of the primary responsibilities of the Council shall be to review applications for course approvals and make recommendations to the Department regarding acceptance/ rejection and the number of CEUs to be granted if accepted.
10.3 The Council shall also advise the Department on matters of concern as they arise and be the liaison between the Department and the professional organizations.
10.4 Members shall serve a term of 2 years. Any member may be reappointed for successive terms. The committee shall meet every 2 months on the third Tuesday of the month or additionally as required. The members of the committee shall serve without pay and shall not be reimbursed for any expenses.
10.5 The Department’s decision with respect to any Entity Sponsor submission shall be final.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-11.0 Separability
If any provision of this Regulation shall be held invalid, the remainder of the Regulation shall not be affected thereby.
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
18 Del. Admin. Code § 504-12.0 Effective Date
This Regulation shall become effective ten (10) days after being published as a final regulation.
March 1, 1985
Amended June 6, 1986
Amended March 24, 1987
Amended March 1, 1998
Amended November 15, 2004
History
- 8 DE Reg. 703 (11/1/04)
- 2 DE Reg. 122 (7/1/98)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1239 (02/01/06)
- 10 DE Reg. 734 (10/01/06)
- 19 DE Reg. 525 (12/01/15)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 8 DE Reg. 703 (11/1/04)
- 9 DE Reg. 1237 (02/01/06)
- 19 DE Reg. 525 (12/01/15)
505 Fiduciary Fund Requirements for Insurance Producers
18 Del. Admin. Code § 505 Fiduciary Fund Requirements for Insurance Producers
505 Fiduciary Fund Requirements for Insurance Producers
1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311, 1706 (e), and 2304(7). It is promulgated in accordance with 29 Del.C. Ch. 101.
2.0 Scope
This regulation shall apply to all producers as defined herein.
3.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
“Anti-commingling” is when the agent is required to keep premium monies in a separate account from the agency's capital, operating or other monies.
“Commingling” is the act of maintaining all fiduciary funds and some or all of the agency's other funds in a single banking account.
“Fiduciary capacity” is the position of a person who acts on behalf of another in matters involving property or money. The term implies a position of trust and power in which confidence is placed and responsibility and good faith are required.
4.0 Consent of the Insurer Required.
No insurance producer shall sell, solicit, or negotiate a contract of insurance and fraudulently appropriate or convert to his own use or, with intent to use or fraudulently appropriate, take, or otherwise dispose of, or withhold, appropriate, lend, invest or otherwise use or apply money or substitutes for money received by him as an insurance producer, contrary to the instructions or without the consent of the insurer.
5.0 Holding of Premium Funds
All insurance producers shall hold premium funds in a fiduciary capacity.
6.0 Immediate Remittance, Separate Bank Accounts Not Required
6.1 Producers who make immediate remittance of collections to their entities need not maintain separate bank accounts for these collections.
6.2 To constitute immediate remittance, payments to entities shall be in the same form as the collection was received from the insured, with the exception of payments by the insured made in cash or with check.
6.3 To constitute immediate remittance, remittance shall occur within five business days.
7.0 Mingling of Premium Funds, when permitted.
7.1 Insurance producers who have the express written consent of their entities to mingle premium moneys with their own funds may do so if the following exists:
7.1.1 Monies held in a fiduciary capacity are reasonably ascertainable from the books of accounts and records of the producers.
7.1.2 Amounts due entities are equal to or less than the combined accounts receivable and current bank balances.
8.0 Commingling of funds, when not permitted.
8.1 A producer who does not have the express consent of his entities to commingle moneys with his personal funds shall hold the premium moneys separate from other funds in accordance with the following:
8.1.1 A producer who does not make immediate remittance to his entities may not deposit premiums in office operating accounts but shall keep the moneys in a separate bank account from which disbursement may not be made other than for the payment of premiums to he entities, the return of premiums to the insured or the transfer of commissions or the withdrawal of voluntary deposits.
8.1.2 Voluntary deposits in the premium account in excess of premiums collected and unpaid to entities may be made for the purpose of maintaining a minimum balance, to guarantee the adequacy of the account or for the purpose of the payment premiums to the entities in advance of their collection. These deposits may not be withdrawn except to the extent that the remaining balance is equal to the total of net premiums collected and unpaid to entities.
8.1.3 The deposit of a premium collection in a separate bank account may not be construed as a mingling by the producer of the net premium and of the commission portion of the premium. The commission portion of the premium may be withdrawn from the separate bank account at the discretion of the producer.
8.1.4 The maintenance in a separate bank account of at least the net balance of premiums collected and unpaid to the entities by producers operating under the "account current system" shall be construed as compliance with this section and with 18 Del.C. §§1706 (e) and 2304(7), if the funds so held are readily ascertainable from the books of account and records of producers.
9.0 Operating and Premium Accounts, Requirements
When both an operating and a premium account are maintained by producers under this section for purposes of segregating premiums collected, the premium account balance shall include funds sufficient to pay premiums collected and any amount delinquent or in dispute with the entity represented. Upon reconciliation of delinquent or disputed accounts, excess moneys remaining in the premium bank account may be withdrawn as if they had been voluntary deposits.
10.0 Deposit of Premiums Collected from Insureds
A producer may deposit premiums collected from insureds in an interest bearing account when the producer is not required to make an immediate remittance to the entity of premium moneys, if the moneys are not placed in an account upon which a penalty may be levied against the principal for early withdrawal and/or if the moneys are placed in an account insured by the United States government or instruments secured by the Unites States government.
11.0 Separability
If any provision of this regulation, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of such provisions, and the application of such provisions to any person or circumstance other than those as to which it is held invalid, shall not be affected.
12.0 Effective Date
This regulation becomes effective on June 11, 2010.
13 DE Reg. 1555 (06/01/10)
506 Crop Insurance Adjusters and Producers
18 Del. Admin. Code § 506 Crop Insurance Adjusters and Producers
506 Crop Insurance Adjusters and Producers
1.0 Purpose
1.1 The purpose of this Chapter is to provide rules to assist the Commissioner in administering the laws relating to the licensure and regulation of crop insurance producers and adjusters, as provided for in 18 Del.C. Chapter 17 et. seq.
1.2 This regulation should not be viewed as replacing any other or additional statutory requirements not explicitly included in this regulation.
2.0 Scope
This regulation applies to all persons acting as crop insurance adjusters or producers in this state. The crop insurance producer and adjuster licenses to be issued by the Commissioner.
3.0 Definitions
"Commissioner" means the Commissioner of the Delaware Insurance Department.
"Crop" means and includes any agricultural product, including livestock, nursery product, tree and product from a tree, as well as anything insured by the Federal Crop Insurance Corporation under a crop insurance program.
“Crop insurance adjuster” means any person, who, for compensation or any other thing of value, does any of the following:
• Acts or aids in investigating, verifying, substantiating, estimating, appraising, determining, presenting, and discussing the value of the claim, and/or effectuating the resolution of a claim for loss or damage covered by an insurance contract that insures crops;
• Advertises for employment as an adjuster of claims arising under insurance contracts that insure crops or solicits business or represents to the public to be a crop insurance adjuster of insurance claims, for losses or damages arising out of policies of insurance that insure crops; or
• Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about claims for losses or damages arising out of policies of insurance that insure crops, when doing any of the foregoing for or on behalf of another person engaged in the business of adjusting losses or damages covered by an insurance policy that insures crops, for the insured.
"Department" means the Department of Insurance;
“NAIC” means the National Association of Insurance Commissioners;
"Person" means a natural person;
“Producer” means any person required to be licensed under the laws of this State to sell, solicit, or negotiate contracts of insurance authorized within the scope of said license.
"Risk Management Agency" means that agency of the United States Department of Agriculture acting on behalf of the Federal Crop Insurance Corporation to administer federal crop insurance programs.
4.0 Qualification for the Issuance of a License
A person shall apply for and receive from the Commissioner a multi-peril crop insurance adjuster and/or producer license to operate as a multi-peril crop insurance producer or adjuster in this State. All applications for licensure shall be in accordance with the requirements of 18 Del.C., §§1706 and 1707 (1).
5.0 Examination Requirements
5.1 All individuals applying for a multi-peril crop insurance adjuster license are required to pass the Risk Management Agency-approved Proficiency test for multi-peril crop insurance adjusters.
5.2 All individuals applying for a multi-crop insurance producer license shall be required pass a written examination as required by 18 Del.C., §1705.
5.3 The Commissioner may enter into a contract with a testing organization for the examination of applicants for a license as a multi-peril crop insurance producer or adjuster. Such contract may provide that the testing organization shall:
5.3.1 Assume responsibility for the administration and grading of the examination; and
5.3.2 Charge and collect from each applicant the fee for administering the examination.
6.0 Continuing Education Requirement
6.1 An individual, who holds a multi-peril crop insurance license shall satisfactorily complete a minimum of twenty-four (24) hours of continuing education credits. The education required by this section shall be in addition to any other continuing education requirements required for other professional licenses held by the individuals licensed under Chapter 17 of the Delaware Code.
6.2 Only continuing education courses approved by the Commissioner shall be used to satisfy the continuing education requirement of Paragraph 6.1.
7.0 Effective Date
This Regulation shall take effect 10 days after execution of an Order by the Commissioner and its publication in the Register of Regulations or January 1, 2011, whichever shall occur last.
14 DE Reg. 573 (12/01/10)
507 Workers’ Compensation Insurance Adjusters
18 Del. Admin. Code § 507 Workers’ Compensation Insurance Adjusters
507 Workers’ Compensation Insurance Adjusters
1.0 Purpose
1.1 The purpose of this Chapter is to provide rules to assist the Commissioner in administering the laws relating to the licensure and regulation of Workers’ Compensation insurance adjusters, as provided for in 18 Del.C. Chapter 17 et. seq.
1.2 This regulation should not be viewed as replacing any other or additional statutory requirements not explicitly included in this regulation.
2.0 Scope
This regulation applies to all persons acting as Workers’ Compensation insurance adjusters in this state. The Workers’ Compensation Insurance adjuster license is to be issued by the Commissioner.
3.0 Definitions.
"Commissioner" means the Commissioner of the Delaware Insurance Department.
"Department" means the Department of Insurance;
“NAIC” means the National Association of Insurance Commissioners;
"Person" means a natural person;
“Workers Compensation insurance adjuster” means any person, who, as an independent contractor, or on behalf of an independent contractor, insurer or self-insurer, producer or managing general agent, investigates and/or negotiates settlement of workers’ compensation claims arising under insurance contracts.
4.0 Qualification for the Issuance of a License.
A person shall apply for and receive from the Commissioner a Workers Compensation insurance adjuster license to operate as a workers compensation adjuster in this State. All applications for licensure shall be in accordance with the requirements of 18 Del.C. §§1706 and 1707(1).
5.0 Examination Requirements.
5.1 All individuals applying for a workers compensation insurance adjuster license are required to pass the approved proficiency test for workers compensation insurance adjusters.
5.2 The Commissioner may enter into a contract with a testing organization for the examination of applicants for a license as a workers compensation insurance adjuster. Such contract may provide that the testing organization shall:
5.2.1 Assume responsibility for the administration and grading of the examination; and
5.2.2 Charge and collect from each applicant the fee for administering the examination.
6.0 Continuing Education Requirement.
6.1 An individual, who holds a workers compensation insurance adjuster license shall satisfactorily complete a minimum of twelve (12) hours of continuing education credits, three (3) of which shall be in ethics subjects, during each biennium reporting period. The education required by this section shall be in addition to any other continuing education requirements required for other professional licenses held by the individuals licensed under Chapter 17 of the Delaware Code.
6.2 Only continuing education courses approved by the Commissioner shall be used to satisfy the continuing education requirement of Paragraph 6.1.
7.0 Effective Date
This Regulation shall take effect 10 days after execution of an Order by the Commissioner and its publication in the Register of Regulations or January 1, 2011, whichever shall occur last.
14 DE Reg. 575 (12/01/10)
600 Automobile Insurance
601 Cancellation or Non-renewal of Automobile Policies
18 Del. Admin. Code § 601 Cancellation or Non-renewal of Automobile Policies
601 Cancellation or Non-renewal of Automobile Policies [Formerly Regulation 2]
1.0 Authority and Scope
1.1 Pursuant to 18 Del.C. §314, the following rules and regulations are hereby promulgated and adopted. They are applicable to all casualty insurance companies delivering or issuing for delivery in this State automobile policies pursuant to 18 Del.C. Ch. 39. (All subsequent references in this regulation to sections or chapters of said Insurance Laws shall be by section or chapter number only, and unless a specific Title reference is otherwise set forth, it shall be understood to refer to a section or chapter in Title 18 of the Delaware Code Annotated.)
2.0 Use of 18 Del.C. §3904(7)(iii)
2.1 It is ordered that in all instances where 18 Del.C. §3904(7)(iii) is invoked said case including all pertinent information shall be submitted to this Department for review thirty days prior to the contemplated action for nonrenewal and twenty days prior for cancellation.
3.0 Cancellation and Non-Renewal
3.1 It is ordered in the event of cancellation or non-renewal that the company must stand ready to justify its action in accordance with its filings or as allowed in 18 Del.C. §3904. Said company must keep all information concerning rejected risks readily available to this Department for a period of three years following such action.
4.0 Primary Notice to Insureds
4.1 Of prime consideration in promulgation of this Rule is a full disclosure at the inception of the contract to the insured of his rights and limitations under the contract regarding cancellation and non-renewal. Therefore, it is ordered in this regard that pertinent provisions stated in the filings be expressly stated in a separate letter or notice which is to accompany each contract.
5.0 Compliance
5.1 It is ordered that full compliance with this Rule shall be effected by the close of business, January 30, 1970 with the exception of existing contracts which shall comply on their next contract renewal date after November 30, 1969.
602 Motor Vehicle Physical Damage Appraisers
18 Del. Admin. Code § 602 Motor Vehicle Physical Damage Appraisers
Statement of Purpose
18 Del.C. Ch. 17 has been amended to include motor vehicle physical damage appraisers under the license requirements therein. The following regulation is required to set standards of conduct for appraisers and to implement the provisions of Chapter 17 and establish through regulations guideline procedures for the manner in which motor vehicle physical damage appraisers conduct their business.
It is not contemplated that this regulation shall apply where no appraisal has been assigned. Recognition is given to the fact that many minor damage claims do not require a formal appraisal and to require such would be an undue burden upon the parties involved.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-1.0 Definitions.
As used in 18 Del.C. Ch. 17:
“Appraisal” is not considered to include an estimate of repair to be performed by the individual or entity making such estimate.
“Appraiser” means a motor vehicle physical damage appraiser licensed under the provisions of 18 Del.C. Ch. 17. This shall include all persons who in this State practice the appraisal of motor vehicle physical damage.
“Motor vehicle” means any "motor vehicle" as defined in 21 Del.C. §101.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-2.0 Display of Appraiser License.
Each appraiser, while engaged in appraisal duties, shall carry the license issued to him by the Insurance Department and shall display it, upon request, to an owner whose vehicle is being inspected, to the repair shop representative involved or to any authorized representative of the Insurance Department.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-3.0 Copies of Appraisal—Specification of New Parts.
The appraiser shall exchange a legible copy of his appraisal with that of the repair shop selected to make the repairs and also furnish a copy to the owner of the vehicle. This appraisal shall contain the name of the insurance company ordering it, if any, the insurance file number, the number of the appraiser's license and the proper identification number of the vehicle being inspected. All unrelated or old damage should be clearly indicated on the appraisal which shall include an itemized listing of all damages, specifying those parts to be replaced or repaired. Because an appraiser is charged with a high degree of regard for the public safety, the operational safety of the vehicle shall be paramount in considering the specification of new parts. This consideration is vitally important where the parts involved pertain to the drive train, steering gear, suspension units, brake system or tires.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-4.0 Manner of Inspection.
An appraiser may prepare an appraisal or a repair estimate on a motor vehicle that has been damaged as a result of a covered loss either from the appraiser’s personal inspection of the vehicle or from photographs, videos, or electronically transmitted digital imagery of the motor vehicle; provided, however, that no insurer may require an owner of a motor vehicle to submit photographs, videos, or electronically transmitted digital imagery as a condition of an appraisal. If the owner of a motor vehicle is not satisfied with an appraisal based upon photographs, videos, or electronically transmitted digital imagery of the motor vehicle, the owner of the motor vehicle may require an insurer to obtain an appraisal based on a personal inspection.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-5.0 Specified Repair Shop Requirement.
No appraiser shall require that repairs be made in a specified repair shop.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-6.0 Supplementary Allowances.
Every appraiser shall promptly reinspect damaged vehicles prior to the repairs in question when supplementary allowances are requested by repair shops and the amount or extent of damages is in dispute.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-7.0 Conduct of Appraisers.
7.1 Every appraiser shall:
7.1.1 Conduct himself in such a manner as to inspire public confidence by fair and honorable dealings;
7.1.2 approach the appraisal of damaged property without prejudice against, or favoritism toward, any party involved in order to make fair and impartial appraisals;
7.1.3 disregard any efforts on the part of others to influence his judgment in the interest of the parties involved;
7.1.4 prepare an independent appraisal of damage;
7.1.5 inspect a vehicle within six working days of assignment to the appraiser unless intervening circumstances (i.e., catastrophe, death, failure of the parties to cooperate) render such inspection impossible.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-8.0 Gratuities or Other Consideration.
8.1 No appraiser shall:
8.1.1 Receive directly or indirectly any gratuity or other consideration in connection with his appraisal services from any person except his employer or, if self‑employed, his customer;
8.1.2 Traffic in automobile salvage if such salvage is obtained in any way as a result of appraisal services rendered by him for his own benefit.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
18 Del. Admin. Code § 602-9.0 Effective Date.
This proposed amended regulation shall become effective 10 days after being published as a final regulation.
History
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
- 19 DE Reg. 1020 (05/01/16)
603 Delaware Motorists Protection Act
18 Del. Admin. Code § 603-1.0 Scope and Authority
1.1 This Regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311 and 2712, 21 Del.C. §2118 and promulgated in accordance with the Delaware Administrative Procedures Act, Title 29 Del.C. Ch. 101.
1.2 21 Del.C. §2118 provides that policies purporting to meet the requirements of the Section must provide coverage and policyholder notifications required by that Section.
1.3 In order to enable insurers to satisfy this requirement, the following guidelines are promulgated to advise insurers of the standards which will be used by the Insurance Department in reviewing forms filed by insurers.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-2.0 Coverage
2.1 Policies shall contain at least the following required coverages:
2.1.1 Bodily injury and property damage liability with limits of at least those prescribed by the Financial Responsibility Laws of Delaware.
2.1.2 Personal Injury Protection.
2.1.3 Compensation for damage to property other than motor vehicles.
2.2 The following additional coverages must be offered to the insured:
2.2.1 Compensation for damage to the insured motor vehicle, including loss of use of the motor vehicle.
2.2.2 Uninsured/Underinsured vehicle coverage.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-3.0 Minimum Coverage Required
The provisions herein required need not be stated in the language or form of these regulations, but the coverage afforded shall be equal or of greater benefit to the insured with the exception of the requirement stated in subsection 11.1 of this regulation.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-4.0 Definitions
"Bodily Injury" means bodily injury to a person and sickness, disease or death which results from it.
"Funeral Expenses" means reasonable, customary and necessary expenses incurred within two years of the accident for professional funeral services. These expenses include the cost of a burial plot for one person.
"Injured Person" is as defined in 21 Del.C. §2118(a)(2)a.5.
"Innocent Third Parties" means claimants who at the time of the event leading to the claim (1) were not in violation of any Rules of the Road as promulgated under Title 21, Delaware Code and (2) whose activities did not contribute in any way to the accident. This presumption may be rebutted by clear and convincing evidence.
"Loss of Earnings" means loss of salary or its equivalent, net of taxes which were lost by reason of inability to work. This covers loss of wages, salary or lost earnings of a self-employed person. Payment of lost earnings is to be at the time they are actually lost.
“Loss of Use” means expenses necessarily and actually incurred by the named insured as a result of damage to the insured motor vehicle.
"Medical Expenses" means reasonable charges for necessary medical, hospital, dental, surgical, x-ray, ambulance, professional nursing services and prosthetic devices.
"Motor Vehicle" means a land motor vehicle, including a trailer or semi‑trailer as used therewith, required to be registered, licensed and required to carry insurance under the Financial Responsibility Laws.
"Nonstandard" means an insured policyholder who is unable to procure insurance through the standard market and whose premium charge is in excess of the premium charged by the Delaware Automobile Insurance Plan ("DAIP") for similar (though not identical) coverage.
"Substitute Service Expenses" means reasonable and necessary extra‑incurred expense for personal services which would have been performed by the injured person had he or she not been injured.
"Wilmington Auto Accident Reparations Arbitration Committee or Its Successors" as described at 21 Del.C. §2118(g)(3) is deemed to include the insurance industry forums including the nationwide intercompany arbitration agreement, special arbitration agreement forum, automobile accident reparations arbitration agreement.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-5.0 Bodily Injury Liability and Property Damage Liability
The insurer shall undertake to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage caused by accident and arising out of ownership, maintenance or use of a motor vehicle. The policy shall designate by explicit description or by appropriate reference the motor vehicle to which this coverage applies. Indemnity from such legal liability shall be to a limit of at least the Financial Responsibility Laws of the State of Delaware and, if a single limit for such bodily injury and property damage liability is provided, such single limit shall be not less than the sum of the bodily injury and property damage limits stated in the Financial Responsibility Laws for any one accident.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-6.0 Personal Injury Protection
6.1 The policy shall provide compensation to an injured person for medical expenses, funeral expenses, loss of earnings and for substitute services incurred as a result of bodily injury, caused by accident, involving the insured vehicle.
6.2 The policy must have minimum limits for this coverage as stated in 21 Del.C. §2118. The policy may provide for higher limits of compensation but the compensation for funeral expenses included in the foregoing shall not exceed the sum of $5000 per person. Personal injury protection benefits shall be payable within 30 days of the demand thereof by the claimants provided that reasonable proof of loss for which the benefits as demanded has been submitted to the PIP carrier.
6.3 Any insurer, in accordance with filings made with the Insurance Department, may provide for certain deductibles, waiting periods, sublimits, percentage reductions, excess provisions or similar reductions at the election of the owner of a motor vehicle to apply only to loss and expense incurred as a result of injury to the owner of the vehicle or members of his household. All deductibles offered must be per accident and not per person. For the purpose of this coverage members of the owner's household shall be members of the named insured's immediate family not having a separate household, and persons actually residing with and economically dependent upon him/her. The owner's election of any reduced benefits described in this section must be made in writing and signed by that owner. The requirement of an election in writing may be satisfied by a statement on the application for insurance, or other form which shall clearly convey the effect of his/her option selected. In order to assure that this election is made, insurers, agents or brokers must offer for the consideration of the owner the deductibles or similar reductions required to be filed in accordance with this section.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-7.0 Compensation for Damage to Property Other than Motor Vehicles
Compensation for damage to property arising as a result of an accident involving the motor vehicle, other than damage to a motor vehicle, aircraft, watercraft, self-propelled mobile equipment and any property in or upon any of the aforementioned, with the minimum limits of $10,000 for any one accident. Payments under this section shall be excess over other valid and collectible insurance.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-8.0 Compensation for Damage to Motor Vehicles
8.1 Every insurer shall offer compensation for damage to the insured motor vehicle identified in the policy including the loss of use of the motor vehicle up to but not exceeding the actual cash value of the vehicle at the time of the loss. The coverage for loss of use shall not be less than $10 per day.
8.2 The owner of the motor vehicle so covered may elect to have such coverage excluded in whole or in part by use of certain deductibles and exclusions in accordance with filings made by the insurer with the Commissioner.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-9.0 General Conditions
9.1 The coverages provided in an insurance policy as described herein may be subject to conditions and exclusions customary to the field of liability, casualty and property insurance and not inconsistent with the requirements of this section.
9.2 Personal Injury Protection benefits shall be considered excess to any other similar insurance for passengers, other than Delaware residents, when the accident occurs outside this State.
9.3 To enable owners of motor vehicles to properly exercise the coverage elections, insurers are required to offer deductibles, waiting periods, sublimits, percentage reductions and excess provisions as designated in 21 Del.C. §2118(a)(2)f.
9.4 To enable owners of motor vehicles who are unable to procure insurance through the standard market to properly exercise their coverage elections, insurers and insurance agents are required to:
9.4.1 Notify policyholders if they are considered nonstandard by the insurer; and
9.4.2 Inform the policyholders of the availability of the Delaware Assigned Insurance Risk Plan ("DAIP"). Notwithstanding the above, no agent is required to write a DAIP policy.
9.5 Insurers are required to notify injured persons covered under this section that the coverage is for two years from the date of the accident, and that it only extends beyond two years in cases involving surgical or dental procedures related to the accident and that were impossible or impractical to perform within the two year period. Such surgical or dental procedures must be verified in writing within two years of the accident, by a qualified medical or dental practitioner. The insurer must give prompt and timely notice after the written application for benefits has been made. This notice can be included on the APPLICATION FOR BENEFITS form.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-10.0 Mandatory Intercompany Arbitration
10.1 All insurers authorized to write auto insurance in this State shall be deemed signatory companies of the insurance industry forums arbitration agreements for accidents, insured events, or losses occurring within the limits of the State of Delaware regarding first and third party claims and to first party claims in other states or territories of the United States or foreign countries.
10.2 The requirement to participate in intercompany arbitration for Delaware disputed claims shall not imply that non‑signatory companies are obligated to become "signatory companies" to the intercompany arbitration agreements or to affect these companies' position with respect to intercompany arbitration outside the jurisdiction of this State.
10.3 Non‑signatory companies shall be subject to all duties and obligations of signatory companies with respect to Delaware claims, or the claims of Delaware policyholders. This includes payment of dues and fees and compliance with the various arbitration forum rules.
10.4 In all disputed Delaware claims involving damage to vehicular or non‑vehicular property of "innocent third parties", where the dispute involves a liability determination, the insurer providing liability and/or non‑vehicular no‑fault property damage coverage for the vehicle which actually strikes or first strikes the "innocent third party's" property shall promptly pay the "innocent third party's" property damage claim. The total payment shall not exceed the lowest of the applicable available coverage of the involved insurance carriers. The insurers shall submit the case to the appropriate arbitration forum after diligent efforts to resolve the claims of the contesting insurers fail.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-11.0 Delaware Form A "Coverage Election"
11.1 The coverage election form (Delaware Form A), attachment to Regulation 603 (Formerly Regulation No. 9), shall be properly presented by the insurer, broker, or agent to the policyholder, and acknowledged by the policyholder's signature. Proper presentation by the insurer, where possible, should be in person at the time application is made. If personal presentation is not possible, or if there is further need for clarification, insurers may present Form A by mail. The language or context of Form A shall be as shown unless, in accordance with filings made with this office, the insurer offers options, deductibles, etc., other than those described on the approved form. Any amended Form A shall clearly describe all additional options of coverage and must be filed with this Department prior to use. Any version of the coverage election form which deviates from Delaware Form A must be filed with the Department prior to its use except that companies may overprint the form with company name, address and logo without filing it with the Department, providing the text remains unchanged.
11.2 The policyholder shall receive a full explanation of all deductible options available to the policyholder in writing as a separate document from the insurer and the insurer shall obtain from the policyholder a written acknowledgment of the policyholder’s receipt of such explanation as a separately includable item on the Form A. Additionally, the Form A acknowledgment signed by the policyholder shall include the related cost for each deductible offered by the insurer.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-12.0 Notices to Policyholders
12.1 Insurers not less than once annually shall inform their policyholders of the coverage in force for each auto policy. The form of this notice may be in any form reasonably calculated to inform policyholders of their existing coverage.
12.2 Upon renewal of any policy in effect, on the date of the adoption of this regulation each insurer shall send a notice to their nonstandard policyholders in substantially the following form:
"NOTICE TO NON‑STANDARD POLICYHOLDERS:
My agent has informed me that I am considered a nonstandard driver and has notified me of the availability of the Delaware Automobile ("Assigned Risk") Insurance Plan, which provides less expensive automobile insurance for some drivers."
12.3 The failure of a policyholder to sign and return this statement shall not create any legal rights nor shall the insurer be responsible for the policyholder's failure to return the signed statement.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-13.0 Claimant's Duty
An injured party shall submit to reasonable treatment recommended by competent physicians, and must act reasonably to minimize the disability and mitigate damages.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-14.0 Separability
If any provision of this Regulation shall be held invalid, the remainder of the Regulation shall not be affected thereby.
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
18 Del. Admin. Code § 603-15.0 Effective Date
This regulation became effective December 1, 1983, was amended May 16, 1987, and was further amended effective December 13, 2017. The effective date of the third amendment, including revisions to Form A, is December 13, 2017. The use of revised Form A shall be required for all newly written and renewed policies issued on or after December 13, 2017.
21 DE Reg. 150 (08/01/17)
STATE OF DELAWARE - INSURANCE DEPARTMENT
History
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 8 DE Reg. 1158 (02/01/05)
- 26 DE Reg. 398 (11/01/22)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 150 (08/01/17)
- 8 DE Reg. 1158 (02/01/05)
- 21 DE Reg. 150 (08/01/17)
- 21 DE Reg. 237 (09/01/17)
- 26 DE Reg. 398 (11/01/22)
604 Salvage and Subrogation
18 Del. Admin. Code § 604 Salvage and Subrogation
604 Salvage and Subrogation [Formerly Regulation 22]
Dated July 28, 1976
Due to the difficulty in ascertaining the value of items received as salvage on losses (whether paid or unpaid) and determining the amount which might be recovered by subrogation on losses (whether paid or unpaid), insurance companies incorporated under the laws of this State and foreign and alien companies licensed to do business in this State shall not take credit in any annual statement or interim statement filed with this Department for salvage or subrogation recoveries until such recoveries shall have been reduced to cash or its equivalent. Salvage or subrogation recoveries reduced to cash or its equivalent shall be accounted for as an offset to losses paid, in accordance with existing practices.
Our position is in consonance with that espoused by the National Association of Insurance Commissioners (NAIC) as evidenced in their instructions to the Annual Convention Blank Form. This has been incorporated by reference in the Delaware Insurance Code, which requires that every insurance company doing business in this State must file a statement, under oath, similar to the Annual Convention Blank Form adopted by the NAIC. The instructions for completion of the required statement provide in effect that a company is to make no deductions for anticipated salvage or subrogation.
Therefore, insurance companies incorporated under the laws of this State and foreign and alien companies licensed to do business in this State shall not report assets for salvage or subrogation recoveries in any annual statement or interim statement filed with this Department until such recoveries shall have been reduced to cash or its equivalent.
John F. Richardson, Insurance Commissioner
605 Basic Readability Requirements for Automobile Insurance Policies
18 Del. Admin. Code § 605 Basic Readability Requirements for Automobile Insurance Policies
605 Basic Readability Requirements for Automobile Insurance Policies [Formerly Regulation 24]
1.0 Purpose
1.1 The purpose of this regulation is to assure that automobile insurance policies issued on January 1, 1977 or thereafter shall be readable and understandable by a person of average intelligence and education.
2.0 Authority
2.1 Pursuant to 18 Del.C. §2740, the Insurance Commissioner is authorized "to promulgate regulations by October 15, 1976 which assure that automobile policies issued in Delaware, after the effective date of said regulations, will be understandable and readable by a person of average intelligence and education." Similar authority is bestowed upon the Commissioner by 18 Del.C. §314.
3.0 Applicability
3.1 The provisions of this regulation shall apply to all policies providing automobile liability, personal injury protection, physical damage or uninsured motorists insurance on private passenger automobiles owned or rented under a long term lease or contract by an individual, or husband and wife who are resident of the same household on a specified car basis. A "private passenger automobile" for the purposes of this regulation include the following:
3.1.1 A motor vehicle of the private passenger, station wagon or motorcycle type which is neither used for transporting goods or passengers for hire, nor rented to others without a driver.
3.1.2 A motor vehicle with a pickup body, a delivery sedan or panel truck, not customarily used in the occupation, profession or business of the insurer other than farming or ranching. A motor vehicle used in the course of driving to and from work, which otherwise meets the eligibility requirements of this definition, shall be classified as a private passenger automobile.
3.1.3 An automobile owned by a farm family, co-partnership or corporation which is principally garaged on a farm or ranch or otherwise meets the definitions in paragraph (1) or paragraph (2) of this subsection, shall be considered a private passenger automobile owned by two or more relatives resident in the same household.
3.2 The requirements of this regulation shall apply to all policy forms covering risks mentioned in this section received by this Department for filing.
4.0 General Guidelines
4.1 The Policy as a Legal Document
4.1.1 Revision of the insurance policy to make it more readable must not lead to its devaluation as a legal document.
COMMENTARY
The principal objective of policy revision is to make it readable and understandable to the average layman. This does not mean that language used should be so informal that the importance of the contract is lessened. While unnecessary legalistic terminology can be and should be avoided, precision and accuracy must not be sacrificed in the process. Moreover, the revised policy should be sufficiently formal that it cannot be mistaken for a brochure or other advertising piece.
4.1.2 The policy revision process must proceed with the highest degree of care and caution.
COMMENTARY
Insurers who have undertaken to revise their policy thus far have found that inevitably there is some simplification. This is a desirable by-product of such a project. However, simplification and "streamlining" should be advertent and deliberate. Great care must be exercised to make certain that coverages set forth in the readable policy accurately express the intent of the drafters. The revised policy should conform to the existing policy or to newly introduced coverage concepts.
4.2 General Organization of Text
4.2.1 The revised policy shall be organized in such a manner that the text follows logical thought patterns.
COMMENTARY
At present automobile insurance policies resemble Topsy in that they "just grew." Coverages, exclusions, conditions, etc., appear to have been tacked-on as legal requirements changed. Initiation of a readability project affords the insurer a unique opportunity to rearrange the contract into logical thought outline-flow sequence.
4.2.2 Coverages shall be self-contained and independent to the greatest degree possible.
COMMENTARY
A format change adopted by some insurers who have already engaged in a readability project has been to rewrite with the objective of making each average independent of other policy provisions to the greatest degree possible. Present contract format does not lend itself to ease of comprehension. Even a knowledgeable reader must often refer to several different policy parts in order to solve specific coverage questions. Revisions should avoid this where possible.
4.2.3 General policy provisions applying to all or several coverages alike shall be located in a common area.
COMMENTARY
While policy conditions applicable only to certain coverages should be located in the appropriate coverage section, this does not mean that each section must be redundant as to certain provisions common to all, or virtually all, coverages. This means on the one hand that there must be some repetition and, on the other, that there must be some compromise with the goal of independence of coverage provisions.
4.2.4 Non-essential provisions shall be eliminated and the policy should be simplified wherever possible.
COMMENTARY
Recent statutes, court decisions, regulations and social changes may make a few policy provisions obsolete. Careful review may well result in identification of unnecessary language. Some reduction of surplusage may be necessary in order to conserve space which may be needed in other areas for additional material introduced to improve readability.
4.3 Specific Organization Suggestions
4.3.1 The readable policy should generally comply with the following organizational format:
4.3.1.1 Type size shall not be smaller than 8 points.
COMMENTARY
Generally, readability is enhanced by judiciously combining reasonably large type with other printing devices. However, other factors must be considered in order to avoid an overly lengthy policy. Increased paper and postage expense may result from adoption of large size type. Therefore, 8 point type size is an acceptable minimum.
4.3.1.2 Type style selection should be at the discretion of the insurer, but care should be taken in selecting a legible type.
COMMENTARY
Extreme type styles, such as "Old English" or heavy block should be avoided. There are many acceptable type styles and reliable printers are generally capable of properly advising as to which individual style or combination of styles is most desirable for ease of reading.
4.3.1.3 Captions or headings shall be designed to stand out clearly.
COMMENTARY
Insurers should consider adoption of bold-face captions or use of a different type size or type style for headings and captions. Upper case type or printing in contrasting color may also be used for emphasis.
4.3.1.4 White space separating coverages, policy sections, and columns should be sufficient to make a distinct separation.
COMMENTARY
Ample usage of white spacing can enhance readability. Insurers should use white or buffer space between the various headings, captions, and columns to avoid squeezing too much language on any one page. This makes the policy less of a challenge to the reader.
4.3.2 In order to enhance readability, insurers shall consider adoption of the following optional devices:
4.3.2.1 Insurers should consider use of various devices to make the automobile insurance policy more attractive, and thus, more readable.
COMMENTARY
Policies are more readable if printed on highly contrasting ink and paper. Use of more than one color might be advisable. Insurers may wish to use appropriate illustrations.
4.3.2.2 Convenience of size and weight should not be overlooked.
COMMENTARY
Policy size and weight of paper is a problem, and will inevitably involve certain compromises. In general, insurers must evaluate their capacity to produce policies of a particular size, based on existing forms, procedures and equipment. The policyholder's convenience in storing the policy should be kept in mind. Cost of mailing and printing is an essential and proper consideration.
4.3.2.3 There must be included a comprehensive table of contents for the reader unfamiliar with the text.
COMMENTARY
A policy table of contents is a necessary readability aid and permits ease of location of important contract provisions.
4.3.2.4 Defined words and terms shall be selected with care and insurers shall include a separate definition section to appear early in the policy format.
COMMENTARY
Defined words and terms shall be used for purposes of clarity and to avoid frequent repetition and avoidable redundancy. Defined words may then be capitalized or underlined in the text. Definitions should be kept to a minimum. Insurers who have already developed readable policies have found that too many definitions are almost as much of a hindrance to ease of comprehension as too few. Many words and terms, particularly those common to one coverage or section, can be explained in the text material itself without appearing to be formal definitions. The number of defined terms depends upon the policy contents, the number of coverages contained in the policy, and the scope of the policy: i.e., whether the policy is designed to cover private passenger cars or all types of vehicles.
4.4 General Readability Guidelines
4.4.1 Policy revisors must adopt modem principles of writing in order that the revised policy can be read with increased comprehension. Some of these principles are as follows:
4.4.1.1 To be readable, the policy shall be written in everyday, conversational language to the extent possible to preserve the legal meaning.
COMMENTARY
Legalistic terminology and legal sounding phrases should be avoided wherever possible. The adoption of conversational style does not mean that writing should be less accurate than at present. Undoubtedly, there will be portions of the contract requiring precision of thought and specific legal terminology. However, this should be kept to a minimum. Contractions can be used where appropriate. Correct grammar should be used throughout the text. Debasement of the English language is not necessary in order to make a formal document more comprehensible to its readers.
4.4.1.2 Use short, familiar words wherever possible.
COMMENTARY
Vocabulary is a tool, a means to an end. It is not a proper end in itself. Avoid long, polysyllabic words when short ones will do just as well.
4.4.1.3 Sentences are more readable if they are short and simple.
COMMENTARY
Most experts in modern writing agree that good sentences should average less than 20 words. It is preferable to express a complete thought in each short sentence and then to convey complex ideas by use of several short sentences. Periods are better than colons or semicolons unless an outline style is adopted.
4.4.1.4 Use a personal style.
COMMENTARY
Use of "his," "her," "you," etc., is proper in a formal document. Current use of the impersonal style in insurance contracts does not lend itself to ease of comprehension. Present tense and active verbs should be used wherever possible.
4.4.2 Readability formulas shall be used to check the revised policy text against the previous existing standard text.
COMMENTARY
Modem readability tests measure comprehension on the basis of sentence and word length and emphasize that short sentences and monosyllabic words are preferable when complex concepts are to be conveyed to the reader. All such automobile insurance policy forms shall have a total "readability score" of 40 or more on the Flesch Scale, although forms with a Flesch Test Score of less than 40 may be approved where the length of sentences and words are sufficiently compensated for by compliance with standards set forth above.
5.0 Review
5.1 Any automobile insurer seeking qualification of its automobile insurance policy forms pursuant to section 4.0 of this regulation shall file a written statement by an authorized officer certifying compliance with the provisions of this regulation. In the event that the general guidelines of this regulation have not been followed, the automobile insurer shall submit a written sheet labeled "Appendix A" which lists the areas of non-compliance and states the reasons therefor. Thereafter the Commissioner shall review and determine the acceptability of said automobile insurance policy forms.
5.2 Notice is taken that virtually all policy declaration pages presently used are easily read. Because they are computer processed and printed and compliance may require re-programming, it would place an unwarranted burden on the companies to meet the April 1, 1977 implementation date. Therefore, the implementation date of declaration pages is extended to August 1, 1977. Please note: it is required that an declaration pages now in use in Delaware must be submitted along with the readability policies and forms. Those pages judged unreasonably difficult to read will require earlier implementation.
5.3 To emphasize: the sole purpose of this regulation is to produce readable policies, not unwarranted expansion or contraction of policy coverage under the guise of readability. If it is necessary to alter coverage, such change must be noted and explained upon submission for filing.
6.0 Enforcement
6.1 Willful violation of this regulation shall be punishable pursuant to the provisions of 18 Del.C. §314(c).
7.0 Compliance Date
7.1 This regulation shall become effective October 14, 1976. All automobile insurance policies issued on January 1, 1977 or thereafter shall comply with the provisions of this regulation.
7.1.1 Thereafter the final date for implementation of all forms, including amendatory endorsements, but excluding declaration pages, shall be April 1, 1977. By that date all new forms shall be printed and distributed to policyholders, who since January 1, 1977 have purchased new policies or whose existing policy anniversary date has occurred. To avoid multiple mailing it shall be permissible to thereafter "roll on" new policies and forms as policy anniversary dates occur. Such new forms must be made available upon request.
7.2 All automobile insurance policies meeting general readability guidelines which have been submitted and filed by the Insurance Commissioner prior to the effective date of this regulation shall not have to comply with the provisions of this regulation until January 1, 1979.
606 Proof of Automobile Insurance
18 Del. Admin. Code § 606-1.0 Authority
This regulation is adopted under the authority of 18 Del.C. §311 and 21 Del.C. §2118, and adopted in cooperation with the Division of Motor Vehicles. This regulation is promulgated under the provisions of the Administrative Procedures Act, 29 Del.C. Ch.101.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-2.0 Purpose
2.1 The purpose of this regulation is to:
2.1.1 Establish requirements to govern the form of the standardized Insurance Identification Card for each insured vehicle pursuant to Delaware law;
2.1.2 Establish the procedure by which automobile insurers shall notify the Division of Motor Vehicles when automobile insurance coverage is terminated or when insurers pay claims for uninsured motorists; and
2.1.3 Provide procedures for the submission of insurance company data to the Division of Motor Vehicles for administrative efficiency.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-3.0 Definitions
To the extent necessary, the definitions contained in 21 Del.C. §101 shall apply to all terms not otherwise defined in Section 3.0 of this regulation. The following words and terms, when used in this regulation, shall have the following meaning unless the context in which they are used clearly indicates otherwise:
"Commercial auto coverage", "commercial vehicle coverage" or "commercial lines policy" means any coverage provided to an insured, regardless of the number of vehicles or entities covered, under a commercial auto, garage, or truckers coverage form or rated from either a commercial manual or rating rule as filed and approved by the Delaware Department of Insurance. Vehicle type and ownership are not necessarily the primary factors in either underwriting the coverage or rating the coverage. The rating may be subject to individual risk characteristics including but not limited to experience rating, schedule rating, loss rating or deductible rating.
"Fleet" means 5 or more vehicles under single ownership or lease used for commercial purposes.
"Personal lines auto coverage", “personal lines vehicle coverage” or "personal lines policy" means any automobile insurance or insurance policy that does not fall within commercial lines.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-4.0 Insurance Identification Card
4.1 All companies licensed to write automobile insurance in the State of Delaware must furnish Insurance Identification Cards to their insureds in accordance with the following:
4.1.1 If the insured and insurance company both consent, the Insurance Identification Card may be produced in electronic format;
4.1.2 Acceptable electronic formats include display of electronic images on a cellular phone or any other type of portable electronic device;
4.1.3 At least 1 written Insurance Identification Card or Insurance Identification Card in electronic format must be issued for each vehicle for which liability insurance is in effect; and
4.1.4 Delaware policyholders who are members of the military and are stationed outside of Delaware may be issued an Insurance Identification Card of that state provided their coverage meets Delaware requirements.
4.2 If an Insurance Identification Card is produced in written format, insurers may use uniform ACORD format or may prepare the ACORD format as described below:
4.2.1 The size, weight, and color of the Insurance Identification Card shall be as below:
4.2.1.1 Size: Not smaller than 3‑1/2" x 2‑1/4" or larger than 3" x 5"
4.2.1.2 Weight: Optional
4.2.1.3 Color: White
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-5.0 Insurance Identification Cards for Personal Lines Coverage
5.1 The Insurance Identification Card for privately owned or leased motor vehicles, for vehicles that are used non-commercially but covered under commercial lines policies, or both shall contain the following information, whether the Insurance Identification Card is provided in written or electronic format:
5.1.1 The statement "The Insurance Identification Card must be carried in the vehicle at all times" shall be shown on the face of the Insurance Identification Card if space is available; otherwise this statement may appear on the back of the Insurance Identification Card;
5.1.2 The Insurance Identification Card shall be identified as "Insurance Identification Card";
5.1.3 The insurance company name shall be printed on the face of the Insurance Identification Card. If the insurer is part of a group, the group name may be printed on the Insurance Identification Card so long as the card clearly identifies the name of the insurer issuing the insurance;
5.1.4 Insurer's 5 digit National Association of Insurance Commissioners ("NAIC") company identification number;
5.1.5 The name of the named insured, which must match the name of the named insured as carried in the insurer's records;
5.1.6 The address of the insured, to be included at the insurer's option;
5.1.7 Policy Number;
5.1.8 Effective date and the time period during which the policy shall be in effect;
5.1.9 Expiration Date. The Insurance Identification Card shall be valid for no more than the term stated in the policy but not to exceed 6 months. Notwithstanding the foregoing limitation, an Insurance Identification Card may be issued for a period of 12 months if the premium has been written on an annual basis and the premium is being paid in installments of no more than for a 12-month period. The expiration date shall be stated in such manner that the exact date of expiration can be clearly identified. For purposes of subsection 5.1.9 of this regulation, a policy renewed in the same company with a lapse in coverage of 30 days or less shall be considered to have been continuously insured by a licensed insurance company during the preceding 6 months; and
5.1.10 Vehicle or Vehicles Insured. Information shall be completed by indicating any of the following, depending on the type of policy or vehicle involved:
5.1.10.1 Year, Make, and Vehicle Identification Number ("VIN") of the vehicle or vehicles insured. Model of the vehicle may be shown as the Make. The Year and Make of the vehicle may be abbreviated, but the complete VIN must be shown.
5.1.11 Items which are not obvious as to meaning shall be appropriately captioned.
5.2 The order of the information to be contained on the Insurance Identification Card may be rearranged at the option of the company, provided there is no drastic change and the rearrangement is necessary to accommodate a fixed printout system already established by a company.
5.3 At least 1 Insurance Identification Card shall be issued for each vehicle insured under the policy for which liability insurance is in effect.
5.4 If a vehicle is specifically described on the Insurance Identification Card, the company must issue a new Insurance Identification Card upon either a change of vehicle or the acquisition of any additional one. If a different policy number is assigned upon renewal, a new Insurance Identification Card must also be issued. The expiration date requirement of subsection 5.1.9 of this regulation shall apply to an insured's replacement or additional insured vehicle in a manner similar to the previously owned or insured vehicle. The owner of the vehicle shall so inform the insurer of the additional or replacement vehicle. Only after the insurer is so informed, shall the insurer be obligated to issue an Insurance Identification Card to the insured for the additional or replacement vehicle.
5.5 A letter or notification should accompany every Insurance Identification Card advising the insured that the Insurance Identification Card is required to register the vehicle, to obtain new tags, and to serve as evidence of insurance for the law enforcement authorities, e.g., in cases involving accidents, moving traffic violations or road spot checks. This notification may be printed on the back of the Insurance Identification Card. Delaware law requires the Insurance Identification Card to be in the vehicle when it is being operated.
5.6 The Division of Motor Vehicles will accept for registration purposes a copy of the application for insurance or the assignment notice or binder pending issuance of insurance or the assignment notice pending issuance of the Insurance Identification Card. However, such evidence of insurance will be accepted for registration purposes only if it has been dated prior to the date and no later than the day preceding the date of application for registration. For Assigned Risk coverage, insurers shall instruct their agents to place an insurer identification code of "99999" on applications to indicate placement with the Assigned Risk Plan.
5.7 Insurance Identification Cards shall be issued in conformance with subsection 5.1 of this regulation. The Insurance Commissioner may exercise his statutory authority to investigate and examine the compliance of insurance carriers with this regulation. The Insurance Commissioner may, after notice and hearing, impose and enter an order as follows:
5.7.1 For each occasion where the Insurance Commissioner determines that an Insurance Identification Card was issued inadvertently in non‑compliance with subsection 5.1.9 of this regulation, the insurer shall be fined $100. No fine, however, shall be imposed if the Insurance Identification Card was validly issued.
5.7.2 For each occasion where the Insurance Commissioner determines an Insurance Identification Card was issued with disregard of the requirements of subsection 5.1.9 of this regulation, but with no pattern of conscious disregard, the insurer shall be fined $1,000.
5.7.3 For each occasion where the Insurance Commissioner determines an Insurance Identification Card was issued as part of a pattern of conscious disregard of the requirements of subsection 5.1.9 of this regulation, the insurer shall be fined $2,000.
5.8 "Date of issuance" of an Insurance Identification Card shall be the effective date of that Insurance Identification Card.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-6.0 Insurance Identification Cards for Commercial Lines Coverage
6.1 Unless otherwise covered in Section 5.0 of this regulation, the Insurance Identification Card for each vehicle insured under each commercial lines policy, which shall include any insurance issued for fleet vehicles, shall contain the following information, whether the Insurance Identification Card is provided in written or electronic format:
6.1.1 The information set forth in subsections 5.1.1 through 5.1.4, subsection 5.1.6 and subsection 5.1.11 of this regulation;
6.1.2 The name of the commercial entity or registrant that owns or leases the fleet as carried in the insurer's records. The insurer, at its option, may include the name of any parent company involved or, in the case of vehicles not operated by the registrant, an indication that the vehicle is "owned or operated by_________";
6.1.3 The policy number with any appropriate designations required by the insurer for commercial or fleet vehicles; and
6.1.4 The effective and expiration dates of the policy.
6.2 The expiration date for Insurance Identification Cards shall be no more than 12 months from the effective date of the policy and the expiration date shall be stated by day, month and year or month, day and year, so long as the exact date of expiration can be clearly identified.
6.3 Insurance Identification Cards subject to the requirements of this Section 6.0 of this regulation shall also be subject to the requirements set forth in subsections 5.2 through 5.6 of this regulation.
6.4 Insurance Identification Cards shall be issued in conformance with subsection 6.1 of this regulation. The Insurance Commissioner may exercise the Commissioner’s statutory authority to investigate and examine the compliance of insurance carriers with this regulation. The Insurance Commissioner may, after notice and hearing, impose and enter an order as follows:
6.4.1 For each occasion where the Insurance Commissioner determines that an Insurance Identification Card was issued inadvertently in non-compliance with subsection 6.2 of this regulation, the insurer shall be fined $100. No fine, however, shall be imposed if the Insurance Identification Card was validly issued.
6.4.2 For each occasion where the Insurance Commissioner determines an Insurance Identification Card was issued with disregard of the requirements of subsection 6.2 of this regulation, but with no pattern of conscious disregard, the insurer shall be fined $1,000.
6.4.3 For each occasion where the Insurance Commissioner determines an Insurance Identification Card was issued as part of a pattern of conscious disregard of the requirements of subsection 6.2 of this regulation, the insurer shall be fined $2,000.
6.5 "Date of issuance" of an Insurance Identification Card shall be the effective date of that Insurance Identification Card.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-7.0 Violations and Penalties
7.1 If an insurer violates any of the provisions of this regulation, the Commissioner shall give written notice to the insurer of the violation and the notice shall inform the insurer of the right to request a hearing pursuant to 18 Del.C. §323.
7.2 If the Commissioner determines that an insurer is in violation by consent or after a hearing, the Commissioner may impose penalties as permitted pursuant to the Insurance Code.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-8.0 Notice of Cancellation or Termination
8.1 When an insurer determines to cancel or terminate a personal lines insurance policy and that cancellation or termination is final under 18 Del.C. §3904(a)(1) within 6 months of the original date of issuance, the insurer shall file a Notice of Cancellation with the Division of Motor Vehicles.
8.2 The insurer shall file the notice of cancellation or termination with the Division of Motor Vehicles within 30 days following the effective date on which cancellation has become final, and in accordance with the following:
8.2.1 For purposes of subsection 8.2 of this regulation, "Final" means the date after which coverage cannot be reinstated except by the issuance of a new policy; and
8.2.2 The insurer shall file the notice of cancellation or termination in accordance with instructions posted by the Division of Motor Vehicles on the Division’s website.
8.3 The notice shall be a form with the size, content, and format approved by the Division of Motor Vehicles.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-9.0 Furnishing Motor Vehicle Liability Insurance Information to the Division of Motor Vehicles
9.1 An insurer shall furnish within 21 days of a request by the Division of Motor Vehicles prescribed information on each motor vehicle insured in the State of Delaware in accordance with the following:
9.1.1 The information shall be provided in the form and manner approved by the Division of Motor Vehicles, as more fully set out in instructions posted by the Division of Motor Vehicles on the Division’s website.
9.1.2 All information submitted by the insurer shall include the insurer's most current Delaware consumer complaint contact designee as submitted by the insurer to the National Association of Insurance Commissioners State Based Systems data base.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-10.0 Random Selection/Verification
10.1 Pursuant to 21 Del.C. §2118 the Division of Motor vehicles shall periodically randomly select on an annual basis at least 10 percent of the vehicle registrations and send them to the insurers of record for verification of liability insurance.
10.2 All responses from the insurers shall be delivered to the Delaware Division of Motor Vehicles within 21 days of the mailing date of the verification request.
10.3 The random selection/verification process shall be done no more than 12 times and no less than 4 times annually.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-11.0 Notification of Uninsured Drivers
Each insurer licensed to write automobile liability insurance in Delaware shall notify the Division of Motor Vehicles on a form approved by the Division of Motor Vehicles the name of any person or persons involved in an accident or filing a claim who is alleged to have been operating a Delaware registered motor vehicle without the insurance required under Delaware law. The insurer shall provide the name, address, and description of the vehicle alleged to be uninsured.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-12.0 Additional Required Proofs of Insurance
When the Division of Motor Vehicles requests that an insurer provide verification of insurance coverage, an insurer licensed to write automobile liability insurance in this State shall furnish verification of the insurance in force to the Division of Motor Vehicles by using a form and filing methods that are approved by the Division of Motor Vehicles.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-13.0 Severability
If any provision of this regulation or the application thereof to any person or situation is held invalid, such invalidity shall not affect any other provision or application of the regulation which can be given effect without the invalid provision or application and to this end the provisions of this regulation are declared to be severable.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
18 Del. Admin. Code § 606-14.0 Effective Date
This regulation became effective December 11, 2007, 10 days after being published as a final regulation. The amendments to this regulation updating and clarifying requirements for insurer notice of automobile insurance cancellations and terminations became effective May 11, 2020. The current amendments to this regulation shall become effective 10 days after being published in the Register of Regulations.
*Regulation No. 31 was entitled "Insurance Identification Card" under an effective date of July 1, 1979; amended July 1, 1982; amended effective January 1, 1991 and again on May 12, 1993 under present title except for the conditions specified under § 6 and § 4 of the regulation and April 12, 1993.
History
- 11 DE Reg. 800 (12/01/07)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 23 DE Reg. 929 (05/01/20)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 11 DE Reg. 800 (12/01/07)
- 12 DE Reg. 346 (09/01/08)
- 19 DE Reg. 414 (11/01/15)
- 23 DE Reg. 929 (05/01/20)
- 26 DE Reg. 867 (04/01/23)
607 Motor Vehicle Accident Prevention Course Discount (Automobiles and Motorcycles)
18 Del. Admin. Code § 607-1.0 Purpose and Authority
The purpose of this Regulation is to provide a discount applicable to total premiums for persons who voluntarily attend and complete a Motor Vehicle Accident Prevention Course. This Regulation is adopted pursuant to 18 Del.C. §311, and 18 Del.C. §2503 and promulgated in accordance with the procedures specified in the Administrative Procedures Act, 29 Del.C. Ch. 101.
History
- 2 DE Reg 989 (12/1/98)
- 18 DE Reg. 700 (03/01/15)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg. 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/01/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
18 Del. Admin. Code § 607-2.0 Definitions
“Department” means the Delaware Insurance Department.
“Division” means the Delaware Division of Motor Vehicles.
“Motor Vehicle Accident Prevention Course” means approved courses referred to as defensive driving courses.
History
- 2 DE Reg 989 (12/1/98)
- 18 DE Reg. 700 (03/01/15)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg. 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/01/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
18 Del. Admin. Code § 607-3.0 Minimum Requirements
A Motor Vehicle Accident Prevention Course Discount shall be applied to the total premiums for bodily injury liability coverage, property damage liability coverage, and personal injury protection coverage provided:
3.1 The automobile, motor home, or motorcycle is individually owned or jointly owned by husband and wife or by members of the same household and is classified and rated as a private passenger automobile, motor home, or motorcycle; and
3.2 The driver who customarily operates the automobile, motor home, or motorcycle has a certificate certifying voluntary attendance and successful completion within the last 36 months from the date of application of a motor vehicle accident prevention course or motorcycle rider course, as appropriate, which is approved by the Division. The presentation of a course-completion certificate (whether for an initial or refresher course) shall constitute conclusive evidence of satisfaction of the requirements of this regulation for purposes of receiving the discount; and insurance carriers may not demand or require any other form of documentation or prior course completion certificates in order to apply the applicable discount required by this regulation.
History
- 2 DE Reg 989 (12/1/98)
- 18 DE Reg. 700 (03/01/15)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg. 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/01/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
18 Del. Admin. Code § 607-4.0 Application
4.1 A 10% discount shall be applied with respect to the applicable premium(s) for each automobile, motor home, or motorcycle insured under a policy if all operators named on the policy as insureds complete the course. If fewer than all the operators covered as principal or occasional drivers complete the course, then the discount shall be a fraction of 10%. The fraction shall be the number of operators completing the course, divided by the total number operators. The discount shall begin at the inception date of the policy or the first renewal date following application by the insured and shall terminate at the policy renewal date subsequent to the expiration of three years since completion of the course. Insurance carriers shall provide notice at the renewal period immediately prior to expiration of the discount that the policyholder must take a refresher course within the timeframe set forth in this regulation in order to continue the discount.
4.2 An insured who has received a motor vehicle accident prevention discount as outlined in section 4.1 above may take, and must then complete, a refresher motor vehicle accident prevention course. An insured who completes a refresher course within the one hundred and eighty days prior to the three year expiration date shall receive a 15% discount effective the next renewal date. An insured who completes the refresher course after the expiration of the three year period shall lose the 10% or 15% discount on the expiration date, but shall receive the 15% discount effective on the date of completion of the refresher course, if said completion is within two years of the expiration date.
4.3 Motor Vehicle Accident Prevention Course instructors that are certified by the Division shall be entitled to the same insurance discount set forth in this regulation as those individuals who have completed a refresher motor vehicle accident prevention course.
History
- 2 DE Reg 989 (12/1/98)
- 18 DE Reg. 700 (03/01/15)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg. 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/01/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
18 Del. Admin. Code § 607-5.0 Implementation
The discount may be applied as a multiplier or on an additive basis compatible with the rating system in use by the company.
History
- 2 DE Reg 989 (12/1/98)
- 18 DE Reg. 700 (03/01/15)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg. 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/01/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
18 Del. Admin. Code § 607-6.0 Effective Date
This regulation shall become effective on the 11th day of March, 2015.
History
- 2 DE Reg 989 (12/1/98)
- 18 DE Reg. 700 (03/01/15)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/1/98)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg. 989 (12/1/98)
- 9 DE Reg 1244 (2/1/06)
- 18 DE Reg. 700 (03/01/15)
- 2 DE Reg 989 (12/01/98)
- 9 DE Reg 1244 (2/1/06)
- 13 DE Reg. 498 (10/01/09)
- 18 DE Reg. 700 (03/01/15)
608 Automobile Insurance Coverage
18 Del. Admin. Code § 608 Automobile Insurance Coverage
608 Automobile Insurance Coverage [Formerly Regulation 45]
1.0 Purpose and Statutory Authority
1.1 The purpose of this regulation is to provide for timely notice of coverage termination for short term automobile insurance coverage and for contact information for claim related matters. This regulation is promulgated pursuant to 18 Del.C. §311. This regulation should not be construed to create any cause of action not otherwise existing at law.
11 DE Reg. 220 (08/01/07)
2.0 Application
2.1 This regulation shall apply to all private passenger automobile insurance policies issued for a period of less than six months. Sections 2 and 3 of this regulation shall not apply to commercial automobile insurance policies.
11 DE Reg. 220 (08/01/07)
3.0 Requirement
3.1 Each insurer issuing a private passenger automobile insurance policy shall ensure that a renewal offer is issued to the policyholder not less than 20 days before the policy expiration date.
3.2 The offer shall contain, as a minimum, the policy number, date of termination of present coverage, renewal period, total cost to continue present coverage for a comparable renewal period, description of the coverage and insured vehicle(s), date by which payment must be made for continuous coverage.
3.3 Each insurer writing private passenger automobile insurance policies for periods of less than six months shall, not less than five days prior to expiration of coverage, provide the policyholder with a notice of termination. Such notice shall contain a warning that coverage will expire on the policy expiration date unless the renewal premium is paid, and shall include instructions for premium payment.
3.4 Exceptions:
3.4.1 No termination notice shall be required where the renewal premium has been paid.
3.4.2 Where the insurer, by written underwriting guidelines, allows a period of time after the policy expiration wherein the coverage will be continued without lapse, the notice of termination may be mailed to be received by the insured within five days of the final date in which the policy may be continued without lapse.
3.4.3 The renewal notice and the notice of termination shall be mailed, by ordinary mail, to the address of record as recorded by the insurer. A copy of the final notice shall be provided the producer of record.
4.0 Insurer’s Obligation to Provide Contact Information
4.1 Every insurer authorized to issue private automobile insurance in this State shall provide a telephone number and email address to the Department of Insurance by and through which any insured or other claimant for benefits could contact the insurer for claims or claim related inquiries.
11 DE Reg. 220 (08/01/07)
609 Limitations on Automobile Surcharges in Voluntary Markets and the Assigned Risk Plan
18 Del. Admin. Code § 609 Limitations on Automobile Surcharges in Voluntary Markets and the Assigned Risk Plan
609 Limitations on Automobile Surcharges in Voluntary Markets and the Assigned Risk Plan [Formerly Regulation 68]
1.0 Authority
1.1 This Regulation is adopted under the authority granted to the Commissioner under 18 Del.C. §§ 314, 2503 and 2527, and promulgated in accordance with 29 Del.C. Ch.101.
2.0 Purpose
2.1 The purpose of this Regulation is to require that rates charged to insureds reflect the variations in hazards or expense provisions chargeable to insureds and that rates be neither inadequate, excessive, nor unfairly discriminatory.
3.0 Applicability and Scope
3.1 This Regulation shall apply to all policies of personal non-fleet automobile insurance delivered in this state after the effective date. All renewal policies must conform with this Regulation. Nothing in this regulation is intended to require an insurer to surcharge any policyholder, nor to prohibit an insurer from filing a surcharge plan with the Department which results in lower surcharges than provided herein, nor to have retroactive effect.
4.0 Definitions
4.1 For purposes of this Regulation, the following terms shall be defined as follows:
"At-fault Accident" means an accident involving the ownership, maintenance or use of a motor vehicle, including unlawful parking, in which damages or losses are incurred and which is chargeable to the named insured or any other insured under the policy. In the event of contributory negligence, an accident shall be considered at fault if more than 50% of the fault is assessed to the insured. There is a rebuttable presumption that a single car accident which results in a claims payment is an "at-fault accident".
"Insured" or "Policyholder" means the named insured and any other person insured under the policy.
"Serviceman" shall mean a member of the United States Armed Forces who has been assigned to duty outside of the United States for at least thirty days immediately prior to applying for insurance.
"Standard Coverage" or "standard market" shall mean a policy of insurance which is customarily offered to new insureds by the insurance group or insurer based on age, sex, type of vehicle, territory and other standard rating criteria, which are actuarially justified but which excludes any consideration for underwriting or rating purposes of the factors which resulted in the insured's placement in the assigned risk program.
"Surcharge" means the additional amount added to the usual premium charge for insurance issued to a policyholder as a result of accidents, claims or convictions involving a motor vehicle, and includes a change in premium which results from the policyholder being moved into a higher pricing tier. The removal of discounts in accordance with an insurer's filed and approved rating plan will not be considered a surcharge for purposes of this regulation.
5.0 Surcharge plans
5.1 No surcharge plan filed for use in Delaware shall contain, nor shall any surcharge plan be used in Delaware, unless it complies with the following standards:
5.1.1 No surcharge shall be imposed against a named insured or any person insured under the policy for any claim paid by an insurer arising from a not at-fault accident.
5.1.2 No surcharge shall be imposed against a named insured or any other person insured under the policy for an accident in which the insured is involved but results in no payment by the insurer.
5.1.3 No surcharge may be imposed for the first at-fault accident during any three year period which exceeds pro rata over a three year period the amount of the claim paid or reserved by the insurer. The amount of the claim shall be net of any deductible amounts assumed by the insured. Each insurer shall file a surcharge plan with the Department which in all but exceptional cases will comply with this subparagraph. An insured may question the amount of the surcharge whereupon a decision by the Department of Insurance shall be rendered within fifteen (15) business days after receiving the inquiry. In rendering its decision, the Department shall consult with the insurer to confirm the amount of the claim and the amount of the surcharge related thereto. If, after such review, the Department finds that the insurer's surcharge exceeds the standard required by this subsection, the Department may order the insurer to adjust the surcharge amount consistent with this subsection.
5.1.4 No insurer shall surcharge for any period which exceeds three years from the date when that surcharge was first imposed by the insurer.
5.1.5 No insurer shall use any surcharge program which results in an insured being both assessed a percentage charge or dollar amount and placed in a higher pricing tier arising from the same accident or violation. This limitation does not apply if the insurer would be permitted under State law to cancel or non-renew the insured.
5.1.6 No insurer shall impose any charge beyond its manual rates to any new policyholder who has had no at-fault accidents or point violations in the preceding three year period.
5.1.7 No surcharge may be imposed unless the named insured is notified at least ten days in advance of the effective date of the surcharge, of the amount of the surcharge and the reasons for the imposition of the surcharge. No surcharge may be instituted against a policyholder except at the time of renewal or policy issuance unless a new insured under the policy is added during the policy term and the new insured is surchargeable under the insurer's filed and approved surcharge plan. Notice of imposition of a surcharge may be included with the renewal offer. This subsection does not apply to new business.
5.1.8 Any named insured or any other person insured under the policy who has had at fault accidents or has been assessed points in the three years immediately preceding application for a policy of insurance may be surcharged in accordance with surcharge plans filed with the Delaware Insurance Department.
5.1.9 No policyholder shall be surcharged or charged any additional premium beyond a three year period because of at-fault accidents or points which occurred three or more years before the date of the policy is first written or renewed, unless additional points or accidents have been incurred.
5.2 For any policy of insurance issued under the Delaware Assigned Risk Program, and notwithstanding any other regulation to the contrary, the following provisions shall apply:
5.2.1 Offer of Standard Coverage after Six Months: Any serviceman serving in the armed forces of the U.S. Government or a returning member of the Peace Corps who has not had insurance in the thirty days immediately preceding application for a policy of insurance because of serving in a foreign country and who, along with all other insureds under the policy, has not been involved in any at fault accidents or been assessed any points during the three years immediately preceding application for a policy of insurance shall be offered coverage by the insurer in the insurer's standard market, if the insurer has a standard market, at the end of six months. In the event the insurer does not have a standard market, the named insured shall be offered the insurer's non-surcharged rates for the named insured's classification. If the insurer offers coverage in a preferred company or preferred rating tier, for one year the insurer may surcharge an amount not greater than 50% of the difference between the assigned risk rate and the preferred rate.
5.2.2 Offer of Standard Coverage after One Year: Each named insured who has been assigned to an insurer shall be offered coverage in the insurer's standard market, if the insurer has a standard market, at the end of one year if the named insured has not had a chargeable at fault accident or points assessed in the three years immediately preceding the date of the policy renewal. This offer does not apply to insureds with Driving Under the Influence convictions, elections under the First Offenders' program, or vehicular homicide convictions. In the event the insurer does not have a standard market, the named insured shall be offered the insurer's non-surcharged rates for the named insured's classification. If the insurer offers coverage in a preferred rating tier or preferred company, for one year the insurer may surcharge an amount not greater than 50% of the difference between the assigned risk plan and the preferred rate.
5.2.3 If maintenance of a membership in an organization is a uniform requirement of eligibility for insurance with the insurer offering a takeout letter, a membership must be offered by the organization and accepted by the insured at the same time as the offer of coverage from the insurer is accepted by the named insured.
6.0 Severability
If any provision of this Regulation is found by a Court of competent jurisdiction to be held invalid, the remainder of the Regulation shall not be affected thereby.
7.0 Effective date
This Regulation shall become effective July 1, 1992.
610 Automobile Premium Consumer Comparison (Repealed)
18 Del. Admin. Code § 610 Automobile Premium Consumer Comparison (Repealed)
Repealed, effective January 11, 2019
History
- 10 DE Reg. 566 (09/01/06)
- 22 DE Reg. 603 (01/01/19)
611 Automobile Insurance Premium Refunds
18 Del. Admin. Code § 611-1.0 Scope and Authority
1.1 This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311 and 3915 and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
1.2 This regulation applies to all automobile insurance policies.
History
- 28 DE Reg. 144 (08/01/24)
18 Del. Admin. Code § 611-2.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning:
"Commissioner" means the Insurance Commissioner of Delaware.
"Insurance premium" means the amount of money paid by an insured for an insurance policy.
History
- 28 DE Reg. 144 (08/01/24)
18 Del. Admin. Code § 611-3.0 Issuance of Premium Refund Upon Policy Cancellation
3.1 When an automobile insurance policy is cancelled by the insured, any unearned premium shall be refunded within 30 days of the date the insured has provided the evidence required by 18 Del.C. § 3915.
3.2 Insurance premium refunds shall be paid in the same manner in which the premium was paid, by check if the original payment method is unavailable, or another manner of refund agreed to by the insured.
3.3 If a policy subject to this regulation is cancelled by an insurance premium finance company, the unearned premium shall be refunded to the insurance premium finance company in accordance with the terms of 18 Del.C. § 4809(f).
History
- 28 DE Reg. 144 (08/01/24)
18 Del. Admin. Code § 611-4.0 Violations; Penalties
Failure to comply with this regulation will subject the violator to the provisions of 18 Del.C. §§329 and 520, which address penalties for non-compliance of any regulation of the Commissioner.
History
- 28 DE Reg. 144 (08/01/24)
18 Del. Admin. Code § 611-5.0 Severability
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of this regulation or the applicability of the provision to other persons or circumstances shall not be affected.
History
- 28 DE Reg. 144 (08/01/24)
18 Del. Admin. Code § 611-6.0 Effective Date
This regulation shall become effective 90 days after the date of publication of the notice of adoption in the Register of Regulations.
History
- 28 DE Reg. 144 (08/01/24)
700 Home Owners Insurance
701 Providing Basic Readability Requirements for Homeowners Insurance Policy Forms [Formerly Regulation 27]
18 Del. Admin. Code § 701 Providing Basic Readability Requirements for Homeowners Insurance Policy Forms [Formerly Regulation 27]
701 Providing Basic Readability Requirements for Homeowners Insurance Policy Forms [Formerly Regulation 27]
1.0 Purpose
1.1 The purpose of this regulation is to assure that homeowners policies issued on July 1, 1978 or thereafter shall be readable and understandable by a person of average intelligence and education. This regulation is specifically not intended to affect homeowners policies issued before July 1, 1978 but compliance to this regulation by June 1, 1978.
2.0 Authority
2.1 Pursuant to 18 Del.C. §314, "The Commissioner may make reasonable rules and regulations necessary for or as an aid to the administration or effectuation of any provisions of this Title."
3.0 Applicability
3.1 The provisions of this regulation shall apply to homeowners policies. A homeowners policy for the purpose of this regulation include the following:
3.1.1 All basic, broad, special and comprehensive forms including tenants and condominium unit - owners forms.
3.1.2 A separate homeowners forms and endorsements.
3.2 The requirements of this regulation shall apply to all policy forms providing coverages as mentioned in this section received by this Department for filing.
4.0 General Guidelines
4.1 The Policy as a Legal Document
4.1.1 Revision of the insurance policy to make it more readable must not lead to its devaluation as a legal document.
COMMENTARY
The principal objective of policy revision is to make it readable and understandable to the average layman. This does not mean that language used should be so informal that the importance of the contract is lessened. While unnecessary legalistic terminology can be and should be avoided, precision and accuracy must not be sacrificed in the process. Moreover, the revised policy should be sufficiently formal that it cannot be mistaken for a brochure or other advertising piece.
4.1.2 The policy revision must proceed with the highest degree of care and caution.
COMMENTARY
Simplification is a desirable by-product of such a project. However, simplification and "Streamlining" should be advertent and deliberate. Great care must be exercised to make certain that coverages set forth in the readable policy accurately express the intent of the drafters. The revised policy should conform to the existing policy or to newly introduced coverage concepts.
4.2 General Organization of Text
4.2.1 The revised policy shall be organized in such a manner that the text follows logical thought patterns.
COMMENTARY
Initiation of a readability project affords the insurer a unique opportunity to rearrange the contract into logical thought outline flow sequence.
4.2.2 Coverages shall be self-contained and independent to the greatest degree possible.
COMMENTARY
An effort should be made to rewrite with the objective of making each coverage independent of other policy provisions to the greatest degree possible. Some contract formats do not lend themselves to ease of comprehension. Even a knowledgeable reader must often refer to several different policy parts in order to solve specific coverage questions. Revisions should avoid this where possible.
4.2.3 General policy provisions applying to all or several coverages alike shall be located in a common area.
COMMENTARY
While policy conditions applicable only to certain coverages should be located in the appropriate coverage section, this does not mean that each section must be redundant as to certain provisions common to all, or virtually all, coverages. This means on the one hand that there must be some repetition and, on the other, that there must be some compromise with the goal of independence of coverage provisions.
4.2.4 Non-essential provisions shall be eliminated and the policy should be simplified wherever possible.
COMMENTARY
Careful review may well result in identification of unnecessary language. Some reduction of surplusage may be necessary in order to conserve space which may be needed in other areas for additional material introduced to improve readability.
4.3 Specific Organization Suggestions
4.3.1 The readable policy should generally comply with the following organizational format:
4.3.1.1 Type size shall not be smaller than 8 points.
COMMENTARY
Generally, readability is enhanced by judiciously combining reasonably large type with other printing devices. However, other factors must be considered in order to avoid an overly lengthy policy. Increased paper and postage expense may result from adoption of large size type. Therefore, 8 point type size is an acceptable minimum.
4.3.1.2 Type style selection should be at the discretion of the insurer, but care should be taken in selecting a legible type.
COMMENTARY
Extreme type styles, such as "Old English" or heavy block should be avoided. There are many acceptable type styles and reliable printers are generally capable of properly advising as to which individual style or combination of styles is most desirable for ease of reading.
4.3.1.3 Captions or headings shall be designed to stand out clearly.
COMMENTARY
Insurers should consider adoption of bold-face captions or use of a different type size or type style for headings and captions. Upper case type or printing in contrasting color may also be used for emphasis.
4.3.1.4 White space separating coverages, policy sections, and columns should be sufficient to make a distinct separation.
COMMENTARY
Ample usage of white spacing can enhance readability. Insurers should use white or buffer space between the various headings, captions, and columns to avoid squeezing too much language on any one page. This makes the policy less of a challenge to the reader.
4.3.2 In order to enhance readability, insurers shall consider adoption of the following optional devices:
4.3.2.1 Insurers should consider use of various devices to make the homeowners insurance policy more attractive, and thus, more readable.
COMMENTARY
Policies are more readable if printed on highly contrasting ink and paper. Use of more than one color might be advisable. Insurers may wish to use appropriate illustrations.
4.3.2.2 Convenience of size and weight should not be overlooked.
COMMENTARY
Policy size and weight of paper is a problem, and will inevitably involve certain compromises. In general, insurers must evaluate their capacity to produce policies of a particular size, based on existing forms, procedures and equipment. The policyholder's convenience in storing the policy should be kept in mind. Cost of mailing and printing is an essential and proper consideration.
4.3.2.3 There must be included a comprehensive table of contents for the reader unfamiliar with the text.
COMMENTARY
A policy table of contents is a necessary readability aid and permits ease of location of important contract provisions.
4.3.2.4 Defined words and terms shall be selected with care and insurers shall include a separate definition section to appear early in the policy format.
COMMENTARY
Defined words and terms shall be used for purposes of clarity and to avoid frequent repetition and avoidable redundancy. Defined words may then be capitalized or underlined in the text. Definitions should be kept to a minimum. Many words and terms, particularly those common to one coverage or section, can be explained in the text material itself without appearing to be formal definitions.
4.4 General Readability Guidelines
4.4.1 Policy revisors must adopt modem principles of writing in order that the revised policy can be read with increased comprehension. Some of these principles are as follows:
4.4.1.1 To be readable, the policy shall be written in everyday, conversational language to the extent possible to preserve the legal meaning.
COMMENTARY
Legalistic terminology and legal sounding phrases should be avoided wherever possible. The adoption of conversational style does not mean that writing should be less accurate than at present. Undoubtedly, there will be portions of the contract requiring precision of thought and specific legal terminology. However, this should be kept to a minimum. Contractions can be used where appropriate. Correct grammar should be used throughout the text. Debasement of the English language is not necessary in order to make a formal document more comprehensible to its readers.
4.4.1.2 Use short, familiar words wherever possible.
COMMENTARY
Vocabulary is a tool, a means to an end. It is not a proper end in itself. Avoid long, polysyllabic words when short ones will do just as well.
4.4.1.3 Sentences are more readable if they are short and simple.
COMMENTARY
Most experts in modem writing agree that good sentences would average less than 20 words. It is preferable to express a complete thought in each short sentence and then to convey complex ideas by use of several short sentences. Periods are better than colons or semicolons unless an outline style is adopted.
4.4.1.4 Use a personal style.
COMMENTARY
Use of "his," "her," "you," etc. is proper in a formal document. Current use of the impersonal style in insurance contracts does not lend itself to ease of comprehension. Present tense and active verbs should be used wherever possible.
4.4.2 Readability formulas shall be used to check the revised policy text against the previous existing standard text.
COMMENTARY
Modem readability tests measure comprehension on the basis of sentence and word length and emphasize that short sentences and monosyllabic words are preferable when complex concepts are to be conveyed to the reader. All such homeowners insurance policy forms shall have a total "readability score" of 40 or more on the Flesch Scale, although forms with a Flesch Test Score of less than 40 may be approved where the length of sentences and words are sufficiently compensated for by compliance with standards set forth above.
5.0 Review
5.1 Any homeowners insurer seeking qualification of its homeowners insurance policy forms pursuant to section 4.0 of this regulation shall file a written statement by an authorized officer certifying compliance with the provisions of this regulation. In the event that the general guidelines of this regulation have not been followed, the homeowners insurer shall submit a written sheet labeled "Appendix A" which lists the areas of non-compliance and states the reasons therefor. Thereafter, the Commissioner shall review and determine the acceptability of said homeowners policy forms.
5.2 To emphasize; the sole purpose of this regulation is to produce readable policies, not unwarranted expansion or contraction of policy coverage under the guise of readability. If it is necessary to alter coverage, such change must be noted and explained upon submission for filing.
6.0 Enforcement
6.1 Willful violation of this regulation shall be punishable pursuant to the provisions of 18 Del.C. §314(c).
7.0 Compliance Date
7.1 This regulation shall become effective June 1, 1978. All homeowners policies issued on July 1, 1978 or thereafter shall comply with the provisions of this regulation, providing that, all homeowners insurance policies meeting general readability guidelines which have been submitted and approved by the Insurance Commissioner prior to the effective date of this regulation shall not have to comply with the provisions of this regulation until June 1, 1978.
702 Required Disclosures For Residential Homeowners Policies
18 Del. Admin. Code § 702 Required Disclosures For Residential Homeowners Policies
702 Required Disclosures For Residential Homeowners Policies
1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311(a) and 2304(1). It is promulgated in accordance with 29 Del.C. Chapter 101.
2.0 Purpose
The purpose of this regulation is to ensure that homeowners insurance policyholders are aware that they are not insured for certain types of risks or claims, to the extent that they do not have such coverage and that they are aware of any deductibles required by their coverage. This regulation does not mandate any coverage by any carrier issuing homeowners insurance in the State of Delaware.
11 DE Reg. 805 (12/01/07)
3.0 Applicability
This regulation shall apply to homeowners insurance policies. A homeowners insurance policy for purposes of this regulation means a property or casualty contract of insurance covering residential properties as defined by 18 Del.C. §4120.
4.0 Requirement of Disclosure
Insurers, upon initial delivery of a homeowners policy terms and declaration page, and not less than once annually after delivery, shall provide a form to the policyholder entitled “Important Information About Your Homeowners Insurance.” The title of the document shall be in at least 30 point type.
5.0 Content of Disclosure
5.1 Each form presented pursuant to Section 4.0 of this Regulation shall make the following disclosures:
5.1.1 Disclosure that the policy does not cover damage caused by flooding, and sufficient information to allow the policyholder to contact the National Flood Insurance Program in order to purchase flood insurance if so desired. The following language shall be sufficient to ensure compliance with this subsection 5.1: “This policy does not cover damage to your property caused by flooding. Flood insurance is available for communities and property that participate in the National Flood Insurance Program (“NFIP”). Not all communities participate in the NFIP. Flood insurance may be available even if you do not live in a flood hazard area as defined by the NFIP. Please call the NFIP at 1-800-427-4661 to see if your community and property are eligible for coverage. If your community does not participate in the NFIP, you may contact your insurance agent or broker to see if there is other flood insurance coverage available to you.” The disclosure may also inform the policyholder that the insurer offers flood insurance as a participant in the NFIP’s “Write Your Own” program. The disclosure required by this subsection shall be entitled “Flood Insurance,” and the subsection title shall be in at least 18 point type.
5.1.2 Disclosure that the policy may not cover the full cost of replacement without depreciation of the property, and sufficient information to allow the policyholder to purchase such coverage from the carrier if it is offered by the carrier. The following language shall be sufficient to ensure compliance with this subsection 5.2: “This policy may not cover the full cost of replacing your home if your home should be destroyed in an event otherwise covered by this policy. You may purchase additional coverage from us sufficient to cover the full cost of replacing your home, at an additional cost.” The disclosure required by this subsection shall be entitled “Replacing Your Home,” and the subsection title shall be in at least 18 point type.
5.1.3 Disclosure of any limitations in the policy regarding reimbursement for items stolen from the property, including but not limited to jewelry, furs, fine art, etc. and sufficient information to allow the policyholder to purchase insurance which would not contain such limitation if such coverage is offered by the insurer. The following language shall be sufficient to ensure compliance with this subsection 5.3: “This policy may not cover the value of all items stolen from your home. Please carefully review your policy to determine which items stolen from your home are not covered by this policy.” The disclosure required by this subsection shall be entitled “Reimbursement for Stolen Items,” and the subsection title shall be in at least 18 point type.
5.1.4 Disclosure of any formal practice followed by the insurer regarding non-renewal of the policy on the occurrence of certain factors or on the basis of claims asserted by the policyholder. The following language shall be sufficient to ensure compliance with this subsection 5.4: “We have a policy of declining to renew homeowners insurance policies under the following circumstances: (list the claim activities or occurrences that are likely to cause non-renewal of a policyholder’s policy).” The disclosure required by this subsection shall be entitled “Non-Renewal of Your Policy,” and the subsection title shall be in at least 18 point type.
5.1.5 Disclosure of information regarding any required deductibles, which disclosure shall include the following information:
5.1.5.1 A description of what a deductible is, including a statement that the policyholder is responsible for payment of the entire amount of the deductible;
5.1.5.2 A full description of the circumstances that will trigger applicability of each deductible;
5.1.5.3 A description and example(s) of how each deductible will be calculated;
5.1.5.4 The following statement: “Deductibles are not required by state law and are not uniform across insurance companies, and therefore the charge for each deductible may vary between insurers.”
The disclosure required by this subsection shall be entitled “Policyholder Payment of Deductibles: and the title shall be in at least 18 point type.
5.2 Where a policy provides full coverage for any of the items required by sections 5.1.1 through 5.1.3, or where the policy does not require payment of a deductible, the insurer may indicate that the disclosure, as to each such item, is not applicable or “N/A.”
11 DE Reg. 805 (12/01/07)
6.0 Time for Compliance
Insurers required by Section 5.1.5 to provide disclosures regarding payment of insurance deductibles must submit the forms containing the language they propose for compliance with Section 5.1.5 to the Insurance Commissioner for approval by December 15, 2007.
11 DE Reg. 805 (12/01/07)
7.0 Review and Approval of Forms
All forms required by this regulation shall be submitted to and approved by the Commissioner, or his representative, pursuant to 18 Del.C. §2712 et seq.
11 DE Reg. 805 (12/01/07)
8.0 Severability
If any provision of this regulation, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of such provisions, and the application of such provisions to any person or circumstance other than those as to which it is held invalid, shall not be affected.
11 DE Reg. 805 (12/01/07)
9.0 Causes of Action
This regulation shall not create, nor form the basis for, a cause of action for any person or entity, other than the Delaware Department of Insurance, against any insurer for violation of the provisions hereof.
11 DE Reg. 805 (12/01/07)
10.0 Effective Date
The effective date of this regulation shall be January 1, 2006.
9 DE Reg. 438 (09/01/05)
11 DE Reg. 805 (12/01/07)
11 DE Reg. 805 (12/01/07)
704 Homeowners Premium Consumer Comparison (Repealed)
18 Del. Admin. Code § 704 Homeowners Premium Consumer Comparison (Repealed)
Repealed, effective May 11, 2019.
History
- 10 DE Reg. 1304 (02/01/07)
- 14 DE Reg. 42 (07/01/10)
- 22 DE Reg. 946 (05/01/19)
800 Workers' Compensation
801 Workmen’s Compensation Deductible [Formerly Regulation 40]
18 Del. Admin. Code § 801 Workmen’s Compensation Deductible [Formerly Regulation 40]
801 Workmen’s Compensation Deductible [Formerly Regulation 40]
1.0 Authority.
1.1 This regulation is adopted and promulgated in accordance with 18 Del.C. §314, Delaware Insurance Code; 19 Del.C. §2305, Workmen's Compensation Code; and 29 Del.C. Ch. 101, Administrative Procedures Act.
2.0 Purpose.
2.1 An amendment to the Delaware Workmen's Compensation Code 19 Del.C. 2305(c) was enacted during the 1982 session of the Delaware Legislature, to become effective December 1, 1982. The amendment requires every insurer writing workmen's compensation insurance in Delaware to "...offer to write each such policy subject to a deductible applying only to medical reimbursement and death benefits. The insured employer shall be permitted to accept or reject such a deductible at the time the policy is issued or renewed..." The statute provides that the deductible shall be available from $500 to $5,000 in increments of $500. The deductible shall apply to each occurrence during the policy term.
2.2 This regulation advises insurers of the requirement as described above and establishes the procedures to be followed for implementing the statute.
3.0 Definitions.
3.1 For the purpose of this regulation, the following definitions shall apply:
“Claim Administration” — The endorsement shall provide for administration by the insurer in the same manner as for policies without a deductible. This shall include payment by the insurer to the claimant of the deductible amount. The insurer shall have full discretion for claim settlement as provided by the Delaware Workmen's Compensation Code and shall make payments to the claimant or medical provider in accordance with that statute.
“Deductible” — The deductible shall be as elected by the insured at the inception or renewal of the policy, such election to be irrevocable for the duration of the policy. The deductible shall be: any amount between $500 and $5,000 (increments of $500); applied separately to each occurrence regardless of the number of employees; applicable only to medical reimbursements and death benefits paid under the policy.
“Endorsement” — Refers to an endorsement prepared and filed by the Delaware Compensation Rating Bureau on behalf of insurers writing workmen's compensation insurance in Delaware and approved by the Delaware Insurance Department. The endorsement shall specify the amount of the deductible; the coverage to which it applies; shall give notice to the insured of the insurer's discretion in claims settlement; contain provisions for reimbursement of the deductible by the employer; and shall put the employer on notice that the coverage may be cancelled for failure to reimburse the insurer for any payment involving the deductible.
“Occurrence” — An occurrence shall be defined as any incident which results in a payment by an insurer under a workmen's compensation policy. An occurrence may result in claims by multiple employees in which case only one deductible is applicable to all claims growing out of a single incident or occurrence.
“Reimbursement to the Insurer” — Shall refer to payment of the deductible amount by the insured to the insurer for first dollar claim payments (medical reimbursement or death benefits only) made by the insurer on behalf of the employer.
4.0 Requirement.
4.1 New Policies
4.1.1 Insurers shall, for all new workmen's compensation policies written on or after December 1, 1982 provide the insured with a notice of election substantially similar to Delaware Insurance Form (B) (Attached). The insured shall sign the form acknowledging the offer of a deductible endorsement and his/her acceptance or rejection of the endorsement.
4.1.2 The employer's election shall be valid for the duration of the policy and subsequent renewals, subject to the employer's right to change his/her election on renewal (on the anniversary rating date or as provided in Rule l(G) of the Delaware Compensation Manual for applicable policies).
4.2 Renewal Policies
4.2.1 The insurer shall provide a notice of election to the policyholder of each policy now in force which is to be renewed on or after December 1, 1982. The notice of election form (Delaware Insurance Form B) shall request the insured to complete and return the form prior to the anniversary or renewal date of the policy.
4.2.2 The insurer may elect to make a one-time mailing to all policies in force or may send the notice of election form in conjunction with normal renewal procedures.
4.2.3 If no response is received within 30 days of the mailing date, the insured will be deemed to have rejected the deductible endorsement on the condition that the insurer can provide proof of mailing to the policyholder at his/her address of record. A certificate of mailing as described in 18 Del.C. §3903(a)(4)c shall constitute adequate proof of mailing.
4.2.4 If the insured does not respond to the notice of election and the insurer elects to renew the policy, it shall issue the renewal on a nondeductible basis.
4.2.5 The insured's election shall remain in force for the duration of the policy and subsequent renewals, subject to the insured's right to change his/her election at each renewal (or anniversary date for applicable policies).
4.3 Deductible Endorsement
4.3.1 A deductible endorsement, filed by the Delaware Compensation Rating Bureau and approved for use by the Delaware Insurance Department, will be attached to and become a part of each policy for which the policyholder's election form requests a deductible endorsement. The endorsement shall give notice to the insured of the:
4.3.1.1 amount and conditions of the deductible;
4.3.1.2 insurer's discretion in claims settlement;
4.3.1.3 insurer's right to cancel the policy (after 10 days written notice by certified mail to the address of record) for the insured's failure to reimburse a deductible expense as defined herein;
4.3.1.4 fact that the deductible election is per occurrence as defined herein; and
4.3.1.5 that the deductible election may not be changed prior to the next renewal date.
4.4 Cancellation For Failure of the Insured to Reimburse
4.4.1 The insurer shall administer all claims for deductible policies in the same manner as for nondeductible policies. This includes payment of first dollar coverage. After payment is made for which the insurer is entitled to reimbursement, the insurer will provide the employer insured with a statement of payments made and request reimbursement.
4.4.2 If reimbursement is not received within 30 days of the statement mailing date, the insurer may send a notice of cancellation to the insured. Such notice must be by certified mail as defined in 18 Del.C. §3903(a)(4)c. Cancellation may not become effective sooner than 10 days after the mailing date as established by postal receipts. A copy of the notice of cancellation shall be provided to the producer of record, the Industrial Accident Board and the Delaware Compensation Rating Bureau.
4.4.3 Provided payment is received by the insurer or its agent prior to the coverage cancellation date, the coverage will be continued in effect.
4.4.4 Policies which are cancelled because of the insured's failure to reimburse for deductible expenses may, at the insurer's option, be reinstated with no loss of coverage on receipt of the applicable reimbursement.
4.4.5 If the original insurer declines to reissue or reinstate the cancelled policy, the policyholder may make application to another insurer or may apply for coverage through the Delaware Workmen's Compensation Assigned Risk Plan.
4.4.6 An employer applying for workmen's compensation coverage through the Assigned Risk Plan will be deemed ineligible for coverage so long as there is an unsatisfied deductible reimbursement outstanding.
5.0 Effective Date
5.1 This regulation shall become effective on December 1, 1982.
Attachments:
-
Deductible Endorsement Form — Delaware
-
Delaware Insurance Form B
Deductible Endorsement — Delaware
In consideration of the reduced premium charged for this policy, the insurance afforded by the policy for death benefits and for medical benefits payable under the Delaware Workers' Compensation Law applies only to death and medical reimbursement benefits in excess of the deductible amount shown below. The deductible shall apply separately to each accident, regardless of the number of people who sustain injury by such accident.
The company shall pay the deductible amount to the persons entitled thereto. Upon notice of payments by the company, the insured will promptly reimburse the company for any amounts so paid. Failure of the insured to reimburse the company, within 30 days of statement mailing date, may result in the coverage being cancelled pro rata upon ten (10) days written notice and any resulting return premium may be applied to the deductible amount due.
The deductible amount is ________________________ for each occurrence.
The premium is reduced _____________________% in consideration of this deductible.
Note 1: Use this Endorsement with the standard policy to provide a death and medical benefits deductible selected in accordance with 19 Del.C. §2372.
Note 2: The company may use its own attachment clause and method of execution.
Delaware Insurance Form B
Notice of Election to Accept or Reject an Insurance Deductible for Delaware Workers' Compensation Death and Medical Benefits
Delaware law permits an employer to buy workers' compensation insurance with a deductible. The deductible is for death and medical benefits and applies to each accident. The deductibles available and the corresponding premium reductions are as follows:
Deductible Per Accident
Percent Premium Reduction
$500
4.0
1,000
5.5
1,500
6.5
2,000
7.0
2,500
7.5
3,000
8.0
3,500
8.5
4,000
9.0
4,500
9.5
5,000
10.0
You are not required to choose a deductible program. However, if you do so choose, it is to be understood that your insurance company will administer and pay all claims and that you will reimburse the insurance company for payments it makes within the amount of the deductible selected. Failure to reimburse the insurance company for such deductible amounts within 30 days can result in cancellation of coverage.
Please show whether or not you want the deductible by initialing the appropriate choice below.
_____________ Yes, I want a deductible of _____________ applied to death and medical benefits under the Delaware workers' Compensation law. I understand that the company shall pay the deductible amount and be reimbursed by the employer shown below.
_____________ No, I do not want the deductible described in this Notice.
I understand that in accordance with 19 Del.C. §2372, I have the option of modifying the above deductible program choice at the time of renewal of my workers' compensation insurance policy with the insurance company named below.
Date Employer
Name
Title
Insurance Company
DELAWARE INSURANCE FORM B
802 Delaware Workplace Safety Regulation
18 Del. Admin. Code § 802-1.0 Authority
This regulation is adopted and promulgated by the Insurance Commissioner pursuant to 18 Del.C. §§311 and 2533 and promulgated under 29 Del.C. Ch.101.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-2.0 Purpose
2.1 The purpose of this regulation is to:
2.1.1 Enhance the health and safety of workers in the State of Delaware;
2.1.2 Provide lower insurance premiums for qualifying employers who currently pay $3,161 or more of annual Delaware Workers' Compensation premiums; and
2.1.3 Establish both testing and inspection procedures to determine an employer's qualification for a premium credit under the Workplace Safety Program.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-3.0 Scope
3.1 An employer is eligible for participation in the Workplace Safety Program if the employer complies with the criteria set forth in this regulation.
3.2 Only employers whose employees work at Delaware work sites are eligible to participate in the Workplace Safety Program; and
3.3 In the case of an employer who purchases a multi-state workers compensation insurance policy, and credit earned by participation in the Workplace Safety Program applies to only that portion of the premium that covers Delaware workers.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-4.0 Eligibility and Premium Credit
4.1 An employer is eligible for the Workplace Safety Program insurance premium credit if:
4.1.1 The employer’s annual workers compensation insurance premium is $3,161 or more, based on the most current unit statistical card filing. The Delaware Compensation Rating Bureau is charged with determining whether an employer meets this requirement by taking the most current unit statistical card payroll times current rates times current experience modification to determine the employer's premium size; and
4.1.2 The employer submits a Workplace Safety Program Questionnaire to the Department of Insurance in which it provides details of the employer’s Workplace Safety Program, including but not limited to:
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-5.0 Notice of Employer Eligibility
Employers meeting the eligibility requirements set forth in Section 4.0 of this regulation will be notified by the Delaware Department of Insurance seven months in advance of their policy renewal date. This notification will include instructions for qualifying for a safe workplace credit.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-6.0 Eligibility Period
The Department will notify the employer of eligibility, and will inform the employer that the employer must elect at least five (5) months in advance of the date of policy renewal to participate in the Workplace Safety Program. Failure to notify the Department within this time period of an intent to renew participation may preclude the employer's participation in the Workplace Safety Program for the upcoming year. Election to participate shall commence by contacting the Delaware Department of Insurance.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-7.0 Inspections and Cost
7.1 All inspections must include a thorough review of the following items, which are to be maintained by the employer and made available for the inspector to review:
NOTE: A recommendation by the inspector based on the above information as to whether or not the employer should receive the workplace safety credit must also be included.
7.2 To obtain the Workplace Safety Program premium credit, all inspection procedures and inspection reports must comply with the requirements and standards set forth in this regulation. In the event of multiple applications, only the first application received will be accepted. Subsections 7.2.1 and 7.2.2 of this regulation set forth the two options according to which a Workplace Safety inspection may be conducted.
7.2.1 All inspections that are conducted by a representative from an independent safety expert company under contract to the Insurance Department shall be conducted as follows:
7.2.1.1 The Insurance Department will notify the inspector of the employer's request. The inspector, in turn, will then contact the employer to set up the first of two inspections. A second unannounced inspection shall be made no later than the expiration date of the policy to which any workplace safety credit based on the inspection will apply to confirm the initial certifications of safety in the workplace. The Department of Insurance will notify the Bureau when an employer successfully completes each scheduled and/or nonscheduled inspection. Failure to pass a scheduled inspection will result in a denial of an employer's eligibility to participate in the Workplace Safety Program. However, the employer, after failing an inspection can request another inspection, after successful completion of which will make them eligible for participation in the Workplace Safety Program.
7.2.1.2 The cost of each inspection will be borne by the employer. The minimum charge for safety inspection is $150 per location. Each work location must successfully pass both inspections before an employer is entitled to a premium credit under the program. Inspection fees for large and/or complex employers may be established by the Department of Insurance.
7.2.2 Insurers issuing workers compensation insurance in Delaware may submit their own workplace safety inspection procedures for review by the Insurance Department. The Insurance Department shall permit the insurer’s inspection to satisfy the inspection requirements of subsection 7.2.1 of this regulation if the inspection procedures are at least as rigorous as those employed by the Insurance Department and its independent safety experts. An insurer’s safety inspection procedures must be re-certified on a bi-annual basis to maintain status as an acceptable substitute.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-8.0 Renewals and Eligibility
8.1 An employer must annually apply for the Workplace Safety Program.
8.2 For each year after the initial qualification, the inspection requirement for the Workplace Safety Program insurance premium credit will consist of one unannounced inspection. The Department will maintain a list of inspection charges for inspections conducted pursuant to subsection 7.2.1 of this regulation, which will be sent to interested parties upon request.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-9.0 Premium Size Ranges and Corresponding Credits
9.1 The Workplace Safety insurance premium credit will be calculated according to the following formula:
20% x [1.0000 - C]
where “C” is the credibility of the qualified employer in the uniform Experience Rating Plan for the policy period expiring immediately prior to the application of the Safety credit. If the qualified employer was not experience-rated in the policy period expiring immediately prior to the application of the Safety credit, “C” will be set at 0.050 Safety credit packages will be rounded to the nearest whole percent.
9.2 If the inspector confirms that an employer maintains a drug-free workplace program that meets the criteria set forth in subsection 7.1 of this regulation, the carrier may offer an additional discount in accordance with rate filings submitted to and approved by the Department.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-10.0 Effect upon Mutual Rates and Schedule Rating Credits
10.1 Workers' Compensation manual rates shall be adjusted because of implementation of this program. A Delaware Workplace Safety Program Factor shall be included in loss costs and residual market rates. This factor may offset credits given to qualified employers, so that the Workplace Safety Program will neither increase nor decrease premiums for eligible employers in the aggregate.
10.2 Schedule rating plan credits given to policyholders for "competitive" reasons cannot be withdrawn. Schedule credits given for safety reasons may be reduced to offset the Workplace Safety Program premium credit.
10.3 A Merit Rating Plan shall be implemented which will provide incentives for employers paying less than $3,161 of annual Delaware Workers’ Compensation premiums to maintain safe workplaces.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
18 Del. Admin. Code § 802-11.0 Effective Date
This Regulation became effective on November 11, 2013. The 2019 amendments to this regulation shall become effective February 11, 2020.
History
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
- 23 DE Reg. 676 (02/01/20)
- 17 DE Reg. 533 (11/01/13)
- 23 DE Reg. 676 (02/01/20)
803 Workers' Compensation Data Collection
18 Del. Admin. Code § 803 Workers' Compensation Data Collection
803 Workers' Compensation Data Collection
1.0 Authority
This regulation is adopted and promulgated in accordance with 18 Del.C. §311, Delaware Insurance Code; 19 Del.C. §2301E, Workmen's Compensation Code; and 29 Del.C. Ch. 101, Administrative Procedures Act.
2.0 Purpose
2.1 The purpose of this regulation is to implement §2301E of Title 19 regarding workers' compensation data collection. Section 2301E authorizes the Insurance Commissioner and a workers' compensation advisory organization established pursuant to Chapter 26 of Title 18 to gather data enabling them to identify systemic cost drivers and provide objective information to evaluate Delaware's workers' compensation system.
2.2 Section 2301E also requires the Insurance Commissioner to appoint a committee to advise the Commissioner on adoption of a standardized data transmission protocol developed by a national workers' compensation organization to facilitate the collection of the data necessary to evaluate Delaware's workers' compensation system.
2.3 Section 2301E further requires the Commissioner to adopt rules establishing a standardized data collection protocol, the data elements to be mandated for collection, a schedule for mandatory implementation of the data elements, and sanctions for noncompliance.
2.4 This regulation is adopted in accordance with the requirements of §2301E.
3.0 Workers' Compensation Protocol/Data Elements and Implementation.
3.1 The Department adopts the National Council on Compensation Insurance's ("NCCI's") medical data collection protocol and data elements as the standard for collection of workers' compensation related medical data in Delaware. Information regarding the NCCI medical data elements and protocol can be found at www.ncci.com.
3.2 The process and infrastructure for the collection of medical data pursuant to this protocol shall be developed in consultation with the committee established pursuant to §2301E.
3.3 Beginning in the year 2010, carriers shall be required to provide the data elements identified by NCCI.
4.0 Additional Regulations.
The committee established pursuant to §2301E shall continue to advise the Commissioner on the adoption of regulations necessary for the implementation of the collection of data elements as the process of establishing the necessary policies and infrastructure proceeds.
12 DE Reg. 973 (01/01/09)
804 Workers Compensation Ratepayer Advocate
18 Del. Admin. Code § 804 Workers Compensation Ratepayer Advocate
804 Workers Compensation Ratepayer Advocate
1.0 Authority
This regulation is adopted and promulgated in accordance with 18 Del.C. §311 and §2610 and promulgated under 29 Del.C. Ch. 101.
2.0 Definitions
“Advisory Organization” means the advisory organization designated by the Department pursuant to 18 Del.C. §2607.
“Attorney General” means the Attorney General of this State, or the Attorney General’s designee.
“Commissioner” means the Insurance Commissioner of this State, or the Commissioner’s designee.
“Department” means the Insurance Department of this State.
“Ratepayer Advocate” means a member of the Delaware bar appointed pursuant to 18 Del.C. §2610(e) and this regulation.
3.0 Purpose
The purpose of this regulation is to implement the provisions of 18 Del.C. §§2610 (e), (f), and (g) regarding the Ratepayer Advocate who shall represent the interests of Delaware workers compensation rate-payers in connection with the filing of any application by the Advisory Organization with the Commissioner relating to rates or prospective loss costs.
4.0 Filings By The Advisory Organization Related To Rates Or Prospective Loss Costs
At least forty-five (45) days in advance of filing an application with the Commissioner relating to rates or prospective loss costs, the Advisory Organization shall advise the Commissioner in writing of the Advisory Organization’s intention to make such a filing and the anticipated date of the filing.
5.0 Selection of the Ratepayer Advocate.
5.1 Within ten (10) days after receiving the notice prescribed in Section 4.1 hereof, the Commissioner, in consultation with the Attorney General, shall prepare and post on the Department of Insurance website a Request for Proposals (“RFP”) for a Ratepayer Advocate with a closing date no more than fourteen (14) days after the date of initial posting of the RFP on the Department of Insurance website. The Commissioner may post the RFP in such other places as the Commissioner deems appropriate. The Attorney General may post the RFP on the Attorney General’s website or in such other places as the Attorney General deems appropriate.
5.2 The RFP shall prescribe the professional qualifications that are necessary or desirable for persons seeking to serve as the Ratepayer Advocate. At a minimum, such qualifications shall include: (a) admission to the Delaware bar; (b) significant experience in matters related to insurance company regulation; (c) preferably experience in insurance rate proceedings; and (d) compliance with the Delaware Lawyers Rules of Professional Conduct guidelines on conflicts of interest. The RFP may specify other qualifications for the Ratepayer Advocate and contain such other provisions as the Commissioner, in consultation with the Attorney General, deems appropriate. In addition to any website or other postings of the RFP, the Commissioner and the Attorney General may encourage Delaware lawyers or law firms with offices in Delaware to submit timely responses to the RFP.
5.3 The Commissioner shall invite the Attorney General to participate in the review of any responses to the RFP, in interviews of applicants, and in negotiation of terms of retention of the Ratepayer Advocate. The Commissioner, with the consent of the Attorney General, shall enter into an agreement retaining the Ratepayer Advocate no less than 30 days prior to any hearing on the Advisory Organization’s filing relating to rates or prospective loss costs.
5.4 The cost of the Ratepayer Advocate shall be borne by the Advisory Organization. The Ratepayer Advocate shall be entitled to charge a reasonable hourly rate acceptable to the Commissioner and the Attorney General, and to be reimbursed for reasonable expenses. Regardless of the approved hourly rate, the total amount charged by the Ratepayer Advocate for fees and expenses, during the course of the application (including any amendments thereto) and any appeals, shall be limited to $40,000. Such amount may be adjusted by the Attorney General for inflation on an annual basis. The Ratepayer Advocate shall submit a statement or statements for fees and expenses to the Commissioner, who shall forward each statement to the Advisory Organization for payment.
6.0 Representation Of The Ratepayers By The Ratepayer Advocate
6.1 The Ratepayer Advocate shall represent the interests of Delaware workers compensation rate-payers during the Commissioner’s consideration of the application.
6.2 The Ratepayer Advocate shall select an actuary to work with him or her in review of the filing and to testify in any rate-setting proceeding. The selected actuary shall be an Associate or Fellow of the Casualty Actuarial Society, and shall have met the qualification standards of the American Academy of Actuaries for issuing a statement of opinion concerning workers compensation insurance. The actuary shall prepare a written report and statement of opinion evaluating the filing, which shall include a calculation of the appropriate increase or decrease in residual market rates and voluntary market loss costs and supporting analysis (“Report”). The Ratepayer Advocate shall provide a complete copy of the Report to the Commissioner, the Advisory Organization and any other party upon receipt of the Report from the actuary.
6.2.1 The cost of this actuary shall be borne by the Advisory Organization. The actuary shall be entitled to charge a reasonable hourly rate acceptable to the Commissioner and the Attorney General, and to be reimbursed for reasonable expenses. The actuary shall submit a statement or statements for fees and expenses to the Commissioner, who shall forward each statement to the Advisory Organization for payment.
6.3 Applications by the Advisory Organization relating to rates or prospective loss costs shall be subject to the case decision provisions of Title 29, Chapter 101, Subchapter III, of the Delaware Code, and the Ratepayer Advocate shall be considered a party to the case.
6.4 Following the commencement of a case concerning an application by a workers compensation advisory organization relating to rates or prospective loss costs, the Department and the Ratepayer Advocate may request from the Advisory Organization, in writing, such documents and information as they may reasonably require in order to allow them to properly participate in review of the filing and in any hearing thereon. Unless the Advisory Organization, within seven days of its receipt of the request, objects in writing to the production of such documents and information, or responds in writing that it is not able to produce the documents and information within seven days of its receipt of the request, the Advisory Organization shall provide such information to the Department and the Ratepayer Advocate within seven days of its receipt of the request. The Advisory Organization shall provide such information in electronic format or by providing a link to information available on the internet, unless doing so would cause the Advisory Organization to incur undue expense. If the Advisory Organization objects to the production of such documents and information, or responds that it is not able to produce the documents or information within seven days of its receipt to any such request, the Department or the Ratepayer Advocate may request that the Hearing Officer, if one has been appointed, or otherwise the Commissioner, issue subpoenas for witnesses and other sources of evidence, in accordance with 29 Del.C. Chapter 101.
6.5 If the Department, the Ratepayer Advocate or any other party retains an actuary who prepares a written report regarding the filing, the Department, the Ratepayer Advocate or other party, upon receipt of the written report from the actuary, shall provide a complete copy thereof to all other parties.
6.6 Pursuant to HB 175, Section 8 (enacted June 27, 2013) (the “Act”), the Advisory Organization “shall, within 90 days after June 27, 2013 [i.e.no later than September 25, 2013], file for approval by the Commissioner prospective loss costs that shall explicitly and individually account for the impact of any statutory changes in this Act or Senate Bill 238 of the 146th General Assembly, as well as any regulatory changes proposed by the Health Care Advisory Panel within 60 days of the enactment of this Act. Any order issued by the Department of Insurance relating to said filing shall explicitly account for all statutory changes and regulatory proposals that are enumerated by the advisory organization in the filing required by this Section.” In furtherance of this directive, and to assist the Commissioner in formulating the findings required by the Act, any report prepared by an actuary retained by the Department of Insurance or the Ratepayer Advocate “shall explicitly account for all statutory changes and regulatory proposals that are enumerated by the advisory organization in the filing required by this Section.”
6.7 The parties may enter into agreements to protect confidential, private or proprietary information. In the event of any dispute between the parties concerning whether any information requested or subpoenaed is of a confidential, private or proprietary nature, the party from whom the information has been requested may request that the Hearing Officer, if one has been appointed, or otherwise the Commissioner, issue an order protecting the information from disclosure.
6.8 The Hearing Officer, if one has been appointed, or otherwise the Commissioner, may conduct such pre-hearing or other meetings and make such rulings as appropriate to simplify the issues, obtain admissions of fact and of documents which will avoid unnecessary proof, and aid in the prompt disposition of the matter. Nothing in this Section 6.8 nor elsewhere in this Regulation 804 is intended to be inconsistent with the provisions and requirements of 18 Del.C. Chapter 26 or 29 Del.C. Chapter 101.
6.9 The parties on their own initiative may submit pre-filed testimony for some or all witnesses. The parties shall submit pre-filed testimony if directed to do so by the Hearing Officer, if one has been appointed, or by the Commissioner.
6.10 Nothing in these regulations shall preclude the parties from resolving any matter by voluntary agreement.
7.0 Effective Date
This Regulation shall become effective 10 days after being published as a final regulation.
17 DE Reg. 534 (11/01/13)
900 Consumer Rights
901 Arbitration of Automobile and Homeowners' Insurance Claims
18 Del. Admin. Code § 901-1.0 Purpose and Statutory Authority
The purpose of this Regulation is to implement 18 Del.C. §331, Ch. 23, and 21 Del.C. §§2118 and 2118B by establishing the procedures for the arbitration of certain claims for benefits available under automobile or homeowners' policies or agreements, and/or those statutes. This Regulation is promulgated pursuant to 18 Del.C. §§311, 2312, and 29 Del.C. Ch. 101. This Regulation should not be construed to create any cause of action not otherwise existing at law.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-2.0 Insurer's Duty to Arbitrate
Every insurer providing coverage or benefits in this State for automobile or homeowners' insurance policies shall submit to arbitration of covered claims (as defined by 18 Del.C. §331, and 21 Del.C. §§2118 and 2118B) by their insureds unless it is exempt from arbitration by the Insurance Commissioner.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-3.0 Exemption from Arbitration
3.1 Insurers requesting exemption from the duty to arbitrate under a homeowners' insurance policy shall submit to the Insurance Commissioner the following:
3.1.1 A request for exemption from arbitration;
3.1.2 Copies or description of policies or plans for which exemption is requested;
3.1.3 A detailed description of its internal review or appraisal procedures;
3.1.4 Copies of documents to be provided to the insured describing its internal procedures including a statement that the insurer will be bound by a decision favorable to the insured;
3.1.5 A certification by an officer of the insurer with binding authority that the procedures described will be followed in all cases, that the insurer will be bound by a decision favorable to the insured and that all documents submitted are true and accurate; and
3.1.6 Payment of a non‑refundable fee of $75.00.
3.2 The Commissioner shall exempt a homeowner insurer from arbitration under this Regulation and continue such exemption as long as the internal appraisal or review procedures submitted under subsection 3.1 contain the following minimum requirements:
3.2.1 The internal appraisal or arbitration procedure is performed by a panel of at least three individuals with both insured and insurer to select an equal number. Those selected by the parties shall select another member who shall preside over the panel. However, neither the insurer's assigned adjuster nor his or her supervisor may participate on the panel nor anyone under that supervisor's control;
3.2.2 The insured or his attorney is permitted to submit evidence and examine the adverse evidence and to appear before the panel prior to the time the matter is to be decided;
3.2.3 The insured is permitted to be represented by counsel;
3.2.4 The insured is informed as to the right to appeal, if any, an adverse decision;
3.2.5 The insured will be provided with at least 10 business days notice of all steps in the procedure. The decision will be made by a majority of the panel and must be provided to the parties, in writing, signed by the majority with a brief explanation of the reasons for the decision; and
3.2.6 The insurer will maintain complete records of the above for a period of three years for inspection at any time during business hours by the Commissioner or the Insurance Department.
3.3 The Commissioner may suspend, revoke or refuse to continue any exemption after notice and a hearing establishing violation of the above. The exemption provided above is not effective until the application has been filed, reviewed and approved by the Commissioner. The Commissioner may request reports from insurers from time to time on the above reviews.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-4.0 Exclusion from Arbitration
4.1 The following claims shall not be subject to arbitration under this Regulation:
4.1.1 Claims for which there is no jurisdiction under 18 Del.C. §331 and 21 Del.C. §§2118 and 2118B;
4.1.2 Claims for which there is no policy coverage in force;
4.1.3 Claims that are already pending before any court;
4.1.4 Claims that arise under an insurance policy from a jurisdiction other than Delaware; or
4.1.5 Claims which arise under a homeowners' policy or plan which has been exempted by the Commissioner under Section 3.0.
4.2 The Arbitration Secretary or Panel is authorized to dismiss a matter upon receipt of information sufficient to establish that the claim is excluded under subsection 4.1.1 and after notice and an opportunity to respond is provided the petitioner.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-5.0 General
5.1 These Arbitration Rules shall be considered applicable to accidents, insured events, or losses occurring within the limits of the State of Delaware regarding first and third party property and PIP claims and to first party claims in other states or territories of the United States or to foreign countries as set forth in the insurance policy.
5.2 In arbitration proceedings and practice, the claimant who initiates the proceeding by filing a request for arbitration of a controverted claim or issue with the Insurance Commissioner shall be known as the "claimant," and the company or companies against which claim or claims is asserted shall be known as "respondent(s)."
5.3 Requests for arbitration with respect to homeowners' insurance coverage shall be in writing and mailed to the Insurance Commissioner within 90 days from the date an offer of settlement or denial of coverage or liability has been made by an insurer.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-6.0 Notice and Manner of Service
6.1 Notice and manner of service, except service of the original petition, is sufficient and complete if properly addressed, upon mailing the same with prepaid first class U.S. Postage.
6.2 Service of an original Petition shall be by Certified U.S. Postage and return receipt requested or hand delivery to the respondent and is complete upon receipt by addressee or an employee in respondent's place of business.
6.3 The parties must provide a brief statement verifying the service of all filed papers with the manner, date and address of service.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-7.0 When Arbitration May Be Commenced
7.1 Arbitration may be commenced after the parties have attempted to resolve the matter informally and the Petitioner has provided the opposing party with all reasonably requested information in Petitioner's possession or provided the opposing party with an opportunity to obtain such information.
7.2 The Panel may dismiss without prejudice the matter if it finds that the Petitioner has not attempted to resolve the matter informally or has failed to provide the opposing party with reasonably requested information.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-8.0 Commencement of Arbitration
8.1 An arbitration will commence upon the filing of a Petition and three copies, in acceptable form with the Commissioner's Arbitration Secretary with the supporting documents or other evidence attached thereto and payment of the proper fee. The petitioner shall at the same time send a copy of the same Petition and supporting documents to the insurer or insurer's representative and a statement verifying service under Section 5.0. The Arbitration Secretary may return any non‑conforming Petition.
8.2 Within 20 business days of receipt of the Petition, the responding insurer ("Respondent") shall file a Response with three copies, in acceptable form, with the Arbitration Secretary with supporting documents or other evidence attached and payment of the proper fee. The Respondent shall at the same time send a copy of the same Response and supporting documents to the Petitioner or Petitioner's representative and a statement verifying service under Section 5.0. The Arbitration Secretary may return any non‑conforming Response.
8.3 If the Respondent fails to file a Response in a timely fashion, the Arbitration Secretary after verifying proper service and notice to the parties may assign the matter to the next scheduled Arbitration Panel for summary disposition. The Panel may determine the matter in the nature of a default judgment after establishing that the Petition is properly supported and was properly served on Respondent. The Arbitration Secretary or Panel may allow the re‑opening of the matter to prevent a manifest injustice. A request for re‑ opening must be made no later than 5 business days after notice of the default judgment.
8.4 Upon the filing of a proper Response, the Arbitration Secretary shall assign and schedule the matter for a hearing before an Arbitration Panel.
8.5 The Insurance Department will provide the approved form of Petition or Response as they may be amended from time to time. The Parties are free to produce and use their own copies of those forms.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-9.0 Arbitration Panels
9.1 The Commissioner shall establish two types of Arbitration Panels. There shall be Panels established for automobile insurance claims and homeowners' insurance claims.
9.2 Each Panel shall consist of three members of suitable backgrounds or experience or as may be specified by statute, to be selected by the Commissioner. No member may serve on a Panel in which his employer or client is a party. Each Panel shall have a presiding member who shall be appointed by the Commissioner.
9.2.1 In the case of automobile claims, each Panel shall consist of at least one Delaware attorney as a member and the balance of the members shall be Delaware licensed insurance adjusters and/or appraiser as defined in 18 Del.C. §1702(c)
9.2.2 In the case of homeowners' claim, the Panel shall consist of individuals of suitable expertise in evaluating such claims and may include Delaware licensed property appraisers or adjusters.
9.2.3 In the case of health insurance claims involving the certification of treatment or procedure, one member of the panel must be a licensed health care professional in the relevant area of dispute.
9.2.4 A decision by the Panel requires concurrence by at least two of the Panel members. The written decision shall be signed by the panel chair and shall reflect the votes of the members.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-10.0 Arbitration Hearings
10.1 The arbitration hearing shall be scheduled and notice of the hearing shall be given the parties at least 10 business days prior to the hearing. Neither party is required to appear and may rely on the filed papers.
10.2 The purpose of Arbitration is an attempt to effect a prompt and inexpensive resolution of claims after reasonable attempts by the parties to resolve the matter informally. Arbitration hearings shall be conducted in keeping with that goal. The arbitration hearing is not a substitute for a civil trial. In accord, the Delaware Rules of Evidence do not apply and hearings are to be limited, to the maximum extent possible, to each party being given the opportunity to explain their view of the previously submitted evidence in support of the pleading and to answer questions by the Panel. If the Panel allows any brief testimony, the Panel shall allow brief cross examination or other response by the opposing party.
10.3 The Arbitration Panel may contact, with the parties' consent, individuals or entities identified in the papers by telephone in or outside the parties' presence for information to resolve the matter.
10.4 The Panel is to consider the matter based on the submissions of the parties and information otherwise obtained by the Panel. The Panel shall not consider any matter not contained in the original or supplemental submissions of the parties which has not been provided the opposing party with at least 5 business days notice, except claims of a continuing nature which are set out in the filed papers.
10.5 Claims for attorney fees under 21 Del.C. §2118B, shall only be granted upon the petitioner proving that the insurer acted in "bad faith." Bad faith is an intentional, reckless or malicious indifference to the duties owed an insured, not negligence, carelessness or inadvertence of any degree.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-11.0 Subrogation Arbitration
Subrogation arbitration between or among insurers pursuant to 21 Del.C. §2118 is not subject to this Regulation and shall continue to be conducted through Arbitration Forums, Inc., or its successor.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-12.0 Arbitration Fees
12.1 Each party to an arbitration shall tender and pay the following filing fees for arbitration.
12.1.1 $50.00 for Automobile Insurance Claims; and
12.1.2 $50.00 for Homeowners' Insurance Claims.
12.2 The filing fees are non‑refundable and shall only be returned when a claim is determined to be excluded from arbitration. The prevailing party at arbitration is normally entitled to recover their paid filing fees as costs. However, the Panel may, for cause, award the filing fee as costs as may be equitable.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-13.0 Appeals
13.1 Appeals from an adverse decision of the Arbitration panel shall be taken to the Superior Court of the State of Delaware by filing a Notice of Appeal with the Arbitration Secretary.
13.2 The Notice of Appeal must be filed within 90 days in the case of claims for homeowners' insurance claims and within 30 days in the case of automobile insurance claims.
13.3 All further filings and proceedings shall be in accordance with the Superior Court Rules of Civil Procedure.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
18 Del. Admin. Code § 901-14.0 Effective Date
This regulation, as amended, shall replace existing Regulations 10 and 10A in their entirety. This regulation shall become on March 11, 2002. Any health claims commenced under this regulation prior to the effective date of Regulation 11 shall be resolved in accordance with the provisions of 73 Del. Laws Ch. 96.
History
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 21 DE Reg. 579 (01/01/18)
- 5 DE Reg. 1746 (03/01/02)
- 5 DE Reg. 1746 (03/01/02)
- 14 DE Reg. 44 (07/01/10)
- 21 DE Reg. 579 (01/01/18)
902 Prohibited Unfair Claim Settlement Practices
18 Del. Admin. Code § 902-1.0 Purpose
The purpose of this regulation is to set forth unfair claim settlement practices which, when committed or performed with such frequency as to indicate a general business practice, are prohibited.
History
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
18 Del. Admin. Code § 902-2.0 Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311 and 2312, and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
History
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
18 Del. Admin. Code § 902-3.0 Prohibited Unfair Claims Settlement Practices
3.1 The following unfair claim settlement practices when committed or performed with such frequency as to indicate a general business practice are prohibited:
3.1.1 Misrepresenting pertinent facts or insurance policy provisions relating to coverage at issue.
3.1.2 Failing to acknowledge and respond within 15 working days, upon receipt by the insurer, to communications with respect to claims by insureds arising under insurance policies.
3.1.3 Failing to implement prompt investigation of claims arising under insurance policies within 10 working days upon receipt of the notice of loss by the insurer.
3.1.4 Refusing to pay claims without conducting an investigation based upon all available information when the notice of loss received by the insurer indicates that such an investigation is necessary to properly determine such a denial of payment.
3.1.5 Failing to affirm or deny coverage or a claim or advise the person presenting the claim, in writing, or other proper legal manner, of the reason for the inability to do so, within 30 days after proof of loss statements have been received by the insurer.
3.1.6 Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims in which liability has become clear.
3.1.7 Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts which they might be entitled to under normal fair claims evaluations.
3.1.8 Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application.
3.1.9 Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge of the insured.
3.1.10 Making claims payments to insured or beneficiaries not accompanied by a statement setting forth the coverage under which the payment has been made.
3.1.11 Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of a formal proof of loss form, both of which submissions contain substantially the same information, unless the formal proof of loss is required by law, prevailing rules, or the policy.
3.1.12 Failing to promptly settle claims, where liability has become clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.
3.1.13 Failing when requested to promptly provide an explanation of the basis in the insurance policy in relation to facts or applicable law for denial of a claim or for the offer of a compromise settlement. Such explanation may be made verbally but when given, must be documented in the claims file.
3.2 It shall be considered prima facie evidence of a general business practice of committing an unfair claim settlement practice if the Department finds that, within a given sample of claims sampled by the Department during an investigation or examination of the insurer, the total number of unfair claims settlement practices exceeds four percent or more of claims, and the general business practice violation occurred within:
3.2.1 A single category of practices prohibited under subsection 3.1 of this regulation; and
3.2.2 A single 12-month period.
3.3 The presumption that a general business practice violation occurred pursuant to subsection 3.2 of this regulation is not, in and of itself, an additional general business practice violation.
3.4 An insurer may overcome the presumption that a general business practice violation has occurred by presenting any relevant evidence to the Commissioner, including evidence relating to the harm to claimants caused by the violation, the nature of the violation, and the insurer's intent.
3.5 This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a person or the person’s representative based upon a violation of 18 Del.C. §2304(16).
3.6 Section 3.0 of this regulation does not apply to general business practice violations if the general business practice is otherwise regulated under 18 DE Admin. Code 1310.
History
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
18 Del. Admin. Code § 902-4.0 Violations; Penalties
Failure to comply will subject the violators to the provisions of 18 Del.C. §§1712, 2307(a) and 2308, which deal with hearings, license revocation, suspension or fine for non‑compliance of any regulation.
History
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
18 Del. Admin. Code § 902-5.0 Severability
If any provision of this Regulation shall be held invalid, the remainder of the Regulation shall not be affected thereby.
History
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
18 Del. Admin. Code § 902-6.0 Effective Date
This Regulation became effective August 1, 1977. The amendments to this Regulation shall become effective 10 days after publication of the final order adopting the amendments.
History
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
- 26 DE Reg. 112 (08/01/22)
903 Prompt Payment of Settled Claims
18 Del. Admin. Code § 903-1.0 Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311, 520, 2304(16), and 2312, and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-2.0 Scope
This regulation applies to all persons that settle claims either pursuant to a legal action or otherwise.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-3.0 Purpose
The purpose of this regulation is to set forth requirements for prompt payment of settled insurance claims by persons as required by 18 Del.C. §2304(16)(f).
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-4.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
“Claimant” means a person covered under an insurance policy or a representative designated by such person and who is entitled to make claims on that person’s behalf including that person’s legal representative, but does not include any provider or other third party who has provided services to a claimant.
“Commissioner” means the Commissioner of the Delaware Department of Insurance.
“Person” shall mean any individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society and other legal entity engaged in the business of insurance, including agents, brokers and adjusters. Person shall also mean medical service plans and hospital service plans as defined in 18 Del.C. §6302. For purposes of this regulation, medical hospital service plans shall be deemed to be engaged in the business of insurance.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-5.0 Prompt Payment
5.1 Under 18 Del.C. §2304(16)(f), persons are required in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. A person shall make prompt payment of a claim that has settled. For purposes of this regulation, prompt payment is defined as remittance of the check or electronic payment within 30 days from any one of the following dates:
5.1.1 The date on which a settlement agreement is fully executed, including the settlement of a case prior to a hearing but pursuant to an action filed in court;
5.1.2 The date a final order is issued by the court;
5.1.3 The date that all of claimant’s documentation has been received and investigation of the claim is complete; or
5.1.4 The last day by which an arbitration award may be appealed as provided in applicable appellate court rules, when neither party to the arbitration has elected to file an appeal.
5.2 Payment shall be made in accordance with the following:
5.2.1 The person may allow a claimant to choose to receive the payment by check or by electronic payment;
5.2.2 If the claimant chooses to receive an electronic payment, the person shall not:
5.2.2.1 Use an institution or issuer to pay claims that imposes charges or fees upon the claimant that reduce the claim payment amount in any way; or
5.2.2.2 Impose any charges or fees upon the claimant in connection with the electronic payment;
5.2.3 For purposes of subsection 5.2 of this regulation, a fee that may be incurred by the claimant due to the claimant's election of certain means to access the funds, including but not limited to the following, shall not be considered a prohibited fee that reduces the claim payment amount:
5.2.4 Notwithstanding anything in this regulation to the contrary, payments for settled workers compensation claims shall be made in the form required by 19 Del.C. §2344.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-6.0 Penalties for Failure to Remit Prompt Payment of a Settled Claim
6.1 If the Department determines that a person has failed to remit prompt payment of a settled claim as required by 18 Del.C. §2304(16)(f) and this regulation in bad faith and with such frequency as to indicate a general business practice, the Department may file an administrative action against the person in accordance with 18 Del.C. §323 and the Administrative Procedures Act. If the Commissioner finds after a hearing that the person has violated 18 Del.C. §2304(16)(f) and this regulation, the Commissioner may:
6.1.1 Award interest to the claimant in an amount equal to the prime rate of interest plus 3% on the amount of the claim, which shall be calculated from the applicable date listed in subsection 5.1 of this regulation;
6.1.2 Fine the person according to the provisions outlined in 18 Del.C. §329 and impose other such penalties as provided in 18 Del.C. §520.
6.1.3 Fine any person involved with the claim or settlement according to the provisions outlined in 18 Del.C. §2308(a)(1).
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-7.0 General Business Practice
7.1 Within a 36-month period, three instances of a person’s failure to make prompt payment, as defined in Section 5.0 of this regulation, shall give rise to a rebuttable presumption that the person is in violation of 18 Del.C. §2304 (16)(f).
7.2 The 36-month period established in subsection 7.1 of this regulation shall be measured from the applicable date as set forth in subsection 5.1 of this regulation.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-8.0 Separability
If any provision of this Regulation or the application of any such provision to any person or circumstance shall be held invalid the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected and shall remain valid.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-9.0 Causes of Action and Defenses
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a person or the person’s representative based upon a violation of 18 Del.C. §2304(16). In the same manner, nothing in this regulation shall establish a defense for any party to any cause of action based upon a violation of 18 Del.C. §2304(16).
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
18 Del. Admin. Code § 903-10.0 Effective Date
This regulation became effective on October 1, 2001. The amendments to this regulation shall become effective on September 11, 2020.
History
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
- 24 DE Reg. 283 (09/01/20)
904 Privacy of Consumer Financial and Health Information
18 Del. Admin. Code § 904-1.0 General Provisions
1.1 Authority. This regulation is promulgated pursuant to the authority granted by 18 Del.C. §§311 and 535.
1.2 Purpose. The purpose of this regulation is to govern the treatment of nonpublic personal financial information about individuals by all licensees of the Delaware Department of Insurance. This regulation:
1.2.1 Requires a licensee to provide notice to individuals about its privacy policies and practices;
1.2.2 Describes the conditions under which a licensee may disclose nonpublic personal financial information about individuals to affiliates and nonaffiliated third parties; and
1.2.3 Provides methods for individuals to prevent a licensee from disclosing that information.
1.3 Applicability
1.3.1 This regulation applies to nonpublic personal financial information about individuals who obtain or are claimants or beneficiaries of products or services primarily for personal, family or household purposes from licensees.
1.3.2 A licensee is not subject to the notice and opt out requirements for nonpublic personal financial information set forth in Sections 1.0 through 11.0 of this regulation if the licensee is an employee, agent or other representative of another licensee (“the principal”) and:
1.3.2.1 The principal otherwise complies with, and provides the notices required by, the provisions of this regulation; and
1.3.2.2 The licensee does not disclose any nonpublic personal information to any person other than the principal or its affiliates in a manner permitted by this regulation.
1.3.3 Examples of employee, agent or other representative of a principal include:
1.3.3.1 An insurance broker, public adjuster or other licensee who is employed by another insurance broker, public adjuster or other licensee;
1.3.3.2 An independent adjuster adjusting a claim or benefit on behalf of an insurer;
1.3.3.3 An insurance agent of an insurer;
1.3.3.4 An insurance producer that has binding authority for an insurer; or
1.3.3.5 A sublicensee of a licensee, whether or not the sublicensee is licensed in any other capacity.
1.3.4 This regulation does not apply to information about companies or about individuals who obtain products or services for business, commercial or agricultural purposes.
1.3.5 An excess lines broker or excess lines insurer shall be deemed to be in compliance with the notice and opt out requirements for nonpublic personal financial information set forth in Sections 1.0 through 11.0 of this regulation, provided that the broker or insurer:
1.3.5.1 Does not disclose nonpublic personal information of a consumer or a customer to nonaffiliated third parties for any purpose, including joint servicing or marketing under Section 9.0 of this regulation, except as permitted by Sections 10.0 or 11.0 of this regulation; and
1.3.5.2 Delivers a notice to the consumer at the time a customer relationship is established on which the following is printed in 16-point type:
PRIVACY NOTICE
NEITHER THE U.S. BROKERS THAT HANDLED THIS INSURANCE NOR THE INSURERS THAT HAVE UNDERWRITTEN THIS INSURANCE WILL DISCLOSE NONPUBLIC PERSONAL INFORMATION CONCERNING THE BUYER TO NON-AFFILIATES OF THE BROKERS OR INSURERS EXCEPT AS PERMITTED BY LAW.
1.4 Compliance. A licensee domiciled in this state that is in compliance with this regulation in a state that has not enacted laws or regulations that meet the requirements of Title V of the Gramm-Leach-Bliley Act (PL 102-106) may nonetheless be deemed to be in compliance with Title V of the Gramm-Leach-Bliley Act in such other state.
1.5 Rules of Construction
1.5.1 The examples in this regulation, the sample clauses in Appendix A of this regulation and the Federal Privacy Form in Appendix B of this regulation are not exclusive. Compliance with an example, use of a sample clause, or use of the Federal Privacy Model Form, to the extent applicable, constitutes compliance with this regulation.
1.5.2 A licensee may rely on use of the Federal Model Privacy Form in Appendix B of this regulation consistent with the attached instructions, as a safe harbor of compliance with the privacy notice content requirement in this regulation.
1.5.3 Use of the Federal Model Privacy Form is not required. Licensees may continue to use other types of privacy notices, including notices that contain the examples in Appendix A of this regulation, provided that such notices accurately describe the licensee’s privacy practices and otherwise meet the notice content requirements of this regulation. However, while a licensee may continue to use privacy notices that contain the examples in this regulation and/or the sample clauses in Appendix A, a licensee may not rely on use of privacy notices with the sample clauses in Appendix A as a safe harbor of compliance with the notice content requirements of this regulation after July 1, 2019.
1.6 Definitions. As used in this regulation, unless the context requires otherwise:
“Affiliate” means any company that controls, is controlled by or is under common control with another company.
“Clear and Conspicuous” means that a notice is reasonably understandable as provided in subsection 1.7 of this regulation and is designed to call attention to the nature and significance of the information in the notice as provided in subsection 1.8 of this regulation.
“Collect” means to obtain information that the licensee organizes or can retrieve by the name of an individual or by identifying number, symbol or other identifying particular assigned to the individual, irrespective of the source of the underlying information.
“Commissioner” means the Insurance Commissioner of Delaware.
“Company” means a corporation, limited liability company, business trust, general or limited partnership, association, sole proprietorship or similar organization.
“Consumer” means an individual who seeks to obtain, obtains or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, and about whom the licensee has nonpublic personal information, or that individual’s legal representative as set forth in the examples listed in subsection 1.9 of this regulation.
“Consumer reporting agency” has the same meaning as in Section 603(f) of the federal Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
“Control” means any action that meets the criteria set forth in subsection 1.10 of this regulation.
“Customer” means a consumer who has a customer relationship with a licensee.
“Customer relationship” means a continuing relationship between a consumer and a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes. Examples of “customer relationship” are set forth in subsection 1.11 of this regulation.
“Financial institution” means any institution the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)). Financial institution does not include:
“Financial product or service” means any product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)). Financial service includes a financial institution’s evaluation or brokerage of information that the financial institution collects in connection with a request or an application from a consumer for a financial product or service.
“Insurance product or service” means any product or service that is offered by a licensee pursuant to the insurance laws of this state. Insurance service includes a licensee's evaluation, brokerage or distribution of information that the licensee collects in connection with a request or an application from a consumer for a insurance product or service.
“Licensee” means all licensed insurers, producers and other persons licensed or required to be licensed, or authorized or required to be authorized, or registered or required to be registered pursuant to the Insurance Law of this state. A licensee does not include a domestic insurer transacting insurance in foreign countries only, under the laws and regulations of a foreign country only, and not transacting insurance in any state as defined in 18 Del.C. §103 of the Delaware Code. Subject to subsection 1.3.2, “licensee” shall also include an unauthorized insurer that accepts business placed through a licensed excess lines broker in this state, but only in regard to the excess lines placements placed pursuant to the Delaware Insurance Code.
“Nonaffiliated Third Party” means any person except a licensee's affiliate or a person employed jointly by a licensee and any company that is not the licensee's affiliate (but nonaffiliated third party includes the other company that jointly employs the person). Nonaffiliated third party includes any company that is an affiliate solely by virtue of the direct or indirect ownership or control of the company by the licensee or its affiliate in conducting merchant banking or investment banking activities of the type described in Section 4(k)(4)(H) or insurance company investment activities of the type described in Section 4(k)(4)(I) of the federal Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H) and (I)).
“Nonpublic Personal Financial Information” means personally identifiable financial information; and any list, description or other grouping of consumers (and publicly available information pertaining to them) that is derived using any personally identifiable financial information that is not publicly available. Examples of lists of nonpublic personal financial information are set forth in subsection 1.12 of this regulation. Nonpublic personal financial information does not include:
“Nonpublic Personal Health Information” means health information that identifies an individual who is the subject of the information; or with respect to which there is a reasonable basis to believe that the information could be used to identify an individual.
“Nonpublic Personal Information” means nonpublic personal financial information and nonpublic personal health information.
“Personally Identifiable Financial Information” means any information a consumer provides to a licensee to obtain an insurance product or service from the licensee; about a consumer resulting from a transaction involving an insurance product or service between a licensee and a consumer; or the licensee otherwise obtains about a consumer in connection with providing an insurance product or service to that consumer. Examples of “personally identifiable financial information” are set forth in subsection 1.13 of this regulation.
“Publicly Available Information” means any information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records; widely distributed media; or disclosures to the general public that are required to be made by federal, state or local law. A licensee has a reasonable basis to believe that information is lawfully made available to the general public if the licensee has taken steps to determine that 1) the information is of the type that is available to the general public; and 2) whether an individual can direct that the information not be made available to the general public and, if so, that the licensee's consumer has not done so. Examples of “publicly available information” are set forth in subsection 1.14 of this regulation.
1.7 A licensee makes its notice “reasonably understandable” for purposes of the defined phrase “clear and conspicuous” if it:
1.7.1 Presents the information in the notice in clear, concise sentences, paragraphs, and sections;
1.7.2 Uses short explanatory sentences or bullet lists whenever possible;
1.7.3 Uses definite, concrete, everyday words and active voice whenever possible;
1.7.4 Avoids multiple negatives;
1.7.5 Avoids legal and highly technical business terminology whenever possible; and
1.7.6 Avoids explanations that are imprecise and readily subject to different interpretations.
1.8 A licensee designs its notice to “call attention to the nature and significance of the information in it” for purposes of the defined phrase “clear and conspicuous” if the licensee:
1.8.1 Uses a plain-language heading to call attention to the notice;
1.8.2 Uses a typeface and type size that is easy to read;
1.8.3 Provides wide margins and ample line spacing;
1.8.4 Uses boldface or italics for key words;
1.8.5 Uses a form that combines the licensee's notice with other information, uses distinctive type size, style, and graphic devices, such as shading or sidebars; and
1.8.6 If applicable, when notice is provided on a web page, designs its notice to call attention to the nature and significance of the information in it if the licensee uses text or visual cues to encourage scrolling down the page if necessary to view the entire notice and ensure that other elements on the web site (such as text, graphics, hyperlinks or sound) do not distract attention from the notice, and the licensee either:
1.8.6.1 Places the notice on a screen that consumers frequently access, such as a page on which transactions are conducted; or
1.8.6.2 Places a link on a screen that consumers frequently access, such as a page on which transactions are conducted, that connects directly to the notice and is labeled appropriately to convey the importance, nature and relevance of the notice.
1.9 Examples of the defined term “consumer” include:
1.9.1 An individual who provides nonpublic personal information to a licensee in connection with obtaining or seeking to obtain financial, investment or economic advisory services relating to an insurance product or service is a consumer regardless of whether the licensee establishes an ongoing advisory relationship.
1.9.2 An applicant for insurance prior to the inception of insurance coverage is a licensee's consumer.
1.9.3 An individual who is a consumer of another financial institution is not a licensee's consumer solely because the licensee is acting as agent for, or provides processing or other services to, that financial institution.
1.9.4 An individual is a licensee's consumer if:
1.9.4.1 The individual is a beneficiary of a life insurance policy underwritten by the licensee;
1.9.4.2 The individual is a claimant under an insurance policy issued by the licensee;
1.9.4.3 The individual is an insured or an annuitant under an insurance policy or an annuity, respectively, issued by the licensee; or
1.9.4.4 The individual is a mortgagor of a mortgage covered under a mortgage insurance policy and the licensee discloses nonpublic personal financial information about the individual to a nonaffiliated third party other than as permitted under Sections 9.0, 10.0 and 11.0 of this regulation.
1.9.5 Provided that the licensee provides the initial, annual and revised notices under subsections 2.1 and 2.2 and Section 4.0 of this regulation to the plan sponsor, group or blanket insurance policyholder or group annuity contract holder, workers' compensation plan participant, and further provided that the licensee does not disclose to a nonaffiliated third party nonpublic personal financial information about such an individual other than as permitted under Sections 9.0, 10.0 and 11.0 of this regulation, an individual is not the consumer of the licensee solely because he or she is:
1.9.5.1 A participant or a beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary;
1.9.5.2 Covered under a group or blanket insurance policy or group annuity contract issued by the licensee; or
1.9.5.3 A beneficiary in a workers' compensation plan.
1.9.6 The individuals described in subsections 1.9.5.1 through 1.9.5.3 are consumers of a licensee if the licensee does not meet all the conditions of subsection 1.9.5 of this regulation.
1.9.7 In no event shall the individuals, solely by virtue of the status described in subsections 1.9.5.1 through 1.9.5.3, be deemed to be customers for purposes of this regulation.
1.9.8 An individual is not a licensee's consumer solely because he or she is a beneficiary of a trust for which the licensee is a trustee.
1.9.9 An individual is not a licensee's consumer solely because he or she has designated the licensee as trustee for a trust.
1.10 Examples of the defined term “control” include:
1.10.1 Ownership, control or power to vote twenty-five percent (25%) or more of the outstanding shares of any class of voting security of the company, directly or indirectly, or acting through one or more other persons;
1.10.2 Control in any manner over the election of a majority of the directors, trustees or general partners (or individuals exercising similar functions) of the company; or
1.10.3 The power to exercise, directly or indirectly, a controlling influence over the management or policies of the company, as the commissioner determines.
1.11 Examples of the defined term “customer relationship” include:
1.11.1 A consumer has a continuing relationship with a licensee if:
1.11.1.1 The consumer is a current policyholder of an insurance product issued by or through the licensee; or
1.11.1.2 The consumer obtains financial, investment or economic advisory services relating to an insurance product or service from the licensee for a fee.
1.11.2 A consumer does not have a continuing relationship with a licensee if:
1.11.2.1 The consumer applies for insurance but does not purchase the insurance;
1.11.2.2 The licensee sells the consumer airline travel insurance in an isolated transaction;
1.11.2.3 The individual is no longer a current policyholder of an insurance product or no longer obtains insurance services with or through the licensee;
1.11.2.4 The consumer is a beneficiary or claimant under a policy and has submitted a claim under a policy choosing a settlement option involving an ongoing relationship with the licensee;
1.11.2.5 The consumer is a beneficiary or a claimant under a policy and has submitted a claim under that policy choosing a lump sum settlement option;
1.11.2.6 The customer's policy is lapsed, expired, or otherwise inactive or dormant under the licensee's business practices, and the licensee has not communicated with the customer about the relationship for a period of twelve (12) consecutive months, other than annual privacy notices, material required by law or regulation, communication at the direction of a state or federal authority, or promotional materials;
1.11.2.7 The individual is an insured or an annuitant under an insurance policy or annuity, respectively, but is not the policyholder or owner of the insurance policy or annuity;
1.11.2.8 For the purposes of this regulation, the individual's last known address according to the licensee's records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful; or
1.11.2.9 In the case of providing real estate settlement services, at the time the customer completes execution of all documents related to the real estate closing, payment for those services has been received, or the licensee has completed all of its responsibilities with respect to the settlement, including filing documents on the public record, whichever is later.
1.12 Examples of lists of “nonpublic personal financial information” as defined in this regulation include any list of individuals' names and street addresses that is derived in whole or in part using personally identifiable financial information that is not publicly available, such as account numbers; but does not include any list of individuals' names and addresses that:
1.12.1 Contains only publicly available information;
1.12.2 Is not derived in whole or in part using personally identifiable financial information that is not publicly available; and
1.12.3 Is not disclosed in a manner that indicates that any of the individuals on the list is a consumer of a financial institution.
1.13 Examples of the defined term “personally identifiable financial information” include:
1.13.1 Information a consumer provides to a licensee on an application to obtain an insurance product or service;
1.13.2 Account balance information and payment history;
1.13.3 The fact that an individual is or has been one of the licensee's customers or has obtained an insurance product or service from the licensee;
1.13.4 Any information about the licensee's consumer if it is disclosed in a manner that indicates that the individual is or has been the licensee's consumer;
1.13.5 Any information that a consumer provides to a licensee or that the licensee or its agent otherwise obtains in connection with collecting on a loan or servicing a loan;
1.13.6 Any information the licensee collects through an Internet cookie (an information-collecting device from a web server); and
1.13.7 Information from a consumer report; except that personally identifiable financial information does not include:
1.13.7.1 A list of names and addresses of customers of an entity that is not a financial institution; and
1.13.7.2 Information that does not identify a consumer, such as aggregate information or blind data that does not contain personal identifiers such as account numbers, names or addresses.
1.14 Examples of the defined term “publicly available information” include:
1.14.1 Government records - Publicly available information in government records includes information in government real estate records and security interest filings.
1.14.2 Widely distributed media - Publicly available information from widely distributed media includes information from a telephone book, a television or radio program, a newspaper or a web site that is available to the general public on an unrestricted basis. A web site is not restricted merely because an Internet service provider or a site operator requires a fee or a password, so long as access is available to the general public.
1.14.3 Mortgage information - A licensee has a reasonable basis to believe that mortgage information is lawfully made available to the general public if the licensee has determined that the information is of the type included on the public record in the jurisdiction where the mortgage would be recorded.
1.14.4 Telephone number - A licensee has a reasonable basis to believe that an individual's telephone number is lawfully made available to the general public if the licensee has located the telephone number in the telephone book or the consumer has informed the public that the telephone number is not unlisted.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-2.0 Privacy and Opt out Notices for Financial Information
2.1 Initial Privacy Notice to Consumers Required
2.1.1 Initial notice requirement. A licensee shall provide a clear and conspicuous notice that accurately reflects its privacy policies and practices to:
2.1.1.1 Customer. An individual who becomes the licensee’s customer, not later than when the licensee establishes a customer relationship, except as provided in subsection 2.1.5 of this regulation; and
2.1.1.2 Consumer. A consumer, before the licensee discloses any nonpublic personal financial information about the consumer to any nonaffiliated third party, if the licensee makes a disclosure other than as authorized by Sections 10.0 and 11.0 of this regulation.
2.1.2 When initial notice to a consumer is not required. A licensee is not required to provide an initial notice to a consumer under section 2.1.1 of this section if:
2.1.2.1 The licensee does not disclose any nonpublic personal financial information about the consumer to any nonaffiliated third party, other than as authorized by Sections 10.0 and 11.0 of this regulation, and the licensee does not have a customer relationship with the consumer; or
2.1.2.2 A notice has been provided by an affiliated licensee, as long as the notice clearly identifies all licensees to whom the notice applies and is accurate with respect to the licensee and the other institutions.
2.1.3 When the licensee establishes a customer relationship.
2.1.3.1 General rule. A licensee establishes a customer relationship at the time the licensee and the consumer enter into a continuing relationship.
2.1.3.2 Examples of establishing customer relationship. A licensee establishes a customer relationship when the consumer:
2.1.3.2.1 Becomes a policyholder of a licensee that is an insurer when the insurer delivers an insurance policy or contract to the consumer, or in the case of a licensee that is an insurance producer or insurance broker, obtains insurance through that licensee; or
2.1.3.2.2 Agrees to obtain financial, economic or investment advisory services relating to insurance products or services for a fee from the licensee.
2.1.4 Existing customers. When an existing customer obtains a new insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, the licensee satisfies the initial notice requirements of subsection 2.1.1 of this regulation as follows:
2.1.4.1 The licensee may provide a revised policy notice, under Section 4.0 of this regulation, that covers the customer’s new insurance product or service; or
2.1.4.2 If the initial, revised or annual notice that the licensee most recently provided to that customer was accurate with respect to the new insurance product or service, the licensee does not need to provide a new privacy notice under subsection 2.1.1 of this regulation.
2.1.5 Exceptions to allow subsequent delivery of notice.
2.1.5.1 A licensee may provide the initial notice required by subsection 2.1.1.1 of this regulation within a reasonable time after the licensee establishes a customer relationship if:
2.1.5.1.1 Establishing the customer relationship is not at the customer’s election; or
2.1.5.1.2 Providing notice not later than when the licensee establishes a customer relationship would substantially delay the customer’s transaction and the customer agrees to receive the notice at a later time.
2.1.5.2 Examples of exceptions.
2.1.5.2.1 Not at customer’s election. Establishing a customer relationship is not at the customer’s election if a licensee acquires or is assigned a customer’s policy from another financial institution or residual market mechanism and the customer does not have a choice about the licensee’s acquisition or assignment.
2.1.5.2.2 Substantial delay of customer’s transaction. Providing notice not later than when a licensee establishes a customer relationship would substantially delay the customer’s transaction when the licensee and the individual agree over the telephone to enter into a customer relationship involving prompt delivery of the insurance product or service.
2.1.5.3 No substantial delay of customer’s transaction. Providing notice not later than when a licensee establishes a customer relationship would not substantially delay the customer’s transaction when the relationship is initiated in person at the licensee’s office or through other means by which the customer may view the notice, such as on a web site.
2.1.6 Delivery. When a licensee is required to deliver an initial privacy notice by this section, the licensee shall deliver it according to Section 5.0 of this regulation. If the licensee uses a short-form initial notice for non-customers according to subsection 2.4 of this regulation, the licensee may deliver its privacy notice according to subsection 2.4.3 of this regulation.
2.2 Annual Privacy Notice to Customers Required
2.2.1 General rule. A licensee shall provide a clear and conspicuous notice to customers that accurately reflects its privacy policies and practices not less than annually during the continuation of the customer relationship. Annually means at least once in any period of twelve (12) consecutive months during which that relationship exists. A licensee may define the twelve-consecutive-month period, but the licensee shall apply it to the customer on a consistent basis.
2.2.1.1 Example. A licensee provides a notice annually if it defines the twelve-consecutive-month period as a calendar year and provides the annual notice to the customer once in each calendar year following the calendar year in which the licensee provided the initial notice. For example, if a customer opens an account on any day of year 1, the licensee shall provide an annual notice to that customer by December 31 of year 2.
2.2.1.2 Exception to General Rule. A licensee is not required to provide an annual notice under this subsection if the licensee is subject to the federal Gramm-Leach-Bliley Act as amended by the Fixing America’s Surface Transportation Act, (P.L. 114-94, section 75001) provided that the licensee:
2.2.1.2.1 Provides nonpublic personal information to nonaffiliated third parties only in accordance with Sections 9.0, 10.0 and 11.0 of this regulation; and
2.2.1.2.2 Has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent notice sent to consumers in accordance with this subsection or with subsection 2.1 of this regulation.
2.2.2 Termination of customer relationship. A licensee is not required to provide an annual notice to a former customer. A former customer is an individual with whom a licensee no longer has a continuing relationship.
2.2.3 When a licensee is required by this section to deliver an annual privacy notice, the licensee shall deliver it according to Section 5.0 of this regulation.
2.3 Information to be Included in Privacy Notices
2.3.1 General rule. The initial, annual and revised privacy notices that a licensee provides under subsections 2.1 and 2.2 and Section 4.0 of this regulation shall include each of the following items of information, in addition to any other information the licensee wishes to provide, that applies to the licensee and to the consumers to whom the licensee sends its privacy notice:
2.3.1.1 The categories of nonpublic personal financial information that the licensee collects;
2.3.1.2 The categories of nonpublic personal financial information that the licensee discloses;
2.3.1.3 The categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information, other than those parties to whom the licensee discloses information under Sections 10.0 and 11.0 of this regulation;
2.3.1.4 The categories of nonpublic personal financial information about the licensee’s former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information about the licensee’s former customers, other than those parties to whom the licensee discloses information under Sections 10.0 and 11.0 of this regulation;
2.3.1.5 If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under Section 9.0 (and no other exception in Sections 10.0 and 11.0 of this regulation applies to that disclosure), a separate description of the categories of information the licensee discloses and the categories of third parties with whom the licensee has contracted;
2.3.1.6 An explanation of the consumer’s right under subsections 6.1 through 6.3 of this regulation to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the methods by which the consumer may exercise that right at that time;
2.3.1.7 Any disclosures that the licensee makes under Section 603(d)(2)(A)(iii) of the federal Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)(iii)) (that is, notices regarding the ability to opt out of disclosures of information among affiliates);
2.3.1.8 The licensee’s policies and practices with respect to protecting the confidentiality and security of nonpublic personal information; and
2.3.1.9 Any disclosure that the licensee makes under subsection 2.3.2 of this regulation.
2.3.2 Description of parties subject to exceptions. If a licensee discloses nonpublic personal financial information as authorized under Sections 10.0 and 11.0 of this regulation, the licensee is not required to list those exceptions in the initial or annual privacy notices required by subsections 2.1 and 2.2 of this regulation. When describing the categories of parties to whom disclosure is made, the licensee is required to state only that it makes disclosures to other affiliated or nonaffiliated third parties, as applicable, as permitted by law.
2.3.3 Examples.
2.3.3.1 Categories of nonpublic personal financial information that the licensee collects. A licensee satisfies the requirement to categorize the nonpublic personal financial information it collects if the licensee categorizes it according to the source of the information, as applicable:
2.3.3.1.1 Information from the consumer;
2.3.3.1.2 Information about the consumer’s transactions with the licensee or its affiliates;
2.3.3.1.3 Information about the consumer’s transactions with nonaffiliated third parties; and
2.3.3.1.4 Information from a consumer reporting agency.
2.3.3.2 Categories of nonpublic personal financial information a licensee discloses.
2.3.3.2.1 A licensee satisfies the requirement to categorize nonpublic personal financial information it discloses if the licensee categorizes the information according to source, as described in subsection 2.3.3.1 of this regulation, as applicable, and provides a few examples to illustrate the types of information in each category. These might include:
2.3.3.2.1.1 Information from the consumer, including application information, such as assets and income and identifying information, such as name, address and social security number;
2.3.3.2.1.2 Transaction information, such as information about balances, payment history and parties to the transaction; and
2.3.3.2.1.3 Information from consumer reports, such as a consumer’s creditworthiness and credit history.
2.3.3.2.2 A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.
2.3.3.2.3 If a licensee reserves the right to disclose all of the nonpublic personal financial information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of nonpublic personal information that the licensee discloses.
2.3.3.3 Categories of affiliates and nonaffiliated third parties to whom the licensee discloses.
2.3.3.3.1 A licensee satisfies the requirement to categorize the affiliates and nonaffiliated third parties to which the licensee discloses nonpublic personal financial information about consumers if the licensee identifies the types of businesses in which they engage.
2.3.3.3.2 Types of businesses may be described by general terms only if the licensee uses a few illustrative examples of significant lines of business. For example, a licensee may use the term financial products or services if it includes appropriate examples of significant lines of businesses, such as life insurer, automobile insurer, consumer banking or securities brokerage.
2.3.3.3.3 A licensee also may categorize the affiliates and nonaffiliated third parties to which it discloses nonpublic personal financial information about consumers using more detailed categories.
2.3.3.3.4 Disclosures under exception for service providers and joint marketers. If a licensee discloses nonpublic personal financial information under the exception in Section 9.0 to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the disclosure requirement of subsection 2.3.1.5 of this regulation if it:
2.3.3.3.4.1 Lists the categories of nonpublic personal financial information it discloses, using the same categories and examples the licensee used to meet the requirements of subsection 2.3.1.2 of this regulation, as applicable; and
2.3.3.3.4.2 States whether the third party is:
2.3.3.3.4.2.1 A service provider that performs marketing services on the licensee’s behalf or on behalf of the licensee and another financial institution; or
2.3.3.3.4.2.2 A financial institution with whom the licensee has a joint marketing agreement.
2.3.3.3.5 Simplified notices. If a licensee does not disclose, and does not wish to reserve the right to disclose, nonpublic personal financial information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under Sections 10.0 and 11.0 of this regulation, the licensee may simply state that fact, in addition to the information it shall provide under subsections 2.3.1.1, 2.3.1.8, 2.3.1.9 and 2.3.2 of this regulation.
2.3.3.4 Confidentiality and security. A licensee describes its policies and practices with respect to protecting the confidentiality and security of nonpublic personal financial information if it does both of the following:
2.3.3.4.1 Describes in general terms who is authorized to have access to the information; and
2.3.3.4.2 States whether the licensee has security practices and procedures in place to ensure the confidentiality of the information in accordance with the licensee’s policy. The licensee is not required to describe technical information about the safeguards it uses.
2.4 Short-form initial notice with opt out notice for non-customers.
2.4.1 A licensee may satisfy the initial notice requirements in subsections 2.1.1.2 and 3.4 of this regulation for a consumer who is not a customer by providing a short-form initial notice at the same time as the licensee delivers an opt out notice as required in Section 3.0 of this regulation.
2.4.2 A short-form initial notice shall:
2.4.2.1 Be clear and conspicuous;
2.4.2.2 State that the licensee’s privacy notice is available upon request; and
2.4.2.3 Explain a reasonable means by which the consumer may obtain that notice.
2.4.3 The licensee shall deliver its short-form initial notice according to Section 5.0 of this regulation. The licensee is not required to deliver its privacy notice with its short-form initial notice. The licensee instead may simply provide the consumer a reasonable means to obtain its privacy notice. If a consumer who receives the licensee’s short-form notice requests the licensee’s privacy notice, the licensee shall deliver its privacy notice according to Section 5.0 of this regulation.
2.4.4 Examples of obtaining privacy notice. The licensee provides a reasonable means by which a consumer may obtain a copy of its privacy notice if the licensee:
2.4.4.1 Provides a toll-free telephone number that the consumer may call to request the notice; or
2.4.4.2 For a consumer who conducts business in person at the licensee’s office, maintains copies of the notice on hand that the licensee provides to the consumer immediately upon request.
2.5 Future disclosures. The licensee’s notice may include:
2.5.1 Categories of nonpublic personal financial information that the licensee reserves the right to disclose in the future, but does not currently disclose; and
2.5.2 Categories of affiliates or nonaffiliated third parties to whom the licensee reserves the right in the future to disclose, but to whom the licensee does not currently disclose, nonpublic personal financial information.
2.6 Sample clauses and Federal Model Privacy Form. Sample clauses illustrating some of the notice content required by this section are included in Appendix A of this regulation. The Federal Model Privacy Form is codified at 16 CFR Part 313 Appendix A, incorporated herein by reference, as may, from time to time, be amended.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-3.0 Form of Opt Out Notice to Consumers and Opt Out Methods
3.1 Form of opt out notice. If a licensee is required to provide an opt out notice under subsections 6.1 through 6.3 of this regulation, it shall provide a clear and conspicuous notice to each of its consumers that accurately explains the right to opt out under that section. The notice shall state:
3.1.1 That the licensee discloses or reserves the right to disclose nonpublic personal financial information about its consumer to a nonaffiliated third party;
3.1.2 That the consumer has the right to opt out of that disclosure; and
3.1.3 A reasonable means by which the consumer may exercise the opt out right.
3.2 Examples.
3.2.1 Adequate opt out notice. A licensee provides adequate notice that the consumer can opt out of the disclosure of nonpublic personal financial information to a nonaffiliated third party if the licensee:
3.2.1.1 Identifies all of the categories of nonpublic personal financial information that it discloses or reserves the right to disclose, and all of the categories of nonaffiliated third parties to which the licensee discloses the information, as described in subsections 2.3.1.2 and 2.3.1.3, and states that the consumer can opt out of the disclosure of that information; and
3.2.1.2 Identifies the insurance products or services that the consumer obtains from the licensee, either singly or jointly, to which the opt out direction would apply.
3.2.2 Reasonable opt out means. A licensee provides a reasonable means to exercise an opt out right if it:
3.2.2.1 Designates check-off boxes in a prominent position on the relevant forms with the opt out notice;
3.2.2.2 Includes a reply form together with the opt out notice;
3.2.2.3 Provides an electronic means to opt out, such as a form that can be sent via electronic mail or a process at the licensee’s web site, if the consumer agrees to the electronic delivery of information; or
3.2.2.4 Provides a toll-free telephone number that consumers may call to opt out.
3.2.3 Unreasonable opt out means. A licensee does not provide a reasonable means of opting out if:
3.2.3.1 The only means of opting out is for the consumer to write his or her own letter to exercise that opt out right; or
3.2.3.2 The only means of opting out as described in any notice subsequent to the initial notice is to use a check-off box that the licensee provided with the initial notice but did not include with the subsequent notice.
3.2.4 Specific opt out means. A licensee may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer.
3.3 Same form as initial notice permitted. A licensee may provide the opt out notice together with or on the same written or electronic form as the initial notice the licensee provides in accordance with subsection 2.1.
3.4 Initial notice required when opt out notice delivered subsequent to initial notice. If a licensee provides the opt out notice later than required for the initial notice in accordance with subsection 2.1, the licensee shall also include a copy of the initial notice with the opt out notice in writing or, if the consumer agrees, electronically.
3.5 Joint relationships.
3.5.1 If two (2) or more consumers jointly obtain an insurance product or service from a licensee, the licensee may provide a single opt out notice. The licensee’s opt out notice shall explain how the licensee will treat an opt out direction by a joint consumer (as explained in subsection 3.5.5 of this regulation).
3.5.2 Any of the joint consumers may exercise the right to opt out. The licensee may either:
3.5.2.1 Treat an opt out direction by a joint consumer as applying to all of the associated joint consumers; or
3.5.2.2 Permit each joint consumer to opt out separately.
3.5.3 If a licensee permits each joint consumer to opt out separately, the licensee shall permit one of the joint consumers to opt out on behalf of all of the joint consumers.
3.5.4 A licensee may not require all joint consumers to opt out before it implements any opt out direction.
3.5.5 Example. If John and Mary are both named policyholders on a homeowner’s insurance policy issued by a licensee and the licensee sends policy statements to John’s address, the licensee may do any of the following, but it shall explain in its opt out notice which opt out policy the licensee will follow:
3.5.5.1 Send a single opt out notice to John’s address, but the licensee shall accept an opt out direction from either John or Mary.
3.5.5.2 Treat an opt out direction by either John or Mary as applying to the entire policy. If the licensee does so and John opts out, the licensee may not require Mary to opt out as well before implementing John’s opt out direction.
3.5.5.3 Permit John and Mary to make different opt out directions. If the licensee does so:
3.5.5.3.1 It shall permit John and Mary to opt out for each other;
3.4.5.3.2 If both opt out, the licensee shall permit both of them to notify it in a single response (such as on a form or through a telephone call); and
3.4.5.3.3 If John opts out and Mary does not, the licensee may only disclose nonpublic personal financial information about Mary, but not about John and not about John and Mary jointly.
3.6 Time to comply with opt out. A licensee shall comply with a consumer’s opt out direction as soon as reasonably practicable after the licensee receives it.
3.7 Continuing right to opt out. A consumer may exercise the right to opt out at any time.
3.8 Duration of consumer’s opt out direction.
3.8.1 A consumer’s direction to opt out under this section is effective until the consumer revokes it in writing or, if the consumer agrees, electronically.
3.8.2 When a customer relationship terminates, the customer’s opt out direction continues to apply to the nonpublic personal financial information that the licensee collected during or related to that relationship. If the individual subsequently establishes a new customer relationship with the licensee, the opt out direction that applied to the former relationship does not apply to the new relationship.
3.9 Delivery. When a licensee is required to deliver an opt out notice by this section, the licensee shall deliver it according to Section 5.0 of this regulation.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-4.0 Revised Privacy Notices
4.1 General rule. Except as otherwise authorized in this regulation, a licensee shall not, directly or through an affiliate, disclose any nonpublic personal financial information about a consumer to a nonaffiliated third party other than as described in the initial notice that the licensee provided to that consumer under subsection 2.1 of this regulation, unless:
4.1.1 The licensee has provided to the consumer a clear and conspicuous revised notice that accurately describes its policies and practices;
4.1.2 The licensee has provided to the consumer a new opt out notice;
4.1.3 The licensee has given the consumer a reasonable opportunity, before the licensee discloses the information to the nonaffiliated third party, to opt out of the disclosure; and
4.1.4 The consumer does not opt out.
4.2 Examples.
4.2.1 Except as otherwise permitted by Sections 9.0, 10.0 and 11.0 of this regulation, a licensee shall provide a revised notice before it:
4.2.1.1 Discloses a new category of nonpublic personal financial information to any nonaffiliated third party;
4.2.1.2 Discloses nonpublic personal financial information to a new category of nonaffiliated third party; or
4.2.1.3 Discloses nonpublic personal financial information about a former customer to a nonaffiliated third party, if that former customer has not had the opportunity to exercise an opt out right regarding that disclosure.
4.2.2 A revised notice is not required if the licensee discloses nonpublic personal financial information to a new nonaffiliated third party that the licensee adequately described in its prior notice.
4.3 Delivery.
4.3.1 When a licensee is required to deliver a revised privacy notice by this section, the licensee shall deliver it according to Section 5.0 of this regulation.
4.3.2 Unless a licensee is providing privacy notices directly to covered individuals described in subsections 1.9.5.1, 1.9.5.2 or 1.9.5.3 of this regulation, a licensee shall provide initial, annual and revised notices to the plan sponsor, group or blanket insurance policyholder or group annuity contract holder, or workers’ compensation policyholder, in the manner described in Sections 2.0 through 4.0 of this regulation, describing the licensee’s privacy practices with respect to nonpublic personal information about individuals covered under the policies, contracts or plans.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-5.0 Delivery
5.1 How to provide notices. A licensee shall provide any notices that this regulation requires so that each consumer can reasonably be expected to receive actual notice in writing or, if the consumer agrees, electronically.
5.2 Examples of reasonable expectation of actual notice. A licensee may reasonably expect that a consumer will receive actual notice if the licensee:
5.2.1 Hand-delivers a printed copy of the notice to the consumer;
5.2.2 Mails a printed copy of the notice to the last known address of the consumer separately, or in a policy, billing or other written communication;
5.2.3 For a consumer who conducts transactions electronically, posts the notice on the electronic site and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining a particular insurance product or service;
5.2.4 For an isolated transaction with a consumer, such as the licensee providing an insurance quote or selling the consumer travel insurance, posts the notice and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining the particular insurance product or service.
5.3 Examples of unreasonable expectation of actual notice. A licensee may not, however, reasonably expect that a consumer will receive actual notice of its privacy policies and practices if it:
5.3.1 Only posts a sign in its office or generally publishes advertisements of its privacy policies and practices; or
5.3.2 Sends the notice via electronic mail to a consumer who does not obtain an insurance product or service from the licensee electronically.
5.4 Annual notices only. A licensee may reasonably expect that a customer will receive actual notice of the licensee’s annual privacy notice if:
5.4.1 The customer uses the licensee’s web site to access insurance products and services electronically and agrees to receive notices at the web site and the licensee posts its current privacy notice continuously in a clear and conspicuous manner on the web site; or
5.4.2 The customer has requested that the licensee refrain from sending any information regarding the customer relationship, and the licensee’s current privacy notice remains available to the customer upon request.
5.5 Oral description of notice insufficient. A licensee may not provide any notice required by this regulation solely by orally explaining the notice, either in person or over the telephone.
5.6 Retention or accessibility of notices for customers.
5.6.1 For customers only, a licensee shall provide the initial notice required by subsection 2.1.1.2 of this regulation, the annual notice required by subsection 2.2.1 of this regulation, and the revised notice required by Section 4.0 of this regulation so that the customer can retain them or obtain them later in writing or, if the customer agrees, electronically.
5.6.2 Examples of retention or accessibility. A licensee provides a privacy notice to the customer so that the customer can retain it or obtain it later if the licensee:
5.6.2.1 Hand-delivers a printed copy of the notice to the customer;
5.6.2.2 Mails a printed copy of the notice to the last known address of the customer; or
5.6.2.3 Makes its current privacy notice available on a web site (or a link to another web site) for the customer who obtains an insurance product or service electronically and agrees to receive the notice at the web site.
5.7 Joint notice with other financial institutions. A licensee may provide a joint notice from the licensee and one or more of its affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to the licensee and the other institutions. A licensee also may provide a notice on behalf of another financial institution.
5.8 Joint relationships. If two (2) or more consumers jointly obtain an insurance product or service from a licensee, the licensee may satisfy the initial, annual and revised notice requirements of subsections 2.1.1, 2.2.1 and 4.1 of this regulation, respectively, by providing one notice to those consumers jointly.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-6.0 Limits on Disclosure of Nonpublic Personal Financial Information to Nonaffiliated Third Parties
6.1 Conditions for disclosure. Except as otherwise authorized in this regulation, a licensee may not, directly or through any affiliate, disclose any nonpublic personal financial information about a consumer to a nonaffiliated third party unless:
6.1.1 The licensee has provided to the consumer an initial notice as required under subsection 2.1 of this regulation;
6.1.2 The licensee has provided to the consumer an opt out notice as required in Section 3.0 of this regulation;
6.1.3 The licensee has given the consumer a reasonable opportunity, before it discloses the information to the nonaffiliated third party, to opt out of the disclosure; and
6.1.4 The consumer does not opt out.
6.2 Opt out definition. Opt out means a direction by the consumer that the licensee not disclose nonpublic personal financial information about that consumer to a nonaffiliated third party, other than as permitted by Sections 9.0, 10.0 and 11.0 of this regulation.
6.3 Examples of reasonable opportunity to opt out. A licensee provides a consumer with a reasonable opportunity to opt out if:
6.3.1 By mail. The licensee mails the notices required in section 6.1 to the consumer and allows the consumer to opt out by mailing a form, calling a toll-free telephone number or any other reasonable means within thirty (30) days from the date the licensee mailed the notices.
6.3.2 By electronic means. A customer opens an on-line account with a licensee and agrees to receive the notices required in section 6.1 electronically, and the licensee allows the customer to opt out by any reasonable means within thirty (30) days after the date that the customer acknowledges receipt of the notices in conjunction with opening the account.
6.3.3 Isolated transaction with consumer. For an isolated transaction such as providing the consumer with an insurance quote, a licensee provides the consumer with a reasonable opportunity to opt out if the licensee provides the notices required in section 6.1 at the time of the transaction and requests that the consumer decide, as a necessary part of the transaction, whether to opt out before completing the transaction.
6.4 Application of opt out to all consumers and all nonpublic personal financial information.
6.4.1 A licensee shall comply with this section, regardless of whether the licensee and the consumer have established a customer relationship.
6.4.2 Unless a licensee complies with this section, the licensee may not, directly or through any affiliate, disclose any nonpublic personal financial information about a consumer that the licensee has collected, regardless of whether the licensee collected it before or after receiving the direction to opt out from the consumer.
6.5 Partial opt out. A licensee may allow a consumer to select certain nonpublic personal financial information or certain nonaffiliated third parties with respect to which the consumer wishes to opt out.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-7.0 Limits on Redisclosure and Reuse of Nonpublic Personal Financial Information
7.1 Information the licensee receives under an exception. If a licensee receives nonpublic personal financial information from a nonaffiliated financial institution under an exception in Sections 10.0 or 11.0 of this regulation, the licensee’s disclosure and use of that information is limited as follows:
7.1.1 The licensee may disclose the information to the affiliates of the financial institution from which the licensee received the information;
7.1.2 The licensee may disclose the information to its affiliates, but the licensee’s affiliates may, in turn, disclose and use the information only to the extent that the licensee may disclose and use the information; and
7.1.3 The licensee may disclose and use the information pursuant to an exception in Sections 10.0 or 11.0 of this regulation, in the ordinary course of business to carry out the activity covered by the exception under which the licensee received the information.
7.2 Example. If a licensee receives information from a nonaffiliated financial institution for claims settlement purposes, the licensee may disclose the information for fraud prevention, or in response to a properly authorized subpoena. The licensee may not disclose that information to a third party for marketing purposes or use that information for its own marketing purposes.
7.3 Information a licensee receives outside of an exception. If a licensee receives nonpublic personal financial information from a nonaffiliated financial institution other than under an exception in Sections 10.0 or 11.0 of this regulation, the licensee may disclose the information only:
7.3.1 To the affiliates of the financial institution from which the licensee received the information;
7.3.2 To its affiliates, but its affiliates may, in turn, disclose the information only to the extent that the licensee may disclose the information; and
7.3.3 To any other person, if the disclosure would be lawful if made directly to that person by the financial institution from which the licensee received the information.
7.4 Example. If a licensee obtains a customer list from a nonaffiliated financial institution outside of the exceptions in Sections 10.0 or 11.0 of this regulation:
7.4.1 The licensee may use that list for its own purposes; and
7.4.2 The licensee may disclose that list to another nonaffiliated third party only if the financial institution from which the licensee purchased the list could have lawfully disclosed the list to that third party. That is, the licensee may disclose the list in accordance with the privacy policy of the financial institution from which the licensee received the list, as limited by the opt out direction of each consumer whose nonpublic personal financial information the licensee intends to disclose, and the licensee may disclose the list in accordance with an exception in Sections 10.0 or 11.0 of this regulation, such as to the licensee’s attorneys or accountants.
7.5 Information a licensee discloses under an exception. If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under an exception in Sections 10.0 or 11.0 of this regulation, the third party may disclose and use that information only as follows:
7.5.1 The third party may disclose the information to the licensee’s affiliates;
7.5.2 The third party may disclose the information to its affiliates, but its affiliates may, in turn, disclose and use the information only to the extent that the third party may disclose and use the information; and
7.5.3 The third party may disclose and use the information pursuant to an exception in Sections 10.0 or 11.0 of this regulation in the ordinary course of business to carry out the activity covered by the exception under which it received the information.
7.6 Information a licensee discloses outside of an exception. If a licensee discloses nonpublic personal financial information to a nonaffiliated third party other than under an exception in Sections 10.0 or 11.0 of this regulation, the third party may disclose the information only:
7.6.1 To the licensee’s affiliates;
7.6.2 To the third party's affiliates, but the third party's affiliates, in turn, may disclose the information only to the extent the third party can disclose the information; and
7.6.3 To any other person, if the disclosure would be lawful if the licensee made it directly to that person.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-8.0 Limits on Sharing Account Number Information for Marketing Purposes
8.1 General prohibition on disclosure of account numbers. A licensee shall not, directly or through an affiliate, disclose, other than to a consumer reporting agency, a policy number or similar form of access number or access code for a consumer’s policy or transaction account to any nonaffiliated third party for use in telemarketing, direct mail marketing or other marketing through electronic mail to the consumer.
8.2 Exceptions. Subsection 8.1 of this regulation does not apply if a licensee discloses a policy number or similar form of access number or access code:
8.2.1 To the licensee’s service provider solely in order to perform marketing for the licensee’s own products or services, as long as the service provider is not authorized to directly initiate charges to the account;
8.2.2 To a licensee who is a producer solely in order to perform marketing for the licensee’s own products or services; or
8.2.3 To a participant in an affinity or similar program where the participants in the program are identified to the customer when the customer enters into the program.
8.3 Examples.
8.3.1 Policy number. A policy number, or similar form of access number or access code, does not include a number or code in an encrypted form, as long as the licensee does not provide the recipient with a means to decode the number or code.
8.3.2 Policy or transaction account. For the purposes of this section, a policy or transaction account is an account other than a deposit account or a credit card account. A policy or transaction account does not include an account to which third parties cannot initiate charges.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-9.0 Exception to Opt Out Requirements for Disclosure of Nonpublic Personal Financial Information for Service Providers and Joint Marketing
9.1 General rule.
9.1.1 The opt out requirements in Sections 3.0 and 5.0 of this regulation do not apply when a licensee provides nonpublic personal financial information to a nonaffiliated third party to perform services for the licensee or functions on the licensee’s behalf, if the licensee:
9.1.1.1 Provides the initial notice in accordance with subsection 2.1 of this regulation; and
9.1.1.2 Enters into a contractual agreement with the third party that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the licensee disclosed the information, including use under an exception in Sections 10.0 or 11.0 of this regulation in the ordinary course of business to carry out those purposes.
9.1.2 Example. If a licensee discloses nonpublic personal financial information under this section to a financial institution with which the licensee performs joint marketing, the licensee's contractual agreement with that institution meets the requirements of subsection 9.1.2 of this regulation if it prohibits the institution from disclosing or using the nonpublic personal financial information except as necessary to carry out the joint marketing or under an exception in Sections 10.0 or 11.0 of this regulation in the ordinary course of business to carry out that joint marketing.
9.2 Service may include joint marketing. The services a nonaffiliated third party performs for a licensee under subsection 9.1 may include marketing of the licensee’s own products or services or marketing of financial products or services offered pursuant to joint agreements between the licensee and one or more financial institutions.
9.3 Definition of “joint agreement.” For purposes of this section, “joint agreement” means a written contract pursuant to which a licensee and one or more financial institutions jointly offer, endorse or sponsor a financial product or service.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-10.0 Exceptions to Notice and Opt Out Requirements for Disclosure of Nonpublic Personal Financial Information for Processing and Servicing Transactions
10.1 Exceptions for processing transactions at consumer’s request. The requirements for initial notice in subsection 2.1.1.2, the opt out in Sections 3.0 and 5.0 of this regulation, and service providers and joint marketing in Section 8.0 of this regulation do not apply if the licensee discloses nonpublic personal financial information as necessary to effect, administer or enforce a transaction that a consumer requests or authorizes, or in connection with:
10.1.1 Servicing or processing an insurance product or service that a consumer requests or authorizes;
10.1.2 Maintaining or servicing the consumer’s account with a licensee, or with another entity as part of a private label credit card program or other extension of credit on behalf of such entity;
10.1.3 A proposed or actual securitization, secondary market sale (including sales of servicing rights) or similar transaction related to a transaction of the consumer; or
10.1.4 Reinsurance or stop loss or excess loss insurance.
10.2 “Necessary to effect, administer or enforce a transaction” means that the disclosure is:
10.2.1 Required, or is one of the lawful or appropriate methods, to enforce the licensee’s rights or the rights of other persons engaged in carrying out the financial transaction or providing the product or service; or
10.2.2 Required, or is a usual, appropriate or acceptable method:
10.2.2.1 To carry out the transaction or the product or service business of which the transaction is a part, and record, service or maintain the consumer’s account in the ordinary course of providing the insurance product or service;
10.2.2.2 To administer or service benefits or claims relating to the transaction or the product or service business of which it is a part;
10.2.2.3 To provide a confirmation, statement or other record of the transaction, or information on the status or value of the insurance product or service to the consumer or the consumer’s agent or broker;
10.2.2.4 To accrue or recognize incentives or bonuses associated with the transaction that are provided by a licensee or any other party;
10.2.2.5 To underwrite insurance at the consumer’s request or for any of the following purposes as they relate to a consumer’s insurance: account administration, reporting, investigating or preventing fraud or material misrepresentation, processing premium payments, processing insurance claims, administering insurance benefits (including utilization review activities), participating in research projects or as otherwise required or specifically permitted by federal or state law; or
10.2.2.6 In connection with:
10.2.2.6.1 The authorization, settlement, billing, processing, clearing, transferring, reconciling or collection of amounts charged, debited or otherwise paid using a debit, credit or other payment card, check or account number, or by other payment means;
10.2.2.6.2 The transfer of receivables, accounts or interests therein; or
10.2.2.6.3 The audit of debit, credit or other payment information.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-11.0 Other Exceptions to Notice and Opt Out Requirements for Disclosure of Nonpublic Personal Financial Information
11.1 Exceptions to opt out requirements. The requirements for initial notice to consumers in subsection 2.1.1.2, the opt out in Sections 3.0 and 5.0 of this regulation, and service providers and joint marketing in Section 8.0 of this regulation do not apply when a licensee discloses nonpublic personal financial information:
11.1.1 With the consent or at the direction of the consumer, provided that the consumer has not revoked the consent or direction;
11.1.2 To protect the confidentiality or security of a licensee’s records pertaining to the consumer, service, product or transaction;
11.1.3 To protect against or prevent actual or potential fraud or unauthorized transactions;
11.1.4 For required institutional risk control or for resolving consumer disputes or inquiries;
11.1.5 To persons holding a legal or beneficial interest relating to the consumer; or
11.1.6 To persons acting in a fiduciary or representative capacity on behalf of the consumer;
11.1.7 To provide information to insurance rate advisory organizations, guaranty funds or agencies, agencies that are rating a licensee, persons that are assessing the licensee’s compliance with industry standards, and the licensee’s attorneys, accountants and auditors;
11.1.8 To the extent specifically permitted or required under other provisions of law and in accordance with the federal Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.), to law enforcement agencies (including the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, National Credit Union Administration, the Securities and Exchange Commission, the Secretary of the Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records and Reports on Monetary Instruments and Transactions) and 12 U.S.C. Chapter 21 (Financial Recordkeeping), a state insurance authority, and the Federal Trade Commission), self-regulatory organizations or for an investigation on a matter related to public safety;
11.1.9 To a consumer reporting agency in accordance with the federal Fair Credit Reporting Act (15 U.S.C. 1681 et seq.); or
11.1.10 From a consumer report reported by a consumer reporting agency;
11.1.11 In connection with a proposed or actual sale, merger, transfer or exchange of all or a portion of a business or operating unit if the disclosure of nonpublic personal financial information concerns solely consumers of the business or unit;
11.1.12 To comply with federal, state or local laws, rules and other applicable legal requirements;
11.1.13 To comply with a properly authorized civil, criminal or regulatory investigation, or subpoena or summons by federal, state or local authorities;
11.1.14 To respond to judicial process or government regulatory authorities having jurisdiction over a licensee for examination, compliance or other purposes as authorized by law; or
11.1.15 For purposes related to the replacement of a group benefit plan, a group health plan, a group welfare plan or a workers’ compensation plan.
11.1.16 When the licensee is in liquidation or receivership.
11.2 Example of revocation of consent. A consumer may revoke consent by subsequently exercising the right to opt out of future disclosures of nonpublic personal information as permitted under subsection 3.7 of this regulation.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-12.0 Protection of Fair Credit Reporting Act
Nothing in this regulation shall be construed to modify, limit or supersede the operation of the federal Fair Credit Reporting Act (15 U.S.C. 1681 et seq.), and no inference shall be drawn on the basis of the provisions of this regulation regarding whether information is transaction or experience information under Section 603 of that Act.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-13.0 Nondiscrimination
A licensee shall not unfairly discriminate against any consumer or customer because that consumer or customer has opted out from the disclosure of his or her nonpublic personal financial information pursuant to the provisions of this regulation.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-14.0 Violation
Repeated failure to comply with this Regulation will be grounds for investigation and enforcement as unfair practices in the insurance business pursuant to 18 Del.C. Ch. 23.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-15.0 Severability
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of the regulation or the applicability of the provision to other persons or circumstances shall not be affected.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
18 Del. Admin. Code § 904-16.0 Effective Date
16.1 Effective date. This regulation is effective as of July 1, 2001.
16.2 Notice requirement for consumers who are the licensee’s customers on the compliance date. By November 1, 2001, a licensee shall provide an initial notice, as required by subsection 2.1 of this regulation, to consumers who are the licensee’s customers on July 1, 2001.
16.3 Example. A licensee provides an initial notice to consumers who are its customers on November 1, 2001, if, by the licensee has established a system for providing an initial notice to all new customers and has mailed the initial notice to all the licensee’s existing customers.
16.4 Two-year grandfathering of service agreements. Until July 1, 2002, a contract that a licensee has entered into with a nonaffiliated third party to perform services for the licensee or functions on the licensee’s behalf satisfies the provisions of subsection 9.1.1.2 of this regulation, even if the contract does not include a requirement that the third party maintain the confidentiality of nonpublic personal information, as long as the licensee entered into the agreement on or before July 1, 2000.
16.5 The amendments to subsections 1.5 and 2.6 of this regulation shall be effective on July 1, 2019.
16.6 The exception to the annual notice requirement set forth in subsection 2.2.1.2 of this regulation shall be effective June 11, 2019.
APPENDIX A – SAMPLE CLAUSES
Licensees, including a group of financial holding company affiliates that use a common privacy notice, may use the following sample clauses, if the clause is accurate for each institution that uses the notice. (Note that disclosure of certain information, such as assets, income and information from a consumer reporting agency, may give rise to obligations under the federal Fair Credit Reporting Act, such as a requirement to permit a consumer to opt out of disclosures to affiliates or designation as a consumer reporting agency if disclosures are made to nonaffiliated third parties.)
A-1–Categories of information a licensee collects (all institutions)
A licensee may use this clause, as applicable, to meet the requirement of 18 DE Admin. Code 904-2.3.1.1 to describe the categories of nonpublic personal information the licensee collects.
Sample Clause A-1:
We collect nonpublic personal information about you from the following sources:
A-2–Categories of information a licensee discloses (institutions that disclose outside of the exceptions)
A licensee may use one of these clauses, as applicable, to meet the requirement of 18 DE Admin. Code 904-2.3.1.2 to describe the categories of nonpublic personal information the licensee discloses. The licensee may use these clauses if it discloses nonpublic personal information other than as permitted by the exceptions in 18 DE Admin. Code 904-9.0, 10.0 and 11.0.
Sample Clause A-2, Alternative 1:
We may disclose the following kinds of nonpublic personal information about you:
Sample Clause A-2, Alternative 2:
We may disclose all of the information that we collect, as described [describe location in the notice, such as “above” or “below”].
A-3–Categories of information a licensee discloses and parties to whom the licensee discloses (institutions that do not disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirements of 18 DE Admin. Code 904-2.3.1.2 through 2.3.1.4 to describe the categories of nonpublic personal information about customers and former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses. A licensee may use this clause if the licensee does not disclose nonpublic personal information to any party, other than as permitted by the exceptions in 18 DE Admin. Code 904-10.0 and 11.0.
Sample Clause A-3:
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.
A-4–Categories of parties to whom a licensee discloses (institutions that disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirement of 18 DE Admin. Code 904-2.3.1.3 to describe the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal information. This clause may be used if the licensee discloses nonpublic personal information other than as permitted by the exceptions in 18 DE Admin. Code 904-9.0, 10.0 and 11.0, as well as when permitted by the exceptions in 18 DE Admin. Code 904-10.0 and 11.0.
Sample Clause A-4:
We may disclose nonpublic personal information about you to the following types of third parties:
We may also disclose nonpublic personal information about you to nonaffiliated third parties as permitted by law.
A-5–Service provider/joint marketing exception
A licensee may use one of these clauses, as applicable, to meet the requirements of 18 DE Admin. Code 904-2.3.1.5 related to the exception for service providers and joint marketers in 18 DE Admin. Code 904-9.0. If a licensee discloses nonpublic personal information under this exception, the licensee shall describe the categories of nonpublic personal information the licensee discloses and the categories of third parties with which the licensee has contracted.
Sample Clause A-5, Alternative 1:
We may disclose the following information to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements:
Sample Clause A-5, Alternative 2:
We may disclose all of the information we collect, as described [describe location in the notice, such as “above” or “below”] to companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements.
A-6–Explanation of opt out right (institutions that disclose outside of the exceptions)
A licensee may use this clause, as applicable, to meet the requirement of 18 DE Admin. Code 904-2.3.1.6 to provide an explanation of the consumer’s right to opt out of the disclosure of nonpublic personal information to nonaffiliated third parties, including the method(s) by which the consumer may exercise that right. The licensee may use this clause if the licensee discloses nonpublic personal information other than as permitted by the exceptions in 18 DE Admin. Code 904-9.0, 10.0 and 11.0.
Sample Clause A-6:
If you prefer that we not disclose nonpublic personal information about you to nonaffiliated third parties, you may opt out of those disclosures, that is, you may direct us not to make those disclosures (other than disclosures permitted by law). If you wish to opt out of disclosures to nonaffiliated third parties, you may [describe a reasonable means of opting out, such as “call the following toll-free number: (insert number)].
A-7–Confidentiality and security (all institutions)
A licensee may use this clause, as applicable, to meet the requirement of 18 DE Admin. Code 904-2.3.1.8 to describe its policies and practices with respect to protecting the confidentiality and security of nonpublic personal information.
Sample Clause A-7:
We restrict access to nonpublic personal information about you to [provide an appropriate description, such as “those employees who need to know that information to provide products or services to you”]. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information.
APPENDIX B. FEDERAL SAMPLE CLAUSES
The Federal sample forms and instructions, as codified at 16 C.F.R. Pt. 313, App. A. (adopted at 74 FR 63966 (Dec. 1, 2009)), as may, from time to time, be amended, are incorporated herein by reference as 18 DE Admin. Code 904 Appendix B.
History
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
- 22 DE Reg. 1017 (06/01/19)
905 Standards for Safeguarding Customer Information
18 Del. Admin. Code § 905 Standards for Safeguarding Customer Information
905 Standards for Safeguarding Customer Information [Formerly Regulation 86]
1.0 Authority
1.1 This regulation is promulgated pursuant to 18 Del.C. §§ 311, 535.
1.2 This regulation establishes standards for developing and implementing administrative, technical and physical safeguards to protect the security, confidentiality and integrity of customer information, pursuant to Sections 501, 505(b), and 507 of the Gramm-Leach-Bliley Act, codified at 15 U.S.C. 6801, 6805(b) and 6807.
1.2.1 Section 501(a) provides that it is the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its Customers and to protect the security and confidentiality of those customers' nonpublic personal information.
1.2.2 Section 501(b) requires the state insurance regulatory authorities to establish appropriate standards relating to administrative, technical and physical safeguards:
1.2.2.1 to ensure the security and confidentiality of customer records and information;
1.2.2.2 to protect against any anticipated threats or hazards to the security or integrity of such records; and
1.2.2.3 to protect against unauthorized access to or use of records or information that could result in substantial harm or inconvenience to a customer.
1.2.3 Section 505(b)(2) calls on state insurance regulatory authorities to implement the standards prescribed under Section 501(b) by regulation with respect to persons engaged in providing insurance.
1.2.4 Section 507 provides, among other things, that a state regulation may afford persons greater privacy protections than those provided by subtitle A of Title V of the Gramm-Leach-Bliley Act. This regulation requires that the safeguards established pursuant to this regulation shall apply to nonpublic personal information, including nonpublic personal financial information and nonpublic personal health information.
6 DE Reg. 966 (2/1/03)
2.0 Definitions
2.1 For purposes of this regulation, the following definitions apply:
"Customer" means a customer of the licensee as the term customer is defined in Delaware Insurance Department Regulation 904 section 4.0 (Formerly Regulation 84).
“Customer information" means nonpublic personal information as defined in Delaware Insurance Department Regulation 904 sections 4.16 and 4.17 (Formerly Regulation 84) about a customer, whether in paper, electronic or other form, that is maintained by or on behalf of the licensee.
“Customer information systems" means the electronic or physical methods used to access, collect, store, use, transmit, protect or dispose of customer information.
"Licensee" means a licensee as that term is defined in Delaware Insurance Department Regulation 904 section 4.17 (Formerly Regulation 84), except that "licensee" shall not include: a purchasing group pursuant to 18 Del.C. Ch. 80, or an unauthorized insurer in regard to the excess line business conducted pursuant to 18 Del.C. Ch. 19.
Drafting Note: Although service contract providers and extended warranty providers are "licensees" under the insurance laws of many states, they are not so defined under Delaware law.
"Service provider" means a person that maintains, processes or otherwise is permitted access to customer information through its provision of services directly to the licensee.
6 DE Reg. 966 (2/1/03)
3.0 Information Security Program
Each licensee shall implement a comprehensive written information security program that includes administrative, technical and physical safeguards for the protection of customer information. The administrative, technical and physical safeguards included in the information security program shall be appropriate to the size and complexity of the licensee and the nature and scope of its activities.
4.0 Objectives of Information Security Program
A licensee's information security program shall be designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazards to the security or integrity of the information; and protect against unauthorized access to or use of the information that could result in substantial harm or inconvenience to any customer.
6 DE Reg. 966 (2/1/03)
5.0 Examples of Methods of Development and Implementation
The actions and procedures described in Sections 6 through 9 of this regulation are examples of methods of implementation of the requirements of sections 3.0 and 4.0 of this regulation. These examples are non-exclusive illustrations of actions and procedures that licensees may follow to implement sections 3.0 and 4.0 of this regulation.
6 DE Reg. 966 (2/1/03)
6.0 Assess Risk
The licensee:
6.1 Identifies reasonably foreseeable internal or external threats that could result in unauthorized disclosure, misuse, alteration or destruction of customer information or customer information systems;
6.2 Assesses the likelihood and potential damage of these threats, taking into consideration the sensitivity of customer information; and
6.3 Assesses the sufficiency of policies, procedures, customer information systems and other safeguards in place to control risks.
6 DE Reg. 966 (2/1/03)
7.0 Manage and Control Risk
The licensee:
7.1 Designs its information security program to control the identified risks, commensurate with the sensitivity of the information, as well as the complexity and scope of the licensee's activities;
7.2 Trains staff, as appropriate, to implement the licensee's information security program; and
7.3 Regularly tests or otherwise regularly monitors the key controls, systems and procedures of the information security program. The frequency and nature of these tests or other monitoring practices are determined by the licensee's risk assessment.
6 DE Reg. 966 (2/1/03)
8.0 Oversee Service Provider Arrangements
8.1 The licensee:
8.1.1 Exercises appropriate due diligence in selecting its service providers; and
8.1.2 Requires its service providers to implement appropriate measures designed to meet the objectives of this regulation, and, where indicated by the licensee's risk assessment, takes appropriate steps to confirm that its service providers have satisfied these obligations.
6 DE Reg. 966 (2/1/03)
9.0 Adjust the Program
The licensee monitors, evaluates and adjusts, as appropriate, the information security program in light of any relevant changes in technology, the sensitivity of its customer information, internal or external threats to information, and the licensee's own changing business arrangements, such as mergers and acquisitions, alliances and joint ventures, outsourcing arrangements and changes to customer information systems.
6 DE Reg. 966 (2/1/03)
10.0 Determined Violation
Repeated failure to comply with this Regulation will be grounds for investigation and enforcement as an unfair practice in the insurance business pursuant to 18 Del.C. Ch. 23.
6 DE Reg. 966 (2/1/03)
11.0 Severability
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of the regulation or the applicability of the provision to other persons or circumstances shall not be affected.
6 DE Reg. 966 (2/1/03)
12.0 Effective Date
This regulation shall become effective on February 11, 2003.
ADOPTED AND SIGNED BY THE COMMISSIONER, December 31, 2002
6 DE Reg. 966 (2/1/03)
906 Use of Credit Information (Repealed)
18 Del. Admin. Code § 906 Use of Credit Information (Repealed)
[Repealed, effective May 1, 2018]
History
- 6 DE Reg. 1706 (06/01/03)
- 11 DE Reg. 1254 (03/01/08)
- 21 DE Reg. 723 (03/01/18)
907 Records Relating To Consumer Complaints
18 Del. Admin. Code § 907 Records Relating To Consumer Complaints
907 Records Relating To Consumer Complaints
1.0 Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§310, 311, 2301 et. seq. and 2501 et. seq., and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101.
2.0 Scope
Except as indicated herein, this regulation applies to all complaints relating to insurance, as defined below.
3.0 Definitions
“Complaint” shall mean any expression of a grievance against an insurer made in any form to the Delaware Department of Insurance. An allegation of insurance fraud, as defined at 18 Del.C. §2407, shall be treated pursuant to procedures authorized under 18 Del.C. Chapter 24 of the Delaware Code and shall not be considered a complaint for purposes of this regulation. Statements that contain allegations of insurance fraud as well as complaints that would not, if true, constitute insurance fraud shall be treated in relevant part according to 18 Del.C. Chapter 24 and this regulation.
“Department” means the Delaware Department of Insurance.
“Founded,” with respect to a complaint, means:
that the insurer’s act, acts, omission, or omissions did not comply with a provision of Title 18 of the Delaware Code, regulations promulgated by the Department, or other applicable Delaware statute or regulation; or
that the insurer’s act, acts, omission, or omissions contravened or were inconsistent with a rate filing, form filing, or other filing made with the Department; or
that the insurer’s act, acts, omission, or omissions contravened or were inconsistent with a provision or provisions of the agreement to which the individual making the complaint was a party or third party beneficiary; or
that the insurer’s act, acts, omission, or omissions contravened or were inconsistent with formal standards or practices of the insurer which were relied upon by the insurer in satisfying the requirements any examination conducted by the Department , alone or in conjunction with the Insurance Departments of other states.
“Insurance” shall have the meaning assigned to it at 18 Del.C. §102(2).
“Insurer” shall have the meaning assigned to it at 18 Del.C. §102(3).
4.0 Tracking of Complaints
It is the policy of the Department that Delaware consumers should be aware of the volume and type of founded complaints that have been resolved against insurers with whom they do business or are contemplating doing business under the provisions of this regulation.
5.0 Intake of Complaints
Any communication with the Department that constitutes a complaint shall be formally recorded as such by the Department, assigned an identifying number, and tracked until it is resolved through one of the methods described in Section 6.0.
6.0 Resolution of Complaints
Complaints shall be resolved in one of the following manners:
6.1 Complaints Lacking Merit. The Department may determine that the complaint did not have merit in which case it shall not be deemed to be founded.
6.2 Resolved In Favor of Consumer. The Department, through negotiation or mediation, may resolve a complaint, absent any formal proceeding, with some benefit accruing to the consumer. Any resolution in favor of the consumer shall be considered a complaint resolved in favor of the consumer.
6.3 Referral for Formal Process. The Department may initiate a proceeding to make a formal determination as to whether the complaint is founded. The Department shall provide a 60 day written notice to the insurer that the complaint has been received and that the complaint will be referred for a formal determination under section 7.0 of this regulation unless the complaint is otherwise resolved within 60 days. Absent a notice from the insurer that the complaint is not subject to informal resolution within 60 days from the time the insurer receives notice of the complaint, the Department will proceed to resolve the complaint formally or informally, in its discretion after the 60 day period without further notice to the insurer. If, within the 60 day notice period, the insurer notifies the Department that the matter is not subject to resolution, such notice shall be a waiver of the balance of the notice period and the Department can proceed to a formal determination. Any resolution in favor of the consumer shall be considered founded complaint. At any time after notice or before the conclusion of a formal proceeding, the parties shall have the right to resolve the complaint informally under sections 6.1 and 6.2 of this regulation.
6.4 Other. The Department shall classify complaints resolved in a manner other than those listed in subsections 6.1 through 6.3 as “other” in which case the complaint will not be considered founded.
7.0 Formal Determinations
If the Department initiates a proceeding to determine whether a complaint is founded, it shall follow the procedures outlined in 18 Del.C. §§323 through 329, and, where consistent with those sections, shall also treat that proceeding as a case decision under 29 Del.C. Chapter 101. A complaint may be resolved in favor of a consumer after a formal proceeding is initiated. This Regulation shall not prohibit the Commissioner from taking any action otherwise permitted by the Delaware Code on behalf of a consumer or consumers related to a complaint prior to the completion of formal proceedings.
8.0 Publication of Findings
The Department shall make available to the public the following information:
8.1 The details of each founded complaint and action taken by the Insurance Department in response thereto, with information related to the identify of the complaining party deleted;
8.2 Statistical information regarding the number of founded complaints against each insurer licensed to do business in the State of Delaware, including information permitting consumers to assess such statistics in the context of the total amount of business done in the state by each insurer.
9.0 Severability
If any provision of this Regulation or the application of any such provision to and person or circumstance shall be held invalid the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected.
10.0 Prior Bulletins and Regulations
This Regulation shall supersede any prior bulletin or regulation of the Department to the extent that such bulletin or regulation is inconsistent with the provisions of this Regulation.
11.0 Inconsistent Statutes
This regulation shall not apply to any type of complaint that the Department is expressly required by the Delaware Code to treat in a manner inconsistent with this regulation.
12.0 Effective Date
This Regulation shall become effective October 11, 2005, and information shall be made public pursuant to Section 8.0 commencing January 1, 2006.
9 DE Reg. 598 (10/01/05)
1000 Reinsurance
1001 Life Reinsurance Agreements [Formerly Regulation 69]
18 Del. Admin. Code § 1001 Life Reinsurance Agreements [Formerly Regulation 69]
1001 Life Reinsurance Agreements [Formerly Regulation 69]
1.0 Authority
This regulation is adopted and promulgated under 18 Del.C. §§314, 1105 and 29 Del.C. Ch. 101.
2.0 Preamble
2.1 The Delaware Insurance Department recognizes that life insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to surplus.
2.2 However, the Department has become aware that some life insurers, in the capacity of ceding insurer, have at times entered into reinsurance agreements, for the principal purpose of producing significant surplus aid for the ceding insurer, which provide little or no indemnification of policy benefits by the reinsurers. In addition, the Department is concerned with reserve credits taken under reinsurance agreements which provide some indemnification of policy benefits where those policy benefits are not included in the gross reserves established by the ceding insurer, such as catastrophic mortality or extraordinary survival. The terms of such agreements referred to herein and described in section 4.0 would violate:
2.2.1 Section 526 (18 Del.C. §526) relating to financial statements of insurers, thus resulting in distorted financial statements which do not properly reflect the financial condition of the ceding life insurer;
2.2.2 Section 911 (18 Del.C. §911) relating to reinsurance reserve credits, thus, resulting in a ceding insurer improperly reducing liabilities or establishing assets for reinsurance ceded;
2.2.3 Section 1105 (18 Del.C. §1105) which prohibits "wash transactions"; and
2.2.4 Section 5911 (18 Del.C. §5911) relating to creating a situation that may be hazardous to policyholders and the people of this State.
3.0 Scope
This Regulation shall apply to all domestic life insurers and to all other licensed life insurers who are not subject to a substantially similar regulation in their domiciliary state.
4.0 Accounting Requirements
4.1 No life insurer subject to this Regulation shall, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the Department if, by the terms of the reinsurance agreement, in substance or effect, any of the following conditions exist:
4.1.1 The primary effect of the reinsurance agreement is to transfer deficiency reserves or excess interest reserves to the books of the reinsurer for a "risk charge" and the agreement does not provide for significant participation by the reinsurer in one or more of the following risks: mortality, morbidity, investment or surrender benefit;
4.1.2 The reserve credit taken by the ceding insurer is not in compliance with the Insurance Law, Rules or Regulations, including actuarial interpretations or standards adopted by the Department;
4.1.3 The reserve credit taken by the ceding insurer is greater than the underlying reserve of the ceding company supporting the policy obligations transferred under the reinsurance agreement;
4.1.4 The ceding insurer is required to reimburse the reinsurer for negative experience under the reinsurance agreement, except that neither offsetting experience refunds against prior years' losses nor payment by the ceding insurer of an amount equal to prior years' losses upon voluntary termination of in-force reinsurance by that ceding insurer shall be considered such a reimbursement to the reinsurer for negative experience;
4.1.5 The ceding insurer can be deprived of surplus at the reinsurer's option or automatically upon the occurrence of some event, such as the insolvency of the ceding insurer, except that termination of the reinsurance agreement by the reinsurer for non-payment of reinsurance premiums shall not be considered to be such a deprivation of surplus;
4.1.6 The ceding insurer must, at specific points in time schedule in the agreement, terminate or automatically recapture all or part of the reinsurance ceded;
4.1.7 No cash payment is due from the reinsurers throughout the lifetime of the reinsurance agreement, with all settlements prior to the termination date of the agreement made only in a "reinsurance account", and no funds in such account are available for the payment of benefits; or
4.1.8 The reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than from income reasonably expected from the reinsured policies.
4.2 Notwithstanding section 4.1 of this section, a life insurer subject to this Regulation may, with the approval of the Insurance Commissioner, take such reserve credit as the insurance Commissioner may deem consistent with the Insurance Law, Rules or Regulations, including actuarial interpretations or standards adopted by the Department.
5.0 Written Agreements
5.1 No reinsurance agreement or amendment to any agreement may be used to reduce any liability or to establish any asset in any financial statement filed with the Department, unless the agreement, amendment or a letter of intent has been duly executed by both parties no later than the "as of date" of the financial statement.
5.2 In the case of a letter of intent, a reinsurance agreement or an amendment to a reinsurance agreement must be executed within a reasonable period of time, not exceeding ninety (90) days from the execution date of the letter of intent, in order for credit to be granted for the reinsurance ceded.
6.0 Existing Agreements
Bulletin 88-1, published December 18, 1987, put all Delaware insurers on notice that surplus relief treaties as described in section 4.0 would not be eligible for reserve credit after December 31, 1990. Therefore, no reduction in liability shall be permitted after December 31, 1990 for these surplus relief treaties.
7.0 Effective Date
This Regulation shall become effective sixty (60) days after signature of the Commissioner.
1002 Life and Health Reinsurance Agreements [Formerly Regulation 78]
18 Del. Admin. Code § 1002 Life and Health Reinsurance Agreements [Formerly Regulation 78]
1002 Life and Health Reinsurance Agreements [Formerly Regulation 78]
1.0 Authority
1.1 This regulation is adopted and promulgated by the Commissioner pursuant to 18 Del.C. §§314 and 910 et seq. of the Delaware Insurance Code, and in accordance with 29 Del.C. Ch. 101.
2.0 Preamble
2.1 The Delaware Insurance Department recognizes that licensed insurers routinely enter into reinsurance agreement that yield legitimate relief to the ceding insurer from strain to surplus.
2.2 However, it is improper for a licensed insurer, in the capacity of ceding insurer, to enter into reinsurance agreements for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business being reinsured. In substance or effect, the expected potential liability to the ceding insurer remains basically unchanged by the reinsurance transaction, notwithstanding certain risk elements in the reinsurance agreement, such as catastrophic mortality or extraordinary survival. The terms of such agreements referred to herein and described in section 4.0 violate:
2.2.1 18 Del.C. §526 which requires that financial statements properly reflect the financial condition of the ceding insurer;
2.2.2 18 Del.C. §912 which requires that reinsurance reserve credits, accurately reflect a ceding insurer's liabilities or establish assets for reinsurance ceded; and
2.2.3 18 Del.C. §1105, which prohibits "wash" transactions.
3.0 Scope
3.1 This regulation shall apply to all domestic life and accident and health insurers and to all other licensed life and accident and health insurers which are not subject to a substantially similar regulation in their domiciliary state. This regulation shall also similarly apply to licensed property and casualty insurers with respect to their accident and health business. This regulation shall not apply to assumption reinsurance, yearly renewable term reinsurance or certain nonproportional reinsurance such as stop loss or catastrophe reinsurance.
4.0 Accounting Requirements
4.1 No insurer subject to this regulation shall, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the Department if, by the terms of the reinsurance agreement, in substance or effect, any of the following conditions exist:
4.1.1 Renewal expense allowances provided or to be provided to the ceding insurer by the reinsurer in any accounting period, are not sufficient to cover anticipated allocable renewal expenses of the ceding insurer on the portion of the business reinsured, unless a liability is established for the present value of the shortfall (using assumptions equal to the applicable statutory reserve basis on the business reinsured). Those expenses include commissions, premium taxes and direct expenses including, but not limited to, billing, valuation, claims and maintenance expected by the company at the time the business is reinsured;
4.1.2 The ceding insurer can be deprived of surplus or assets at the reinsurer's option or automatically upon the occurrence of some event, such as the insolvency of the ceding insurer, except that termination of the reinsurance agreement by the reinsurer for nonpayment of reinsurance premiums or other amounts due, such as modified coinsurance reserve adjustments, interest and adjustments on funds withheld, and tax reimbursements, shall not be considered to be such a deprivation of surplus or assets;
4.1.3 The ceding insurer is required to reimburse the reinsurer for negative experience under the reinsurance agreement, except that neither offsetting experience refunds against current and prior years' losses under the agreement nor payment by the ceding insurer of an amount equal to the current and prior years' losses under the agreement upon voluntary termination of in force reinsurance by the ceding insurer shall be considered such a reimbursement to the reinsurer for negative experience. Voluntary termination does not include situations where termination occurs because of unreasonable provisions which allow the reinsurer to reduce its risk under the agreement. An example of such a provision is the right of the reinsurer to increase reinsurance premiums or risk and expense charges to excessive levels forcing the ceding company to prematurely terminate the reinsurance treaty;
4.1.4 The ceding insurer must, at specific points in time scheduled in the agreement, terminate or automatically recapture all or part of the reinsurance ceded;
4.1.5 The reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than from income realized from the reinsured policies. For example, it is improper for a ceding company to pay reinsurance premiums, or other fees or charges to a reinsurer which are greater than the direct premiums collected by the ceding company;
4.1.6 The treaty does not transfer all of the significant risk inherent in the business being reinsured. The following table identifies for a representative sampling of products or type of business, the risks which are considered to be significant. For products not specifically included, the risks determined to be significant shall be consistent with this table.
4.1.7 Risk categories:
4.1.7.1 Morbidity
4.1.7.2 Mortality
4.1.7.3 Lapse
4.1.8 This is the risk that a policy will voluntarily terminate prior to the recoupment of a statutory surplus strain experienced at issue of the policy.
4.1.8.1 Credit Quality (C1)
This is the risk that invested assets supporting the reinsurance business will decrease in value. The main hazards are that assets will default or that there will be a decrease in earning power. It excludes market value declines due to changes in interest rate.
4.1.8.2 Reinvestment (C3)
This is the risk that interest rates will fall and funds reinvested (coupon payments or monies received upon asset maturity or call) will therefore earn less than expected. If asset durations are less than liability durations, this mismatch will increase.
4.1.8.3 Disintermediation (C3)
This is the risk that interest rates rise and policy loans and surrenders increase or maturing contracts do not renew at anticipated rates of renewal. If asset durations are greater than the liability durations, the mismatch will increase. Policyholders will move their funds into new products offering higher rates. The company may have to sell assets at a loss to provide for these withdrawals.
-
- Significant 0 - Insignificant
RISK CATEGORY
a
b
c
d
e
f
Health Insurance — other than LTC/LTD*
0
0
0
0
Health Insurance — LTC/LTD*
0
0
Immediate Annuities
0
0
0
Single Premium Deferred Annuities
0
0
Flexible Premium Deferred Annuities
0
0
Guaranteed Interest Contracts
0
0
0
Other Annuity Deposit Business
0
0
Single Premium Whole Life
0
Traditional Non-Par Permanent
0
Traditional Non-Par Term
0
0
0
0
Traditional Par Permanent
0
Traditional Par Term
0
0
0
0
Adjustable Premium Permanent
0
Indeterminate Premium Permanent
0
Universal Life Flexible Premium
0
Universal Life Fixed Premium
0
Universal Life Fixed Premium
0
dump-in premiums allowed
*LTC = Long Term Care Insurance
LTD = Long Term Disability Insurance
4.1.8.4
4.1.8.4.1 The credit quality, reinvestment, or disintermediation risk is significant for the business reinsured and the ceding company does not (other than for the classes of business excepted section 4.1.8.4.2 either transfer the underlying assets to the reinsurer or legally segregate such assets in a trust classes of business excepted in section 4.1.8.4.2 either transfer the underlying assets to the reinsurer or legally segregate such assets in a trust or escrow account or otherwise establish a mechanism satisfactory to the commissioner which legally segregates, by contract or contract provision, the underlying assets.
4.1.8.4.2 Notwithstanding the requirements of section 4.1.8.4.1, the assets supporting the reserves for the following classes of business and any classes of business which do not have a significant credit quality, reinvestment or disintermediation risk may be held by the ceding company without segregation of such assets:
4.1.8.4.2.1 Health Insurance - LTC/LTD
4.1.8.4.2.2 Traditional Non-Par Permanent
4.1.8.4.2.3 Traditional Par Permanent
4.1.8.4.2.4 Adjustable Premium Permanent
4.1.8.4.2.5 Indeterminate Premium Permanent
4.1.8.4.2.6 Universal Life Fixed Premium
4.1.8.4.2.7 (no dump-in premiums allowed
The associated formula for determining the reserve interest rate adjustment must use a formula which reflects the ceding company's investment earnings and incorporates all realized and unrealized gains and losses reflected in the statutory statement. The following is an acceptable formula:
Rate = 2 (I + CG)
X + Y- I- CG
Where: I is the net investment income (Exhibit 2, Line 16, Column 7)
CG is capital gains less capital losses (Exhibit 4, Line 10, Column 6)
X is the current year cash and invested assets (Page 2, Line 10A, Column 1) plus investment income due and accrued (Page 2, Line 16, Column 1) less borrowed money (Page 3, Line 22, Column 1).
Y is the same as X but for the prior year
N.B. Line references are for the 1992 annual statement. Annual statement line references may change from year to year.
4.1.8.5 Settlements are made less frequently than quarterly or payments due from the reinsurer are not made in cash within ninety (90) days of the settlement date.
4.1.8.6 The ceding insurer is required to make representations or warranties not reasonably related to the business being reinsured.
4.1.8.7 The ceding insurer is required to make representations or warranties about future performance of the business being reinsured.
4.1.8.8 The reinsurance agreement is entered into for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business reinsured and, in substance or effect, the expected potential liability to the ceding insurer remains basically unchanged.
4.2 Notwithstanding 4.1, an insurer subject to this regulation may, with the prior approval of the commissioner, take such reserve credit or establish such asset as the commissioner may deem consistent with the Insurance Law [or Code], Rules or Regulations, including actuarial interpretations or standards adopted by the Department.
4.3
4.3.1 Agreements entered into after the effective date of this regulation which involve the reinsurance of business issued prior to the effective date of the agreements, along with any subsequent amendments thereto, shall be filed by the ceding company with the commissioner within thirty (30) days from its date of execution. Each filing shall include data detailing the financial impact of the transaction. The ceding insurer's actuary who signs the financial statement actuarial opinion with respect to valuation of reserves shall consider this regulation and any applicable actuarial standards of practice when determining the proper credit in financial statements filed with this department. The actuary should remain adequate documentation and be prepared upon request to describe the actuarial work performed for inclusion in the financial statements and to demonstrate that such work conforms to this regulation.
4.3.2 Any increase in surplus net of federal income tax resulting from arrangements described in section 4.3.1 shall be identified separately on the insurer's statutory financial statement as a surplus item (aggregate write-ins for gains and losses in surplus in the Capital and Surplus Account, page 4 of the Annual Statement) and recognition of the surplus increase as income shall be reflected on a net of tax basis in the "Reinsurance ceded" line, page 4 of the Annual Statement as earnings emerge from the business reinsured.
[For example, on the last day of calendar year N, company XYZ pays a $20 million initial commission and expense allowance to company ABC for reinsuring an existing block of business. Assuming a 34% tax rate, the net increase in surplus at inception is $13.2 million ($20 million - $6.8 million) which is reported on the "Aggregate write-ins for gains and losses in surplus" line in the Capital and Surplus account. $6.8 million (34% of $20 million) is reported as income on the "Commissions and expense allowances on reinsurance ceded" line of the Summary of Operations.
At the end of the year N+1 the business has earned $4 million. ABC has paid $.5 million in profit and risk charges in arrears for the year and has received a $1 million experience refund. Company ABC's annual statement would report $1.65 million (66% of ($4 million - $1 million - $.5 million) up to an maximum of $13.2 million) on the "Commissions and expense allowance on reinsurance ceded" line of the Summary of Operations, and -$1.65 million on the "Aggregate write-ins for gains and losses in surplus" line of the capital and Surplus account. The experience refund would be reported separately as a miscellaneous income item in the Summary of Operations].
5.0 Written Agreements
5.1 No reinsurance agreement or amendment to any agreement may be used to reduce any liability or to establish any asset in any financial statement filed with the Department, unless the agreement, amendment or a binding letter of intent has been duly executed by both parties no later than the "as of date" of the financial statement.
5.2 In the case of a letter of intent, a reinsurance agreement or an amendment to a reinsurance agreement must be executed within a reasonable period of time, not exceeding ninety (90) days from the execution date of the letter of intent, in order for credit to be granted for the reinsurance ceded.
5.3 The reinsurance agreement shall contain provisions which provide that:
5.3.1 The agreement shall constitute the entire agreement between the parties with respect to the business being reinsured thereunder and that there are no understanding between the parties other than as expressed in the agreement; and
5.3.2 Any change or modification to the agreement shall be null and void unless made by amendment to the agreement and signed by both parties.
6.0 Existing Agreements
6.1 Insurers subject to this regulation shall reduce to zero by December 31, 1996 any reserve credits or assets established with respect to reinsurance agreements entered into prior to the effective date of this regulation which, under the provisions of this regulation would not be entitled to recognition of the reserve credits or assets; provided, however, that the reinsurance agreements shall have been in compliance with laws or regulations in existence immediately preceding the effective date of this regulation.
7.0 Effective Date
This regulation shall become effective 30 days after the Commissioner's signature.
1003 Credit for Reinsurance
18 Del. Admin. Code § 1003-1.0 Authority
This regulation is promulgated pursuant to the authority granted by 18 Del.C. §§311 and 915 of the Insurance Code; and 29 Del.C. Ch. 101.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-2.0 Purpose
The purpose of this regulation is to set forth rules and procedural requirements that the Commissioner deems necessary to carry out the provisions of 18 Del.C. §§910-916. (the “Reinsurance Act”). The actions and information required by this regulation are declared to be necessary and appropriate in the public interest and for the protection of the ceding insurers in this state.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-3.0 Severability
If any provision of this regulation, or the application of the provision to any person or circumstance, is held invalid, the remainder of the regulation, and the application of the provision to persons or circumstances other than those to which it is held invalid, shall not be affected.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-4.0 Credit for Reinsurance—Reinsurer Licensed in this State
Pursuant to 18 Del.C. §911(1), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that was licensed in this state as of any date on which statutory financial statement credit for reinsurance is claimed.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-5.0 Credit for Reinsurance—Accredited Reinsurers
5.1 Pursuant to 18 Del.C. §911(2), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this state as of the date on which statutory financial statement credit for reinsurance is claimed. An accredited reinsurer must:
5.1.1 File a properly executed Form AR-1 as evidence of its submission to this state’s jurisdiction and to this state’s authority to examine its books and records;
5.1.2 File with the Commissioner a certified copy of a certificate of authority or other acceptable evidence that it is licensed to transact insurance or reinsurance in at least one state, or, in the case of a U.S. branch of an alien assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one state;
5.1.3 File annually with the Commissioner a copy of its annual statement filed with the insurance department of its state of domicile or, in the case of an alien assuming insurer, with the state through which it is entered and in which it is licensed to transact insurance or reinsurance, and a copy of its most recent audited financial statement; and
5.1.4 Maintain a surplus as regards policyholders in an amount not less than $20,000,000, or obtain the affirmative approval of the Commissioner upon a finding that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers.
5.2 If the Commissioner determines that the assuming insurer has failed to meet or maintain any of these qualifications, the Commissioner may upon written notice and opportunity for hearing, suspend or revoke the accreditation. Credit shall not be allowed a domestic ceding insurer under this section if the assuming insurer’s accreditation has been revoked by the Commissioner, or if the reinsurance was ceded while the assuming insurer’s accreditation was under suspension by the Commissioner.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-6.0 Credit for Reinsurance—Reinsurer Domiciled in Another State
6.1 Pursuant to 18 Del.C. §911(3), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that, as of any date on which statutory financial statement credit for reinsurance is claimed:
6.1.1 Is domiciled in (or, in the case of a U.S. branch of an alien assuming insurer, is entered through) a state that employs standards regarding credit for reinsurance substantially similar to those applicable under the Reinsurance Act and this regulation;
6.1.2 Maintains a surplus as regards policyholders in an amount not less than $20,000,000; and
6.1.3 Files a properly executed Form AR-1 with the Commissioner as evidence of its submission to this state’s authority to examine its books and records.
6.2 The provisions of this section relating to surplus as regards policyholders shall not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. As used in this section, “substantially similar” standards means credit for reinsurance standards that the Commissioner determines equal or exceed the standards of the Reinsurance Act and this regulation.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-7.0 Credit for Reinsurance—Reinsurers Maintaining Trust Funds
7.1 Pursuant to 18 Del.C. §911(4), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer which, as of any date on which statutory financial statement credit for reinsurance is claimed, and thereafter for so long as credit for reinsurance is claimed, maintains a trust fund in an amount prescribed below in a qualified U.S. financial institution as defined in 18 Del.C. §913(b), for the payment of the valid claims of its U.S. domiciled ceding insurers, their assigns and successors in interest. The assuming insurer shall report annually to the Commissioner substantially the same information as that required to be reported on the National Association of Insurance Commissioners (NAIC) annual statement form by licensed insurers, to enable the Commissioner to determine the sufficiency of the trust fund.
7.2 The following requirements apply to the following categories of assuming insurer:
7.2.1 The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. domiciled insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000, except as provided in subsection 7.2.2 of this regulation.
7.2.2 At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of U.S. ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurer’s liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than thirty percent (30%) of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers covered by the trust.
7.2.3 Group trust fund
7.2.3.1 The trust fund for a group including incorporated and individual unincorporated underwriters shall consist of:
7.2.3.1.1 For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after January 1, 1993, funds in trust in an amount not less than the respective underwriters’ several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any underwriter of the group;
7.2.3.1.2 For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this regulation, funds in trust in an amount not less than the respective underwriters’ several insurance and reinsurance liabilities attributable to business written in the United States; and
7.2.3.1.3 In addition to these trusts, the group shall maintain a trusteed surplus of which $100,000,000 shall be held jointly for the benefit of the U.S. domiciled ceding insurers of any member of the group for all years of account.
7.2.3.2 The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group’s domiciliary regulator as are the unincorporated members. The group shall, within ninety (90) days after its financial statements are due to be filed with the group’s domiciliary regulator, provide to the Commissioner:
7.2.3.2.1 An annual certification by the group’s domiciliary regulator of the solvency of each underwriter member of the group; or
7.2.3.2.2 If a certification is unavailable, a financial statement, prepared by independent public accountants, of each underwriter member of the group.
7.2.4 The trust fund for a group of incorporated insurers under common administration, whose members possess aggregate policyholders surplus of $10,000,000,000 (calculated and reported in substantially the same manner as prescribed by the annual statement instructions and Accounting Practices and Procedures Manual of the NAIC) and which has continuously transacted an insurance business outside the United States for at least three (3) years immediately prior to making application for accreditation, shall:
7.2.4.1 Consist of funds in trust in an amount not less than the assuming insurers’ several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any members of the group pursuant to reinsurance contracts issued in the name of such group;
7.2.4.2 Maintain a joint trusteed surplus of which $100,000,000 shall be held jointly for the benefit of U.S. domiciled ceding insurers of any member of the group; and
7.2.4.3 File a properly executed Form AR-1 as evidence of the submission to this state’s authority to examine the books and records of any of its members and certify that any member examined will bear the expense of any such examination.
7.2.5 Within ninety (90) days after the statements are due to be filed with the group’s domiciliary regulator, the group shall file with the Commissioner an annual certification of each underwriter member’s solvency by the member’s domiciliary regulators, and financial statements, prepared by independent public accountants, of each underwriter member of the group.
7.3 Trust instrument
7.3.1 Credit for reinsurance shall not be granted unless the form of the trust and any amendments to the trust have been approved by either the commissioner of the state where the trust is domiciled or the commissioner of another state who, pursuant to the terms of the trust instrument, has accepted responsibility for regulatory oversight of the trust. The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that:
7.3.1.1 Contested claims shall be valid and enforceable out of funds in trust to the extent remaining unsatisfied thirty (30) days after entry of the final order of any court of competent jurisdiction in the United States;
7.3.1.2 Legal title to the assets of the trust shall be vested in the trustee for the benefit of the grantor’s U.S. ceding insurers, their assigns and successors in interest;
7.3.1.3 The trust shall be subject to examination as determined by the Commissioner;
7.3.1.4 The trust shall remain in effect for as long as the assuming insurer, or any member or former member of a group of insurers, shall have outstanding obligations under reinsurance agreements subject to the trust; and
7.3.1.5 No later than February 28 of each year, the trustee of the trust shall report to the Commissioner in writing the balance in the trust and the trust’s investments at the preceding year-end, and shall certify the date of termination of the trust, if so planned, or certify that the trust shall not expire prior to the following December 31.
7.3.2 Assets of the trust fund
7.3.2.1 Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by this subsection or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight over the trust or other designated receiver all of the assets of the trust fund.
7.3.2.2 The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight over the trust in accordance with the laws of the state in which the trust is domiciled applicable to the liquidation of domestic insurance companies.
7.3.2.3 If the commissioner with regulatory oversight over the trust determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the U.S. beneficiaries of the trust, the commissioner with regulatory oversight over the trust shall return the assets, or any part thereof, to the trustee for distribution in accordance with the trust agreement.
7.3.2.4 The grantor shall waive any right otherwise available to it under U.S. law that is inconsistent with this provision.
7.4 For purposes of this Section, the term “liabilities” shall mean the assuming insurer’s gross liabilities attributable to reinsurance ceded by U.S. domiciled insurers excluding liabilities that are otherwise secured by acceptable means, and, shall include:
7.4.1 For business ceded by domestic insurers authorized to write accident and health, and property and casualty insurance:
7.4.1.1 Losses and allocated loss expenses paid by the ceding insurer, recoverable from the assuming insurer;
7.4.1.2 Reserves for losses reported and outstanding;
7.4.1.3 Reserves for losses incurred but not reported;
7.4.1.4 Reserves for allocated loss expenses; and
7.4.1.5 Unearned premiums.
7.4.2 For business ceded by domestic insurers authorized to write life, health and annuity insurance:
7.4.2.1 Aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums;
7.4.2.2 Aggregate reserves for accident and health policies;
7.4.2.3 Deposit funds and other liabilities without life or disability contingencies; and
7.4.2.4 Liabilities for policy and contract claims.
7.5 Assets deposited in trusts established pursuant to 18 Del.C. §911(4), and this Section shall be valued according to their current fair market value and shall consist only of cash in U.S. dollars, certificates of deposit issued by a U.S. financial institution as defined in 18 Del.C. §913(a), clean, irrevocable, unconditional and “evergreen” letters of credit issued or confirmed by a qualified U.S. financial institution, as defined in 18 Del.C. §913(a), and investments of the type specified in this subsection, but investments in or issued by an entity controlling, controlled by or under common control with either the grantor or beneficiary of the trust shall not exceed five percent (5%) of total investments. No more than twenty percent (20%) total of the investments in the trust may be foreign investments authorized under subsections 7.5.1.5, 7.5.3, 7.5.6.2, or 7.5.7 of this regulation and no more than ten percent (10%) total of the investments in the trust may be securities denominated in foreign currencies. For purposes of applying the preceding sentence, a depository receipt denominated in U.S. dollars and representing rights conferred by a foreign security shall be classified as a foreign investment denominated in a foreign currency. The assets of a trust established to satisfy the requirements of 18 Del.C. §911(4), shall be invested only as follows:
7.5.1 Government obligations that are not in default as to principal or interest, that are valid and legally authorized and that are issued, assumed or guaranteed by:
7.5.1.1 The United States or by any agency or instrumentality of the United States;
7.5.1.2 A state of the United States;
7.5.1.3 A territory, possession or other governmental unit of the United States;
7.5.1.4 An agency or instrumentality of a governmental unit referred to in subsections 7.5.1.1 and 7.5.1.2 of this regulation if the obligations shall be by law (statutory or otherwise) payable, as to both principal and interest, from taxes levied or by law required to be levied or from adequate special revenues pledged or otherwise appropriated or by law required to be provided for making these payments, but shall not be obligations eligible for investment under this subsection if payable solely out of special assessments on properties benefited by local improvements; or
7.5.1.5 The government of any other country that is a member of the Organization for Economic Cooperation and Development and whose government obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC;
7.5.2 Obligations that are issued in the United States, or that are dollar denominated and issued in a non-U.S. market, by a solvent U.S. institution (other than an insurance company) or that are assumed or guaranteed by a solvent U.S. institution (other than an insurance company) and that are not in default as to principal or interest if the obligations:
7.5.2.1 Are rated A or higher (or the equivalent) by a securities rating agency recognized by the Securities Valuation Office of the NAIC, or if not so rated, are similar in structure and other material respects to other obligations of the same institution that are so rated;
7.5.2.2 Are insured by at least one authorized insurer (other than the investing insurer or a parent, subsidiary or affiliate of the investing insurer) licensed to insure obligations in this state and, after considering the insurance, are rated AAA (or the equivalent) by a securities rating agency recognized by the Securities Valuation Office of the NAIC; or
7.5.2.3 Have been designated as Class One or Class Two by the Securities Valuation Office of the NAIC;
7.5.3 Obligations issued, assumed or guaranteed by a solvent non‑U.S. institution chartered in a country that is a member of the Organization for Economic Cooperation and Development or obligations of U.S. corporations issued in a non-U.S. currency, provided that in either case the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC;
7.5.4 An investment made pursuant to the provisions of subsections 7.5.1, 7.5.2 or 7.5.3 of this regulation shall be subject to the following additional limitations:
7.5.4.1 An investment in or loan upon the obligations of an institution other than an institution that issues mortgage-related securities shall not exceed five percent (5%) of the assets of the trust;
7.5.4.2 An investment in any one mortgage-related security shall not exceed five percent (5%) of the assets of the trust;
7.5.4.3 The aggregate total investment in mortgage-related securities shall not exceed twenty-five percent (25%) of the assets of the trust; and
7.5.4.4 Preferred or guaranteed shares issued or guaranteed by a solvent U.S. institution are permissible investments if all of the institution’s obligations are eligible as investments under subsections 7.5.2.1 and 7.5.2.3 of this regulation, but shall not exceed two percent (2%) of the assets of the trust.
7.5.5 As used in this regulation:
7.5.5.1 “Mortgage-related security” means an obligation that is rated AA or higher (or the equivalent) by a securities rating agency recognized by the Securities Valuation Office of the NAIC and that either:
7.5.5.1.1 Represents ownership of one or more promissory notes or certificates of interest or participation in the notes (including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates or participation), that:
7.5.5.1.1.1 Are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C. Section 5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and
7.5.5.1.1.2 Were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. Sections 1709 and 1715b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the Secretary of Housing and Urban Development pursuant to 12 U.S.C. Section 1703; or
7.5.5.1.2 Is secured by one or more promissory notes or certificates of deposit or participations in the notes (with or without recourse to the insurer of the notes) and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of subsections 7.5.5.1.1.1 and 7.5.5.1.1.2 of this regulation;
7.5.5.2 “Promissory note,” when used in connection with a manufactured home, shall also include a loan, advance or credit sale as evidenced by a retail installment sales contract or other instrument.
7.5.6 Equity interests
7.5.6.1 Investments in common shares or partnership interests of a solvent U.S. institution are permissible if:
7.5.6.1.1 Its obligations and preferred shares, if any, are eligible as investments under this Subsection; and
7.5.6.1.2 The equity interests of the institution (except an insurance company) are registered on a national securities exchange as provided in the Securities Exchange Act of 1934, 15 U.S.C. §§78a to 78kk or otherwise registered pursuant to that Act, and if otherwise registered, price quotations for them are furnished through a nationwide automated quotations system approved by the Financial Industry Regulatory Authority, or successor organization. A trust shall not invest in equity interests under this subsection in an amount exceeding one percent (1%) of the assets of the trust even though the equity interests are not so registered and are not issued by an insurance company;
7.5.6.2 Investments in common shares of a solvent institution organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development, if:
7.5.6.2.1 All its obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC; and
7.5.6.2.2 The equity interests of the institution are registered on a securities exchange regulated by the government of a country that is a member of the Organization for Economic Cooperation and Development;
7.5.6.3 An investment in or loan upon any one institution’s outstanding equity interests shall not exceed one percent (1%) of the assets of the trust. The cost of an investment in equity interests made pursuant to this subsection when added to the aggregate cost of other investments in equity interests then held pursuant to this subsection shall not exceed ten percent (10%) of the assets in the trust;
7.5.7 Obligations issued, assumed or guaranteed by a multinational development bank, provided the obligations are rated A or higher, or the equivalent, by a rating agency recognized by the Securities Valuation Office of the NAIC.
7.5.8 Investment companies
7.5.8.1 Securities of an investment company registered pursuant to the Investment Company Act of 1940, 15 U.S.C. § 80a, are permissible investments if the investment company:
7.5.8.1.1 Invests at least ninety percent (90%) of its assets in the types of securities that qualify as an investment under subsections 7.5.1, 7.5.2, or 7.5.3 of this regulation or invests in securities that are determined by the Commissioner to be substantively similar to the types of securities set forth in subsections 7.5.1, 7.5.2, or 7.5.3 of this regulation; or
7.5.8.1.2 Invests at least ninety percent (90%) of its assets in the types of equity interests that qualify as an investment under subsection 7.5.6.1 of this regulation;
7.5.8.2 Investments made by a trust in investment companies under this subsection shall not exceed the following limitations:
7.5.8.2.1 An investment in an investment company qualifying under subsection 7.5.8.1.1 of this regulation shall not exceed ten percent (10%) of the assets in the trust and the aggregate amount of investment in qualifying investment companies shall not exceed twenty-five percent (25%) of the assets in the trust; and
7.5.8.2.2 Investments in an investment company qualifying under subsection 7.5.8.1.2 of this regulation shall not exceed five percent (5%) of the assets in the trust and the aggregate amount of investment in qualifying investment companies shall be included when calculating the permissible aggregate value of equity interests pursuant to subsection 7.5.6.1 of this regulation.
7.5.9 Letters of Credit
7.5.9.1 In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the trust agreement or some other binding agreement (as duly approved by the Commissioner), to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.
7.5.9.2 The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where such draw would be required shall be deemed to be negligence or willful misconduct.
7.6 A specific security provided to a ceding insurer by an assuming insurer pursuant to Section 11.0 of this regulation shall be applied, until exhausted, to the payment of liabilities of the assuming insurer to the ceding insurer holding the specific security prior to, and as a condition precedent for, presentation of a claim by the ceding insurer for payment by a trustee of a trust established by the assuming insurer pursuant to this section.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-8.0 Credit for Reinsurance––Certified Reinsurers
8.1 Pursuant to 18 Del.C. §911(5), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that has been certified as a reinsurer in this state at all times for which statutory financial statement credit for reinsurance is claimed under this section. The credit allowed shall be based upon the security held by or on behalf of the ceding insurer in accordance with a rating assigned to the certified reinsurer by the Commissioner. The security shall be in a form consistent with the provisions of 18 Del.C. §§911(5) and 912 and Sections 12.0, 13.0 or 14.0 of this regulation. The amount of security required in order for full credit to be allowed shall correspond with the following requirements:
8.1.1 Ratings Security Required
Secure – 1 0%
Secure – 2 10%
Secure – 3 20%
Secure – 4 50%
Secure – 5 75%
Vulnerable 6 100%
8.1.2 Affiliated reinsurance transactions shall receive the same opportunity for reduced security requirements as all other reinsurance transactions.
8.1.3 The Commissioner shall require the certified reinsurer to post one hundred percent (100%), for the benefit of the ceding insurer or its estate, security upon the entry of an order of rehabilitation, liquidation or conservation against the ceding insurer.
8.1.4 In order to facilitate the prompt payment of claims, a certified reinsurer shall not be required to post security for catastrophe recoverables for a period of one year from the date of the first instance of a liability reserve entry by the ceding company as a result of a loss from a catastrophic occurrence as recognized by the Commissioner. The one-year deferral period is contingent upon the certified reinsurer continuing to pay claims in a timely manner. Reinsurance recoverables for only the following lines of business as reported on the NAIC annual financial statement related specifically to the catastrophic occurrence will be included in the deferral:
Line 1: Fire
Line 2: Allied Lines
Line 3: Farmowners multiple peril
Line 4: Homeowners multiple peril
Line 5: Commercial multiple peril
Line 9: Inland Marine
Line 12: Earthquake
Line 21: Auto physical damage
8.1.5 Credit for reinsurance under this section shall apply only to reinsurance contracts entered into or renewed on or after the effective date of the certification of the assuming insurer. Any reinsurance contract entered into prior to the effective date of the certification of the assuming insurer that is subsequently amended after the effective date of the certification of the assuming insurer, or a new reinsurance contract, covering any risk for which collateral was provided previously, shall only be subject to this section with respect to losses incurred and reserves reported from and after the effective date of the amendment or new contract.
8.1.6 Nothing in Section 8.0 of this regulation shall prohibit the parties to a reinsurance agreement from agreeing to provisions establishing security requirements that exceed the minimum security requirements established for certified reinsurers under Section 8.0 of this regulation.
8.2 Certification Procedure.
8.2.1 The Commissioner shall post notice on the Insurance Department’s website promptly upon receipt of any application for certification, including instructions on how members of the public may respond to the application. The Commissioner may not take final action on the application until at least thirty (30) days after posting the notice required by this subsection.
8.2.2 The Commissioner shall issue written notice to an assuming insurer that has made application and been approved as a certified reinsurer. Included in such notice shall be the rating assigned the certified reinsurer in accordance with subsection 8.1 of this regulation. The Commissioner shall publish a list of all certified reinsurers and their ratings.
8.2.3 In order to be eligible for certification, the assuming insurer shall meet the following requirements:
8.2.3.1 The assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner pursuant to subsection 8.3 of this regulation.
8.2.3.2 The assuming insurer must maintain capital and surplus, or its equivalent, of no less than $250,000,000 calculated in accordance with subsection 8.2.4.8 of this regulation. This requirement may also be satisfied by an association including incorporated and individual unincorporated underwriters having minimum capital and surplus equivalents (net of liabilities) of at least $250,000,000 and a central fund containing a balance of at least $250,000,000.
8.2.3.3 The assuming insurer must maintain financial strength ratings from two or more rating agencies deemed acceptable by the Commissioner. These ratings shall be based on interactive communication between the rating agency and the assuming insurer and shall not be based solely on publicly available information. These financial strength ratings will be one factor used by the Commissioner in determining the rating that is assigned to the assuming insurer. Acceptable rating agencies include the following:
(i) Standard & Poor’s;
(ii) Moody’s Investors Service;
(iii) Fitch Ratings;
(iv) A.M. Best Company; or
(v) Any other Nationally Recognized Statistical Rating Organization.
8.2.3.4 The certified reinsurer must comply with any other requirements reasonably imposed by the Commissioner.
8.2.4 Each certified reinsurer shall be rated on a legal entity basis, with due consideration being given to the group rating where appropriate, except that an association including incorporated and individual unincorporated underwriters that has been approved to do business as a single certified reinsurer may be evaluated on the basis of its group rating. Factors that may be considered as part of the evaluation process include, but are not limited to, the following:
8.2.4.1 The certified reinsurer’s financial strength rating from an acceptable rating agency. The maximum rating that a certified reinsurer may be assigned will correspond to its financial strength rating as outlined in the table below. The Commissioner shall use the lowest financial strength rating received from an approved rating agency in establishing the maximum rating of a certified reinsurer. A failure to obtain or maintain at least two financial strength ratings from acceptable rating agencies will result in loss of eligibility for certification:
8.2.4.2 The business practices of the certified reinsurer in dealing with its ceding insurers, including its record of compliance with reinsurance contractual terms and obligations;
8.2.4.3 For certified reinsurers domiciled in the U.S., a review of the most recent applicable NAIC Annual Statement Blank, either Schedule F (for property/casualty reinsurers) or Schedule S (for life and health reinsurers);
8.2.4.4 For certified reinsurers not domiciled in the U.S., a review annually of Form CR-F (for property/casualty reinsurers) or Form CR-S (for life and health reinsurers);
8.2.4.5 The reputation of the certified reinsurer for prompt payment of claims under reinsurance agreements, based on an analysis of ceding insurers’ Schedule F reporting of overdue reinsurance recoverables, including the proportion of obligations that are more than ninety (90) days past due or are in dispute, with specific attention given to obligations payable to companies that are in administrative supervision or receivership;
8.2.4.6 Regulatory actions against the certified reinsurer;
8.2.4.7 The report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in subsection 8.2.4.8 of this regulation;
8.2.4.8 For certified reinsurers not domiciled in the U.S., audited financial statements, regulatory filings, and actuarial opinion (as filed with the non-U.S. jurisdiction supervisor, with a translation into English). Upon the initial application for certification, the Commissioner will consider audited financial statements for the last two (2) years filed with its non-U.S. jurisdiction supervisor;
8.2.4.9 The liquidation priority of obligations to a ceding insurer in the certified reinsurer’s domiciliary jurisdiction in the context of an insolvency proceeding;
8.2.4.10 A certified reinsurer’s participation in any solvent scheme of arrangement, or similar procedure, which involves U.S. ceding insurers. The Commissioner shall receive prior notice from a certified reinsurer that proposes participation by the certified reinsurer in a solvent scheme of arrangement; and
8.2.4.11 Any other information deemed relevant by the Commissioner.
8.2.5 Based on the analysis of a certified reinsurer’s reputation for prompt payment of claims that is conducted under subsection 8.2.4.5 of this regulation, the Commissioner may make appropriate adjustments in the security the certified reinsurer is required to post to protect its liabilities to U.S. ceding insurers, provided that the Commissioner shall, at a minimum, increase the security the certified reinsurer is required to post by one rating level under subsection 8.2.4.1 of this regulation if the Commissioner finds that:
8.2.5.1 More than fifteen percent (15%) of the certified reinsurer’s ceding insurance clients have overdue reinsurance recoverables on paid losses of ninety (90) days or more which are not in dispute and which exceed $100,000 for each cedent; or
8.2.5.2 The aggregate amount of reinsurance recoverables on paid losses which are not in dispute that are overdue by ninety (90) days or more exceeds $50,000,000.
8.2.6 The assuming insurer must submit a properly executed Form CR-1 as evidence of its submission to the jurisdiction of this state, appointment of the Commissioner as an agent for service of process in this state, and agreement to provide security for one hundred percent (100%) of the assuming insurer’s liabilities attributable to reinsurance ceded by U.S. ceding insurers if it resists enforcement of a final U.S. judgment. The Commissioner shall not certify any assuming insurer that is domiciled in a jurisdiction that the Commissioner has determined does not adequately and promptly enforce final U.S. judgments or arbitration awards.
8.2.7 The certified reinsurer must agree to meet applicable information filing requirements as determined by the Commissioner, both with respect to an initial application for certification and on an ongoing basis. All information submitted by certified reinsurers which are not otherwise public information subject to disclosure shall be exempted from disclosure under 29 Del.C., Ch. 100, and shall be withheld from public disclosure. The applicable information filing requirements are, as follows:
8.2.7.1 Notification within ten (10) days of any regulatory actions taken against the certified reinsurer, any change in the provisions of its domiciliary license or any change in rating by an approved rating agency, including a statement describing such changes and the reasons therefor;
8.2.7.2 Annually, Form CR-F or CR-S, as applicable;
8.2.7.3 Annually, the report of the independent auditor on the financial statements of the insurance enterprise, on the basis described in subsection 8.2.7.4 of this regulation;
8.2.7.4 Annually, the most recent audited financial statements, regulatory filings, and actuarial opinion (as filed with the certified reinsurer’s supervisor, with a translation into English). Upon the initial certification, audited financial statements for the last two (2) years filed with the certified reinsurer’s supervisor;
8.2.7.5 At least annually, an updated list of all disputed and overdue reinsurance claims regarding reinsurance assumed from U.S. domestic ceding insurers;
8.2.7.6 A certification from the certified reinsurer’s domestic regulator that the certified reinsurer is in good standing and maintains capital in excess of the jurisdiction’s highest regulatory action level; and
8.2.7.7 Any other information that the Commissioner may reasonably require.
8.2.8 Change in Rating or Revocation of Certification.
8.2.8.1 In the case of a downgrade by a rating agency or other disqualifying circumstance, the Commissioner shall upon written notice assign a new rating to the certified reinsurer in accordance with the requirements of subsection 8.2.4.1 of this regulation.
8.2.8.2 The Commissioner shall have the authority to suspend, revoke, or otherwise modify a certified reinsurer’s certification at any time if the certified reinsurer:
8.2.8.2.1 Fails to meet its obligations or security requirements under this Section;
8.2.8.2.2 Ceases to underwrite reinsurance of domestic ceding insurers. For the purposes of this subsection, the Commissioner may determine that a certified reinsurer has ceased reinsurance underwriting operations if its gross reinsurance premium assumed from domestic ceding insurers during the twelve month period ending December 31 of any year is less than 10% of the gross reinsurance premium assumed from domestic ceding insurers during the immediately preceding twelve month period;
8.2.8.2.3 Has, without the written consent of its domestic ceding insurers, attempted to transfer, assign or otherwise delegate its obligations under reinsurance contracts with domestic ceding insurers to an unaffiliated entity;
8.2.8.2.4 Has, without the written consent of its domestic ceding insurers, participated in a solvent scheme of arrangement or other similar process, as determined by the Commissioner, that may affect the duties, rights and obligations under reinsurance contracts with domestic ceding insurers; or
8.2.8.2.5 If other financial or operating results of the certified reinsurer, or documented significant delays in payment by the certified reinsurer, lead the Commissioner to reconsider the certified reinsurer’s ability or willingness to meet its contractual obligations.
8.2.8.3 If the rating of a certified reinsurer is upgraded by the Commissioner, the certified reinsurer may meet the security requirements applicable to its new rating on a prospective basis, but the Commissioner shall require the certified reinsurer to post security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating. If the rating of a certified reinsurer is downgraded by the Commissioner, the Commissioner shall require the certified reinsurer to meet the security requirements applicable to its new rating for all business it has assumed as a certified reinsurer.
8.2.8.4 Upon revocation of the certification of a certified reinsurer by the Commissioner, the assuming insurer shall be required to post security in accordance with Section 11.0 of this regulation in order for the ceding insurer to continue to take credit for reinsurance ceded to the assuming insurer. If funds continue to be held in trust in accordance with Section 7.0 of this regulation, the Commissioner may allow additional credit equal to the ceding insurer’s pro rata share of such funds, discounted to reflect the risk of uncollectibility and anticipated expenses of trust administration. Notwithstanding the change of a certified reinsurer’s rating or revocation of its certification, a domestic insurer that has ceded reinsurance to that certified reinsurer may not be denied credit for reinsurance for a period of three (3) months for all reinsurance ceded to that certified reinsurer, unless the reinsurance is found by the Commissioner to be at high risk of uncollectibility.
8.3 Qualified Jurisdictions.
8.3.1 If, upon conducting an evaluation under this section with respect to the reinsurance supervisory system of any non-U.S. assuming insurer, the Commissioner determines that the jurisdiction qualifies to be recognized as a qualified jurisdiction, the Commissioner shall publish notice and evidence of such recognition in an appropriate manner. The Commissioner may establish a procedure to withdraw recognition of those jurisdictions that are no longer qualified.
8.3.2 In order to determine whether the domiciliary jurisdiction of a non-U.S. assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall evaluate the reinsurance supervisory system of the non-U.S. jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal recognition afforded by the non-U.S. jurisdiction to reinsurers licensed and domiciled in the U.S. The Commissioner shall determine the appropriate approach for evaluating the qualifications of such jurisdictions and shall create and publish a list of jurisdictions whose reinsurers may be approved by the Commissioner as eligible for certification. A qualified jurisdiction must agree to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction. Additional factors to be considered in determining whether to recognize a qualified jurisdiction, in the discretion of the Commissioner, include but are not limited to the following:
8.3.2.1 The framework under which the assuming insurer is regulated.
8.3.2.2 The structure and authority of the domiciliary regulator with regard to solvency regulation requirements and financial surveillance.
8.3.2.3 The substance of financial and operating standards for assuming insurers in the domiciliary jurisdiction.
8.3.2.4 The form and substance of financial reports required to be filed or made publicly available by reinsurers in the domiciliary jurisdiction and the accounting principles used.
8.3.2.5 The domiciliary regulator’s willingness to cooperate with U.S. regulators in general and the Commissioner in particular.
8.3.2.6 The history of performance by assuming insurers in the domiciliary jurisdiction.
8.3.2.7 Any documented evidence of substantial problems with the enforcement of final U.S. judgments in the domiciliary jurisdiction. A jurisdiction will not be considered to be a qualified jurisdiction if the Commissioner has determined that it does not adequately and promptly enforce final U.S. judgments or arbitration awards.
8.3.2.8 Any relevant international standards or guidance with respect to mutual recognition of reinsurance supervision adopted by the International Association of Insurance Supervisors or successor organization.
8.3.2.9 Any other matters deemed relevant by the Commissioner.
8.3.3 A list of qualified jurisdictions shall be published through the NAIC committee process. The Commissioner shall consider this list in determining qualified jurisdictions. If the Commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the Commissioner shall provide thoroughly documented justification with respect to the criteria provided under subsections 8.3.2.1 to 8.3.2.9 of this regulation.
8.3.4 U.S. jurisdictions that meet the requirements for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions.
8.4 Recognition of Certification Issued by an NAIC Accredited Jurisdiction.
8.4.1 If an applicant for certification has been certified as a reinsurer in an NAIC accredited jurisdiction, the Commissioner has the discretion to defer to that jurisdiction’s certification, and to defer to the rating assigned by that jurisdiction, if the assuming insurer submits a properly executed Form CR-1 and such additional information as the Commissioner requires. The assuming insurer shall be considered to be a certified reinsurer in this state.
8.4.2 Any change in the certified reinsurer’s status or rating in the other jurisdiction shall apply automatically in this state as of the date it takes effect in the other jurisdiction. The certified reinsurer shall notify the Commissioner of any change in its status or rating within 10 days after receiving notice of the change.
8.4.3 The Commissioner may withdraw recognition of the other jurisdiction’s rating at any time and assign a new rating in accordance with subsection 8.2.4.1 of this regulation.
8.4.4 The Commissioner may withdraw recognition of the other jurisdiction’s certification at any time, with written notice to the certified reinsurer. Unless the Commissioner suspends or revokes the certified reinsurer’s certification in accordance with subsection 8.2.8.2 of this regulation, the certified reinsurer’s certification shall remain in good standing in this state for a period of three (3) months, which shall be extended if additional time is necessary to consider the assuming insurer’s application for certification in this state.
8.5 Mandatory Funding Clause. In addition to the clauses required under Section 15.0 of this regulation, reinsurance contracts entered into or renewed under this section shall include a proper funding clause, which requires the certified reinsurer to provide and maintain security in an amount sufficient to avoid the imposition of any financial statement penalty on the ceding insurer under this section for reinsurance ceded to the certified reinsurer.
8.6 The Commissioner shall comply with all reporting and notification requirements that may be established by the NAIC with respect to certified reinsurers and qualified jurisdictions.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-9.0 Credit for Reinsurance - Reciprocal Jurisdictions
9.1 Pursuant to 18 Del.C. §911(6), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head office or is domiciled in, a reciprocal jurisdiction, and which meets the other requirements of this regulation.
9.2 A "reciprocal jurisdiction" is a jurisdiction, as designated by the Commissioner pursuant to subsection 9.4 of this regulation, that meets one of the following:
9.2.1 A non-U.S. jurisdiction that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union. For purposes of this subsection, a "covered agreement" is an agreement entered into pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. §§ 313 and 314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;
9.2.2 A U.S. jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or
9.2.3 A qualified jurisdiction, as determined by the commissioner pursuant to 18 Del.C. §911(5)c. and subsection 8.3 of this regulation, which is not otherwise described in subsection 9.2.1 or 9.2.2 of this regulation and which the Commissioner determines meets all of the following additional requirements:
9.2.3.1 Provides that an insurer which has its head office or is domiciled in such qualified jurisdiction shall receive credit for reinsurance ceded to a U.S.-domiciled assuming insurer in the same manner as credit for reinsurance is received for reinsurance assumed by insurers domiciled in such qualified jurisdiction;
9.2.3.2 Does not require a U.S.-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with any ceding insurer subject to regulation by the non-U.S. jurisdiction or as a condition to allow the ceding insurer to recognize credit for such reinsurance;
9.2.3.3 Recognizes the U.S. state regulatory approach to group supervision and group capital, by providing written confirmation by a competent regulatory authority, in such qualified jurisdiction, that insurers and insurance groups that are domiciled or maintain their headquarters in this state or another jurisdiction accredited by the NAIC shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the Commissioner or the commissioner of the domiciliary state and will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and
9.2.3.4 Provides written confirmation by a competent regulatory authority in such qualified jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the Commissioner in accordance with a memorandum of understanding or similar document between the Commissioner and such qualified jurisdiction, including but not limited to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC.
9.3 Credit shall be allowed when the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting each of the conditions set forth below:
9.3.1 The assuming insurer must be licensed to transact reinsurance by, and have its head office or be domiciled in, a reciprocal jurisdiction.
9.3.2 The assuming insurer must have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated on at least an annual basis as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction, and confirmed as set forth in subsection 9.3.7 of this regulation according to the methodology of its domiciliary jurisdiction, in the following amounts:
9.3.2.1 No less than $250,000,000; or
9.3.2.2 If the assuming insurer is an association, including incorporated and individual unincorporated underwriters:
9.3.2.2.1 Minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least $250,000,000; and
9.3.2.2.2 A central fund containing a balance of the equivalent of at least $250,000,000.
9.3.3 The assuming insurer must have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:
9.3.3.1 If the assuming insurer has its head office or is domiciled in a reciprocal jurisdiction as defined in subsection 9.2.1 of this regulation, the ratio specified in the applicable covered agreement;
9.3.3.2 If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in subsection 9.2.2 of this regulation, a risk-based capital (RBC) ratio of three hundred percent (300%) of the authorized control level, calculated in accordance with the formula developed by the NAIC; or
9.3.3.3 If the assuming insurer is domiciled in a reciprocal jurisdiction as defined in subsection 9.2.3 of this regulation, after consultation with the reciprocal jurisdiction and considering any recommendations published through the NAIC committee process, such solvency or capital ratio as the Commissioner determines to be an effective measure of solvency.
9.3.4 The assuming insurer must agree to and provide adequate assurance, in the form of a properly executed Form RJ-1 (attached as an exhibit to this regulation), of its agreement to the following:
9.3.4.1 The assuming insurer must agree to provide prompt written notice and explanation to the commissioner if it falls below the minimum requirements set forth in subsection 9.3.2 or 9.3.3 of this regulation, or if any regulatory action is taken against it for serious noncompliance with applicable law.
9.3.4.2 The assuming insurer must consent in writing to the jurisdiction of the courts of this state and to the appointment of the Commissioner as agent for service of process.
9.3.4.2.1 The Commissioner may also require that such consent be provided and included in each reinsurance agreement under the commissioner's jurisdiction.
9.3.4.2.2 Nothing in this provision shall limit or in any way alter the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent such agreements are unenforceable under applicable insolvency or delinquency laws.
9.3.4.3 The assuming insurer must consent in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer, that have been declared enforceable in the territory where the judgment was obtained.
9.3.4.4 Each reinsurance agreement must include a provision requiring the assuming insurer to provide security in an amount equal to one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded pursuant to that agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its estate, if applicable.
9.3.4.5 The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement that involves this state's ceding insurers, and agrees to notify the ceding insurer and the Commissioner and to provide one hundred percent (100%) security to the ceding insurer consistent with the terms of the scheme, should the assuming insurer enter into such a solvent scheme of arrangement.
9.3.4.5.1 Such security shall be in a form consistent with the provisions of 18 Del.C. §§911(3) and 911(5)f. and Sections 12.0, 13.0 or 14.0 of this regulation.
9.3.4.5.2 For purposes of this regulation, the term "solvent scheme of arrangement" means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer's home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor, or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis, and which may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer's home jurisdiction.
9.3.4.6 The assuming insurer must agree in writing to meet the applicable information filing requirements as set forth in subsection 9.3.5 of this regulation.
9.3.5 The assuming insurer or its legal successor must provide, if requested by the Commissioner, on behalf of itself and any legal predecessors, the following documentation to the Commissioner:
9.3.5.1 For the two years preceding entry into the reinsurance agreement and on an annual basis thereafter, the assuming insurer's annual audited financial statements, in accordance with the applicable law of the jurisdiction of its head office or domiciliary jurisdiction, as applicable, including the external audit report;
9.3.5.2 For the two years preceding entry into the reinsurance agreement, the solvency and financial condition report or actuarial opinion, if filed with the assuming insurer's supervisor;
9.3.5.3 Prior to entry into the reinsurance agreement and not more than semi-annually thereafter, an updated list of all disputed and overdue reinsurance claims outstanding for 90 days or more, regarding reinsurance assumed from ceding insurers domiciled in the United States; and
9.3.5.4 Prior to entry into the reinsurance agreement and not more than semi-annually thereafter, information regarding the assuming insurer's assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the criteria set forth in subsection 9.6 of this regulation.
9.3.6 The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements. The lack of prompt payment will be evidenced if any of the following criteria is met:
9.3.6.1 More than fifteen percent (15%) of the reinsurance recoverables from the assuming insurer are overdue and in dispute as reported to the Commissioner;
9.3.6.2 More than fifteen percent (15%) of the assuming insurer's ceding insurers or reinsurers have overdue reinsurance recoverable on paid losses of 90 days or more which are not in dispute and which exceed for each ceding insurer $100,000, or as otherwise specified in a covered agreement; or
9.3.6.3 The aggregate amount of reinsurance recoverable on paid losses which are not in dispute, but are overdue by 90 days or more, exceeds $50,000,000, or as otherwise specified in a covered agreement.
9.3.7 The assuming insurer's supervisory authority must confirm to the Commissioner on an annual basis that the assuming insurer complies with the requirements set forth in subsections 9.3.2 and 9.3.3 of this regulation.
9.3.8 Nothing in this provision precludes an assuming insurer from providing the Commissioner with information on a voluntary basis.
9.4 The Commissioner shall timely create and publish a list of reciprocal jurisdictions.
9.4.1 A list of reciprocal jurisdictions is published through the NAIC committee process. The Commissioner's list shall include any reciprocal jurisdiction as defined under subsections 9.2.1 and 9.2.2 of this regulation and shall consider any other reciprocal jurisdiction included on the NAIC list. The Commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions as provided by applicable law, regulation, or in accordance with criteria published through the NAIC committee process.
9.4.2 The Commissioner may remove a jurisdiction from the list of reciprocal jurisdictions upon a determination that the jurisdiction no longer meets one or more of the requirements of a reciprocal jurisdiction, as provided by applicable law, regulation, or in accordance with a process published through the NAIC committee process, except that the Commissioner shall not remove from the list a reciprocal jurisdiction as defined under subsections 9.2.1 and 9.2.2 of this regulation. Upon removal of a reciprocal jurisdiction from this list credit for reinsurance ceded to an assuming insurer domiciled in that jurisdiction shall be allowed, if otherwise allowed pursuant to this regulation.
9.5 The Commissioner shall timely create and publish a list of assuming insurers that have satisfied the conditions set forth in this section and to which cessions shall be granted credit in accordance with this section.
9.5.1 If an NAIC accredited jurisdiction has determined that the conditions set forth in subsection 9.3 of this regulation have been met, the Commissioner has the discretion to defer to that jurisdiction's determination, and add such assuming insurer to the list of assuming insurers to which cessions shall be granted credit in accordance with this subsection. The Commissioner may accept financial documentation filed with another NAIC accredited jurisdiction or with the NAIC in satisfaction of the requirements of subsection 9.3 of this regulation.
9.5.2 When requesting that the Commissioner defer to another NAIC accredited jurisdiction's determination, an assuming insurer must submit a properly executed Form RJ-1 and additional information as the Commissioner may require. A state that has received such a request will notify other states through the NAIC committee process and provide relevant information with respect to the determination of eligibility.
9.6 If the Commissioner determines that an assuming insurer no longer meets one or more of the requirements under this section, the Commissioner may revoke or suspend the eligibility of the assuming insurer for recognition under this Section.
9.6.1 While an assuming insurer's eligibility is suspended, no reinsurance agreement issued, amended or renewed after the effective date of the suspension qualifies for credit except to the extent that the assuming insurer's obligations under the contract are secured in accordance with Section 11.0 of this regulation.
9.6.2 If an assuming insurer's eligibility is revoked, no credit for reinsurance may be granted after the effective date of the revocation with respect to any reinsurance agreements entered into by the assuming insurer, including reinsurance agreements entered into prior to the date of revocation, except to the extent that the assuming insurer's obligations under the contract are secured in a form acceptable to the commissioner and consistent with the provisions of Section 11.0 of this regulation.
9.7 Before denying statement credit or imposing a requirement to post security with respect to subsection 9.6 of this regulation or adopting any similar requirement that will have substantially the same regulatory impact as security, the Commissioner shall:
9.7.1 Communicate with the ceding insurer, the assuming insurer, and the assuming insurer's supervisory authority that the assuming insurer no longer satisfies one of the conditions listed in subsection 9.3 of this regulation;
9.7.2 Provide the assuming insurer with 30 days from the initial communication to submit a plan to remedy the defect, and 90 days from the initial communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection;
9.7.3 After the expiration of 90 days or less, as set out in subsection 9.7.2 of this regulation, if the Commissioner determines that no or insufficient action was taken by the assuming insurer, the Commissioner may impose any of the requirements as set out in this subsection; and
9.7.4 Provide a written explanation to the assuming insurer of any of the requirements set out in subsection 9.7 of this regulation.
9.8 If subject to a legal process of rehabilitation, liquidation or conservation, as applicable, the ceding insurer, or its representative, may seek and, if determined appropriate by the court in which the proceedings are pending, may obtain an order requiring that the assuming insurer post security for all outstanding liabilities.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-10.0 Credit for Reinsurance Required by Law
Pursuant to 18 Del.C. §911(7), the Commissioner shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of 18 Del.C. §§911(1), (2), (3), (4), (5) and (6), but only as to the insurance of risks located in jurisdictions where the reinsurance is required by the applicable law or regulation of that jurisdiction. As used in this section, “jurisdiction” means state, district or territory of the United States and any lawful national government.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-11.0 Asset or Reduction from Liability for Reinsurance Ceded to an Unauthorized Assuming Insurer not Meeting the Requirements of Sections 4.0 through 10.0 of this Regulation.
11.1 Pursuant to 18 Del.C. §912, the Commissioner shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of 18 Del.C. §911 in an amount not exceeding the liabilities carried by the ceding insurer. The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the exclusive benefit of the ceding insurer, under a reinsurance contract with such assuming insurer as security for the payment of obligations under the reinsurance contract. The security shall be held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer or, in the case of a trust, held in a qualified United States financial institution as defined in 18 Del.C. §913(b). This security may be in the form of any of the following:
11.1.1 Cash;
11.1.2 Securities listed by the Securities Valuation Office of the NAIC, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;
11.1.3 Clean, irrevocable, unconditional and “evergreen” letters of credit issued or confirmed by a qualified United States financial institution, as defined in 18 Del.C. §913(a), effective no later than December 31 of the year for which filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement. Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance (or confirmation) shall, notwithstanding the issuing (or confirming) institution’s subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification or amendment, whichever first occurs; or
11.1.4 Any other form of security acceptable to the Commissioner.
11.2 An admitted asset or a reduction from liability for reinsurance ceded to an unauthorized assuming insurer pursuant to this Section shall be allowed only when the requirements of Section 15.0 and the applicable portions of Sections 12.0, 13.0 or 14.0 of this regulation have been satisfied.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-12.0 Trust Agreements Qualified under Section 11.0
12.1 As used in this Section:
12.1.1 “Beneficiary” means the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court appointed domiciliary receiver (including conservator, rehabilitator or liquidator).
12.1.2 “Grantor” means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer.
12.1.3 “Obligations,” as used in subsection 12.2.11 of this regulation means:
12.1.3.1 Reinsured losses and allocated loss expenses paid by the ceding company, but not recovered from the assuming insurer;
12.1.3.2 Reserves for reinsured losses reported and outstanding;
12.1.3.3 Reserves for reinsured losses incurred but not reported; and
12.1.3.4 Reserves for allocated reinsured loss expenses and unearned premiums.
12.2 Required conditions.
12.2.1 The trust agreement shall be entered into between the beneficiary, the grantor and a trustee, which shall be a qualified United States financial institution as defined in 18 Del.C. §913(b).
12.2.2 The trust agreement shall create a trust account into which assets shall be deposited.
12.2.3 All assets in the trust account shall be held by the trustee at the trustee’s office in the United States.
12.2.4 The trust agreement shall provide that:
12.2.4.1 The beneficiary shall have the right to withdraw assets from the trust account at any time, without notice to the grantor, subject only to written notice from the beneficiary to the trustee;
12.2.4.2 No other statement or document is required to be presented to withdraw assets, except that the beneficiary may be required to acknowledge receipt of withdrawn assets;
12.2.4.3 It is not subject to any conditions or qualifications outside of the trust agreement; and
12.2.4.4 It shall not contain references to any other agreements or documents except as provided for in subsections 12.2.11 and 12.2.12 of this regulation.
12.2.5 The trust agreement shall be established for the sole benefit of the beneficiary.
12.2.6 The trust agreement shall require the trustee to:
12.2.6.1 Receive assets and hold all assets in a safe place;
12.2.6.2 Determine that all assets are in such form that the beneficiary, or the trustee upon direction by the beneficiary, may whenever necessary negotiate any such assets, without consent or signature from the grantor or any other person or entity;
12.2.6.3 Furnish to the grantor and the beneficiary a statement of all assets in the trust account upon its inception and at intervals no less frequent than the end of each calendar quarter;
12.2.6.4 Notify the grantor and the beneficiary within ten (10) days, of any deposits to or withdrawals from the trust account;
12.2.6.5 Upon written demand of the beneficiary, immediately take any and all steps necessary to transfer absolutely and unequivocally all right, title and interest in the assets held in the trust account to the beneficiary and deliver physical custody of the assets to the beneficiary; and
12.2.6.6 Allow no substitutions or withdrawals of assets from the trust account, except on written instructions from the beneficiary, except that the trustee may, without the consent of but with notice to the beneficiary, upon call or maturity of any trust asset, withdraw such asset upon condition that the proceeds are paid into the trust account.
12.2.7 The trust agreement shall provide that at least thirty (30) days, but not more than forty-five (45) days, prior to termination of the trust account, written notification of termination shall be delivered by the trustee to the beneficiary.
12.2.8 The trust agreement shall be made subject to and governed by the laws of the state in which the trust is domiciled.
12.2.9 The trust agreement shall prohibit invasion of the trust corpus for the purpose of paying commission to, or reimbursing the expenses of, the trustee. In order for a letter of credit to qualify as an asset of the trust, the trustee shall have the right and the obligation pursuant to the trust agreement or some other binding agreement (as duly approved by the Commissioner), to immediately draw down the full amount of the letter of credit and hold the proceeds in trust for the beneficiaries of the trust if the letter of credit will otherwise expire without being renewed or replaced.
12.2.10 The trust agreement shall provide that the trustee shall be liable for its negligence, willful misconduct or lack of good faith. The failure of the trustee to draw against the letter of credit in circumstances where such draw would be required shall be deemed to be negligence or willful misconduct.
12.2.11 Notwithstanding other provisions of this regulation, when a trust agreement is established in conjunction with a reinsurance agreement covering risks other than life, annuities and accident and health, where it is customary practice to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:
12.2.11.1 To pay or reimburse the ceding insurer for the assuming insurer’s share under the specific reinsurance agreement regarding any losses and allocated loss expenses paid by the ceding insurer, but not recovered from the assuming insurer, or for unearned premiums due to the ceding insurer if not otherwise paid by the assuming insurer;
12.2.11.2 To make payment to the assuming insurer of any amounts held in the trust account that exceed 102 percent of the actual amount required to fund the assuming insurer’s obligations under the specific reinsurance agreement; or
12.2.11.3 Where the ceding insurer has received notification of termination of the trust account and where the assuming insurer’s entire obligations under the specific reinsurance agreement remain unliquidated and undischarged ten (10) days prior to the termination date, to withdraw amounts equal to the obligations and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified U.S. financial institution as defined in 18 Del.C. §913(b) apart from its general assets, in trust for such uses and purposes specified in subsections 12.2.11.1 and 12.2.11.2 of this regulation as may remain executory after such withdrawal and for any period after the termination date.
12.2.12 Notwithstanding other provisions of this regulation, when a trust agreement is established to meet the requirements of Section 11.0 of this regulation in conjunction with a reinsurance agreement covering life, annuities or accident and health risks, where it is customary to provide a trust agreement for a specific purpose, the trust agreement may provide that the ceding insurer shall undertake to use and apply amounts drawn upon the trust account, without diminution because of the insolvency of the ceding insurer or the assuming insurer, only for the following purposes:
12.2.12.1 To pay or reimburse the ceding insurer for:
12.2.12.1.1 The assuming insurer’s share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of the policies; and
12.2.12.1.2 The assuming insurer’s share under the specific reinsurance agreement of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurer, under the terms and provisions of the policies reinsured under the reinsurance agreement;
12.2.12.2 To pay to the assuming insurer amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer; or
12.2.12.3 Where the ceding insurer has received notification of termination of the trust and where the assuming insurer’s entire obligations under the specific reinsurance agreement remain unliquidated and undischarged ten (10) days prior to the termination date, to withdraw amounts equal to the assuming insurer’s share of liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer, and deposit those amounts in a separate account, in the name of the ceding insurer in any qualified U.S. financial institution apart from its general assets, in trust for the uses and purposes specified in subsection 12.2.12.1 and 12.2.12.2 as may remain executory after withdrawal and for any period after the termination date.
12.2.13 Either the reinsurance agreement or the trust agreement must stipulate that assets deposited in the trust account shall be valued according to their current fair market value and shall consist only of cash in United States dollars, certificates of deposit issued by a United States bank and payable in United States dollars, and investments permitted by the Insurance Code or any combination of the above, provided investments in or issued by an entity controlling, controlled by or under common control with either the grantor or the beneficiary of the trust shall not exceed five percent (5%) of total investments. The agreement may further specify the types of investments to be deposited. If the reinsurance agreement covers life, annuities or accident and health risks, then the provisions required by this subsection must be included in the reinsurance agreement.
12.3 Permitted conditions.
12.3.1 The trust agreement may provide that the trustee may resign upon delivery of a written notice of resignation, effective not less than ninety (90) days after the beneficiary and grantor receive the notice and that the trustee may be removed by the grantor by delivery to the trustee and the beneficiary of a written notice of removal, effective not less than ninety (90) days after the trustee and the beneficiary receive the notice, provided that no such resignation or removal shall be effective until a successor trustee has been duly appointed and approved by the beneficiary and the grantor and all assets in the trust have been duly transferred to the new trustee.
12.3.2 The grantor may have the full and unqualified right to vote any shares of stock in the trust account and to receive from time to time payments of any dividends or interest upon any shares of stock or obligations included in the trust account. Any interest or dividends shall be either forwarded promptly upon receipt to the grantor or deposited in a separate account established in the grantor’s name.
12.3.3 The trustee may be given authority to invest, and accept substitutions of, any funds in the account, provided that no investment or substitution shall be made without prior approval of the beneficiary, unless the trust agreement specifies categories of investments acceptable to the beneficiary and authorizes the trustee to invest funds and to accept substitutions that the trustee determines are at least equal in current fair market value to the assets withdrawn and that are consistent with the restrictions in subsection 12.4.1.2 of this regulation.
12.3.4 The trust agreement may provide that the beneficiary may at any time designate a party to which all or part of the trust assets are to be transferred. Transfer may be conditioned upon the trustee receiving, prior to or simultaneously, other specified assets.
12.3.5 The trust agreement may provide that, upon termination of the trust account, all assets not previously withdrawn by the beneficiary shall, with written approval by the beneficiary, be delivered over to the grantor.
12.4 Additional conditions applicable to reinsurance agreements:
12.4.1 A reinsurance agreement may contain provisions that:
12.4.1.1 Require the assuming insurer to enter into a trust agreement and to establish a trust account for the benefit of the ceding insurer, and specifying what the agreement is to cover;
12.4.1.2 Require the assuming insurer, prior to depositing assets with the trustee, to execute assignments or endorsements in blank, or to transfer legal title to the trustee of all shares, obligations or any other assets requiring assignments, in order that the ceding insurer, or the trustee upon the direction of the ceding insurer, may whenever necessary negotiate these assets without consent or signature from the assuming insurer or any other entity;
12.4.1.3 Require that all settlements of account between the ceding insurer and the assuming insurer be made in cash or its equivalent; and
12.4.1.4 Stipulate that the assuming insurer and the ceding insurer agree that the assets in the trust account, established pursuant to the provisions of the reinsurance agreement, may be withdrawn by the ceding insurer at any time, notwithstanding any other provisions in the reinsurance agreement, and shall be utilized and applied by the ceding insurer or its successors in interest by operation of law, including without limitation any liquidator, rehabilitator, receiver or conservator of such company, without diminution because of insolvency on the part of the ceding insurer or the assuming insurer, only for the following purposes:
12.4.1.4.1 To pay or reimburse the ceding insurer for:
12.4.1.4.1.1 The assuming insurer’s share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurer, to the owners of policies reinsured under the reinsurance agreement because of cancellations of such policies;
12.4.1.4.1.2 The assuming insurer’s share of surrenders and benefits or losses paid by the ceding insurer pursuant to the provisions of the policies reinsured under the reinsurance agreement; and
12.4.1.4.1.3 Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer;
12.4.1.4.2 To make payment to the assuming insurer of amounts held in the trust account in excess of the amount necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer.
12.4.2 The reinsurance agreement also may contain provisions that:
12.4.2.1 Give the assuming insurer the right to seek approval from the ceding insurer, which shall not be unreasonably or arbitrarily withheld, to withdraw from the trust account all or any part of the trust assets and transfer those assets to the assuming insurer, provided:
12.4.2.1.1 The assuming insurer shall, at the time of withdrawal, replace the withdrawn assets with other qualified assets having a current fair market value equal to the market value of the assets withdrawn so as to maintain at all times the deposit in the required amount; or
12.4.2.1.2 After withdrawal and transfer, the current fair market value of the trust account is no less than 102 percent of the required amount.
12.4.2.2 Provide for the return of any amount withdrawn in excess of the actual amounts required for subsection 12.4.1.4.1 of this regulation and for interest payments at a rate not in excess of the prime rate of interest on such amounts;
12.4.2.3 Permit the award by any arbitration panel or court of competent jurisdiction of:
12.4.2.3.1 Interest at a rate different from that provided in subsection 12.4.2.2 of this regulation;
12.4.2.3.2 Court or arbitration costs;
12.4.2.3.3 Attorney’s fees; and
12.4.2.3.4 Any other reasonable expenses.
12.5 Financial reporting. A trust agreement may be used to reduce any liability for reinsurance ceded to an unauthorized assuming insurer in financial statements required to be filed with this department in compliance with the provisions of this regulation when established on or before the date of filing of the financial statement of the ceding insurer. Further, the reduction for the existence of an acceptable trust account may be up to the current fair market value of acceptable assets available to be withdrawn from the trust account at that time, but such reduction shall be no greater than the specific obligations under the reinsurance agreement that the trust account was established to secure.
12.6 Existing agreements. Notwithstanding the effective date of this regulation, any trust agreement or underlying reinsurance agreement in existence prior to the effective date of this regulation will continue to be acceptable until December 31, 2013, at which time the agreements will have to fully comply with this regulation for the trust agreement to be acceptable.
12.7 The failure of any trust agreement to specifically identify the beneficiary as defined in subsection 12.1 of this regulation shall not be construed to affect any actions or rights that the Commissioner may take or possess pursuant to the provisions of the laws of this state.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-13.0 Letters of Credit Qualified under Section 11.0
13.1 The letter of credit must be clean, irrevocable, unconditional and issued or confirmed by a qualified United States financial institution as defined in 18 Del.C. §913(a).The letter of credit shall contain an issue date and expiration date and shall stipulate that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds and that no other document need be presented. The letter of credit also shall indicate that it is not subject to any condition or qualifications outside of the letter of credit. In addition, the letter of credit itself shall not contain reference to any other agreements, documents or entities, except as provided in subsections 13.5 and 13.6 of this regulation. As used in this Section, “beneficiary” means the domestic insurer for whose benefit the letter of credit has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court appointed domiciliary receiver (including conservator, rehabilitator or liquidator).
13.2 The heading of the letter of credit may include a boxed section containing the name of the applicant and other appropriate notations to provide a reference for the letter of credit. The boxed section shall be clearly marked to indicate that such information is for internal identification purposes only.
13.3 The letter of credit shall contain a statement to the effect that the obligation of the qualified United States financial institution under the letter of credit is in no way contingent upon reimbursement with respect thereto.
13.4 The term of the letter of credit shall be for at least one year and shall contain an “evergreen clause” that prevents the expiration of the letter of credit without due notice from the issuer. The “evergreen clause” shall provide for a period of no less than thirty (30) days notice prior to expiration date or nonrenewal.
13.5 The letter of credit shall state whether it is subject to and governed by the laws of this state or the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce Publication 600 (UCP 600) or International Standby Practices of the International Chamber of Commerce Publication 590 (ISP98), or any successor publication, and all drafts drawn thereunder shall be presentable at an office in the United States of a qualified United States financial institution.
13.6 If the letter of credit is made subject to the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 500), or any successor publication, then the letter of credit shall specifically address and provide for an extension of time to draw against the letter of credit in the event that one or more of the occurrences specified in Article 17 of Publication 500 or any other successor publication, occur.
13.7 If the letter of credit is issued by a financial institution authorized to issue letters of credit, other than a qualified United States financial institution as described in subsection 13.1 of this regulation, then the following additional requirements shall be met:
13.7.1 The issuing financial institution shall formally designate the confirming qualified United States financial institution as its agent for the receipt and payment of the drafts; and
13.7.2 The “evergreen clause” shall provide for thirty (30) days notice prior to the expiration date for nonrenewal.
13.8 Reinsurance agreement provisions.
13.8.1 The reinsurance agreement in conjunction with which the letter of credit is obtained may contain provisions that:
13.8.1.1 Require the assuming insurer to provide letters of credit to the ceding insurer and specify what they are to cover;
13.8.1.2 Stipulate that the assuming insurer and ceding insurer agree that the letter of credit provided by the assuming insurer pursuant to the provisions of the reinsurance agreement may be drawn upon at any time, notwithstanding any other provisions in the agreement, and shall be utilized by the ceding insurer or its successors in interest only for one or more of the following reasons:
13.8.1.2.1 To pay or reimburse the ceding insurer for:
13.8.1.2.1.1 The assuming insurer’s share under the specific reinsurance agreement of premiums returned, but not yet recovered from the assuming insurers, to the owners of policies reinsured under the reinsurance agreement on account of cancellations of such policies;
13.8.1.2.1.2 The assuming insurer’s share, under the specific reinsurance agreement, of surrenders and benefits or losses paid by the ceding insurer, but not yet recovered from the assuming insurers, under the terms and provisions of the policies reinsured under the reinsurance agreement; and
13.8.1.2.1.3 Any other amounts necessary to secure the credit or reduction from liability for reinsurance taken by the ceding insurer;
13.8.1.2.2 Where the letter of credit will expire without renewal or be reduced or replaced by a letter of credit for a reduced amount and where the assuming insurer’s entire obligations under the reinsurance agreement remain unliquidated and undischarged ten (10) days prior to the termination date, to withdraw amounts equal to the assuming insurer’s share of the liabilities, to the extent that the liabilities have not yet been funded by the assuming insurer and exceed the amount of any reduced or replacement letter of credit, and deposit those amounts in a separate account in the name of the ceding insurer in a qualified U.S. financial institution apart from its general assets, in trust for such uses and purposes specified in subsection 13.8.1.2.1.1 of this regulation as may remain after withdrawal and for any period after the termination date.
13.8.1.3 All of the provisions of subsection 13.8.1 of this regulation shall be applied without diminution because of insolvency on the part of the ceding insurer or assuming insurer.
13.8.2 Nothing contained in subsection 13.8.1 of this regulation shall preclude the ceding insurer and assuming insurer from providing for:
13.8.2.1 An interest payment, at a rate not in excess of the prime rate of interest, on the amounts held pursuant to subsection 13.8.1.2 of this regulation; or
13.8.2.2 The return of any amounts drawn down on the letters of credit in excess of the actual amounts required for the above or any amounts that are subsequently determined not to be due.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-14.0 Other Security
A ceding insurer may take credit for unencumbered funds withheld by the ceding insurer in the United States subject to withdrawal solely by the ceding insurer and under its exclusive control.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-15.0 Reinsurance Contract
15.1 Credit will not be granted, nor an asset or reduction from liability allowed, to a ceding insurer for reinsurance effected with assuming insurers meeting the requirements of Sections 4.0, 5.0, 6.0, 7.0, 8.0, 9.0, or 11.0 of this regulation or otherwise in compliance with 18 Del.C. §911 after the adoption of this regulation unless the reinsurance agreement:
15.1.1 Includes a proper insolvency clause, which stipulates that reinsurance is payable directly to the liquidator or successor without diminution regardless of the status of the ceding company, pursuant to 18 Del.C. Ch. 59;
15.1.2 Includes a provision pursuant to 18 Del.C. §911 whereby the assuming insurer, if an unauthorized assuming insurer, has submitted to the jurisdiction of an alternative dispute resolution panel or court of competent jurisdiction within the United States, has agreed to comply with all requirements necessary to give the court or panel jurisdiction, has designated an agent upon whom service of process may be effected, and has agreed to abide by the final decision of the court or panel; and
15.1.3 Includes a proper reinsurance intermediary clause, if applicable, which stipulates that the credit risk for the intermediary is carried by the assuming insurer.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-16.0 Contracts Affected
All new and renewal reinsurance transactions shall conform to the requirements of the Reinsurance Act and this regulation if credit is to be given to the ceding insurer for such reinsurance.
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
18 Del. Admin. Code § 1003-17.0 Applicability and Effective Date
This regulation became effective on the 11th day of January, 2015. New Section 9.0 shall become effective 10 days after the date of publication of a final adoption order, and shall apply to all cessions after July 30, 2021 under reinsurance agreements that have an inception, anniversary, or renewal date not less than 6 months after July 30, 2021.
*Please Note: Due to the size and formatting of the accompanying forms, they are being attached here as a series of PDF documents:
Form AR-1 Certificate of Assuming Insurer (https://regulations.delaware.gov/AdminCode/title18/1003/Form AR-1 Certificate of Assuming Insurer.pdf)
Form CR-1 Certificate of Certified Reinsurer (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-1 Certificate of Certified Reinsurer.pdf)
Form RJ-1 Reinsurer Domiciled in Reciprocal Jurisdiction (https://regulations.delaware.gov/AdminCode/title18/1003/Form RJ-1 Reinsurer Domiciled in Reciprocal Jurisdiction.pdf)
Form CR-F - Part 1 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-F - Part 1.pdf)
Form CR-F - Part 2 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-F - Part 2.pdf)
Form CR-S - Part 1 - Section 1 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-S - Part 1 - Section 1.pdf)
Form CR-S - Part 1 - Section 2 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-S - Part 1 - Section 2.pdf)
Form CR-S - Part 2 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-S - Part 2.pdf)
Form CR-S - Part 3 - Section 1 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-S - Part 3 - Section 1.pdf)
Form CR-S - Part 3 - Section 2 (https://regulations.delaware.gov/AdminCode/title18/1003/Form CR-S - Part 3 - Section 2.pdf)
History
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 18 DE Reg. 574 (01/01/15)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
- 25 DE Reg. 630 (12/01/21)
- 11 DE Reg. 1378 (04/01/08)
- 17 DE Reg. 235 (08/01/13)
- 18 DE Reg. 574 (01/01/15)
- 21 DE Reg. 443 (11/01/17)
- 25 DE Reg. 630 (12/01/21)
1004 Term and Universal Life Insurance Reserve Financing
18 Del. Admin. Code § 1004-1.0 Purpose
1.1 The purpose and intent of this regulation is to establish uniform standards governing reserve financing arrangements pertaining to life insurance policies containing guaranteed nonlevel gross premiums, guaranteed nonlevel benefits and universal life insurance policies with secondary guarantees; and to ensure that, with respect to each such financing arrangement, funds consisting of primary security and other security, as defined in Section 5.0 of this regulation, are held by or on behalf of ceding insurers in the forms and amounts required in this regulation.
1.2 In general, reinsurance ceded for reserve financing purposes has one or more of the following characteristics: some or all of the assets used to secure the reinsurance treaty or to capitalize the reinsurer:
1.2.1 Are issued by the ceding insurer or its affiliates; or
1.2.2 Are not unconditionally available to satisfy the general account obligations of the ceding insurer; or
1.2.3 Create a reimbursement, indemnification or other similar obligation on the part of the ceding insurer or any if its affiliates other than a payment obligation under a derivative contract acquired in the normal course and used to support and hedge liabilities pertaining to the actual risks in the policies ceded pursuant to the reinsurance treaty.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-2.0 Authority
This regulation is promulgated pursuant to authority granted by 18 Del.C. §§311 and 915 and 29 Del.C. Ch. 101.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-3.0 Applicability
This regulation shall apply to reinsurance treaties that cede liabilities pertaining to covered policies, as that term is defined in Section 5.0 of this regulation, issued by any life insurance company domiciled in this state. This regulation and 18 DE Admin. Code 1003 shall both apply to such reinsurance treaties; provided, that in the event of a direct conflict between the provisions of this regulation and 18 DE Admin. Code 1003, the provisions of this regulation shall apply, but only to the extent of the conflict.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-4.0 Exemptions from this Regulation
4.1 This regulation does not apply to any of the following situations for Reinsurance of:
4.1.1 Policies that satisfy the criteria for exemption set forth in 18 DE Admin. Code 1212, subsection 6.6 or 18 DE Admin. Code 1212, subsection 6.7 and which are issued before the effective date of this regulation;
4.1.2 Portions of policies that satisfy the criteria for exemption set forth in 18 DE Admin. Code 1212, subsection 6.5 and which are issued before the effective date of this regulation;
4.1.3 Any universal life policy that meets all of the following requirements:
4.1.3.1 Secondary guarantee period, if any, is 5 years or less;
4.1.3.2 Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the Commissioner Standard Ordinary (CSO) valuation tables and valuation interest rate applicable to the issue year of the policy; and
4.1.3.3 The initial surrender charge is not less than 100% of the first year annualized specified premium for the secondary guarantee period;
4.1.4 Credit life insurance;
4.1.5 Any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts; or
4.1.6 Any group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of 1 year.
4.2 Reinsurance ceded to an assuming insurer that meets the applicable requirements of 18 Del.C. § 911(4);
4.3 Reinsurance ceded to an assuming insurer that meets the applicable requirements of 18 Del.C. § 911(1), 911(2) or 911(3), and that, in addition:
4.3.1 Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual, without any departures from NAIC statutory accounting practices and procedures pertaining to the admissibility or valuation of assets or liabilities that increase the assuming insurer's reported surplus and are material enough that they need to be disclosed in the financial statement of the assuming insurer pursuant to Statement of Statutory Accounting Principles No. 1 ("SSAP 1"); and
4.3.2 Is not in a Company Action Level Event, Regulatory Action Level Event, Authorized Control Level Event, or Mandatory Control Level Event as those terms are defined in 18 Del.C. Ch. 58 when its risk-based capital (RBC) is calculated in accordance with the life RBC report including overview and instructions for companies, as the same may be amended by the NAIC from time to time, without deviation;
4.4 Reinsurance ceded to an assuming insurer that meets the applicable requirements of 18 Del.C. § 911(1), 911(2), or 911(3), and that, in addition:
4.4.1 Is not an affiliate, as that term is defined in 18 Del.C. § 5001(1) of:
4.4.1.1 The insurer ceding the business to the assuming insurer; or
4.4.1.2 Any insurer that directly or indirectly ceded the business to that ceding insurer;
4.4.2 Prepares statutory financial statements in compliance with the NAIC Accounting Practices and Procedures Manual;
4.4.3 Is both:
4.4.3.1 Licensed or accredited in at least 10 states including its state of domicile; and
4.4.3.2 Not licensed in any state as a captive, special purpose vehicle, special purpose financial captive, special purpose life reinsurance company, limited purpose subsidiary, or any other similar licensing regime; and
4.4.4 Is not, or would not be, below 500% of the Authorized Control Level RBC as that term is defined in 18 Del.C. Ch. 58 when its RBC is calculated in accordance with the life RBC report including overview and instructions for companies, as the same may be amended by the NAIC from time to time, without deviation, and without recognition of any departures from NAIC statutory accounting practices and procedures pertaining to the admission or valuation of assets or liabilities that increase the assuming insurer's reported surplus;
4.5 Reinsurance ceded to an assuming insurer that:
4.5.1 Meets the conditions set forth in 18 Del.C. §911(6); or
4.5.2 Is certified in this state as set forth in 18 Del.C. §911(5); or
4.5.3 Maintains at least $250 million in capital and surplus when determined in accordance with NAIC Accounting Practices and Procedures Manual, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices; and is
4.5.3.1 Licensed in at least 26 states; or
4.5.3.2 Licensed in at least 10 states, and licensed or accredited in a total of at least 35 states.
4.6 Reinsurance not otherwise exempt under subsections 4.1 through 4.5 of this regulation if the Commissioner, after consulting with the NAIC Financial Analysis Working Group (FAWG) or other group of regulators designated by the NAIC, as applicable, determines under all the facts and circumstances that all of the following apply:
4.6.1 The risks are clearly outside of the intent and purpose of this regulation as described in Section 1.0 of this regulation;
4.6.2 The risks are included within the scope of this regulation only as a technicality; and
4.6.3 The application of this regulation to those risks is not necessary to provide appropriate protection to policyholders. The Commissioner shall publicly disclose any decision made pursuant to this subsection 4.6 to exempt a reinsurance treaty from this regulation, as well as the general basis for the decision including a summary description of the treaty.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-5.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning:
"Actuarial method" means the methodology used to determine the required level of primary security, as described in Section 6.0 of this regulation.
"Commissioner" means the Commissioner of the Delaware Department of Insurance.
"Covered policies" means type-1 covered policies and type-2 covered policies.
"Grandfathered policies" means policies of the types that otherwise meet the definitions of "type-1 covered policies" and "type-2 covered policies" but were:
"NAIC" means the National Association of Insurance Commissioners.
"Net premium reserve" means the reserve amount determined according to the requirements in VM-20, section 3, of the valuation manual.
"Non-covered policies" means any policy that does not meet the definition of covered policies, including grandfathered policies.
"Other security" means any security acceptable to the Commissioner other than security meeting the definition of primary security.
"Primary security" means any of the following forms of security:
"Required level of primary security" means the dollar amount determined by applying the actuarial method to the risks ceded with respect to covered policies, but not more than the total reserve ceded.
"Type-1 covered policies" means, subject to the exemptions described in Section 4.0 of this regulation, and other than grandfathered policies, life insurance policies with guaranteed nonlevel gross premiums and/or guaranteed nonlevel benefits except for flexible premium universal life insurance policies.
"Type-2 covered policies" means, subject to the exemptions described in Section 4.0 of this regulation, and other than grandfathered policies, flexible premium universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a second guarantee period,
"Valuation manual" means the valuation manual adopted by the NAIC as described in 18 Del.C. §1121(b)(1), with all amendments adopted by the NAIC that are effective for the financial statement date on which credit for reinsurance is claimed.
"VM-20" means "Requirements for Principle-Based Reserves for life products," including all relevant definitions, from the valuation manual.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-6.0 The Actuarial Method
6.1 The Actuarial Method. The actuarial method to establish the required level of primary security for each reinsurance treaty subject to this regulation shall be VM-20, applied on a treaty-by-treaty basis, including all relevant definitions, from the valuation manual as then in effect, applied as follows:
6.1.1 For type-1 covered policies, the actuarial method is the greater of the deterministic reserve or the net premium reserve (NPR) regardless of whether the criteria for exemption testing can be met. However, if such covered policies do not meet the requirements of the stochastic reserve exclusion test in the valuation manual, then the actuarial method is the greatest of the deterministic reserve, the stochastic reserve, or the NPR. In addition, if such covered policies are reinsured in a reinsurance treaty that also contains type-2 covered policies, the ceding insurer may elect to instead use subsection 6.2 of this regulation as the actuarial method for the entire reinsurance agreement. Whether subsection 6.1 or 6.2 of this regulation is used, the actuarial method must comply with any requirements or restrictions that the valuation manual imposes when aggregating these policy types for purposes of principle-based reserve calculations.
6.1.2 For type-2 covered policies, the actuarial method is the greatest of the deterministic reserve, the stochastic reserve, or the NPR regardless of whether the criteria for exemption testing can be met.
6.1.3 Except as provided in subsection 6.1.4 of this regulation, the actuarial method is to be applied on a gross basis to all risks with respect to the covered policies as originally issued or assumed by the ceding insurer.
6.1.4 If the reinsurance treaty cedes less than 100% of the risk with respect to the covered policies then the required level of primary security may be reduced as follows:
6.1.4.1 If a reinsurance treaty cedes only a quota share of some or all of the risks pertaining to the covered policies, the required level of primary security, as well as any adjustment under subsection 6.1.4.3 of this regulation, may be reduced to a pro rata portion in accordance with the percentage of the risk ceded;
6.1.4.2 If the reinsurance treaty in a non-exempt arrangement cedes only the risks pertaining to a secondary guarantee, the required level of primary security may be reduced by an amount determined by applying the actuarial method on a gross basis to all risks, other than risks related to the secondary guarantee, pertaining to the covered policies, except that for covered policies for which the ceding insurer did not elect to apply the provisions of VM-20 to establish statutory reserves, the required level of primary security may be reduced by the statutory reserve retained by the ceding insurer on those covered policies, where the retained reserve of those covered policies should be reflective of any reduction pursuant to the cession of mortality risk on a yearly renewable term basis in an exempt arrangement;
6.1.4.3 If a portion of the covered policy risk is ceded to another reinsurer on a yearly renewable term basis in an exempt arrangement, the required level of primary security may be reduced by the amount resulting by applying the actuarial method including the reinsurance section of VM-20 to the portion of the covered policy risks ceded in the exempt arrangement, except that for covered policies issued prior to January 1, 2017, this adjustment is not to exceed [cx/ (2 * number of reinsurance premiums per year)] where cx is calculated using the same mortality table used in calculating the NPR; and
6.1.4.4 For any other treaty ceding a portion of risk to a different reinsurer, including but not limited to stop loss, excess of loss and other non-proportional reinsurance treaties, there will be no reduction in the required level of primary security;
6.1.4.5 It is possible for any combination of subsections 6.1.4.1, 6.1.4.2, 6.1.4.3, and 6.1.4.4 of this regulation to apply. Such adjustments to required level of primary security will be done in the sequence that accurately reflects the portion of the risk ceded via the treaty. The ceding insurer should document the rationale and steps taken to accomplish the adjustments to the required level of primary security due to the cession of less than 100% of the risk. The adjustments for other reinsurance will be made only with respect to reinsurance treaties entered into directly by the ceding insurer. The ceding insurer will make no adjustment as a result of a retrocession treaty entered into by the assuming insurers;
6.1.5 In no event will the required level of primary security resulting from application of the actuarial method exceed the amount of statutory reserves ceded;
6.1.6 If the ceding insurer cedes risks with respect to covered policies, including any riders, in more than one reinsurance treaty subject to this regulation, in no event will the aggregate required level of primary security for those reinsurance treaties be less than the required level of primary security calculated using the actuarial method as if all risks ceded in those treaties were ceded in a single treaty subject to this regulation;
6.1.7 If a reinsurance treaty subject to this regulation cedes risk on both covered and non-covered policies, credit for the ceded reserves shall be determined as follows:
6.1.7.1 The actuarial method shall be used to determine the required level of primary security for the covered policies, and Section 7.0 of this regulation shall be used to determine the reinsurance credit for the covered policy reserves; and
6.1.7.2 Credit for the non-covered policy reserves shall be granted only to the extent that security, in addition to the security held to satisfy the requirements of subsection 6.1.7.1 of this regulation, is held by or on behalf of the ceding insurer in accordance with 18 Del.C. §§911 and 912. Any primary security used to meet the requirements of this subparagraph may not be used to satisfy the required level of primary security for the covered policies.
6.2 Valuation used for purposes of calculations. For the purposes of both calculating the required level of primary security pursuant to the actuarial method and determining the amount of primary security and other security, as applicable, held by or on behalf of the ceding insurer, the following shall apply:
6.2.1 For assets, including any such assets held in trust, that would be admitted under the NAIC Accounting Practices and Procedures Manual if they were held by the ceding insurer, the valuations are to be determined according to statutory accounting procedures as if such assets were held in the ceding insurer's general account and without taking into consideration the effect of any prescribed or permitted practices; and
6.2.2 For all other assets, the valuations are to be those that were assigned to the assets for the purpose of determining the amount of reserve credit taken. In addition, the asset spread tables and asset default cost tables required by VM-20 shall be included in the Actuarial method if adopted by the NAIC's Life Actuarial (A) Task Force no later than the December 31st on or immediately preceding the valuation date for which the required level of primary security is being calculated. The tables of asset spreads and asset default costs shall be incorporated into the actuarial method in the manner specified in VM-20.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-7.0 Requirements Applicable to Covered Policies to Obtain Credit for Reinsurance; Opportunity for Remediation
7.1 Subject to the exemptions described in Section 4.0 of this regulation and the provisions of subsection 7.2 of this regulation, credit for reinsurance shall be allowed with respect to ceded liabilities pertaining to covered policies pursuant to 18 Del.C. §911 or 912 if, and only if, in addition to all other requirements imposed by law or regulation, the following requirements are met on a treaty-by-treaty basis:
7.1.1 The ceding insurer's statutory policy reserves with respect to the covered policies are established in full and in accordance with the applicable requirements of 18 Del.C. §1112 and related regulations and actuarial guidelines, and credit claimed for any reinsurance treaty subject to this regulation does not exceed the proportionate share of those reserves ceded under the contract;
7.1.2 The ceding insurer determines the required level of primary security with respect to each reinsurance treaty subject to this regulation and provides support for its calculation as determined to be acceptable to the Commissioner;
7.1.3 Funds consisting of primary security, in an amount at least equal to the required level of primary security, are held by or on behalf of the ceding insurer, as security under the reinsurance treaty within the meaning of 18 Del.C. §912, on a funds withheld, trust, or modified coinsurance basis;
7.1.4 Funds consisting of other security, in an amount at least equal to any portion of the statutory reserves as to which primary security is not held pursuant to subsection 7.1.3 of this regulation, are held by or on behalf of the ceding insurer as security under the reinsurance treaty within the meaning of 18 Del.C. §912;
7.1.5 Any trust used to satisfy the requirements of this Section 7.0 shall comply with all of the conditions and qualifications of 18 DE Admin. Code 1003, Section 12.0, except that:
7.1.5.1 Funds consisting of primary security or other security held in trust, shall for the purposes identified in subsection 6.2 of this regulation, be valued according to the valuation rules set forth in subsection 6.2 of this regulation, as applicable;
7.1.5.2 There are no affiliate investment limitations with respect to any security held in such trust if such security is not needed to satisfy the requirements of subsection 7.1.3 of this regulation;
7.1.5.3 The reinsurance treaty must prohibit withdrawals or substitutions of trust assets that would leave the fair market value of the primary security within the trust (when aggregated with primary security outside the trust that is held by or on behalf of the ceding insurer in the manner required by subsection 7.1.3 of this regulation, 102% of the level required by subsection 7.1.3 of this regulation at the time of the withdrawal or substitution; and
7.1.5.4 The determination of reserve credit under 18 DE Admin. Code 1003, subsection 12.5 shall be determined according to the valuation rules set forth in subsection 6.2 of this regulation, as applicable; and
7.1.6 The reinsurance treaty has been approved by the Commissioner.
7.2 Requirements at inception date and on an on-going basis; remediation.
7.2.1 The requirements of subsection 7.1 of this regulation must be satisfied as of the date that risks under covered policies are ceded if such date is on or after the effective date of this regulation and on an ongoing basis thereafter. Under no circumstances shall a ceding insurer take or consent to any action or series of actions that would result in a deficiency under subsection 7.1.3 or 7.1.4 of this regulation with respect to any reinsurance treaty under which covered policies have been ceded, and in the event that a ceding insurer becomes aware at any time that such a deficiency exists, it shall use its best efforts to arrange for the deficiency to be eliminated as expeditiously as possible.
7.2.2 Prior to the due date of each quarterly or annual statement, each life insurance company that has ceded reinsurance within the scope of Section 3.0 of this regulation shall perform an analysis, on a treaty-by-treaty basis, to determine, as to each reinsurance treaty under which covered policies have been ceded, whether as of the end of the immediately preceding calendar quarter (the valuation date) the requirements of subsections 7.1.3 and 7.1.4 of this regulation were satisfied. The ceding insurer shall establish a liability equal to the excess of the credit for reinsurance taken over the amount of primary security actually held pursuant to subsection 7.1.3 of this regulation, unless either:
7.2.2.1 The requirements of subsections 7.1.3 and 7.1.4 of this regulation were fully satisfied as of the valuation date as to such reinsurance treaty; or
7.2.2.2 Any deficiency has been eliminated before the due date of the quarterly or annual statement to which the valuation date relates through the addition of primary security and/or other security, as the case may be, in such amount and in such form as would have caused the requirements of subsections 7.1.3 and 7.1.4 of this regulation to be fully satisfied as of the valuation date.
7.3 Nothing in subsection 7.2.2 of this regulation shall be construed to allow a ceding company to maintain any deficiency under subsection 7.1.3 or 7.1.4 of this regulation for any period of time longer than is reasonably necessary to eliminate it.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-8.0 Severability
If any provision of this regulation is held invalid, the remainder shall not be affected.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-9.0 Prohibition Against Avoidance
No insurer that has covered policies as to which this regulation applies shall take any action or series of actions, or enter into any transaction or arrangement or series of transactions or arrangements if the purpose of such action, transaction or arrangement or series thereof is to avoid the requirements of this regulation, or to circumvent the purpose and intent of this regulation.
History
- 27 DE Reg. 682 (03/01/24)
18 Del. Admin. Code § 1004-10.0 Effective Date
This regulation shall be effective 10 days after the date of the publication of the order adopting this regulation as a final regulation and shall pertain to all covered policies in force as of and after that date.
History
- 27 DE Reg. 682 (03/01/24)
1100 Surplus Lines
1101 Listed Surplus Lines Carriers Intending to Establish an Office in Delaware [Formerly Regulation 4] (Repealed)
18 Del. Admin. Code § 1101 Listed Surplus Lines Carriers Intending to Establish an Office in Delaware [Formerly Regulation 4] (Repealed)
(Repealed, effective October 11, 2019)
History
- 23 DE Reg. 310 (10/01/19)
1200 Life Insurance & Annuities
1201 Variable Contract Regulations [Formerly Regulation 1]
18 Del. Admin. Code § 1201 Variable Contract Regulations [Formerly Regulation 1]
1201 Variable Contract Regulations [Formerly Regulation 1]
1.0 Authority
Pursuant to authority given by 18 Del.C. §314, and §2932 as same appears in the Insurance Laws of the State of Delaware, the Insurance Commissioner, after due notice and publication and after affording interested persons an opportunity to present written data, views and arguments, does hereby make and promulgate the following rules and regulations to be applicable to insurance companies delivering or issuing for delivery in this state variable contracts pursuant to 18 Del.C. §2932.*
2.0 Definitions
"Agent" when used in this Regulation, shall mean any individual, firm, or corporation, which under the laws of this State is licensed as a life insurance agent, or solicitor, general lines agent, or life insurance broker, as said terms are defined in 18 Del.C. Ch. 17.
"Variable Contract" when used in this Regulation, shall mean any policy or contract, whether on an individual or group basis, which provides for insurance or annuity benefits which may vary according to the investment experience of any separate account or accounts maintained by the insurer as to such policy or contract, as provided for in 18 Del.C. §2932.
"Variable Contract Agent" when used in this Regulation, shall mean an agent who shall be licensed by this Department to sell or offer to sell any variable contract.
3.0 Qualification of Insurance Companies to Issue Variable Contracts
3.1 No company shall deliver or issue for delivery variable contracts within this State unless and until:
3.1.1 it is licensed by this Department to engage in the life insurance or annuity business in this State, and
3.1.2 in addition thereto, is licensed by this Department to engage in the business of issuing and delivering variable contracts in this State.
3.1.3 Before a variable contract license shall be issued by this Department, the Commissioner shall be satisfied that the condition and method of operation of the company in connection with the issuance of such contracts will not render its operation hazardous to the public or its policyholders in this State. In determining the qualifications of a company requesting a variable contract license, the Commissioner shall consider among other things:
3.1.3.1 The history and financial condition of the company;
3.1.3.2 The character, responsibility and general fitness of the officers and directors of the company; and
3.1.4 In the case of a company other than a domestic insurer, whether the statute or regulations of the jurisdiction of its incorporation, as to the issuance of variable contracts, provide a degree of protection to the policyholders and the public substantially equal to that provided by the Insurance Laws of this State and the rules and regulations issued thereunder on the question of the operations of such a business in variable contracts.
3.2 If the company is a wholly owned subsidiary of an admitted life insurance company, or affiliated with such company by common management or ownership, it may be deemed by the Commissioner to have satisfied the provisions of section 3.1.2, if either it or such admitted life company satisfies the aforementioned provisions; provided, further, that companies licensed and having a satisfactory record of doing business in this State for a period of at least three (3) years may be deemed to have satisfied the Commissioner with respect to section 3.1.2 above. Any wholly owned subsidiary or company affiliated as aforesaid qualifying to issue variable contracts by virtue of this subsection may continue to issue such contracts only for so long as it continues to remain a wholly owned subsidiary of, or affiliated as aforesaid with, the parent company, unless such subsidiary or affiliated company, subsequent to such qualification, has satisfied such requirements wholly on its own merits.
3.3 Before any company shall be licensed to deliver or issue for delivery variable contracts within this State it shall, in addition to complying with the applicable Insurance Laws of this State and the other provisions of this Regulation, file with the Commissioner the following material:
3.3.1 A certified copy of a resolution adopted by its board of directors establishing one or more separate accounts. Any amendments to this resolution or any resolution superseding the same shall immediately be filed with the Commissioner;
3.3.2 A copy of the Company's latest "Report of Examination" and "Annual Statement" if the company has not been previously admitted;
3.3.3 A general description of the kinds of variable contracts to be issued or in effect and, as to individual variable contracts, a statement of reserving procedures, investment objectives and two copies of any financial prospectus contained in a registration statement filed with the Securities and Exchange Commission;
3.3.4 A copy of any management or service contract entered into between the company and a third party or between any separate account and a third party, the terms of which contain provisions for the third party to provide managerial, investment or sales services to any separate account; any such contract entered into following the initial filing shall also be filed with the Commissioner;
3.3.5 Biographical statements concerning officers and directors of the insurance company or separate account and, if requested by the Commissioner, of the officers and directors of the management company; and
3.3.6 Such other information as may be required by the Commissioner.
4.0 Separate Account or Separate Accounts
4.1 A domestic company licensed to issue variable contracts in this State shall establish one or more separate accounts subject to the following provisions of this Article:
4.1.1 Except as hereinafter provided, the amounts allocated to each separate account established by the insurer pursuant to 18 Del.C. §2932, together with any accumulations thereon, may be invested and reinvested in any class of investments which may be authorized in written contract or agreement without regard to any other requirements or limitations presented by 18 Del.C. Ch. 13; except that to the extent that the insurer's reserve liability with regard to (i) benefits guaranteed as to dollar amount and duration, and (ii) funds guaranteed as to principal amount or stated rate of interest, is maintained in any separate account, a portion of the assets of such separate account at least equal to such reserve liability shall be invested in accordance with the applicable provisions of 18 Del.C. Ch. 13 governing the investments of life insurance companies. The investments in such separate account or accounts shall not be taken into account in applying the investment limitations applicable to the investments of the insurer.
4.1.2 With respect to 75% of the market value of the total assets in a separate account no company shall purchase or otherwise acquire the securities of any issuer, other than securities issued or guaranteed as to principal or interest by the United States, if immediately after such purchase or acquisition the market value of such investment, together with prior investments of such separate account in such security taken at market, would exceed 10% of the market value of the assets of said separate account; provided, however, that the Commissioner may waive such limitation if, in his opinion, such waiver will not render the operation of such separate account hazardous to the public or the policyholders in this State.
4.1.3 No company shall, whether for its separate accounts or otherwise, invest in the voting securities of a single issuer in an amount in excess of 10% of the total issued and outstanding voting securities of such issuer provided that the foregoing shall not apply with respect to securities held in separate accounts, the voting rights in which are exercisable only in accordance with instructions from persons having interests in such accounts.
4.1.4 The limitations provided in sections 4.1.1 and 4.1.2 shall not apply to the investment with respect to a separate account in the securities of an investment company registered under the Investment Company Act of 1940, provided that the investments of such investment company comply in substance with sections 4.1.1 and 4.1.2.
4.2 Assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to such separate account; except, that the portion of the assets of such separate account at least equal to the insurers' reserve liability with regard to the guaranteed benefits and funds referred to in section 4.1.1, and 18 Del.C. §1322, if any, shall be valued in accordance with the rules otherwise applicable to the insurers' assets.
4.3 The income, if any, and gains and losses, realized or unrealized, on each such account, shall be credited to or charged against the amounts allocated to the account in accordance with the agreement, without regard to the other income, gains or losses of the insurer.
4.4 Notwithstanding any other provisions of law a company may:
4.4.1 with respect to any separate account registered with the Securities and Exchange Commission as a unit investment trust exercise voting rights in connection with any securities of a regulated investment company registered under the Investment Company Act of 1940 and held in such separate accounts in accordance with instructions from persons having interests in such accounts ratably as determined by the company; or
4.4.2 with respect to any separate account registered with the Securities and Exchange Commission as a management investment company, establish for such account a committee, board, or other body, the members of which may or may not be otherwise affiliated with such company and may be elected to such membership by the vote of persons having interests in such account ratably as determined by the company. Such committee, board or other body may have the power, exercisable alone or in conjunction with others, to manage such separate account and the investment of its assets.
4.4.3 A company, committee, board or other body may make such other provisions in respect to any such separate account as may be deemed appropriate to facilitate compliance with requirements of any Federal or State law now or hereafter in effect; provided that the Commissioner approves such provisions as not hazardous to the public or the Company's policyholders in this State.
4.5 No sale, exchange or other transfer of assets may be made by a company between any of its separate accounts or between any other investment account and one or more of its separate accounts unless, in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the account or contracts with respect to the separate account to which the transfer is made, and unless such transfer, whether into or from a separate account, is made (a) by a transfer of cash, or (b) by a transfer of securities having a valuation which could be readily determined in the marketplace, provided that such transfer of securities is approved by the Commissioner. The Commissioner may authorize other transfers among such accounts if, in his opinion, such transfers would not be inequitable.
4.6 The insurer shall maintain in each such separate account assets with a value at least equal to the insurer's reserve liability with regard to (i) benefits guaranteed as to dollar amount and duration and (ii) funds guaranteed as to principal amount or stated rate of interest, which assets shall be invested and valued pursuant to the exception clauses of sections 4.1.1 and 4.2 above, and which assets shall not be chargeable with liabilities arising out of any other business the insurer may conduct.
4.7 Rules under any provision of the Insurance Law of this State or any regulation applicable to the officers and directors of insurance companies with respect to conflicts of interest shall also apply to members of any separate account's committee, board or other similar body. No officer or director of such company nor any member of the committee, board or body of a separate account shall receive directly or indirectly any commission or any other compensation with respect to the purchase or sale of assets of such separate account.
5.0 Filing of Contracts
The filing requirements applicable to variable contracts shall be those filing requirements otherwise applicable under existing statutes and regulations of this State with respect to individual and group life insurance and annuity contract form filings, to the extent appropriate.
6.0 Contracts Providing for Variable Benefits
6.1 Any variable contract providing benefits payable in variable amounts delivered or issued for delivery in this State shall contain a statement of the essential features of the procedures to be followed by the insurer in determining the dollar amounts of such variable benefits. Any such contract or agreement, including a group contract and any certificate issued thereunder, shall state that such dollar amounts will vary to reflect investment experience of the separate account and shall contain on its first page or on the front cover of any certificate evidencing variable benefits issued pursuant to any variable contract on a group basis, in a prominent position, a clear statement to the effect that the benefits thereunder are on a variable basis.
6.2 Illustrations of benefits payable under any contract providing benefits payable in variable amounts shall not include projections of past investment experience into the future nor shall they attempt predictions of future investment experience; provided that nothing contained herein is intended to prohibit use of hypothetical assumed rates of return clearly designated as such, to illustrate possible levels of annuity payments.
6.3 No individual variable contract calling for the payment of periodic stipulated payments or premiums shall be delivered or issued for delivery in this State unless it contains in substance the following provisions, or provisions which in the opinion of the Commissioner are more favorable to the holders of such contracts:
6.3.1 a provision that there shall be a period of grace of 30 days or of one month, within which any stipulated payment or premium to the insurer falling due after the first may be made, during which period of grace the contract shall continue in force. The contract may include a statement of the basis for determining the date as of which any such payment received during the period of grace shall be applied to produce the values under the contract arising therefrom.
6.3.2 a provision that, at any time, within no less than one year from the date of default in making periodic stipulated payments or premiums to the insurer during the life of the annuitant, and unless the cash surrender value has been paid, the contract may be reinstated upon payment to the insurer of such overdue payments as required by the contract, and of all indebtedness to the insurer on the contract, including interest. The contract shall also include a statement of the basis for determining the date as of which the amount to cover such overdue payment and indebtedness shall be applied to produce the values under the contract arising therefrom;
6.3.3 a provision specifying the options available in the event of default in a periodic stipulated payment, which options may include an option to surrender the contract for a cash value as determined by the contract, and shall include an option to receive a paid-up annuity if the contract is not surrendered for cash, the amount of such paid-up annuity being determined by applying the value of the contract at the annuity commencement date in accordance with the terms of the contract.
6.3.4 Any individual variable contract delivered or issued for delivery in this State shall stipulate the expense, mortality and investment increment factors to be used in computing the dollar amount of variable benefits or other contractual payments or values thereunder. "Expense," as used in this subsection may exclude some or all taxes, if so stipulated in the contract or agreement.
6.4 In computing the dollar amount of variable benefits or other contractual payments or values under an individual variable contract:
6.4.1 The annual net investment increment assumption shall not exceed 5%, except with the approval of the Commissioner; and
6.4.2 To the extent that the level of benefits may be affected by future mortality results, the mortality factor shall be determined from the Annuity Mortality Table for 1949, Ultimate, or any modification of that table not having a higher mortality rate at any age, or, if approved by the Commissioner, from another table.
6.5 The reserve liability for variable contracts shall be established pursuant to the requirements of the standard valuation law as set forth in 18 Del.C. Ch. 13, in accordance with actuarial procedures that recognize the variable nature of the benefits provided.
6.6 In the sale of an individual variable contract, made in conjunction with the sale of either a life insurance policy or a fixed annuity contract, there shall be a disclosure to the prospective purchaser which shows the consideration to be paid for the variable contract separately from the other charges. If any benefits or non-forfeiture values which may accrue prior to the death of the insured are involved in the presentation of such a sale, the value of such life insurance policy or such fixed annuity must be shown separately from any other values.
6.7 Individual annuity contracts which provide for both fixed and variable dollar benefits (which are specified at the time of the sale of such contracts) shall show, separately, the consideration to be paid for the fixed dollar benefits and for the variable dollar benefits or the proportion of such consideration to be paid for each such benefit.
7.0 Required Reports
7.1 Each insurer issuing variable contracts shall mail to the contractholder at least once in each contract year after the first at his last address known to the company, a statement or statements reporting the investments held in the separate account applicable to said contractholder and, in the case of contracts under which payments have not yet commenced, a statement reporting as of a date not more than four months previous to the date of mailing, (a) the number of accumulation units credited to such contracts and the dollar value of a unit, or (b) the value of the contractholder's account. The reporting date, once fixed, shall remain constant each year, unless the Commissioner shall approve the use of a different reporting date or dates.
7.2 Each insurer licensed by this Department to issue variable contracts shall annually file with the Commissioner, on or before 1 March (or within a reasonable extension of time therefor which the Commissioner for good cause may have granted), a full and true statement of its financial condition, transactions and affairs as of 31 December next preceding. Such statements shall be in such form as may be prescribed by the Commissioner pursuant to the authority of 18 Del.C. §526(a), and, inter alia, shall include details as to all of the income, disbursements, assets and liability items associated with any separate account. Such statements shall be verified as provided for by 18 Del.C. §526(a) and (b), and the provisions of 18 Del.C. §526(c) shall apply for failure to file such statements when due, and the provisions of 18 Del.C. §526(d) shall apply as to the fees due upon filing such statements. In addition to such annual statements, the Commissioner, from time to time, may require of an insurer such other statements concerning the business of its separate accounts as he in his discretion may deem necessary.
8.0 Foreign Companies
If and when the laws or regulations in the place of domicile of a foreign or alien insurer prevent compliance with any specific provision of this regulation, such insurer shall so advise the Commissioner in writing, setting forth the specific conflicts, and if the Commissioner, in his discretion, shall consider such conflicts of sufficient importance he may refuse to license such foreign company or upon due notice and hearing, may revoke a license issued prior to such conflict being brought to his attention. If on the other hand, said foreign or alien laws or regulations provide a degree of protection to the policyholders and public, which in the opinion of the Commissioner is substantially equal to that provided by these regulations, the Commissioner to the extent deemed appropriate by him in his discretion, may consider compliance with such law or regulation as compliance with these regulations. With regard to investments in separate accounts, foreign companies will be expected to adhere to standards substantially similar to those hereinabove set forth in section 4.0 for domestic companies, and if the laws and regulations of the domicile of any foreign company shall fail to provide for substantially similar safeguards to those hereinabove required in the case of domestic companies, the Commissioner in his discretion may refuse to license such foreign company or, upon due notice and hearing, may revoke a license issued prior to such situation being brought to his attention, unless such foreign company, in a manner not otherwise forbidden by the laws and regulations of its domicile, shall enter into an agreement with the Department to adhere to standards for separate accounts identical to or substantially similar to those set forth in section 4.0 above.
9.0 Examination of Agents and Other Persons
9.1 No agent shall be eligible to sell or offer for sale in this State any variable contract unless prior to making any solicitation or sale of such a contract, he also be licensed by this Department as a variable contract agent per the authority and subject to the provisions of 18 Del.C. §1714(d) and these regulations.
9.2 The Commissioner shall issue the variable annuity authority to agents who have successfully completed the life agent's examination or have otherwise qualified for an agent's license for the line of life insurance and who present evidence of a valid NASD license (Series 6 or 7).
Amendments to Article IX effective July 1, 1983: Article IX was amended by deleting sections 2 through 12 in their entirety and by substituting a new section 2 in lieu thereof, effective July 1, 1983. See Item III, Decision. of the Regulatory Hearing proceedings preceding the text of Regulation No. 44.
9.3 The Commissioner may reject any application or suspend or revoke or refuse to renew any variable contract agent's license upon any ground that would bar such applicant or such agent from being licensed to sell life insurance contracts in this State. The Insurance Laws of this State and any regulations issued thereunder governing any proceeding relating to the suspension or revocation of a life insurance agent's license shall also govern any proceeding for suspension or revocation of a variable contract agent's license.
9.4 Renewal of a variable contract agent's license shall follow the same procedure established for renewal of an agent's license to sell life insurance contracts in this State.
10.0 Severability
If any provision or clause of this Regulation or the application hereof to any person or situation is held invalid, such invalidity shall not affect any other provision or application of the Regulation which can be given effect without the invalid provision or application and to this end the provisions of this Regulation are declared to be severable.
11.0 Grace Period
In order to allow applicants to regularly comply with the provisions of this Regulation without suffering unnecessary impairment or curtailment of their then current operations, Insurers, Agents or Brokers issuing or selling variable contracts in this State at the date of the promulgation of these Regulations shall be permitted to continue under criteria heretofore applicable until June 2, 1969. Insurers, Agents and Brokers must comply with the requirements of this Regulation, not previously met, in order to be authorized for sale of variable contracts subsequent to the aforesaid date.
1202 Life Insurance Policy Loans, Maximum Rate of Interest [Formerly Regulation 19]
18 Del. Admin. Code § 1202 Life Insurance Policy Loans, Maximum Rate of Interest [Formerly Regulation 19]
1202 Life Insurance Policy Loans, Maximum Rate of Interest [Formerly Regulation 19]
1.0 Authority
1.1 18 Del.C. §314 of the Delaware Insurance Code authorizes the Insurance Commissioner to "... make reasonable Rules and Regulations necessary for or as an aid to the administration or effectuation of any provision of this Title." 18 Del.C. §2911 provides that the maximum rate of interest which may be charged by insurance companies on life insurance policy loans written after September 6, 1975 shall not exceed 8% per annum, or if payable in advance such interest shall not exceed the rate of 7.4% per annum.
1.2 18 Del.C. §2911 also contains the following new language:
1.2.1 "Before approving any policy provision providing for a rate of interest in excess of 6%, the Commissioner may require assurances by the insurer that the holders of such policies will benefit from the increased earnings of the insurer resulting from the use of such higher rates, through the use of higher dividends or lower premiums, or both."
2.0 Purpose
This regulation is promulgated to designate the method by which all life insurance companies doing business in this State shall assure the Commissioner that the holders of life insurance policies employing higher interest rates will benefit from increased earnings resulting therefrom.
3.0 Compliance
3.1 Consistent with the foregoing discussion, actuarial assumptions and rate making methods shall be outlined in detail. The following guidelines shall be followed by an insurer when filing policy forms providing for a maximum policy loan interest rate in excess of 6%:
3.1.1 The minimum standard for the valuation of all policies and contracts shall be a change in the reserve value interest assumption of not less than one-half of 1%, and a comparison indicating a benefit for the insured/owner using the NAIC surrender cost index, or any other comparison such as the traditional net cost approach.
4.0 Effective Date
This Regulation shall become effective this 30th day of March, 1976.
1203 Life Insurance Solicitation Regulation [Formerly Regulation 29]
18 Del. Admin. Code § 1203 Life Insurance Solicitation Regulation [Formerly Regulation 29]
1203 Life Insurance Solicitation Regulation [Formerly Regulation 29]
1.0 Authority
This rule is adopted and promulgated by the Administrative Procedures Act, 29 Del.C. §§6411 through 6418; and 18 Del.C. §314 which authorizes the Insurance Commissioner to "...make reasonable rules and regulations necessary for or as an aid to the administration or effectuation of any provision of this Title."
2.0 Purpose
2.1 The purpose of this regulation is to require insurers to deliver to purchasers of life insurance, information which will improve the buyer's ability to select the most appropriate plan of life insurance for his needs, improve the buyer's understanding of the basic features of the policy which has been purchased or which is under consideration and improve the ability of the buyer to evaluate the relative costs of similar plans of life insurance.
2.2 This regulation does not prohibit the use of additional material which is not in violation of this regulation or any other Delaware statute or regulation.
3.0 Scope
3.1 Except as hereafter exempted, this regulation shall apply to any solicitation, negotiation or procurement of life insurance occurring within this State. This regulation shall apply to any issuer of life insurance contracts including fraternal benefit societies.
3.2 Unless otherwise specifically included, this regulation shall not apply to:
3.2.1 Annuities.
3.2.2 Credit life insurance.
3.2.3 Group life insurance.
3.2.4 Life insurance policies issued in connection with pension and welfare plans as defined by and which are subject to the Federal Employee Retirement Income Security Act of 1974 (ERISA).
3.2.5 Variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account.
4.0 Definitions
4.1 For the purposes of this regulation, the following definitions shall apply:
“Buyer's Guide” A Buyer's Guide is a document which contains, and is limited to, the language approved by the National Association of Insurance Commissioners in its Life Insurance Buyer’s Guide or language approved by the Commissioner.
“Cash Dividend” A Cash Dividend is the current illustrated dividend which can be applied toward payment of the gross premium.
“Equivalent Level Annual Dividend” The Equivalent Level Annual Dividend is calculated by applying the following steps:
• Accumulate the annual cash dividends at five percent interest compounded annually to the end of the tenth and twentieth policy years.
• Divide each accumulation of Step 1 by an interest factor that converts it into one equivalent level annual amount that, if paid at the beginning of each year, would accrue to the values in Step 1 over the respective periods stipulated in Step 1. If the period is ten years, the factor is 13.207 and if the period is twenty years, the factor is 34.719.
• Divide the results of Step 2 by the number of thousands of the Equivalent Level Death Benefit to arrive at the Equivalent Level Annual Dividend.
“Equivalent Level Death Benefit” The Equivalent Level Death Benefit of policy or term life insurance rider is an amount calculated as follows:
• Accumulate the guaranteed amount payable upon death, regardless of the cause of death, at the beginning of each policy year for ten and twenty years at five percent interest compounded annually to the end of the tenth and twentieth policy years respectively.
• Divide each accumulation of Step 1 by an interest factor that converts it into one equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in Step 1 over the respective periods stipulated in Step 1. If the period is ten years, the factor is 13.207 and if the period is twenty years, the factor is 34.719.
“Generic Name” Generic name means a short title which is descriptive of the premium and benefit patterns of a policy or a rider.
“Life Insurance Cost Indexes” means:
• Life Insurance Surrender Cost Index. The Life Insurance Surrender Cost Index is calculated by applying the following steps:
• Determine the guaranteed cash surrender value, if any, available at the end of the tenth and twentieth policy years.
• For participating policies, add the terminal dividend payable upon surrender, if any, to the accumulation of the annual Cash Dividends at five percent interest compounded annually to the end of the period selected and add this sum to the amount determined in Step a.
• Divide the result of Step b. (Step a. for guaranteed-cost policies) by an interest factor that converts it into an equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in Step b. (Step a. for guaranteed cost policies) over the respective periods stipulated in Step a. If the period is ten years, the factor is 13.207 and if the period is twenty years, the factor is 34.719.
• Determine the equivalent level premium by accumulating each annual premium payable for the basic policy or rider at five percent interest compounded annually to the end of the period stipulated in Step a. and dividing the result by the respective factors stated in Step c (this amount is the annual premium payable for a level premium plan).
• Subtract the result of Step c. from Step d.
• Divide the result of Step e. by the number of thousands of the Equivalent Level Death Benefit to arrive at the Life Insurance Surrender Cost Index.
• Life Insurance Net Payment Cost Index. The Life Insurance Net Payment Cost Index is calculated in the same manner as the comparable Life Insurance Cost Index except that the cash surrender value and any terminal dividend are set at zero.
“Policy Summary” A policy summary is not required to inlcude information available in the policy form or illustrations. If an illustration subject to the provisions of the Delaware Insurance regulation 1210 is used in the sale of a policy, delivery of a policy summary is not required. A policy summary may not include any element that is notguaranteed. For the purposes of this regulation, Policy Summary means a written statement describing the elements of the policy including but not limited to:
• A prominently placed title as follows: STATEMENT OF POLICY COST AND BENEFIT INFORMATION.
• The name and address of the insurance agent, or, if no agent is involved, a statement of the procedure to be followed in order to receive responses to inquiries regarding the Policy Summary.
• The full name and home office or administrative office address of the company in which the life insurance policy is to be or has been written.
• The Generic Name of the basic policy and each rider.
• The following amounts, where applicable, for the first five policy years and representative policy years thereafter sufficient to clearly illustrate the premium and benefit patterns, including, but not necessarily limited to, the years for which Life Insurance Cost Indexes are displayed and at least one age from sixty through sixty-five or maturity whichever is earlier:
• The annual premium for the basic policy.
• The annual premium for each optional rider.
• Guaranteed amount payable upon death, at the beginning of the policy year regardless of the cause of death other than suicide, or other specifically enumerated exclusions, which is provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately.
• Total guaranteed cash surrender values at the end of the year with values shown separately for the basic policy and each rider.
• Cash Dividends payable at the end of the year with values shown separately for the basic policy and each rider. (Dividends need not be displayed beyond the twentieth policy year.)
• Guaranteed endowment amounts payable under the policy which are not included under guaranteed cash surrender values above.
• The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether this rate is applied in advance or in arrears. If the policy loan interest rate is variable, the Policy Summary includes the maximum annual percentage rate.
• Life Insurance Cost Indexes for ten and twenty years but in no case beyond the premium paying period. Separate indexes are displayed for the basic policy and for each optional term life insurance rider. Such indexes need not be included for optional riders which are limited to benefits such as accidental death benefits, disability waiver of premium, preliminary term life insurance coverage of less than 12 months and guaranteed insurability benefits nor for the basic policies or optional riders covering more than one life.
• The Equivalent Level Annual Dividend, in the case of participating policies and participating optional term life insurance riders, under the same circumstances and for the same durations at which Life Insurance Cost Indexes are displayed.
• A Policy Summary which includes dividends shall also include a statement that dividends are based on the company's current dividend scale and are not guaranteed in addition to a statement in close proximity to the Equivalent Level Annual Dividend as follows: An explanation of the intended use of the Equivalent Level Annual Dividend is included in the Life Insurance Buyer's Guide.
• A statement in close proximity to the Life Insurance Cost Indexes as follows: An explanation of the intended use of these indexes is provided in the Life Insurance Buyer's Guide.
• The date on which the Policy Summary is prepared. The Policy Summary must consist of a separate document. All information required to be disclosed must be set out in such a manner as to not minimize or render any portion thereof obscure. Any amounts which remain level for two or more years of the policy may be represented by a single number if it is clearly indicated what amounts are applicable for each policy year. Amounts in section 4.1.7.5 shall be listed in total, not on a per thousand nor per unit basis. If more than one insured is covered under one policy or rider, guaranteed death benefits shall be displayed separately for each insured or for each class of insureds if death benefits do not differ within the class. Zero amounts shall be displayed as zero and shall not be displayed as a blank space.
5.0 Disclosure Requirements
5.1 The insurer shall provide, to all prospective purchasers, a Buyer's Guide and a Policy Summary prior to accepting the applicant's initial premium or premium deposit, unless the policy for which application is made contains an unconditional refund provision of at least ten days or unless the Policy Summary contains such an unconditional refund offer, in which event the Buyer's Guide and Policy Summary must be delivered with the policy or prior to delivery of the policy.
5.2 The insurer shall provide a Buyer's Guide and a Policy Summary to any prospective purchaser upon request.
5.3 In the case of policies whose Equivalent Level Death Benefit does not exceed $5,000, the requirement for providing a Policy Summary will be satisfied by delivery of a written statement containing the information described in sections 4.1.7, 4.1.7.2, 4.1.7.3, 4.1.7.4, 4.1.7.5.1, 4.1.7.5.2, 4.1.7.5.3, 4.1.7.6, 4.1.7.7, 4.1.7.10, and 4.1.7.11.
6.0 General Rules
6.1 Each insurer shall maintain at its home office or principal office, a complete file containing one copy of each document authorized by the insurer for use pursuant to this regulation. Such file shall contain one copy of each authorized form for a period of three years following the date of its last authorized use.
6.2 An agent shall inform the prospective purchaser, prior to commencing a life insurance sales presentation, that he is acting as a life insurance agent and inform the prospective purchaser of the full name of the insurance company which he is representing to the buyer. In sales situations in which an agent is not involved, the insurer shall identify its full name.
6.3 Terms such as financial planner, investment advisor, financial consultant, or financial counseling shall not be used in such a way as to imply that the insurance agent is generally engaged in an advisory business in which compensation is unrelated to sales unless such is actually the case.
6.4 Any reference to policy dividends must include a statement that dividends are not guaranteed.
6.5 A system or presentation which does not recognize the time value of money through the use of appropriate interest adjustments shall not be used for comparing the cost of two or more life insurance policies. Such a system may be used for the purpose of demonstrating the cash-flow pattern of a policy if such presentation is accompanied by a statement disclosing that the presentation does not recognize that, because of interest, a dollar in the future has less value than a dollar today.
6.6 A presentation of benefits shall not display guaranteed and non-guaranteed benefits as a single sum unless they are shown separately in close proximity thereto.
6.7 A statement regarding the use of the Life Insurance Cost Indexes shall include an explanation to the effect that the indexes are useful only for the comparison of the relative costs of two or more similar policies.
6.8 A Life Insurance Cost Index which reflects dividends or an Equivalent Level Annual Dividend shall be accompanied by a statement that it is based on the company's current dividend scale and is not guaranteed.
6.9 For the purposes of this regulation, the annual premium for a basic policy or rider, for which the company reserves the right to change the premium, shall be the maximum annual premium.
7.0 Failure to Comply
7.1 Failure of an insurer to provide or deliver a Buyer's Guide, or a Policy Summary as provided in section 5.0 shall constitute an omission which misrepresents the benefits, advantages, conditions or terms of an insurance policy. In each such instance, the insurer shall, after hearing, be subjected to the penalties as prescribed in 18 Del.C. §106.
8.0 Effective Date
8.1 This rule shall apply to all solicitations of life insurance which commence on or after July 1, 1971.
1204 Replacement of Life Insurance [Formerly Regulation 30]
18 Del. Admin. Code § 1204 Replacement of Life Insurance [Formerly Regulation 30]
Published May 15, 1981; effective July 1, 1981
Amended April 15, 1984
18 Del. Admin. Code § 1204-1.0 Purpose
1.1 The purpose of this regulation is:
1.1.1 To regulate the activities of insurers, agents and brokers with respect to the replacement of existing life insurance and annuities.
1.1.2 To protect the interests of life insurance and annuity purchasers by establishing minimum standards to be observed in replacement transactions by:
1.1.2.1 Assuring that purchasers who wish to receive information with which a decision can be made in his or her own best interest receive that information in a timely manner;
1.1.2.2 Reducing the opportunity for misrepresentation and incomplete disclosures; and
1.1.2.3 Establishing penalties for failure to comply with requirements of this regulation.
18 Del. Admin. Code § 1204-2.0 Definition of Replacement
"Replacement" means any transaction in which new life insurance or a new annuity is to be purchased, and it is known or should be known to the proposing agent or broker, or to the proposing insurer if there is no agent, that by reason of such transaction, existing life insurance or annuity has been or is to be:
18 Del. Admin. Code § 1204-3.0 Other Definitions
"Conservation" means any attempt by the existing insurer or its agents or brokers to dissuade a policyowner from the replacement of existing life insurance or annuity. Conservation does not include such routine administrative procedures such as late payment notices or reinstatement offers.
"Direct‑Response Sales" means any sale of life insurance or annuity where the insurer does not utilize an agent in the sale or delivery of the policy.
"Existing Insurer" means the insurance company whose policy is or will be changed or terminated in such a manner as described within the definition of "replacement."
"Existing Life Insurance" means any life insurance or annuity in force, including life insurance or annuity under a binding or conditional receipt or a life insurance or annuity policy that is within an unconditional refund period.
"Ledger Statement" means an informal statement of the policy cost, benefits and value as maintained by the insurer for their convenience. The format is not specified as it varies from insurer to insurer, but the statement will contain, as a minimum, the generic name of the policy, the insured's name, address, the policy number, the insurer's name and address, the face value of the policy, the current annual premium for the base policy and any riders, the current cash value, a listing of any outstanding policy loans, a list of any accumulated dividends.
"Policy Summary" means the concise statement of policy information as described in Regulation 1203 section 4.1.7 (Formerly Regulation 29).
"Registered Contract" means variable annuities, investment annuities or variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account, or any other contracts issued by life insurance companies which are registered with the Federal Securities and Exchange Commission.
"Replacing Insurer" means the insurance company that issues or proposes to issue a new policy or contract which is a replacement of existing life insurance or annuity.
18 Del. Admin. Code § 1204-4.0 Exemptions
4.1 Unless otherwise specifically included, this Regulation shall not apply to transactions involving:
4.1.1 Credit Life Insurance;
4.1.2 Group Life Insurance or Group Annuities;
4.1.3 An application to the existing insurer that issued the existing life insurance and a contractual change or conversion privilege is being exercised;
4.1.4 Transactions where the replacing insurer and the existing insurer are the same, or are subsidiaries or affiliates under common ownership or control. In such cases the agent or broker shall comply with the requirements of section 5.1.
4.1.5 Registered Contracts shall be exempt from the requirements of sections 7.2 and 7.2.1 requiring provision of policy summary or ledger statement information; however, premium or contract contribution amounts and identification of the appropriate prospectus or offering circular shall be required in lieu thereof;
4.1.6 Life insurance or annuity products issued in connection with a pension, profit‑sharing or other benefit plan qualifying for tax deductibility of premiums, provided however, that as to any plan described in this subsection, full and complete disclosure shall be given to the administrator of any plan to be replaced;
18 Del. Admin. Code § 1204-5.0 Duties of Agents and Brokers
5.1 Each agent or broker who initiates the application shall, on the request of the prospective purchaser, furnish the Buyers Guide as described by Regulation 29 and shall submit to the insurer to which an application for life insurance or annuity is presented, with or as a part of each application:
5.1.1 statement signed by the applicant as to whether the replacement of existing life insurance or annuities are involved in the transaction; and
5.1.2 a signed statement as to whether the agent or broker knows replacement is or may be involved in the transaction.
5.2 Where replacement is involved, the agent or broker shall:
5.2.1 Present to the applicant, not later than at the time of taking the application, a "Notice Regarding Replacement" (Delaware Insurance Form R, attached as Exhibit A), or other substantially similar form approved by the Commissioner. The notice shall be signed by both the applicant and the agent or broker and a copy left with the applicant.
5.2.2 Obtain with or as a part of each application a list of all existing life insurance and/or annuity to be replaced, properly identified by name of insurer, the insured and contract number. If a contract number has not been assigned by the existing insurer, provide other identifying information such as an application or receipt number.
5.2.3 Leave with the applicant not later than the time of the taking of the application the original or a copy of written or printed communications used for presentation to the applicant.
5.2.4 Submit to the replacing insurer with the application a copy of the replacement notice provided pursuant to section 5.2.1.
5.3 Each agent or broker who uses written or printed communication in a conservation shall leave with the applicant the original or a copy of such materials used.
5.4 Written or printed communication as used in this section means individualized, written or printed sales aids of all kinds. Sales aids of a general nature and handwritten notes prepared by an agent or broker at the point of sale shall not be considered written communications within the meaning of this section.
18 Del. Admin. Code § 1204-6.0 Duties of All Insurers
6.1 Each agent shall:
6.1.1 Inform its field representatives or other personnel responsible for compliance with this regulation of the requirements of this regulation.
6.1.2 Require with or as a part of each completed application for life insurance or annuity a statement signed by the applicant as to whether such proposed insurance or annuity will replace existing life insurance or annuity.
18 Del. Admin. Code § 1204-7.0 Duties of Insurers That Use Agents or Brokers
7.1 Each insurer that uses an agent of broker in a life insurance or annuity sale shall:
7.1.1 Require with or as a part of each completed application for life insurance or annuity, a statement signed by the agent or broker as to whether he or she knows replacement is or may be involved in the transaction.
7.1.2 Where a replacement is involved:
7.1.2.1 Require from the agent or broker with the application for life insurance or annuity:
7.1.2.1.1 A list of all the applicant's existing life insurance or annuities to be replaced, and
7.1.2.1.2 A copy of the Replacement Notice provided the applicant pursuant to section 5.2.1. Such existing life insurance or annuity shall be identified by name of insurer, insured and contract number. If a number has not been assigned by the existing insurer, alternative identification, such as an application or receipt number, shall be listed.
7.1.2.2 Send to each existing insurer a written communication advising of the replacement or proposed replacement of the policy. The communication should include the information obtained pursuant to section 7.1.2.1 above and a Summary or Ledger Statement describing the proposed new policy. This written communication shall be made within 7 working days of the date the application is received in the replacing insurer's home office, or the date the proposed life insurance policy or annuity contract is issued, whichever is sooner.
Amendment to section 7.1.2.2 by Bulletin No. 84‑5: The amendment to Section 7(B)(2), dated June 1, 1984 is described in Bulletin No. 84‑5. Prior to the June 1, 1984 amendment section 7.1.2.2 read:
7.2 Send to each existing insurer a written communication advising of the replacement or proposed replacement, the identification information obtained pursuant to section 7.1.2.1 and a Policy Summary or Ledger Statement containing policy data on the proposed life insurance as described by Regulation 1203 section 4.1.7 (Formerly Regulation 29). Life insurance cost index and equivalent level annual dividend figures need not be included in the policy summary or ledger statement. This written communication shall be made within 7 working days of the date the application is received in the replacing insurer's home office, or the date the proposed policy or contract is issued, whichever is sooner."
7.2.1 Each existing insurer, agent or broker that undertakes a conversion shall, within 20 days of the receipt of the written communication (Notice Concerning Replacement) on which the applicant indicates a request for policy information, furnish the policyholder with a Policy Summary or Ledger Statement for the existing life insurance or annuity. Such Policy Summary or Ledger Statement shall be completed in accordance with Regulation 1203 (Formerly Regulation 29) except that information relating to premiums, cash values, death benefits and dividends, if any, shall be computed from the current policy year of the existing life insurance or annuity.
7.2.1.1 The Policy Summary shall include the amount of any outstanding indebtedness, the sum of any dividend accumulations or additions, and may include any other information that is not in violation of any regulation or statute.
7.2.1.2 Life insurance cost index and equivalent level annual dividend figures need not be included in the Policy Summary.
7.2.2 The existing insurer may, but is not required to, furnish the information described in (3) above where the Notice Concerning Replacement (Delaware Form R, attached as Exhibit A) reflects the applicant declined to request policy information.
7.2.3 The replacing insurer may request the existing insurer to furnish it with a copy of the Summary or Ledger Statement used by the existing insurer in a conservation attempt.
7.3 The replacing insurer shall maintain evidence of the "Notice Regarding Replacement," the Policy Summary, and any Ledger Statements used, and a replacement register, cross indexed, by replacing agent and existing insurer to be replaced. The existing insurer shall maintain evidence of Policy Summaries or Ledger Statements used in any conservation. Evidence that all requirements were met shall be maintained for at least three years or until the conclusion of the next succeeding regular examination by the Insurance Department of its state of domicile, whichever is earlier.
7.4 The replacing insurer shall provide in its policy or in a separate written notice which is delivered with the policy that the applicant has a right to an unconditional refund of all premiums paid, which right may be exercised within a period of twenty days commencing from the date of delivery of the policy.
18 Del. Admin. Code § 1204-8.0 Duties of Insurer with Respect to Direct Response Sales
8.1 If in the solicitation of a direct response sale, the insurer did not propose the replacement, and a replacement is involved, the insurer shall send to the applicant with the policy a Replacement Notice as described in Exhibit A or other substantially similar form approved by the Commissioner. Form R (Exhibit A) modified by deleting the agent's name and signature block may be used by direct response insurers without obtaining prior approval so long as the text of the notice is not modified.
8.2 If the insurer proposed the replacement it shall:
8.2.1 Provide to applicants or prospective applicants with or as a part of the application a Replacement Notice as described in Exhibit A.
8.2.2 Request from the applicant with or as a part of the application, a list of all existing life insurance or annuities to be replaced and properly identified by name of insurer and insured.
8.2.3 Comply with the requirements of section 7.1.2.2, if the applicant furnishes the names of the existing insurers, and the requirements of section 7.4, except that it need not maintain a replacement register.
18 Del. Admin. Code § 1204-9.0 Penalties
9.1 A violation of this regulation shall occur if an agent, broker or insurer recommends the replacement or conservation of an existing policy by use of a substantially inaccurate presentation or comparison of an existing contract's premiums and benefits or dividends and values, if any. Any insurer, agent, representative, officer or employee of such insurer failing to comply with the requirements of this regulation shall be subject to such penalties as may be appropriate under the Insurance Laws.
9.2 Patterns of action by the policyowners who purchase replacing policies from the same agent or broker after indicating on the application that no replacement was involved, shall be deemed prima facie evidence of the agent or broker's knowledge that replacement was intended in connection with the sale of those policies, and such patterns of action shall be deemed prima facie evidence of the agent or broker's intent to violate this regulation.
9.3 This regulation does not prohibit the use of additional material other than that which is required that is not in violation of the regulation or any other statute or regulation.
18 Del. Admin. Code § 1204-10.0 Severability
If any section or portion of a section of this regulation, or the applicability thereof to any person or circumstance, is held invalid by a court, the remainder of this regulation, or the applicability of such provision to other persons, shall not be affected thereby.
18 Del. Admin. Code § 1204-11.0 Effective Date
This regulation shall become effective on April 15, 1984.
Exhibit A. Delaware Insurance Regulation 1204 (Formerly Regulation 30)
NOTICE TO APPLICANT REGARDING REPLACEMENT OF LIFE INSURANCE
It is in your best interest to get all the facts before making a decision. Make sure you fully understand the proposed new policy and your existing insurance. New policies may contain provisions which limit benefits during the initial period of the contract, in particular, the suicide and incontestable clauses.
To assist you in evaluating the proposed and the existing insurance, Delaware Insurance Regulation 1204 (Formerly Regulation 30) requires that the insurer advising or recommending replacement:
Provide the consumer, not later than the date the policy or contract is delivered, with a concise summary of the policy or contract to be issued.
Allow a twenty-day period following the delivery of the policy during which time the consumer may surrender the new policy for a full refund.
Advise the present insurance company(s) of the pending replacement.
This same regulation requires your present insurer to provide, on your request, a similar summary describing your present insurance. This information will be provided if you request it using the form below.
Amendments dated June 1, 1984 by Bulletin No. 84-5 to the third and fourth paragraphs of Exhibit A: Prior to the amendment as described in Bulletin No. 84-5, the third paragraph read: "Provide the consumer with a concise summary of the policy it proposes to issue".
Prior to the amendment as described in Bulletin No. 84-5 the fourth paragraph read:
"Allow a twenty-day period for the issue of the proposed policy during which time the consumer may surrender the new policy for a full refund."
(Form appears on the next following page)
INFORMATION ON PRESENT POLICIES
Company Name Policy Number Name of Insured Summary Requested
(mark yes or no)
(continue on reverse as required)
IT IS SELDOM WISE TO TERMINATE YOUR EXISTING POLICY UNTIL YOUR NEW POLICY HAS BEEN ISSUED AND YOU HAVE EXAMINED IT AND FOUND IT TO BE ACCEPTABLE.
I have read this notice and received a copy of it.
Applicant's signature Date
Agent's signature* Date*
Agent's name and address (printed)* Company Name*
Delaware Form R (REG 30) 3/15/84
*Direct Response Insurers may Omit Items marked by Asterisk
1205 Variable Life Insurance [Formerly Regulation 44]
18 Del. Admin. Code § 1205 Variable Life Insurance [Formerly Regulation 44]
1205 Variable Life Insurance [Formerly Regulation 44]
1.0 Authority
The following regulations applicable to variable life insurance policies are promulgated under the authority of 18 Del.C. §311 and §2932.
2.0 Definitions
2.1 As used in this regulation:
"Affiliate" of an insurer means any person, directly or indirectly, controlling, controlled by, or under common control with such insurer; any person who regularly furnishes investment advice to such insurer with respect to its separate accounts for which a specific fee or commission is charged; or any director, officer, partner, or employee of any such insurer, controlling or controlled person, or person providing investment advice or any member of the immediate family of such person.
"Agent" means any person, corporation, partnership, or other legal entity which is licensed by this state as a life insurance agent.
"Assumed Investment Rate" means the rate of investment return which would be required to be credited to a variable life insurance policy, after deduction of charges for taxes, investment expenses, and mortality and expense guarantees to maintain the variable death benefit equal at all times to the amount of death benefit, other than incidental insurance benefits, which would be payable under the plan of insurance if the death benefit did not vary according to the investment experience of the separate account.
"Benefit Base" means the amount, to which the net investment return is applied.
"Commissioner" means the Insurance Commissioner of this state.
"Control" (including the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing more than ten (10) percent of the voting securities of any other person. This presumption may be rebutted by a showing made to the satisfaction of the Commissioner that control does not exist in fact. The Commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.
"Flexible Premium Policy" means any variable life insurance policy other than a scheduled premium policy as specified in section 2.1.15.
"General Account" means all assets of the insurer other than assets in separate accounts established pursuant to 18 Del.C. §2932, or pursuant to the corresponding section of the Insurance Laws of the state of domicile of a foreign or alien insurer, whether or not for variable life insurance.
"Incidental Insurance Benefit" means all insurance benefits in a variable life insurance policy, other than the variable death benefit and the minimum death benefit, including but not limited to accidental death and dismemberment benefits, disability benefits, guaranteed insurability options, family income, or term riders.
"May" is permissive.
"Minimum Death Benefit" means the amount of the guaranteed death benefit, other than incidental insurance benefits, payable under a variable life insurance policy regardless of the investment performance of the separate account.
"Net Investment Return" means the rate of investment return in a separate account to be applied to the benefit base.
"Person" means an individual, corporation, partnership, association, trust, or fund.
"Policy Processing Day" means the day on which charges authorized in the policy are deducted from the policy's cash value.
"Scheduled Premium Policy" means any variable life insurance policy under which both the amount and timing of premium payments are fixed by the insurer.
"Separate Account" means a separate account established pursuant to 18 Del.C. §2932 or pursuant to the corresponding section of the Insurance Laws of the state of domicile of a foreign or alien insurer.
"Shall" is mandatory.
"Variable Death Benefit" means the amount of the death benefit, other than incidental insurance benefits, payable under a variable life insurance policy dependent on the investment performance of the separate account, which the insurer would have to pay in the absence of any minimum death benefit.
"Variable Life Insurance Policy" means any individual policy which provides for life insurance the amount or duration of which varies according to the investment experience of any separate account or accounts established and maintained by the insurer as to such policy, pursuant to 18 Del.C. §2932 or pursuant to the corresponding section of the Insurance Laws of the state of domicile of a foreign or alien insurer.
3.0 Qualification of Insurer to Issue Variable Life Insurance
3.1 The following requirements are applicable to all insurers either seeking authority to issue variable life insurance in this state or having authority to issue variable life insurance in this state.
3.1.1 Licensing and Approval to do Business in This State.
3.1.1.1 An insurer shall not deliver or issue for delivery in this state any variable life insurance policy unless:
3.1.1.1.1 the insurer is licensed or organized to do a life insurance business in this state;
3.1.1.1.2 the insurer's Delaware Certificate of Authority has been issued or amended to include the line of variable life authority as authorized by 18 Del.C. §2932, which the Commissioner shall issue or amend only after he has found that:
3.1.1.1.2.1 the plan of operation for the issuance of variable life insurance policies is not unsound;
3.1.1.1.2.2 the general character, reputation, and experience of the management and those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer are such as to reasonably assure competent operation of the variable life insurance business of the insurer in this state; and
3.1.1.1.2.3 the present and foreseeable future financial condition of the insurer and its method of operation in connection with the issuance of such policies is not likely to render its operation hazardous to the public or its policyholders in this state. The Commissioner shall consider, among other things:
3.1.1.1.2.3.1 the history of operation and financial condition of the insurer;
3.1.1.1.2.3.2 the qualifications, fitness, character, responsibility, reputation, and experience of the officers and directors and other management of the insurer and those persons or firms proposed to supply consulting, investment, administrative, or custodial services to the insurer;
3.1.1.1.2.3.3 the applicable law and regulations under which the insurer is authorized in its state of domicile to issue variable life insurance policies. The state of entry of an alien insurer shall be deemed its state of domicile for this purpose; and
3.1.1.1.2.3.4 if the insurer is a subsidiary of, or is affiliated by common management or ownership with another company, its relationship to such other company and the degree to which the requesting insurer, as well as the other company, meets these standards.
3.1.1.2 insurers admitted in this State which have previously been authorized to conduct variable life transactions in accordance with Delaware Insurance Regulation 1201 may continue such operations on the basis of such prior approval without amendment to their Delaware Certificate of Authority until December 1, 1983.
3.1.2 Filing for Approval to do Business in This State.
3.1.2.1 The Commissioner may, at his discretion, require that an insurer, before it delivers or issues for delivery any variable life insurance policy in this state, file with this Department the following information for the consideration of the Commissioner in making the determination required by Section 3.1.1.1.2 of this regulation:
3.1.2.1.1 copies of and a general description of the variable life insurance policies it intends to issue;
3.1.2.1.2 a general description of the methods of operation of the variable life insurance business of the insurer, including methods of distribution of policies and the names of those persons or firms proposed to supply consulting, investment, administrative, custodial or distribution services to the insurer;
3.1.2.1.3 with respect to any separate account maintained by an insurer for any variable life insurance policy, a statement of the investment policy the issuer intends to follow for the investment of the assets held in such separate account, and a statement of procedures for changing such investment policy. The statement of investment policy shall include a description of the investment objectives intended for the separate account;
3.1.2.1.4 a description of any investment advisory services contemplated as required by Section 6.10 of this regulation.
3.1.2.1.5 a copy of the statutes and regulations of the state of domicile of the insurer under which it is authorized to issue variable life insurance policies;
3.1.2.1.6 biographical data with respect to officers and directors of the insurer on the National Association of Insurance Commissioners Uniform Biographical Data Form; and
3.1.2.1.7 a statement of the insurer's actuary describing the mortality and expense risks which the insurer will bear under the policy.
3.1.2.1.8 insurers filing for an amended Certificate of Authority pursuant to 3.1.1.2 shall not be required to duplicate filings previously made in compliance with Insurance Department Regulation 1201.
3.1.3 Standards of Suitability.
3.1.3.1 Every insurer seeking approval to enter into the variable life insurance business in this state shall establish and maintain a written statement specifying the Standards of Suitability to be used by the insurer. Such Standards of Suitability shall specify that no recommendation shall be made to an applicant to purchase a variable life insurance policy and that no variable life insurance policy shall be issued in the absence of reasonable grounds to believe that the purchase of such policy is not unsuitable for such applicant on the basis of information furnished after reasonable inquiry of such applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and any other information known to the insurer or to the agent making the recommendation.
3.1.4 Use of Sales Materials.
3.1.4.1 An insurer authorized to transact variable life insurance business in this state shall not use any sales material, advertising material, or descriptive literature or other materials of any kind in connection with its variable life insurance business in this state which is false, misleading, deceptive, or inaccurate.
3.1.5 Requirements Applicable to Contractual Services.
3.1.5.1 Any material contract between an insurer and suppliers of consulting, investment, administrative, sales, marketing, custodial, or other services with respect to variable life insurance operations shall be in writing and provide that the supplier of such services shall furnish the Commissioner with any information or reports in connection with such services which the Commissioner may request in order to ascertain whether the variable life insurance operations of the insurer are being conducted in a manner consistent with these regulations and any other applicable law or regulations.
3.1.6 Reports to the Commissioner.
3.1.6.1 Any insurer authorized to transact the business of variable life insurance in this state shall submit to the Commissioner, in addition to any other materials which may be required by this regulation or any other applicable laws or regulations:
3.1.6.1.1 an Annual Statement of the business of its separate account or accounts in such form as may be prescribed by the National Association of Insurance Commissioners; and
3.1.6.1.2 prior to the use in this state any information furnished to applicants as provided for in section 7.1; and
3.1.6.1.3 prior to the use in this state the form of any of the Reports to Policyholders as provided for in section 9.1; and
3.1.6.1.4 such additional information concerning its variable life insurance operations or its separate accounts as the Commissioner shall deem necessary.
3.1.6.2 Any material submitted to the Commissioner under this Section shall be disapproved if it is found to be false, misleading, deceptive, or inaccurate in any material respect and, if previously distributed, the Commissioner shall require the distribution of amended material.
3.1.7 Authority of Commissioner to Disapprove.
3.1.7.1 Any material required to be filed with and approved by the Commissioner shall be subject to disapproval if at any time it is found by him not to comply with the standards established by this regulation.
4.0 Insurance Policy Requirements
Policy Qualification. The Commissioner shall not approve any variable life insurance form filed pursuant to this regulation unless it conforms to the requirements of this section.
4.1 Filing of Variable Life Insurance Policies.
4.1.1 All variable life insurance policies, and all riders, endorsements, applications and other documents which are to be attached to and made a part of the policy and which relate to the variable nature of the policy, shall be filed with the Commissioner and approved by him prior to delivery or issuance for delivery in this state.
4.1.1.1 The procedures and requirements for such filing and approval shall be, to the extent appropriate and not inconsistent with this regulation, the same as those otherwise applicable to other life insurance policies.
4.1.1.2 The Commissioner may approve variable life insurance policies and related forms with provisions the Commissioner deems to be not less favorable to the policyholder and the beneficiary than those required by this regulation.
4.2 Mandatory Policy Benefit and Design Requirements.
4.2.1 Variable life insurance policies delivered or issued for delivery in this state shall comply with the following minimum requirements:
4.2.1.1 Mortality and expense risks shall be borne by the insurer. The mortality and expense charges shall be subject to the maximums stated in the contract.
4.2.1.2 For scheduled premium policies, a minimum death benefit shall be provided in an amount at least equal to the initial face amount of the policy so long as premiums are duly paid (subject to the provisions of section 4.3.2).
4.2.1.3 The policy shall reflect the investment experience of one or more separate accounts established and maintained by the insurer. The insurer must demonstrate that the reflection of investment experience in the variable life insurance policy is actuarially sound.
4.2.1.4 Each variable life insurance policy shall be credited with the full amount of the net investment return applied to the benefit base.
4.2.1.5 Any changes in variable death benefits of each variable life insurance policy shall be determined at least annually.
4.2.1.6 The cash value of each variable life insurance policy shall be determined at least monthly. The method of computation of cash values and other non-forfeiture benefits, as described either in the policy or in a statement filed with the Commissioner of the state in which the policy is delivered, or issued for delivery, shall be in accordance with actuarial procedures that recognize the variable nature of the policy. The method of computation must be such that, if the net investment return credited to the policy at all times from the date of issue should be equal to the assumed investment rate with premiums and benefits determined accordingly under the terms of the policy, then the resulting cash values and other non-forfeiture benefits must be at least equal to the minimum values required by the Standard Non-Forfeiture Law of this state for a general account policy with such premiums and benefits. The assumed investment rate shall not exceed the minimum interest rate permitted under the Standard Non-Forfeiture Law of this state. If the policy does not contain an assumed investment rate, this demonstration shall be based on the maximum interest rate permitted under the Standard Non-Forfeiture Law. The method of computation may disregard incidental minimum guarantees as to the dollar amounts payable. Incidental minimum guarantees include, for example, but are not to be limited to, a guarantee that the amount payable at death or maturity shall be at least equal to the amount that otherwise would have been payable if the net investment return credited to the policy at all times from the date of issue had been equal to the assumed investment rate.
4.2.1.7 The computation of values required for each variable life insurance policy may be based upon such reasonable and necessary approximations as are acceptable to the Commissioner.
4.3 Mandatory Policy Provisions.
4.3.1 Every variable life insurance policy filed for approval in this state shall contain at least the following:
4.3.1.1 The cover page or pages corresponding to the cover page of each such policy shall contain:
4.3.1.1.1 A prominent statement in either contrasting color or in bold-face type that the amount or duration of death benefit may be variable or fixed under specified conditions;
4.3.1.1.2 A prominent statement in either contrasting color or in bold-face type that cash values may increase or decrease in accordance with the experience of the separate account subject to any specified minimum guarantees;
4.3.1.1.3 A statement describing any minimum death benefit required pursuant to section 4.2.1.2;
4.3.1.1.4 The method, or a reference to the policy provision which describes the method, for determining the amount of insurance payable at death;
4.3.1.1.5 To the extent permitted by state law, a captioned provision that the policyholder may return variable life insurance policy within 10 days of receipt of the policy by the policyholder, and receive a refund equal to the sum of (A) the difference between the premiums paid including any policy fees or other charges and the amounts allocated to any separate accounts under the policy and (B) the value of the amounts allocated to any separate accounts under the policy, on the date the returned policy is received by the insurer or its agent. Until such time as state law authorizes the return of payments as calculated in the preceding sentence, the amount of the refund shall be the total of all premium payments for such policy;
4.3.1.1.6 Such other items as are currently required for fixed benefit life insurance policies and which are not inconsistent with this regulation.
4.3.2 Grace Period
4.3.2.1 For scheduled premium policies, a provision for a grace period of not less than thirty-one days from the premium due date which shall provide that where the premium is paid within the grace period, policy values will be the same, except for the deduction of any overdue premium, as if the premium were paid on or before the due date.
4.3.2.2 For flexible premium policies, a provision for a grace period beginning on the policy processing day when the total charges authorized by the policy that are necessary to keep the policy in force until the next policy processing day exceed the amounts available under the policy to pay such charges in accordance with the terms of the policy. Such grace period shall end on a date not less than 61 days after the mailing date of the Report to Policyholders required by section 9.1.3. The death benefit payable during the grace period will equal the death benefit in effect immediately prior to such period less any overdue charges. If the policy processing days occur monthly, the insurer may require the payment of not more than 3 times the charges which were due on the policy processing day on which the amounts available under the policy were insufficient to pay all charges authorized by the policy that are necessary to keep such policy in force until the next policy processing day.
4.3.3 For scheduled premium policies, a provision that the policy will be reinstated at any time within two years from the date of default upon the written application of the insured and evidence of insurability, including good health, satisfactory to the insurer, unless the cash surrender value has been paid or the period of extended insurance has expired, upon the payment of any outstanding indebtedness arising subsequent to the end of the grace period following the date of default together with accrued interest thereon to the date of reinstatement and payment of an amount not exceeding the greater of:
4.3.3.1 All overdue premiums with interest at a rate not exceeding 8% per annum compounded annually and any indebtedness in effect at the end of the grace period following the date of default with interest at a rate not exceeding 8% per annum compounded annually; or
4.3.3.2 110% of the increase in cash value resulting from reinstatement plus all overdue premiums for incidental insurance benefits with interest at a rate not exceeding 8% per annum compounded annually.
4.3.3.3 A full description of the benefit base and of the method of calculation and application of any factors used to adjust variable benefits under the policy;
4.3.3.4 A provision designating the separate account to be used and stating that:
4.3.3.4.1 The assets of such separate account shall be available to cover the liabilities of the general account of the insurer only to the extent that the assets of the separate account exceed the liabilities of the separate account arising under the variable life insurance policies supported by the separate account.
4.3.3.4.2 The assets of such separate account shall be valued at least as often as any policy benefits vary but at least monthly.
4.3.3.5 A provision specifying what documents constitute the entire insurance contract under state law;
4.3.3.6 A designation of the officers who are empowered to make an agreement or representation on behalf of the insurer and an indication that statements by the insured, or on his behalf, shall be considered as representations and not warranties;
4.3.3.7 An identification of the owner of the insurance contract;
4.3.3.8 A provision setting forth conditions or requirements as to the designation, or change of designation, of a beneficiary and a provision for disbursement of benefits in the absence of a beneficiary designation;
4.3.3.9 A statement of any conditions or requirements concerning the assignment of the policy;
4.3.3.10 A description of any adjustments in policy values to be made in the event of misstatement of age or sex of the insured;
4.3.3.11 A provision that the policy shall be incontestable by the insurer after it has been in force for two years during the lifetime of the insured, provided, however, that any increase in the amount of the policy's death benefits subsequent to the policy issue date, which increase occurred upon a new application or request of the owner and was subject to satisfactory proof of the insured's insurability, shall be incontestable after any such increase has been in force, during the lifetime of the insured, for two years from the date of issue of such increase;
4.3.3.12 A provision stating that the investment policy of the separate account shall not be changed without the approval of the Insurance Commissioner of the state of domicile of the insurer, and that the approval process is on file with the Commissioner of this state;
4.3.3.13 A provision that payment of variable death benefits in excess of any minimum death benefits, cash values, policy loans, or partial withdrawals (except when used to pay premiums) or partial surrenders may be deferred:
4.3.3.13.1 For up to six months from the date of request, if such payments are based on policy values which do not depend on the investment performance of the separate account, or
4.3.3.13.2 Otherwise, for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make such payment impractical;
4.3.3.14 If settlement options are provided, at least one such option shall be provided on a fixed basis only;
4.3.3.15 A description of the basis for computing the cash value and the surrender value under the policy shall be included;
4.3.3.16 Premiums or charges for incidental insurance benefits shall be stated separately;
4.3.3.17 Any other policy provision required by this regulation;
4.3.3.18 Such other items as are currently required for fixed benefit life insurance policies and are not inconsistent with this regulation;
4.3.3.19 A provision for non-forfeiture insurance benefits.
4.3.3.20 The insurer may establish a reasonable minimum cash value below which any non-forfeiture insurance options will not be available.
4.3.4 Policy Loan Provisions.
4.3.4.1 Every variable life insurance policy, other than term insurance policies and pure endowment policies, delivered or issued for delivery in this state shall contain provisions which are not less favorable to the policyholder than the following:
4.3.4.1.1 A provision for policy loans after the policy has been in force for three full years which provides the following:
4.3.4.1.1.1 At least 75% of the policy's cash surrender value may be borrowed.
4.3.4.1.1.2 The amount borrowed shall bear interest at a rate not to exceed that permitted by state insurance law.
4.3.4.1.1.3 Any indebtedness shall be deducted from the proceeds payable on death.
4.3.4.1.1.4 Any indebtedness shall be deducted from the cash surrender value upon surrender or in determining any non-forfeiture benefit.
4.3.4.1.1.5 For scheduled premium policies, whenever the indebtedness exceeds the cash surrender value, the insurer shall give notice of any intent to cancel the policy if the excess indebtedness is not repaid within thirty-one days after the date of mailing of such notice. For flexible premium policies, whenever the total charges authorized by the policy that are necessary to keep the policy in force until the next following policy processing day exceed the amounts available under the policy to pay such charges, a report must be sent to the policyholder containing the information specified by section 9.1.3.
4.3.4.1.1.6 The policy may provide that if, at any time, so long as premiums are duly paid, the variable death benefit is less than it would have been if no loan or withdrawal had ever been made, the policyholder may increase such variable death benefit up to what it would have been if there had been no loan or withdrawal by paying an amount not exceeding 110% of the corresponding increase in cash value and by furnishing such evidence of insurability as the insurer may request.
4.3.4.1.1.7 The policy may specify a reasonable minimum amount which may be borrowed at any time but such minimum shall not apply to any automatic premium loan provision.
4.3.4.1.1.8 No policy loan provision is required if the policy is under extended insurance non-forfeiture option.
4.3.4.1.1.9 The policy loan provisions shall be constructed so that variable life insurance policyholders who have not exercised such provisions are not disadvantaged by the exercise thereof.
4.3.4.1.1.10 Amounts paid to the policyholders upon the exercise of any policy loan provision shall be withdrawn from the separate account and shall be returned to the separate account upon repayment except that a stock insurer may provide the amounts for policy loans from the general account.
4.3.5 Other Policy Provisions.
4.3.5.1 The following provision may in substance be included in a variable life insurance policy or related form delivered or issued for delivery in this state:
4.3.5.1.1 An exclusion for suicide within two years of the issue date of the policy; provided, however, that to the extent of the increased death benefits only, the policy may provide an exclusion for suicide within two years of any increase in death benefits which results from an application of the owner subsequent to the policy issue date;
4.3.5.1.2 Incidental insurance benefits may be offered on a fixed or variable basis;
4.3.5.1.3 Policies issued on a participating basis shall offer to pay dividend amounts in cash. In addition, such policies may offer the following dividend options:
4.3.5.1.3.1 the amount of the dividend may be credited against premium payments;
4.3.5.1.3.2 the amount of the dividend may be applied to provide amounts of additional fixed or variable benefit life insurance;
4.3.5.1.3.3 the amount of the dividend may be deposited in the general account at a specified minimum rate of interest;
4.3.5.1.3.4 the amount of the dividend may be applied to provide paid-up amounts of fixed benefit one-year term insurance;
4.3.5.1.3.5 the amount of the dividend may be deposited as a variable deposit in a separate account.
4.3.5.1.4 A provision allowing the policyholder to elect in writing in the application for the policy or thereafter an automatic premium loan on a basis not less favorable than that required of policy loans under section 4.3.4, except that a restriction that no more than two consecutive premiums can be paid under this provision may be imposed;
4.3.5.1.5 A provision allowing the policyholder to make partial withdrawals;
4.3.5.1.6 Any other policy provision approved by the Commissioner.
5.0 Reserve Liabilities for Variable Life Insurance
5.1 Reserve liabilities for variable life insurance policies shall be established under the Standard Valuation Law in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.
5.2 For scheduled premium policies, reserve liabilities for the guaranteed minimum death benefit shall be the reserve needed to provide for the contingency of death occurring when the guaranteed minimum death benefit exceeds the death benefit that would be paid in the absence of the guarantee, and shall be maintained in the general account of the insurer and shall be not less than the greater of the following minimum reserves:
5.2.1 The aggregate total of the term costs, if any, covering a period of one full year from the valuation date, of the guarantee on each variable life insurance contract, assuming an immediate one-third depreciation in the current value of the assets of the separate account followed by a net investment return equal to the assumed investment rate; or
5.2.2 The aggregate total of the "attained age level" reserves on each variable life insurance contract. The "attained age level" reserve on each variable life insurance contract shall not be less than zero and shall equal the "residue," as described in paragraph (1), of the prior year's "attained age level" reserve on the contract, with any such "residue," increased or decreased by a payment computed on an attained age basis as described in section 5.2.2.2.
5.2.2.1 the "residue" of the prior year's "attained age level" reserve on each variable life insurance contract shall not be less than zero and shall be determined by adding interest at the valuation interest rate to such prior year's reserve, deducting the tabular claims based on the "excess," if any, of the guaranteed minimum death benefit over the death benefit that would be payable in the absence of such guarantee, and dividing the net result by the tabular probability of survival. The "excess" referred to in the preceding sentence shall be based on the actual level of death benefits that would have been in effect during the preceding year in the absence of the guarantee, taking appropriate account of the reserve assumptions regarding the distribution of death claim payments over the year.
5.2.2.2 the payment referred to in subsection section 5.2.2 shall be computed so that the present value of a level payment of that amount each year over the future premium paying period of the contract is equal to (A) minus (B) minus (C), where (A) is the present value of the future guaranteed minimum death benefits, (B) is the present value of the future death benefits that would be payable in the absence of such guarantee, and (C) is any "residue", as described in paragraph (1), of the prior year's "attained age level" reserve on such variable life insurance contract. If the contract is paid up, the payment shall equal (A) minus (B) minus (C). The amounts of future death benefits referred to in (B) shall be computed assuming a net investment return of the separate account which may differ from the assumed investment rate and/or the valuation interest rate but in no event may exceed the maximum interest rate permitted for the valuation of life contracts.
5.2.3 The valuation interest rate and mortality table used in computing the two minimum reserves described in sections 5.2.2.1 and 5.2.2.2 shall conform to permissible standards for the valuation of life insurance contracts. In determining such minimum reserve, the company may employ suitable approximations and estimates including, but not limited to, groupings and averages.
5.3 For flexible premium policies, reserve liabilities for any guaranteed minimum death benefit shall be maintained in the general account of the insurer and shall not be less than the aggregate total of the term costs, if any, covering the period provided for in the guarantee not otherwise provided for by the reserves held in the separate account assuming an immediately one-third depreciation in the current value of the assets of the separate account followed by a net investment return equal to the valuation interest rate. The valuation interest rate and mortality table used in computing this additional reserve, if any, shall conform to permissible standards for the valuation of life insurance contracts. In determining such minimum reserve, the company may employ suitable approximations and estimates including, but not limited to, groupings and averages.
5.4 Reserve liabilities for all fixed incidental insurance benefits and any guarantees associated with variable incidental insurance benefits shall be maintained in the general account, and reserve liabilities for all variable aspects of the variable incidental insurance benefits shall be maintained in a separate account, in amounts determined in accordance with the actuarial procedures appropriate to such benefit.
6.0 Separate Accounts
6.1 The following requirements apply to the establishment and administration of variable life insurance separate accounts by any domestic insurer:
6.1.1 Any domestic insurer issuing variable life insurance shall establish one or more separate accounts pursuant to 18 Del.C. §2932.
6.1.2 If no law or other regulation provides for the custody of separate account assets and if such insurer is not the custodian of such separate account assets, all contracts for custody of such assets shall be in writing and the Commissioner shall have the authority to review and approve of both the terms of any such contract and the proposed custodian prior to the transfer of custody.
6.1.3 Such insurer shall not, without the prior written approval of the Commissioner, employ in any material connection with the handling of separate account assets any person who:
6.1.3.1 within the last ten years has been convicted of any felony or a misdemeanor arising out of such person's conduct involving embezzlement, fraudulent conversion, or misappropriation of funds or securities or involving violation of Sections 1341, 1342, or 1343 of Title 18, United States Code; or
6.1.3.2 within the last ten years has been found by any state regulatory authority to have violated or has acknowledged violation of any provision of any state insurance law involving fraud, deceit or knowing misrepresentation; or
6.1.3.3 within the last ten years has been found by federal or state regulatory authorities to have violated or has acknowledged violation of any provision of federal or state securities laws involving fraud, deceit or knowing misrepresentation.
6.1.3.4 All persons with access to the cash, securities or other assets of the separate account shall be under bond in the amount of not less than the following amounts:
Total Assets
Minimum Amount of Bond
Under $100,000
$10,000
More Than:
But Not More Than:
100,000
600,000
10,000 plus 4% of assets over
100,000
600,000
1,200,000
30,000 plus 3-1/3% of assets over
600,000
1,200,000
3,200,000
50,000 plus 2-1/2% of assets over
1,200,000
3,200,000
4,450,000
100,000 plus 2% of assets over
3,200,000
4,450,000
6,450,000
125,000 plus 1-1/4% of assets over
4,450,000
6,450,000
90,450,000
150,000 plus 5/8% of assets over
6,450,000
90,450,000
350,450,000
675,000 plus 3/8% of assets over
90,450,000
350,450,000
1,070,450,000
1,650,000 plus 3/16% of assets over
350,450,000
1,070,450,000
3,000,000 plus 3/32% of assets over
1,070,450,000
until total bond equals $5,000,000
6.1.3.5 The assets of such separate accounts shall be valued at least as often as variable benefits are determined but in any event at least monthly.
6.2 Amounts in the Separate Account.
6.2.1 The insurer shall maintain in each separate account assets with a value at least equal to the greater of the valuation reserves for the variable portion of the variable life insurance policies or the benefit base for such policies.
6.3 Investments by the Separate Account.
6.3.1 No sale, exchange or other transfer of assets may be made by an insurer or any of its affiliates between any of its separate accounts or between any other investment account and one or more of its separate accounts unless:
6.3.1.1 in case of a transfer into a separate account, such transfer is made solely to establish the account or to support the operation of the policies with respect to the separate account to which the transfer is made; and
6.3.1.2 such transfer, whether into or from a separate account, is made by a transfer of cash; but, other assets may be transferred, if approved by the Commissioner in advance.
6.3.2 The separate account shall have sufficient net investment income and readily marketable assets to meet anticipated withdrawals under policies funded by the account.
6.4 Limitations on Ownership.
6.4.1 A separate account shall not purchase or otherwise acquire the securities of any issuer, other than securities issued or guaranteed as to principal and interest by the United States, if immediately after such purchase or acquisition the value of such investment, together with prior investments of such account in such security valued as required by these regulations, would exceed ten percent (10%) of the value of the assets of the separate account. The Commissioner may waive this limitation in writing if he believes such waiver will not render the operation of the separate account hazardous to the public or the policyholders in this state.
6.4.2 No separate account shall purchase or otherwise acquire the voting securities of any issuer if as a result of such acquisition the insurer and its separate accounts, in the aggregate, will own more than 10% of the total issued and outstanding voting securities of such issuer. The Commissioner may waive this limitation in writing if he believes such waiver will not render the operation of the separate account hazardous to the public or the policyholders in this state or jeopardize the independent operation of the issuer of such securities.
6.4.3 The percentage limitation specified in section 6.4.1 shall not be construed to preclude the investment of the assets of separate accounts in shares of investment companies registered pursuant to the Investment Company Act of 1940 or other pools of investment assets if the investments and investment policies of such investment companies or asset pools comply substantially with the provisions section 6.4.3 and other applicable portions of this regulation.
6.5 Valuation of Separate Account Assets.
6.5.1 Investments of the separate account shall be valued at their market value on the date of valuation, or at amortized cost if it approximates market value.
6.6 Separate Account Investment Policy.
6.6.1 The investment policy of a separate account operated by a domestic insurer filed under section 3.1.1.2 shall not be changed without first filing such change with the Insurance Commissioner.
6.6.1.1 Any change filed pursuant to this section shall be effective sixty days after the date it was filed with the Commissioner, unless the Commissioner notifies the insurer before the end of such sixty-day period of his disapproval of the proposed change. At any time the Commissioner may, after notice and public hearing, disapprove any change that has become effective pursuant to this section.
6.6.1.2 The Commissioner may disapprove the change if he determines that the change would be detrimental to the interests of the policyholders participating in such separate account.
6.7 Charges Against Separate Account.
6.7.1 The insurer must disclose in writing, prior to or contemporaneously with delivery of the policy, all changes that may be made against the separate account, including, but not limited to, the following:
6.7.1.1 taxes or reserves for taxes attributable to investment gains and income of the separate account;
6.7.1.2 actual cost of reasonable brokerage fees and similar direct acquisition and sale costs incurred in the purchase or sale of separate account assets;
6.7.1.3 actuarially determined costs of insurance (tabular costs) and the release of separate account liabilities;
6.7.1.4 charges for administrative expenses and investment management expenses, including internal costs attributable to the investment management of assets of the separate account;
6.7.1.5 a charge, at a rate specified in the policy, for mortality and expense guarantees;
6.7.1.6 any amounts in excess of those required to be held in the separate accounts;
6.7.1.7 charges for incidental insurance benefits.
6.8 Standard of Conduct.
6.8.1 Every insurer seeking approval to enter into the variable life insurance business in this state shall adopt by formal action of its Board of Directors a written statement specifying the Standards of Conduct of the insurer, its officers, directors, employees, and affiliates with respect to the purchase or sale of investments of separate accounts. Such Standards of Conduct shall be binding on the insurer and those to whom it refers. A code or codes of ethics meeting the requirements of Section 17j under the Investment Company Act of 1940 and applicable rules and regulations thereunder shall satisfy the provisions of this Section.
6.9 Conflicts of Interest.
6.9.1 Rules under any provision of the Insurance Laws of this state or any regulation applicable to the officers and directors of insurance companies with respect to conflicts of interest shall also apply to members of any separate account's committee or other similar body.
6.10 Investment Advisory Services to a Separate Account.
6.10.1 An insurer shall not enter into a contract under which any person undertakes, for a fee, to regularly furnish investment advice to such insurer with respect to its separate accounts maintained for variable life insurance policies unless:
6.10.1.1 the person providing such advise is registered as an investment adviser under the Investment Advisers Act of 1940; or
6.10.1.2 the person providing such advice is an investment manager under the Employee Retirement Income Security Act of 1974 with respect to the assets of each employee benefit plan allocated to the separate account; or
6.10.1.3 the insurer has filed with the Commissioner and continues to file annually the following information and statements concerning the proposed adviser:
6.10.1.3.1 the name and form of organization, state of organization, and its principal place of business;
6.10.1.3.2 the names and addresses of its partners, officers, directors, and persons performing similar functions or, if such an investment advisor be an individual, of such individual;
6.10.1.3.3 a written Standard of Conduct complying in substance with the requirements of section 6.1.3 which has been adopted by the investment adviser and is applicable to the investment adviser, its officers, directors, and affiliates;
6.10.1.3.4 a statement provided by the proposed adviser as to whether the adviser or any person associated therewith:
6.10.1.3.4.1 has been convicted within ten years of any felony or misdemeanor arising out of such person's conduct as an employee, salesman, officer or director of an insurance company, a banker, an insurance agent, a securities broker, or an investment adviser involving embezzlement, fraudulent conversion, or misappropriation of funds or securities, or involving the violation of Sections 1341, 1342, or 1343 of Title 18 of United States Code;
6.10.1.3.4.2 has been permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, or dealer, or as an affiliated person or as an employee of any investment company, bank, or insurance company, or from engaging in or containing any conduct or practice in connection with any such activity;
6.10.1.3.4.3 has been found by federal or state regulatory authorities to have willfully violated or have acknowledged willful violation of any provision of federal or state securities laws or state insurance laws or of any rule or regulation under any such laws; or
6.10.1.3.4.4 has been censured, denied an investment adviser registration, had a registration as an investment adviser revoked or suspended, or been barred or suspended from being associated with an investment adviser by order of federal or state regulatory authorities; and
6.10.1.3.5 such investment advisory contract shall be in writing and provide that it may be terminated by the insurer without penalty to the insurer or the separate account upon no more than sixty days' written notice to the investment adviser.
6.10.1.3.6 The Commissioner may, after notice and opportunity for hearing, by order require such investment advisory contract to be terminated if he deems continued operation thereunder to be hazardous to the public or the insurer's policyholders.
7.0 Information Furnished to Applicants
7.1 An insurer delivering or issuing for delivery in this state any variable life insurance policies shall deliver to the applicant for the policy, and obtain a written acknowledgment of receipt from such applicant coincident with or prior to the execution of the application, the following information. The requirements of section 6.0 shall be deemed to have been satisfied to the extent that a disclosure containing information required by section 6.0 is delivered, either in the form of (1) a prospectus included in the requirements of the Securities Act of 1933 and which was declared effective by the Securities and Exchange commission; or (2) all information and reports required by the Employee Retirement Income Security Act of 1974 if the policies are exempted from the registration requirements of the Securities Act of 1933 pursuant to section 3(a)(2) thereof.
7.1.1 a summary explanation, in non-technical terms, of the principal features of the policy, including a description of the manner in which the variable benefits will reflect the investment experience of the separate account and the factors which affect such variation. Such explanation must include notices of the provision required by sections 4.3.1.1.5 and 4.3.3.4;
7.1.2 a statement of the investment policy of the separate account, including:
7.1.2.1 a description of the investment objectives intended for the separate account and the principal types of investments intended to be made; and
7.1.2.2 any restriction or limitations on the manner in which the operations of the separate account are intended to be conducted.
7.1.2.3 a statement of the net investment return of the separate account for each of the last ten years or such lesser period as the separate account has been in existence;
7.1.2.4 a statement of the charges levied against the separate account during the previous years;
7.1.2.5 a summary of the method to be used in valuing assets held by the separate account;
7.1.2.6 a summary of the federal income tax aspects of the policy applicable to the insured, the policyholder, and the beneficiary;
7.1.2.7 illustrations of benefits payable under the variable life insurance contract. Such illustrations shall be prepared by the insurer and shall not include projections of past investment experience into the future or attempted predictions of future investment experience, provided that nothing contained herein prohibits use of hypothetical assumed rates of return to illustrate possible levels of benefits if it is made clear that such assumed rates are hypothetical only.
8.0 Applications
8.1 The application for a variable life insurance policy shall contain:
8.2 a prominent statement that the death benefit may be variable or fixed under specified conditions;
8.3 a prominent statement that cash values may increase or decrease in accordance with the experience of the separate account (subject to any specified minimum guarantees);
8.4 questions designed to elicit information which enables the insurer to determine the suitability of variable life insurance for the applicant.
9.0 Report to Policyholders
9.1 Any insurer delivering or issuing for delivery in this state any variable life insurance policies shall mail to each variable life insurance policyholder at his or her last known address the following reports:
9.1.1 Within thirty days after each anniversary of the policy, a statement or statements of the cash surrender value, death benefit, any partial withdrawal or policy loan, any interest charge, any optional payments allowed pursuant to section 4.3.4 under the policy computed as of the policy anniversary date. Provided, however, that such statement may be furnished within thirty days after a specified date in each policy year so long as the information contained therein is computed as of a date not more than sixty days prior to the mailing of such notice. This statement shall state that, in accordance with the investment experience of the separate account, the cash values and the variable death benefit may increase or decrease, and shall prominently identify any value described therein which may be recomputed prior to the next statement required by this section 9.0. If the policy guarantees that the variable death benefit on the next policy anniversary date will not be less than the variable death benefit specified in such statement, the statement shall be modified to so indicate. For flexible premium policies, the report must contain a reconciliation of the charge since the previous report in cash value and cash surrender value, if different, because of payments made (less deduction for expense charges), withdrawals, investment experience, insurance charges and any other charges made against the cash value. In addition, the report must show the projected cash value and cash surrender value, if different, as of one year from the end of the period covered by the report assuming that: (i) planned periodic premiums, if any, are paid as scheduled; (ii) guaranteed costs of insurance are deducted; and (iii) the net investment return is equal to the guaranteed rate or, in the absence of a guaranteed rate, is not greater than zero. If the projected value is less than zero, a warning message must be included that states that the policy may be in danger of terminating without value in the next 12 months unless additional premium is paid.
9.1.2 Annually, a statement or statements including:
9.1.2.1 a summary of the financial statement of the separate account based on the annual statement last filed with the Commissioner;
9.1.2.2 the net investment return of the separate account for the last year and, for each year after the first, a comparison of the investment rate of the separate account during the last year with the investment rate during prior years, up to a total of not less than five years when available;
9.1.2.3 a list of investments held by the separate account as of a date not earlier than the end of the last year for which an annual statement was filed with the Commissioner;
9.1.2.4 any charges levied against the separate account during the previous years;
9.1.2.5 a statement of any change, since the last report, in the investment objective and orientation of the separate account, in any investment restriction or material quantitative or qualitative investment requirement applicable to the separate account or in the investment adviser of the separate account.
9.1.3 For flexible premium policies, a report must be sent to the policyholder if the amounts available under the policy on any policy processing day to pay the charges authorized by the policy are less than the amount necessary to keep the policy in force until the next following policy processing day. The report must indicate the minimum payment required under the terms of the policy to keep it in force and the length of the grace period for payment of such amount.
10.0 Foreign Companies
If the law or regulation in the place of domicile of a foreign company provides a degree of protection to the policyholders and the public which is substantially similar to that provided by these regulations, the Commissioner to the extent deemed appropriate by him in his discretion, may consider compliance with such law or regulation as compliance with these regulations.
11.0 Qualification of Agents for the Sale of Variable Life Insurance
11.1 Qualification to Sell Variable Life Insurance
11.1.1 No person may sell or offer for sale in this state any variable life insurance policy unless such person holds a Delaware insurance license (either resident or nonresident), valid for the line of variable annuity (18 Del.C. §1707), and a valid agent's appointment to represent an admitted insurer (18 Del.C. §1715).
11.1.2 The Commissioner shall issue the variable annuity authority to agents who have successfully completed the life agent's license examination, or who have otherwise qualified for an agent's license for the lines of life insurance, and who present evidence of a valid NASD license (Series 6 or 7).
11.2 Reports of Disciplinary Actions:
11.2.1 Any person qualified in this state under this Article to sell or offer to sell variable life insurance shall immediately report to the Commissioner:
11.2.1.1 any suspension or revocation of his agent's license in any other state or territory of the United States;
11.2.1.2 the imposition of any disciplinary sanction, including suspension or expulsion from membership, suspension, or revocation of or denial of registration, imposed upon him by any national securities exchange, or national securities association, or any federal, state, or territorial agency with jurisdiction over securities or variable life insurance;
11.2.1.3 any judgment or injunction entered against him on the basis of conduct deemed to have involved fraud, deceit, misrepresentation, or violation of any insurance or securities law or regulation.
11.3 Refusal to Qualify Agent to Sell Variable Life Insurance:
11.3.1 Suspension, Revocation, or Nonrenewal of Qualification: The Commissioner may reject any application or suspend or revoke or refuse to renew any agent's qualification under this section 11.0 to sell or offer to sell variable life insurance upon any ground that would bar such applicant or such agent from being licensed to sell other life insurance contracts in this state. The rules governing any proceeding relating to the suspension or revocation of any agent's license shall also govern any proceeding for suspension or revocation of an agent's qualification to sell or offer to sell variable life insurance.
12.0 Separability Article
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
13.0 Effective Date
This regulation shall be effective June 1, 1983, except that insurers previously qualified to conduct variable life insurance transactions in Delaware may defer amending their Delaware Certificate of Authority, as provided in section 3.1.1.1.2 of this regulation until December 1, 1983. All other provisions of this regulation shall apply to such insurers.
1206 Mixed-gender Mortality Tables [Formerly Regulation 48]
18 Del. Admin. Code § 1206 Mixed-gender Mortality Tables [Formerly Regulation 48]
1206 Mixed-gender Mortality Tables [Formerly Regulation 48]
1.0 Authority
This Regulation is promulgated by the Department of Insurance pursuant to 18 Del.C. §2929.
2.0 Purpose
The purpose of this Regulation is to adopt the NAIC Model Regulation which permits individual life insurance policies to provide the same cash surrender values and paid-up nonforfeiture benefits to both men and women. No change in minimum valuation standards is implied by this Regulation.
3.0 Definitions
3.1 As used in this Regulation
"1980 CSO Table, with or without Ten-Year Select Mortality Factors" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law and Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioners' 1980 Standard Ordinary Mortality Table, with or without Ten-Year Select Mortality Factors.
"1980 CSO Table (M), with or without Ten-Year Select Mortality Factors" means that mortality table consisting of the rates of mortality for male lives from the 1980 CSO Table, with or without Ten-Year Select Mortality Factors.
"1980 CSO Table (F), with or without Ten-Year Select Mortality Factors" means that mortality table consisting of the rates of mortality for female lives from the 1980 CSO Table, with or without Ten-Year Select Mortality Factors.
"1980 CET Table" means that mortality table consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law and Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioners' 1980 Extended Term Insurance Table.
"1980 CET Table (M)" means that mortality table consisting of the rates of mortality for male lives from the 1980 CET Table.
"1980 CET Table (F)" means that mortality table consisting of the rates of mortality for female lives from the 1980 CET Table.
4.0 Rule
4.1 For any policy of insurance on the life of either a male or female insured delivered or issued for delivery in this State after the operative date of 18 Del.C. §2929(g)(11) for that policy form,
4.1.1 a mortality table which is a blend of the 1980 CSO Table (M) and the 1980 CSO Table (F) with or without Ten-Year Select Mortality Factors may at the option of the company be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors, and
4.1.2 a mortality table which is of the same blend as used in (i) but applied to form a blend of the 1980 CET Table (M) and the 1980 CET Table (F) may at the option of the company be substituted for the 1980 CET Table for use in determining minimum cash surrender values and amounts of paidup nonforfeiture benefits.
4.1.3 The following tables will be considered as the basis for acceptable tables:
4.1.3.1 100% Male 0% Female for tables to be designated as the "1980 CSO-A" and "1980 CET-A" tables.
4.1.3.2 80% Male 20% Female for tables to be designated as the "1980 CSO-B" and "1980 CET-B" tables.
4.1.3.3 60% Male 40% Female for tables to be designated as the "1980 CSO-C" and "1980 CET-C" tables.
4.1.3.4 50% Male 50% Female for tables to be designated as the "1980 CSO-D" and "1980 CET-D" tables.
4.1.3.5 40% Male 60% Female for tables to be designated as the "1980 CSO-E" and "1980 CET-E" tables.
4.1.3.6 20% Male 80% Female for tables to be designated as the "1980 CSO-F" and "1980 CET-F" tables.
4.1.3.7 0% Male 100% Female for tables to be designated as the "1980 CSO-G" and "1980 CET-G" tables.
4.1.4 Tables A and G (4.1.3.1 and 4.1.3.7) are not to be used with respect to policies issued on or after January 1, 1985, except where the proportion of persons insured is anticipated to be 90% or more of one sex or the other or except for certain policies converted from group insurance. Such group conversions issued on or after January 1, 1986 must use Mortality Tables based on the blend of lives by sex expected for such policies if such group conversions are considered as extensions of the Norris decision. This consideration has not been clearly defined by court or legislative action in all jurisdictions.
4.1.5 The values for the tables are as published in Appendix I of the NAIC Model Regulation, Mixed-Gender Mortality Tables, December 1983, and are adopted by reference as is the memorandum which is Appendix 11 of that document.
5.0 Unfair Discrimination
It shall not be a violation of 18 Del.C. §2304(13) for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.
6.0 Separability
If any provision of this Regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the Regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
7.0 Effective Date
7.1 The effective date of this Regulation is December 30, 1984.
7.2 Notwithstanding the above, insurers obligated to comply with the Norris decision (Norris v. Arizona Governing Committee, August 1, 1983) may use the blended tables described in Section 4 for affected business.
7.3 Insurers may use this Regulation for the preparation of the annual statement for the year ending December 31, 1984 and thereafter.
1988 amendment: In the introductory paragraph to §4 of Regulation No. 48, Rule, following the words "in this State" the words "before January 1, 1989 and" were deleted, effective 30 days after July 27, 1988.
1207 Smoker/Nonsmoker Mortality Tables [Formerly Regulation 49]
18 Del. Admin. Code § 1207 Smoker/Nonsmoker Mortality Tables [Formerly Regulation 49]
1207 Smoker/Nonsmoker Mortality Tables [Formerly Regulation 49]
1.0 Authority
This Regulation is promulgated by the Department of Insurance pursuant to 18 Del.C. §2929(g)(8)f.
2.0 Purpose
The purpose of this Regulation is to adopt the NAIC Model Regulation which permits the use of mortality tables that reflect differences in mortality between smokers and nonsmokers in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits for plans of insurance with separate premium rates for smokers and nonsmokers.
3.0 Definitions
3.1 As used in this Regulation:
"1980 CSO Table, with or without Ten-Year Select Mortality Factor" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard Valuation Law and Standard Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioners' 1980 Standard Ordinary Mortality Table, with or without Ten-Year Select Mortality Factors. The same select factors will be used for both smokers and nonsmokers tables.
"1980 CET Table" means that mortality table consisting of separate rates of mortality for male and female lives, developed by the Society of Actuaries Committee to Recommend New Mortality Tables for Valuation of Standard Individual Ordinary Life Insurance, incorporated in the 1980 NAIC Amendments to the Model Standard and Nonforfeiture Law for Life Insurance, and referred to in those models as the Commissioners' 1980 Extended Term Insurance Table.
"1958 CSO Table" means that mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Nonforfeiture Law for Life Insurance, and referred to in that model as the Commissioners' 1958 Standard Ordinary Mortality Table.
"1958 CET Table" means that mortality table developed by the Society of Actuaries Special Committee on New Mortality Tables, incorporated in the NAIC Model Standard Nonforfeiture Law for Life Insurance, and referred to in that model as the Commissioners' 1958 Extended Term Insurance Table.
"Composite mortality tables" refers to the mortality tables defined in 3.0 as they were originally published with rates of mortality that do not distinguish between smokers and nonsmokers.
"Smoker and nonsmoker mortality tables" refers to the mortality tables with separate rates of mortality for smokers and nonsmokers derived from the tables defined in 3.1 through 3.4 of this section which were developed by the Society of Actuaries Task Force on Smoker/Nonsmoker Mortality and the California Insurance Department staff and recommended on the NAIC Technical Staff Actuarial Group.
4.0 Alternate Tables
4.1 For any policy of insurance delivered or issued for delivery in this State after the operative date of 18 Del.C. §2929(g)(11) for that policy form and before January 1, 1989, at the option of the company and subject to the conditions stated in section 5.0 of this Regulation.
4.1.1 The 1958 CSO Smoker and Nonsmoker Mortality Tables may be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors, and
4.1.2 The 1958 CET Smoker and Nonsmoker Mortality Tables may be substituted for the 1980 CET Table for use in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
4.1.3 Provided that for any category of insurance issued on female lives with minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits determined using the 1958 CSO or 1958 CET Smoker and Nonsmoker Mortality Tables, such minimum values may be calculated according to an age not more than six years younger than the actual age of the insured.
4.1.4 Provided further that the substitution of the 1958 CSO or 1958 CET Smoker and Nonsmoker Mortality Tables is available only if made for each policy of insurance on a policy form delivered or issued for delivery on or after the operative date for that policy form and before a date not later than January 1, 1989.
4.2 For any policy of insurance delivered or issued for delivery in this State after the operative date of 18 Del.C. §2929(g)(11) for that policy form, at the option of the company and subject to the conditions stated in section 5.0 of this Regulation,
4.2.1 The 1980 CSO Smoker and Nonsmoker Mortality Tables, with or without Ten-Year Select Mortality Factors, may be substituted for the 1980 CSO Table, with or without Ten-Year Select Mortality Factors, and
4.2.2 The 1980 CET Smoker and Nonsmoker Mortality Tables may be substituted for the 1980 CET Table for use in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
5.0 Conditions
5.1 For each plan of insurance with separate rates for smokers and nonsmokers an insurer may
5.1.1 use composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paidup nonforfeiture benefits,
5.1.2 use smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by 18 Del.C. §1113(g) and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits, or
5.1.3 use smoker and nonsmoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
6.0 Separability
If any provision of this Regulation or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
7.0 Effective Date
This Regulation shall be effective December 30, 1984. Insurers may use the alternate tables described in section 4.0 for any policies issued in calendar year 1984 and later in the preparation of the annual statement for the year ending December 31, 1984 and thereafter.
1208 New Annuity Mortality Table for Use in Determining Reserve Liabilities for Annuities
18 Del. Admin. Code § 1208-1.0 Authority
This rule is promulgated by the Commissioner of Insurance pursuant to 18 Del.C. §1113 and 29 Del.C. Ch. 101 (Administrative Procedures Act).
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-2.0 Purpose
The purpose of this regulation is to recognize the following mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts: the 1983 Table "a" and 1983 Group Annuity Mortality (GAM) Table, the Annuity 2000 Mortality Table, the 2012 Individual Annuity Reserving (2012 IAR) Table, and the 1994 Group Annuity Reserving (1994 GAR) Table.
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-3.0 Definitions
3.1 As used in this regulation:
"1983 GAM Table" means that mortality table developed by the Society of Actuaries Committee on Annuities and adopted as a recognized mortality table for annuities in December 1983 by the National Association of Insurance Commissioners.
"1983 Table 'a'" means that mortality table developed by the Society of Actuaries Committee to Recommend a New Mortality Basis for Individual Annuity Valuation and adopted as a recognized mortality table for annuities in June 1982 by the National Association of Insurance Commissioners.
"1994 GAR Table" means that mortality table developed by the Society of Actuaries Group Annuity Valuation Table Task Force and adopted as a recognized mortality table in December 1996 by the National Association of Insurance Commissioners.
“2012 IAR Table” means that Generational mortality table developed by the Society of Actuaries Committee on Life Insurance Research and containing rates, qx2012+n, derived from a combination of the 2012 IAM Period Table and Projection Scale G2, using the methodology stated in section 5.0.
“2012 Individual Annuity Mortality Period Life (2012 IAM Period) Table” means the Period table containing loaded mortality rates for calendar year 2012. This table contains rates, qx2012, developed by the Society of Actuaries Committee on Life Insurance Research and is shown in Appendices 1-2.
"Annuity 2000 Mortality Table" means that mortality table developed by the Society of Actuaries Committee on Life Insurance Research and adopted as a recognized mortality table for annuities in December 1996 by the National Association of Insurance Commissioners.
“Generational mortality table” means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a Period table and a projection scale containing rates of mortality improvement.
“Period table” means a table of mortality rates applicable to a given calendar year (the Period).
“Projection Scale G2 (Scale G2)” is a table of annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012. This table was developed by the Society of Actuaries Committee on Life Insurance Research and is shown in Appendices 3-4.
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-4.0 Individual Annuity or Pure Endowment Contracts
4.1 Except as provided in Subsections 4.2 and 4.3 of this section, the 1983 Table "a" is recognized and approved as an individual annuity mortality table for valuation and, at the option of the company, may be used for purposes of determining the minimum standard for valuation for any individual annuity or pure endowment contract issued on or after July 8, 1980.
4.2 Except as provided in Subsection 4.3 of this section, either the 1983 Table "a" or the Annuity 2000 Mortality Table shall be used for determining the minimum standard valuation for any individual annuity or pure endowment contract issued on or after January 1, 1987.
4.3 Except as provided in Subsections 4.4 and 4.5 of this section, the Annuity 2000 Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2001.
4.4 Except as provided in Subsection 4.5 of this section, the 2012 IAR Mortality Table shall be used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015.
4.5 The 1983 Table "a" without projection is to be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after January 1, 2001, solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from:
4.5.1 Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions;
4.5.2 Settlements involving similar actions such as worker's compensation claims; or
4.5.3 Settlements of long term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-5.0 Application of the 2012 IAR Mortality Table
In using the 2012 IAR Mortality Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:
The resulting qx 2012+n shall be rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. Also, the rounding shall occur according to the formula above, starting at the 2012 period table rate.
For example, for a male age 30, qx2012= 0.741.
qx 2013= 0.741 * (1 – 0.010) ^ 1 = 0.73359, which is rounded to 0.734.
qx 2014= 0.741 * (1 – 0.010) ^ 2 = 0.7262541, which is rounded to 0.726.
A method leading to incorrect rounding would be to calculate qx 2014 as qx 2013 * (1 – 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx 2013 to calculate qx 2014
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-6.0 Group Annuity or Pure Endowment Contracts
6.1 Except as provided in Subsections 6.2 and 6.3 of this section, the 1983 GAM Table, the 1983 Table "a" and the 1994 GAR Table are recognized and approved as group annuity mortality tables for valuation and, at the option of the company, any one of these tables may be used for purposes of valuation for any annuity or pure endowment purchased on or after July 8, 1980 under a group annuity or pure endowment contract.
6.2 Except as provided in Subsection 6.3 of this section, either the 1983 GAM Table or the 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 1987 under a group annuity or pure endowment contract.
6.3 The 1994 GAR Table shall be used for determining the minimum standard of valuation for any annuity or pure endowment purchased on or after January 1, 2001 under a group annuity or pure endowment contract.
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-7.0 Application of the 1994 GAR Table
In using the 1994 GAR Table, the mortality rate for a person age x in year (1994 + n) is calculated as follows:
qx 1994+n = qx 1994 (1 - AAx ) n
where the qx 1994 and AAxs are as specified in the 1994 GAR Table.
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-8.0 Separability
If any provision of this Regulation or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
18 Del. Admin. Code § 1208-9.0 Effective Date
This Regulation shall become effective ten (10) days after being published as a final regulation and shall be used for the minimum reserve valuation for individual annuity and pure endowment contracts issued on or after January 1, 2015.
APPENDIX 1
2012 IAM Period Table
Female, Age Nearest Birthday
APPENDIX 2
2012 IAM Period Table
Male, Age Nearest Birthday
APPENDIX 3
Projection Scale G2
Female, Age Nearest Birthday
APPENDIX 4
Projection Scale G2
Male, Age Nearest Birthday
History
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 14 DE Reg. 49 (07/01/10)
- 19 DE Reg. 526 (12/01/15)
- 19 DE Reg. 526 (12/01/15)
1209 Life and Health Submissions Regarding Acquired Immunodeficiency Syndrome (AIDS) [Formerly Regulation 56]
18 Del. Admin. Code § 1209 Life and Health Submissions Regarding Acquired Immunodeficiency Syndrome (AIDS) [Formerly Regulation 56]
1209 Life and Health Submissions Regarding Acquired Immunodeficiency Syndrome (AIDS) [Formerly Regulation 56]
1.0 Authority
This regulation is promulgated in accordance with 18 Del.C. §§311 and 2714 and 29 Del.C. Ch. 101.
2.0 Purpose
The purpose of this regulation is to establish guidelines to prevent discrimination against prospective insureds by life and health insurers when phrasing policy questions or requiring tests relating to Acquired Immunodeficiency Syndrome (“AIDS”) or Human Immunodeficiency Virus (“HIV”).
3.0 Testing and Filings Allowed
3.1 Whenever an applicant is requested to take an AIDS-related test in connection with an application for insurance, the use of such a test must be revealed to the applicant and his or her written consent obtained. The administration of the test must meet the test protocol as established by the Delaware Division of Public Health. (Attachment 1) The results of testing must be maintained in confidentiality between the insured and insurer. The insurer may ask the applicant to designate whether the applicant wants the results forwarded to (1) applicant only, (2) applicant’s personal physician, (3) other (list) or (4) no one.
3.2 Insurers are permitted to ask diagnostic questions. The Department will permit diagnostic questions such as, but not limited to, the following examples:
3.2.1 “Have you ever been treated for or diagnosed as having Acquired Immunodeficiency Syndrome (AIDS) or Human Immunodeficiency Virus (“HIV”)?
3.2.2 “Have you ever been told you have Acquired Immunodeficiency Syndrome (AIDS) or Human Immunodeficiency Virus (HIV)?“
Insurers are also permitted to ask predictive questions (i.e., have you tested positive on an AIDS-related blood test) but only if predictive questions are asked by the insurer pertaining to other major life threatening diseases.
Questions which are vague, subjective, unfairly discriminatory, overly technical or ask for the applicant’s opinion are prohibited.
3.3 Any underwriting use of AIDS-related test information or results, whether acquired by questioning the applicant or by tests administered in accordance with this Regulation, must be strictly limited to the test’s predictive value, and used in a balanced way relative to predictive information relating to other life threatening diseases.
3.4 The Commissioner will disapprove a policy form filing which he determines violates the standards set forth in sections 3.1, 3.2, and 3.3.
Willful disregard of Delaware Insurance Law may subject an insurer to all administrative remedies provided in accordance with 18 Del.C. §§106 and 334.
4.0 Effective Date
This regulation shall become effective February 1, 1998.
(ATTACHMENT NO. 1)
Test Protocol As Established By The Delaware Department Of Public Health
A medically significant and sufficiently reliable test or series of tests for the presence of HIV, antigen or nonantigenic products of HIV or an antibody to HIV includes one of more of the following.
3 DE Reg. 288 (8/1/99)
a. A single specimen which is repeatedly reactive using any Food and Drug Administration (FDA) licensed enzyme immunoassay (EIA) HIV antibody test and confirmed positive using an FDA licensed HIV antibody confirmatory test (e.g., Western blot, immunofluorescence assay).
b. A single specimen which is repeatedly reactive using an FDA licensed HIV antigen test and an FDA licensed EIA HIV antibody test. Specimens which are repeatedly reactive to an FDA licensed HIV antigen test shall be confirmed through a neutraliza-tion assay. Specimens which are repeatedly reactive to an FDA licensed EIA HIV antibody test shall be tested with an FDA licensed HIV antibody confirmatory test.
c. A single specimen which is tested for the presence of HIV using a molecular amplification method for the detection of HIV nucleic acids (e.g., polymerase chain reaction, RNA viral load) consistent with the National Committee for Clinical Laboratory Standards.
d. A single specimen which is tested for the presence of HIV using viral culture methods.
1210 Life Insurance Illustrations [Formerly Regulation 62]
18 Del. Admin. Code § 1210 Life Insurance Illustrations [Formerly Regulation 62]
1210 Life Insurance Illustrations [Formerly Regulation 62]
1.0 Purpose
The purpose of this regulation is to provide rules for life insurance policy illustrations that will protect consumers and foster consumer education. The regulation provides illustration formats, prescribes standards to be followed when illustrations are used, and specifies the disclosures that are required in connection with illustrations. The goals of this regulation are to ensure that illustrations do not mislead purchasers of life insurance and to make illustrations more understandable. Insurers will, as far as possible, eliminate the use of footnotes and caveats and define terms used in the illustration in language that would be understood by a typical person within the segment of the public to which the illustration is directed.
2.0 Authority
This regulation is issued based upon the authority granted the commissioner under 18 Del.C. §§311 and 2304.
3.0 Applicability and Scope
3.1 This regulation applies to all group and individual life insurance policies and certificates except:
3.1.1 Variable life insurance;
3.1.2 Individual and group annuity contracts;
3.1.3 Credit life insurance; or
3.1.4 Life insurance policies with no illustrated death benefits on any individual exceeding $10,000.
4.0 Definitions
4.1 For Purpose of this Regulation:
"Actuarial Standards Board" means the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice.
"Contract premium" means the gross premium that is required to be paid under a fixed premium policy, including the premium for a rider for which benefits are shown in the illustration.
"Currently payable scale" means a scale of non-guaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next ninety-five (95) days.
"Disciplined current scale" means a scale of non-guaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer. Further guidance in determining the disciplined current scale as contained in standards established by the Actuarial Standards Board may be relied upon if the standards:
• Are consistent with all provisions of this regulation;
• Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred;
• Do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and
• Do not permit assumed expenses to be less than minimum assumed expenses.
"Generic name" means a short title descriptive of the policy being illustrated such as "whole life," "term life," or "flexible premium adjustable life."
“Guaranteed elements" means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and determined at issue.
"Non-guaranteed elements" means the premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.
"Illustrated scale" means a scale of non-guaranteed elements currently being illustrated that is not more favorable to the policy owner than the lesser of:
• The disciplined current scale; or
• The currently payable scale.
"Illustration" means a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years and that is one of the three (3) types defined below:
• “Basic illustration" means a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and non-guaranteed elements.
• “Supplemental illustration" means an illustration furnished in addition to a basic illustration that meets the applicable requirements of this regulation, and that may be presented in a format differing from the basic illustration, but may only depict a scale of non-guaranteed elements that is permitted in a basic illustration.
• "In force illustration" means an illustration furnished at any time after the policy that it depicts has been in force for one year or more.
"Illustration actuary" means an actuary meeting the requirements of Section~11 who certifies to illustrations based on the standard of practice promulgated by the Actuarial Standards Board.
"Lapse-supported illustration" means an illustration of a policy form failing the test of self-supporting as defined in this regulation, under a modified persistency rate assumption using persistency rates underlying the disciplined current scale for the first five~(5)~years and 100~percent policy persistency thereafter.
"Minimum assumed expenses" means the minimum expenses that may be used in the calculation of the disciplined current scale for a policy form. The insurer may choose to designate each year the method of determining assumed expenses for all policy forms from the following:
• Fully allocated expenses;
• Marginal expenses; and
• A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the National Association of Insurance Commissioners.
• Marginal expenses may be used only if greater than a generally recognized expense table. If no generally recognized expense table is approved, fully allocated expenses must be used.
"Non-term group life" means a group policy or individual policies of life insurance issued to members of an employer group or other permitted group where:
• Every plan of coverage was selected by the employer or other group representative;
• Some portion of the premium is paid by the group or through payroll deduction; and
• Group underwriting or simplified underwriting is used.
"Policy owner" means the owner named in the policy or the certificate holder in the case of a group policy.
“Premium outlay" means the amount of premium assumed to be paid by the policy owner or other premium payer out-of-pocket.
"Self-supporting illustration" means an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the fifteenth policy anniversary or the twentieth policy anniversary for second-or-later-to-die policies (or upon policy expiration if sooner), the accumulated value of all policy cash flows equals or exceeds the total policy owner value available. For this purpose, policy owner value will include cash surrender values and any other illustrated benefit amounts available at the policy owner's election.
5.0 Policies to be Illustrated
5.1 Each insurer marketing policies to which this regulation is applicable shall notify the commissioner whether a policy form is to be marketed with or without an illustration. For all policy forms being actively marketed on the effective date of this regulation, the insurer shall identify in writing those forms and whether or not an illustration will be used with them. For policy forms filed after the effective date of this regulation, the identification shall be made at the time of filing. Any previous identification may be changed by notice to the commissioner.
5.2 If the insurer identifies a policy form as one to be marketed without an illustration, any use of an illustration for any policy using that form prior to the first policy anniversary is prohibited.
5.3 If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with this regulation is required, except that a basic illustration need not be provided to individual members of a group or to individuals insured under multiple lives coverage issued to a single applicant unless the coverage is marketed to these individuals. The illustration furnished an applicant for a group life insurance policy or policies issued to a single applicant on multiple lives may be either an individual or composite illustration representative of the coverage on the lives of members of the group or the multiple lives covered.
5.4 Potential enrollees of non-term group life subject to this regulation shall be furnished a quotation with the enrollment materials. The quotation shall show potential policy values for sample ages and policy years on a guaranteed and non-guaranteed basis appropriate to the group and the coverage. This quotation shall not be considered an illustration for purposes of this regulation, but all information shall be consistent with the illustrated scale.
5.4.1 A basic illustration shall be provided at delivery of the certificate to enrollees for non-term group life who enroll for more than the minimum premium necessary to provide pure death benefit protection. In addition, the insurer shall make a basic illustration available to any non-term group life enrollee who requests it.
6.0 General Rules and Prohibitions
6.1 An illustration used in the sale of a life insurance policy shall satisfy the applicable requirements of this regulation, be clearly labeled "life insurance illustration" and contain the following basic information:
6.1.1 Name of insurer;
6.1.2 Name and business address of producer or insurer's authorized representative, if any;
6.1.3 Name, age and sex of proposed insured, except where a composite illustration is permitted under this regulation.
6.1.4 Underwriting or rating classification upon which the illustration is based;
6.1.5 Generic name of policy, the company product name, if different, and form number;
6.1.6 Initial death benefit; and
6.1.7 Dividend option election or application of non-guaranteed elements, if applicable.
6.2 When using an illustration in the sale of a life insurance policy, an insurer or its producers or other authorized representatives shall not:
6.2.1 Represent the policy as anything other than a life insurance policy;
6.2.2 Use or describe non-guaranteed elements in a manner that is misleading or has the capacity or tendency to mislead;
6.2.3 State or imply that the payment or amount of non-guaranteed elements is guaranteed;
6.2.4 Use an illustration that does not comply with the requirements of this regulation;
6.2.5 Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated.
6.2.6 Provide an applicant with an incomplete illustration.
6.2.7 Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits unless that is the fact;
6.2.8 Use the term "vanish" or "vanishing premium" or a similar term that implies the policy becomes paid up, to describe a plan for using non-guaranteed elements to pay a portion of future premiums;
6.2.9 Except for policies that can never develop nonforfeiture values, use an illustration that is "lapse-supported"; or
6.2.10 Use an illustration that is not "self-supporting".
6.3 If an interest rate used to determine the illustrated non-guaranteed elements is shown, it shall not be greater than the earned interest rate underlying the disciplined current scale.
7.0 Standards for Basic Illustrations
7.1 Format. A basic illustration shall conform with the following requirements:
7.1.1 The illustration shall be labeled with the date on which it was prepared.
7.1.2 Each page, including any explanatory notes or pages, shall be numbered and show its relationship to the total number of pages in the illustration (e.g., the fourth page of a seven-page illustration shall be labeled "page 4 of 7 pages").
7.1.3 The assumed dates of payment receipt and benefit pay-out within a policy year shall be clearly identified.
7.1.4 If the age of the proposed insured is shown as a component of the tabular detail, it shall be issued age plus the numbers of years the policy is assumed to have been in force.
7.1.5 The assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments shall be identified as premium outlay.
7.1.6 Guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed.
7.1.7 If the illustration shows any non-guaranteed elements, they cannot be based on a scale more favorable to the policy owner than the insurer's illustrated scale at any duration. These elements shall be clearly labeled non-guaranteed.
7.1.8 The guaranteed elements, if any, shall be shown before corresponding non-guaranteed elements and shall be specifically referred to on any page of an illustration that shows or describes only the non-guaranteed elements (e.g., "see page one for guaranteed elements").
7.1.9 The account or accumulation value of a policy, if shown, shall be identified by the name this value is given in the policy being illustrated and shown in the close proximity to the corresponding value available upon surrender.
7.1.10 The value available upon surrender shall be identified by the name this value is given in the policy being illustrated and shall be the amount available to the policy owner in a lump sum after deduction of surrender charges, policy loans and policy loan interest, as applicable.
7.1.11 Illustrations may show policy benefits and values in graphic or chart form in addition to the tabular form.
7.1.12 Any illustration of non-guaranteed elements shall be accompanied by a statement indicating that:
7.1.12.1 The benefits and values are not guaranteed;
7.1.12.2 The assumptions on which they are based are subject to change by the insurer; and
7.1.12.3 Actual results may be more or less favorable.
7.1.13 If the illustration shows that the premium payer may have the option to allow policy charges to be paid using non-guaranteed values, the illustration must clearly disclose that a charge continues to be required and that, depending on actual results, the premium payer may need to continue or resume premium outlays. Similar disclosure shall be made for premium outlay of lesser amounts or shorter durations than the contract premium. If a contract premium is due, the premium outlay display shall not be left blank or show zero unless accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up.
7.1.14 If the applicant plans to use dividends or policy values, guaranteed or non-guaranteed, to pay all or a portion of the contract premium or policy charges, or for any other purpose, the illustration may reflect those plans and the impact on future policy benefits and values.
7.2 Narrative Summary. A basic illustration shall include the following:
7.2.1 A brief description of the policy being illustrated, including a statement that is a life insurance policy;
7.2.2 A brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration shall show the premium outlay that must be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of the Internal Revenue Code;
7.2.3 A brief description of any policy features, riders or options, guaranteed or non-guaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy;
7.2.4 Identification and a brief definition of column headings and key terms used in the illustration; and
7.2.5 A statement containing in substance the following: "This illustration assumes that the currently illustrated non-guaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown".
7.3 Numeric Summary.
7.3.1 Following the narrative summary, a basic illustration shall include a numeric summary of the death benefits and values and the premium outlay and contract premium, as applicable. For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years five(5), ten(10) and twenty(20) and at age70, if applicable, on the three bases shown below.
For multiple life policies the summary shall show policy years five(5), ten(10), twenty(20) and thirty(30).
7.3.1.1 Policy guarantees;
7.3.1.2 Insurer's illustrated scale;
7.3.1.3 Insurer's illustrated scale used, but with the non-guaranteed elements reduced as follows:
7.3.1.3.1 Dividends at fifty percent (50%) of the dividends contained in the illustrated scale used;
7.3.1.3.2 Non-guaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used; and
7.3.1.3.3 All non-guaranteed charges, including but not limited to, term insurance charges, mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.
7.3.2 In addition, if coverage would cease prior to policy maturity or age100, the year in which coverage ceases shall be identified for each of the three(3) bases.
7.4 Statements. Statements substantially similar to the following shall be included on the same page as the numeric summary and signed by the applicant, or the policy owner in the case of an illustration provided at time of delivery, as required in this regulation.
7.4.1 A statement to be signed and dated by the applicant or policy owner reading as follows: "I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change and could be higher or lower. The agent has told me they are not guaranteed."
7.4.2 A statement to be signed and dated by the insurance producer or other authorized representative of the insurer reading as follows: "I certify that this illustration has been presented to the applicant and that I have explained that any non-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration."
7.5 Tabular Detail.
7.5.1 A basic illustration shall include the following for at least each policy year from one~(1) to ten~(10) and for every fifth policy year thereafter ending at age~100, policy maturity or final expiration; and except for term insurance beyond the 20th year, for any year in which the premium outlay and contract premium, if applicable, is to change:
7.5.1.1 The premium outlay and mode the applicant plans to pay and the contract premium, as applicable;
7.5.1.2 The corresponding guaranteed death benefit, as provided in the policy; and
7.5.1.3 The corresponding guaranteed value available upon surrender, as provided in the policy.
7.5.2 For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender shall correspond to the contract premium.
7.5.3 Non-guaranteed elements may be shown if described in the contract. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurer's current practice is to pay terminal dividends. If any non-guaranteed elements are shown, they must be shown at the same durations as the corresponding guaranteed elements, if any.
7.5.3.1 If no guaranteed benefit or value is available at any duration for which a non-guaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.
8.0 Standards for Supplemental Illustrations
8.1 A supplemental illustration may be provided so long as:
8.1.1 It is appended to, accompanied by or preceded by a basic illustration that complies with this regulation;
8.1.2 The non-guaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration;
8.1.3 It contains the same statement required of a basic illustration that non-guaranteed elements are not guaranteed; and
8.1.4 For a policy that has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration. For policies that do not require a contract premium, the premium outlay underlying the supplemental illustration shall be equal to the premium outlay shown in the basic illustration.
8.2 The supplemental illustration shall include a notice referring to the basic illustration for guaranteed elements and other important information.
9.0 Delivery of Illustration and Record Retention
9.1
9.1.1 If a basic illustration is used by an insurance producer or other authorized representative of the insurer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with this regulation, shall be submitted to the insurer at the time of policy application. A copy also shall be provided to the applicant.
9.1.2 If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued shall be sent with the policy. The revised illustration shall conform to the requirements of this regulation, shall be labeled "Revised Illustration" and shall be signed and dated by the applicant or policy owner and producer or other authorized representative of the insurer no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.
9.2
9.2.1 If no illustration is used by an insurance producer or other authorized representative in the sale of a life insurance policy or if the policy is applied for other than as illustrated, the producer or representative shall certify to that effect in writing on a form provided by the insurer. On the same form the applicant shall acknowledge that no illustration conforming to the policy applied for was provided and shall further acknowledge an understanding that an illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. This form shall be submitted to the insurer at the time of policy application.
9.2.2 If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.
9.3 If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it shall include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer.
The insurer's obligation under this subsection shall be satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort shall be deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.
9.4 A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used or that the policy was applied for other than illustrated, shall be retained by the insurer until three (3) years after the policy is no longer in force. A copy need not be retained if no policy is issued.
10.0 Annual Report; Notice to Policy Owners
10.1 In the case of a policy designated as one for which illustrations will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that shall contain at least the following information:
10.1.1 For universal life policies, the report shall include the following:
10.1.1.1 The beginning and end date of the current report period;
10.1.1.2 The policy value at the end of the previous report period and at the end of the current report period;
10.1.1.3 The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders);
10.1.1.4 The current death benefit at the end of the current report period on each life covered by the policy;
10.1.1.5 The net cash surrender value of the policy as of the end of the current report period;
10.1.1.6 The amount of outstanding loans, if any, as of the end of the current report period; and
10.1.1.7 For fixed premium policies:
10.1.1.7.1 If, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments, the policy's net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect shall be included in the report; or
10.1.1.8 For flexible premium policies:
10.1.1.8.1 If, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments, the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect shall be included in the report.
10.1.2 For all other policies, where applicable:
10.1.2.1 Current death benefit;
10.1.2.2 Annual contract premium;
10.1.2.3 Current cash surrender value;
10.1.2.4 Current dividend;
10.1.2.5 Application of current dividend; and
10.1.2.6 Amount of outstanding loan.
10.1.3 Insurers writing life insurance policies that do not build nonforfeiture values shall only be required to provide an annual report with respect to these policies for those years when a change has been made to nonguaranteed policy elements by the insurer.
10.2 If the annual report does not include an in force illustration, it shall contain the following notice displayed prominently: "IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy and make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling [insurer's phone number], writing to [insurer's name] at [insurer's address] or contacting your agent. If you do not receive a current illustration of your policy within 30~days from your request, you should contact your state insurance department." The insurer may vary the sequential order of the methods for obtaining an in force illustration.
10.3 Upon request of the policy owner, the insurer shall furnish an in force illustration of current and future benefits and values based on the insurer's present illustrated scale. This illustration shall comply with the requirements of sections 6.1, 6.2, 7.1 and 7.5. No signature or other acknowledgment of receipt of this illustration shall be required.
10.4 If an adverse change in non-guaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report shall contain a notice of that fact and the nature of the change prominently displayed.
11.0 Annual Certifications
11.1 The board of directors of each insurer shall appoint one or more illustration actuaries.
11.2 The illustration actuary shall certify that the disciplined current scale used in illustration is in conformity with the Actuarial Standard of Practice for Compliance with the NAIC Model Regulation on Life Insurance Illustrations promulgated by the Actuarial Standards Board, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of this regulation.
11.3 The illustration actuary shall:
11.3.1 Be a member of good standing of the American Academy of Actuaries;
11.3.2 Be familiar with the standard of practice regarding life insurance policy illustrations;
11.3.3 Not have been found by the commissioner, following appropriate notice and hearing to have:
11.3.3.1 Violated any provision of, or any obligation imposed by, the insurance law or other law in the course of his or her dealings as an illustration actuary;
11.3.3.2 Been found guilty of fraudulent or dishonest practices;
11.3.3.3 Demonstrated his or her incompetence, lack of cooperation or untrustworthiness to act as an illustration actuary; or
11.3.3.4 Resigned or been removed as an illustration actuary within the past five (5) years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards.
11.3.4 Not fail to notify the commissioner of any action taken by a commissioner of another state similar to that under section 11.3.3 above;
11.3.5 Disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous five (5) years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale.
11.3.5.1 If non-guaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies, this must be disclosed in the annual certification. If non-guaranteed elements illustrated for both new and in force policies are not consistent with the non-guaranteed elements actually being paid, charged or credited to the same or similar forms, this must be disclosed in the annual certification; and
11.3.6 Disclose in the annual certification the method used to allocate overhead expenses for all illustrations:
11.3.6.1 Fully allocated expenses;
11.3.6.2 Marginal expenses; or
11.3.7 A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the National Association of Insurance Commissioners.
11.4
11.4.1 The illustration actuary shall file a certification with the board and with the commissioner:
11.4.1.1 Annually for all policy forms for which illustrations are used; and
11.4.1.2 Before a new policy form is illustrated.
11.4.2 If an error in a previous certification is discovered, the illustration actuary shall notify the board of directors of the insurer and the commissioner promptly.
11.5 If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary shall notify the board of directors of the insurer and the commissioner promptly of his or her inability to certify.
11.6 A responsible officer of the insurer, other than the illustration actuary, shall certify annually;
11.6.1 That the illustration formats meet the requirements of this regulation and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary; and
11.6.2 That the company has provided its agents with information about the expense allocation method used by the company in its illustrations and disclosed as required in 11.3.5 of this section.
11.7 The annual certifications shall be provided to the commissioner each year by a date determined by the insurer.
11.8 If an insurer changes the illustration actuary responsible for all or a portion of the company's policy forms, the insurer shall notify the commissioner of that fact promptly and disclose the reason for the change.
12.0 Penalties
In addition to any other penalties provided by the laws of this state, an insurer or producer that violates a requirement of this regulation shall be guilty of a violation of 18 Del.C. Section.
13.0 Separability
If any provision of this regulation or its application to any person or circumstance is for any reason held to be invalid by any court of law, the remainder of the regulation and its application to other persons or circumstances shall not be affected.
14.0 Effective Date
This regulation shall become effective July 1, 1997, and shall apply to policies sold on or after the effective date.
1211 Wellness Plan Regulation Guidelines for Corporate Life Insurance [Formerly Regulation 64]
18 Del. Admin. Code § 1211 Wellness Plan Regulation Guidelines for Corporate Life Insurance [Formerly Regulation 64]
1211 Wellness Plan Regulation Guidelines for Corporate Life Insurance [Formerly Regulation 64]
1.0 Authority
This Regulation is adopted in accordance with 18 Del.C. §314, 18 Del.C. §2704, and 18 Del.C. §2708, and promulgated in accordance with 29 Del.C. Ch. 101.
2.0 Purpose
The purpose of this Regulation is to establish the Wellness Plan standards required by 18 Del.C. §§2704 and 2708 and to insure to the extent possible that the proceeds and benefits issued under corporate life insurance be applied for the benefit of plan participants.
3.0 Applicability
This Regulation shall apply in circumstances involving the delivery or issuance for delivery in this State of corporate owned life insurance policies pursuant to 18 Del.C. §2708(4) issued without the consent of the insured, and insuring the lives of those individuals who participate, or are eligible to participate, in a welfare plan established and maintained for the benefit of employees pursuant to the Federal Employee Retirement Income Security Act of 1984 ("ERISA").
4.0 Corporate Owned Life Insurance
4.1 In the case of an insurance policy issued to a corporation insuring the life of any active employee or retiree of such corporation who is a participant, or is eligible to participate in a welfare plan, the policy may be issued, without the consent of the insured, only if:
4.1.1 The corporation offers to its employees and retirees eligible to participate, a wellness plan which provides discounts on health care benefits, either in the form of a reduction in premiums assessed against each participant or an enhancement of the benefits available to each participant; and
4.1.2 The corporation provides the following statement to the carrier: "At the time coverage is issued, the total amount of insurance coverage issued to date to the corporation or trust under the authority of 18 Del.C., §2704(c)(3) shall not exceed the cost of employee and/or retiree benefits already incurred in connection with such welfare benefit plan since the earliest date coverage on any employee or retiree was issued under this subsection, plus the projected future cost of such benefits as established as of the close of the employer's last fiscal year, plus the projected cost of the coverage issued to the employer or trust under the authority of 18 Del.C. §2704(c)(3)."
The insurer may rely upon information concerning the plan provided by a corporation purchasing such a policy in determining that a wellness plan satisfies the criteria of this section and is established and operating for the benefit of employees pursuant to ERISA. The plan shall be submitted to the Commissioner within 30 days of issuance of the policy, and if the Commissioner has not disapproved the plan within 60 days, the plan shall be deemed approved.
For purposes of applying this section, the retiree upon whom a life or health insurance contract has been or is to be made or effectuated shall be deemed to have consented thereto where:
4.1.2.1 The insurer issuing coverage pursuant to 18 Del.C. §2708(4) gives to the retiree, at his or her last known address as contained in the records of the employer, written notice which describes the retiree's rights under this section in substantially the form annexed to this regulation as Form I or as may otherwise be approved by the Commissioner; and
4.1.2.2 Within 30 days of the date of the written notice, the insured does not receive written notice from the retiree that he or she rejects such coverage. If timely written notice of rejection is received by the insurer before such insurance has become effectuated, coverage shall not be issued. If timely written notice is received by the insurer after such insurance has been effectuated, coverage shall be terminated and the insurer shall pay the proceeds which are payable as a result of the termination of coverage to the employer or trust, in accordance with the terms and conditions of such coverage. Unless the retiree complies with the requirements of this section, neither the retiree nor his or her successor in interest may contest the validity of the coverage.
5.0 Minimum Standards for Wellness Plans
5.1 No person, partnership, corporation or other entity shall be eligible to purchase corporate owned life insurance without the consent of the active employee or retiree unless the person, partnership, corporation or other entity provides a wellness program for their active employees and retirees. The following types of behavior modification plans to encourage healthy lifestyle behavior are described as an example only and not to limit the types of plans which will be approved as wellness plans by the Insurance Commissioner:
5.1.1 Economic incentives for nonsmokers and the availability of programs to discourage tobacco use;
5.1.2 Exercise programs;
5.1.3 Drug and alcohol abuse programs;
5.1.4 Blood pressure maintenance incentives and programs;
5.1.5 Weight control maintenance incentives and programs;
5.1.6 Seat belt usage incentive;
5.1.7 Benefits for periodic preventive screening examination as appropriate to an employee's or insured's age, sex, and health condition; and
5.1.8 Adult immunizations based on public health criteria.
Each wellness plan to be qualified must contain the incentives contained in sections 5.1.1, 5.1.4, 5.1.5, 5.1.7, and 5.1.8
6.0 Severability
If any provision of this Regulation should be held invalid, the remainder of the Regulation shall not be affected thereby.
7.0 Effective Date
This Regulation shall become effective 30 days after the Commissioner's signature.
Regulation No. 64 was signed by the Insurance Commissioner on September 19, 1990.
FORM I
Dear [Retiree]:
[Name of corporation] has established and maintains a welfare benefit plan pursuant to the Federal Employee Retirement Income Security Act of 1984 ("ERISA"), in which you participate or are eligible to participate. In order to assist [name of corporation] to recover the cost of the welfare benefit plan, [name of corporation] may, under Delaware law, purchase corporate owned life insurance policies on the lives of its employees or retirees.
This notice is given for the purpose of informing you that [name of corporation] has purchased or intends to purchase corporate life insurance policies on the lives of its retirees, including yours, from [name of insurer], in the amount of [$ ______________________], the benefits of which are payable to [name of corporation] as beneficiary under and owner of such insurance policies.
You have the right to decline to be insured. To exercise that right you must send [name of insurer] a signed written notice, which includes your address and date of birth, stating that you decline to be insured. To be effective the notice must be received by [name of insurer] at the following address: [address] within 30 days of the date specified below.
If you elect not to reject the insurance coverage described above, neither you nor your successors in interest may contest the validity of the coverage.
Date:_________________________________
Very truly yours,
[name of insurer]
1212 Valuation of Life Insurance Policies [Formerly Regulation 85]
18 Del. Admin. Code § 1212 Valuation of Life Insurance Policies [Formerly Regulation 85]
1212 Valuation of Life Insurance Policies [Formerly Regulation 85]
1.0 Purpose
1.1 The purpose of this regulation is to provide:
1.1.1 Tables of select mortality factors and rules for their use;
1.1.2 Rules concerning a minimum standard for the valuation of plans with non-level premiums or benefits; and
1.1.3 Rules concerning a minimum standard for the valuation of plans with secondary guarantees.
1.2 The method for calculating basic reserves defined in this regulation will constitute the Commissioners' Reserve Valuation Method for policies to which this regulation is applicable.
5 DE Reg. 1470 (1/1/02)
2.0 Authority
This regulation is issued under the authority of 18 Del.C. §§312, 1113 and 29 Del.C. Ch. 101.
3.0 Applicability
3.1 This regulation shall apply to all life insurance policies, with or without nonforfeiture values, issued on or after January 1, 2002, subject to the following exceptions and conditions.
3.2 Exceptions
3.2.1 This regulation shall not apply to any individual life insurance policy issued on or after January 1, 2002 if the policy is issued in accordance with and as a result of the exercise of a reentry provision contained in the original life insurance policy of the same or greater face amount, issued before January 1, 2002, that guarantees the premium rates of the new policy. This regulation also shall not apply to subsequent policies issued as a result of the exercise of such a provision, or a derivation of the provision, in the new policy.
3.2.2 This regulation shall not apply to any universal life policy that meets all the following requirements:
3.2.2.1 Secondary guarantee period, if any, is five (5) years or less;
3.2.2.2 Specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the CSO valuation tables as defined in Section 4F and the applicable valuation interest rate; and
3.2.2.3 The initial surrender charge is not less than 100 percent of the first year annualized specified premium for the secondary guarantee period.
3.2.3 This regulation shall not apply to any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.
3.2.4 This regulation shall not apply to any variable universal life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.
3.2.5 This regulation shall not apply to a group life insurance certificate unless the certificate provides for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year.
3.3 Conditions
3.3.1 Calculation of the minimum valuation standard for policies with guaranteed non-level gross premiums or guaranteed non-level benefits (other than universal life policies), or both, shall be in accordance with the provisions of Section 6.
3.3.2 Calculation of the minimum valuation standard for flexible premium and fixed premium universal life insurance policies, that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period shall be in accordance with the provisions of Section 7.
5 DE Reg. 1470 (1/1/02)
4.0 Definitions
4.1 For purposes of this regulation:
"1980 CSO valuation tables" means the Commissioners' 1980 Standard Ordinary Mortality Table (1980 CSO Table) without ten-year selection factors, incorporated into the 1980 amendments to the NAIC Standard Valuation Law, and variations of the 1980 CSO Table approved by the NAIC, such as the smoker and nonsmoker versions approved in December 1983.
"Basic reserves" means reserves calculated in accordance with 18 Del.C. §1113(c).
"Contract segmentation method" means the method of dividing the period from issue to mandatory expiration of a policy into successive segments, with the length of each segment being defined as the period from the end of the prior segment (from policy inception, for the first segment) to the end of the latest policy year as determined below. All calculations are made using the 1980 CSO valuation tables, as defined in section 4.1.6 of this section, (or any other valuation mortality table adopted by the National Association of Insurance Commissioners (NAIC) after January 1, 2002, and promulgated by regulation by the commissioner for this purpose), and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in section 5.2 of this regulation.
The length of a particular contract segment shall be set equal to the minimum of the value t for which Gt is greater than Rt (if Gt never exceeds Rt the segment length is deemed to be the number of years from the beginning of the segment to the mandatory expiration date of the policy), where Gt and Rt are defined as follows:
GPx+k+t
Gt = __________
GPx+k+t-1
where:
x = original issue age;
k = the number of years from the date of issue to the beginning of the segment;
t = 1, 2, ...; t is reset to 1 at the beginning of each segment;
GPx+k+t-1 = Guaranteed gross premium per thousand of face amount for year t of the segment, ignoring policy fees only if level for the premium paying period of the policy.
qx+k+t
Rt = __________, However, Rt may be increased or
qx+k+t-1 decreased by one percent in any
policy year, at the company's
option, but Rt shall not be less than one;
where:
x, k and t are as defined above, and
qx+k+t-1 = valuation mortality rate for deficiency reserves in policy year k+t but using the mortality of Section 5B(2) if Section 5B(3) is elected for deficiency reserves.
However, if GPx+k+t is greater than 0 and GPx+k+t-1 is equal to 0, Gt shall be deemed to be 1000. If GPx+k+t and GPx+k+t-1 are both equal to 0, Gt shall be deemed to be 0.
"Deficiency reserves" means the excess, if greater than zero, of
(1) Minimum reserves calculated in accordance with 18 Del.C. §1113(g) over
(2) Basic reserves.
“Guaranteed gross premiums" means the premiums under a policy of life insurance that are guaranteed and determined at issue.
"Maximum valuation interest rates" means the interest rates defined in 18 Del.C. §1113(b)(3) (Computation of Minimum Standard by Calendar Year of Issue) that are to be used in determining the minimum standard for the valuation of life insurance policies.
"Scheduled gross premium" means the smallest illustrated gross premium at issue for other than universal life insurance policies. For universal life insurance policies, scheduled gross premium means the smallest specified premium described in section 7.1.3, if any, or else the minimum premium described in Section 7.1.4.
"Segmented reserves" means reserves, calculated using segments produced by the contract segmentation method, equal to the present value of all future guaranteed benefits less the present value of all future net premiums to the mandatory expiration of a policy, where the net premiums within each segment are a uniform percentage of the respective guaranteed gross premiums within the segment.
(1) The uniform percentage for each segment is such that, at the beginning of the segment, the present value of the net premiums within the segment equals:
(a) The present value of the death benefits within the segment, plus
(b) The present value of any unusual guaranteed cash value (see section 6.4) occurring at the end of the segment, less
(c) Any unusual guaranteed cash value occurring at the start of the segment, plus
(d) For the first segment only, the excess of the Item (i) over Item (ii), as follows:
(i) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for in the first segment after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary within the first segment on which a premium falls due. However, the net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy.
(ii) A net one year term premium for the benefits provided for in the first policy year.
(2) The length of each segment is determined by the "contract segmentation method," as defined in this section.
(3) The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the sum of the lengths of all segments of the policy.
(4) For both basic reserves and deficiency reserves computed by the segmented method, present values shall include future benefits and net premiums in the current segment and in all subsequent segments.
“Tabular cost of insurance" means the net single premium at the beginning of a policy year for one-year term insurance in the amount of the guaranteed death benefit in that policy year.
"Ten-year select factors" means the select factors adopted with the 1980 amendments to the NAIC Standard Valuation Law.
"Unitary reserves" means the present value of all future guaranteed benefits less the present value of all future modified net premiums, where:
(a) Guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy; and
(b) Modified net premiums are a uniform percentage of the respective guaranteed gross premiums, where the uniform percentage is such that, at issue, the present value of the net premiums equals the present value of all death benefits and pure endowments, plus the excess of Item (i) over Item (ii), as follows
(i) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy.
(ii) A net one year term premium for the benefits provided for in the first policy year.
The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the length from issue to the mandatory expiration of the policy.
"Universal life insurance policy" means any individual life insurance policy under the provisions of which separately identified interest credits (other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts) and mortality or expense charges are made to the policy.
13 DE Reg. 408 (09/01/09)
5.0 General Calculation Requirements for Basic Reserves and Premium Deficiency Reserves
5.1 At the election of the company for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using the 1980 CSO valuation tables with select mortality factors (or any other valuation mortality table adopted by the NAIC after January 1, 2002, and promulgated by regulation by the commissioner for this purpose). If select mortality factors are elected, they may be:
5.1.1 The ten-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;
5.1.2 The select mortality factors in the Appendix; or
5.1.3 Any other table of select mortality factors adopted by the NAIC after January 1, 2002, and promulgated by regulation by the commissioner for the purpose of calculating basic reserves.
5.2 Deficiency reserves, if any, are calculated for each policy as the excess, if greater than zero, of the quantity A over the basic reserve. The quantity A is obtained by recalculating the basic reserve for the policy using guaranteed gross premiums instead of net premiums when the guaranteed gross premiums are less than the corresponding net premiums. At the election of the company for any one or more specified plans of insurance, the quantity A and the corresponding net premiums used in the determination of quantity A may be based upon the 1980 CSO valuation tables with select mortality factors (or any other valuation mortality table adopted by the NAIC after January 1, 2002, and promulgated by regulation by the commissioner). If select mortality factors are elected, they may be:
5.2.1 The ten-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;
5.2.2 The select mortality factors in the Appendix of this regulation;
5.2.3 For durations in the first segment, X percent of the select mortality factors in the Appendix , subject to the following:
5.2.3.1 X may vary by policy year, policy form, underwriting classification, issue age, or any other policy factor expected to affect mortality experience;
5.2.3.2 X is such that, when using the valuation interest rate used for basic reserves, Item 5.2.3.4.1 is greater than or equal to Item 5.2.3.4.1.2;
5.2.3.2.1 The actuarial present value of future death benefits, calculated using the mortality rates resulting from the application of X;
5.2.3.2.2 The actuarial present value of future death benefits calculated using anticipated mortality experience without recognition of mortality improvement beyond the valuation date;
5.2.3.3 X is such that the mortality rates resulting from the application of X are at least as great as the anticipated mortality experience, without recognition of mortality improvement beyond the valuation date, in each of the first five (5) years after the valuation date;
5.2.3.4 The appointed actuary shall increase X at any valuation date where it is necessary to continue to meet all the requirements of section 5.2.3;
5.2.3.5 The appointed actuary may decrease X at any valuation date as long as X continues to meet all the requirements of section 5.2.3; and
5.2.3.6 The appointed actuary shall specifically take into account the adverse effect on expected mortality and lapsation of any anticipated or actual increase in gross premiums.
5.2.3.7 If X is less than 100 percent at any duration for any policy, the following requirements shall be met:
5.2.3.7.1 The appointed actuary shall annually prepare an actuarial opinion and memorandum for the company in conformance with the requirements of 18 Del.C. §1111(c); and
5.2.3.7.2 The appointed actuary shall disclose, in the regulatory asset adequacy issues summary, the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods; and
5.2.3.7.3 The appointed actuary shall annually opine for all policies subject to this regulation as to whether the mortality rates resulting from the application of X meet the requirements of section 5.2.3. This opinion shall be supported by an actuarial report, subject to appropriate Actuarial Standards of Practice promulgated by the Actuarial Standards Board of the American Academy of Actuaries. The X factors shall reflect anticipated future mortality, without recognition of mortality improvement beyond the valuation date, taking into account relevant emerging experience.
5.2.4 Any other table of select mortality factors adopted by the NAIC after January 1, 2002, and promulgated by regulation by the commissioner for the purpose of calculating deficiency reserves.
5.3 This subsection applies to both basic reserves and deficiency reserves. Any set of select mortality factors may be used only for the first segment. However, if the first segment is less than ten (10) years, the appropriate ten-year select mortality factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law may be used thereafter through the tenth policy year from the date of issue.
5.4 In determining basic reserves or deficiency reserves, guaranteed gross premiums without policy fees may be used where the calculation involves the guaranteed gross premium but only if the policy fee is a level dollar amount after the first policy year. In determining deficiency reserves, policy fees may be included in guaranteed gross premiums, even if not included in the actual calculation of basic reserves.
5.5 Reserves for policies that have changes to guaranteed gross premiums, guaranteed benefits, guaranteed charges, or guaranteed credits that are unilaterally made by the insurer after issue and that are effective for more than one year after the date of the change shall be the greatest of the following: (1) reserves calculated ignoring the guarantee, (2) reserves assuming the guarantee was made at issue, and (3) reserves assuming that the policy was issued on the date of the guarantee.
5.6 The commissioner may require that the company document the extent of the adequacy of reserves for specified blocks, including but not limited to policies issued prior to January 1, 2002. This documentation may include a demonstration of the extent to which aggregation with other non-specified blocks of business is relied upon in the formation of the appointed actuary opinion pursuant to and consistent with the requirements of 18 Del.C. §1111(c).
5 DE Reg. 1470 (1/1/02)
13 DE Reg. 408 (09/01/09)
6.0 Calculation of Minimum Valuation Standard for Policies with Guaranteed Non-level Gross Premiums or Guaranteed Non-level Benefits (Other than Universal Life Policies)
6.1 Basic Reserves
6.1.1 Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both the segmented reserves and the unitary reserves for any policy shall use the same valuation mortality table and selection factors. At the option of the insurer, in calculating segmented reserves and net premiums, either of the adjustments described in sections 6.1.1.1 or 6.1.1.2 below may be made:
6.1.1.1 Treat the unitary reserve, if greater than zero, applicable at the end of each segment as a pure endowment and subtract the unitary reserve, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.
6.1.1.2 Treat the guaranteed cash surrender value, if greater than zero, applicable at the end of each segment as a pure endowment; and subtract the guaranteed cash surrender value, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.
6.2 Deficiency Reserves
6.2.1 The deficiency reserve at any duration shall be calculated:
6.2.1.1 On a unitary basis if the corresponding basic reserve determined by Subsection A is unitary;
6.2.1.2 On a segmented basis if the corresponding basic reserve determined by section 6.1 is segmented; or
6.2.1.3 On the segmented basis if the corresponding basic reserve determined by section 6.1 is equal to both the segmented reserve and the unitary reserve.
6.2.2 This subsection shall apply to any policy for which the guaranteed gross premium at any duration is less than the corresponding modified net premium calculated by the method used in determining the basic reserves, but using the minimum valuation standards of mortality (specified in section 5.2) and rate of interest.
6.2.3 Deficiency reserves, if any, shall be calculated for each policy as the excess if greater than zero, for the current and all remaining periods, of the quantity A over the basic reserve, where A is obtained as indicated in section 5.2.
6.2.4 For deficiency reserves determined on a segmented basis, the quantity A is determined using segment lengths equal to those determined for segmented basic reserves.
6.3 Minimum Value
6.3.1 Basic reserves may not be less than the tabular cost of insurance for the balance of the policy year, if mean reserves are used. Basic reserves may not be less than the tabular cost of insurance for the balance of the current modal period or to the paid-to-date, if later, but not beyond the next policy anniversary, if mid-terminal reserves are used. The tabular cost of insurance shall use the same valuation mortality table and interest rates as that used for the calculation of the segmented reserves. However, if select mortality factors are used, they shall be the ten-year select factors incorporated into the 1980 amendments of the NAIC Standard Valuation Law. In no case may total reserves (including basic reserves, deficiency reserves and any reserves held for supplemental benefits that would expire upon contract termination) be less than the amount that the policy owner would receive (including the cash surrender value of the supplemental benefits, if any, referred to above), exclusive of any deduction for policy loans, upon termination of the policy.
6.4 Unusual Pattern of Guaranteed Cash Surrender Values
6.4.1 For any policy with an unusual pattern of guaranteed cash surrender values, the reserves actually held prior to the first unusual guaranteed cash surrender value shall not be less than the reserves calculated by treating the first unusual guaranteed cash surrender value as a pure endowment and treating the policy as an n year policy providing term insurance plus a pure endowment equal to the unusual cash surrender value, where n is the number of years from the date of issue to the date the unusual cash surrender value is scheduled.
6.4.2 The reserves actually held subsequent to any unusual guaranteed cash surrender value shall not be less than the reserves calculated by treating the policy as an n year policy providing term insurance plus a pure endowment equal to the next unusual guaranteed cash surrender value, and treating any unusual guaranteed cash surrender value at the end of the prior segment as a net single premium, where
6.4.2.1 n is the number of years from the date of the last unusual guaranteed cash surrender value prior to the valuation date to the earlier of:
6.4.2.1.1 The date of the next unusual guaranteed cash surrender value, if any, that is scheduled after the valuation date; or
6.4.2.1.2 The mandatory expiration date of the policy; and
6.4.2.2 The net premium for a given year during the n year period is equal to the product of the net to gross ratio and the respective gross premium; and
6.4.2.3 The net to gross ratio is equal to Item (i) divided by Item (ii) as follows:
6.4.2.3.1 The present value, at the beginning of the n year period, of death benefits payable during the n year period plus the present value, at the beginning of the n year period, of the next unusual guaranteed cash surrender value, if any, minus the amount of the last unusual guaranteed cash surrender value, if any, scheduled at the beginning of the n year period.
6.4.2.3.2 The present value, at the beginning of the n year period, of the scheduled gross premiums payable during the n year period.
6.4.3 For purposes of this subsection, a policy is considered to have an unusual pattern of guaranteed cash surrender values if any future guaranteed cash surrender value exceeds the prior year's guaranteed cash surrender value by more than the sum of:
6.4.3.1 One hundred ten percent (110%) of the scheduled gross premium for that year;
6.4.3.2 One hundred ten percent (110%) of one year's accrued interest on the sum of the prior year's guaranteed cash surrender value and the scheduled gross premium using the nonforfeiture interest rate used for calculating policy guaranteed cash surrender values; and
6.4.3.3 Five percent (5%) of the first policy year surrender charge, if any.
6.5 Optional Exemption for Yearly Renewable Term Reinsurance. At the option of the company, the following approach for reserves on YRT reinsurance may be used:
6.5.1 Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.
6.5.2 Basic reserves shall never be less than the tabular cost of insurance for the appropriate period, as defined in section 6.3.
6.5.3 Deficiency reserves.
6.5.3.1 For each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium.
6.5.3.2 Deficiency reserves shall never be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with section section 6.5.3.1 above.
6.5.4 For purposes of this subsection, the calculations use the maximum valuation interest rate and the 1980 CSO mortality tables with or without ten-year select mortality factors, or any other table adopted after January 1, 2002, by the NAIC and promulgated by regulation by the commissioner for this purpose.
6.5.5 A reinsurance agreement shall be considered YRT reinsurance for purposes of this subsection if only the mortality risk is reinsured.
6.5.6 If the assuming company chooses this optional exemption, the ceding company's reinsurance reserve credit shall be limited to the amount of reserve held by the assuming company for the affected policies.
6.6 Optional Exemption for Attained-Age-Based Yearly Renewable Term Life Insurance Policies. At the option of the company, the following approach for reserves for attained-age-based YRT life insurance policies may be used:
6.6.1 Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.
6.6.2 Basic reserves shall never be less than the tabular cost of insurance for the appropriate period, as defined in section 6.3.
6.6.3 Deficiency reserves.
6.6.3.1 For each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium.
6.6.3.2 Deficiency reserves shall never be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with section 6.6.3.1 above.
6.6.4 For purposes of this subsection, the calculations use the maximum valuation interest rate and the 1980 CSO valuation tables with or without ten-year select mortality factors, or any other table adopted after January 1, 2002, by the NAIC and promulgated by regulation by the commissioner for this purpose.
6.6.5 A policy shall be considered an attained-age-based YRT life insurance policy for purposes of this subsection if:
6.6.5.1 The premium rates (on both the initial current premium scale and the guaranteed maximum premium scale) are based upon the attained age of the insured such that the rate for any given policy at a given attained age of the insured is independent of the year the policy was issued; and
6.6.5.2 The premium rates (on both the initial current premium scale and the guaranteed maximum premium scale) are the same as the premium rates for policies covering all insureds of the same sex, risk class, plan of insurance and attained age.
6.6.6 For policies that become attained-age-based YRT policies after an initial period of coverage, the approach of this subsection may be used after the initial period if:
6.6.6.1 The initial period is constant for all insureds of the same sex, risk class and plan of insurance; or
6.6.6.2 The initial period runs to a common attained age for all insureds of the same sex, risk class and plan of insurance; and
6.6.6.3 After the initial period of coverage, the policy meets the conditions of Paragraph 6.6.5 above.
6.6.7 If this election is made, this approach shall be applied in determining reserves for all attained-age-based YRT life insurance policies issued on or after January 1, 2002.
6.7 Exemption from Unitary Reserves for Certain n-Year Renewable Term Life Insurance Polices. Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if the following conditions are met:
6.7.1 The policy consists of a series of n-year periods, including the first period and all renewal periods, where n is the same for each period, except that for the final renewal period, n may be truncated or extended to reach the expiry age, provided that this final renewal period is less than 10 years and less than twice the size of the earlier n-year periods, and for each period, the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are level;
6.7.2 The guaranteed gross premiums in all n-year periods are not less than the corresponding net premiums based upon the 1980 CSO Table with or without the ten-year select mortality factors; and
6.7.3 There are no cash surrender values in any policy year.
6.8 Exemption from Unitary Reserves for Certain Juvenile Policies
6.8.1 Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if the following conditions are met, based upon the initial current premium scale at issue:
6.8.1.1 At issue, the insured is age twenty-four (24) or younger;
6.8.1.2 Until the insured reaches the end of the juvenile period, which shall occur at or before age twenty-five (25), the gross premiums and death benefits are level, and there are no cash surrender values; and
6.8.1.3 After the end of the juvenile period, gross premiums are level for the remainder of the premium paying period, and death benefits are level for the remainder of the life of the policy.
5 DE Reg. 1470 (1/1/02)
13 DE Reg. 408 (09/01/09)
7.0 Calculation of Minimum Valuation Standard for Flexible Premium and Fixed Premium Universal Life Insurance Policies That Contain Provisions Resulting in the Ability of a Policy owner to Keep a Policy in Force Over a Secondary Guarantee Period
7.1 General
7.1.1 Policies with a secondary guarantee include:
7.1.1.1 A policy with a guarantee that the policy will remain in force at the original schedule of benefits, subject only to the payment of specified premiums;
7.1.1.2 A policy in which the minimum premium at any duration is less than the corresponding one year valuation premium, calculated using the maximum valuation interest rate and the 1980 CSO valuation tables with or without ten-year select mortality factors, or any other table adopted after January 1, 2002, by the NAIC and promulgated by regulation by the commissioner for this purpose; or
7.1.1.3 A policy with any combination of sections 7.1.1.1 and 7.1.1.2.
7.1.2 A secondary guarantee period is the period for which the policy is guaranteed to remain in force subject only to a secondary guarantee. When a policy contains more than one secondary guarantee, the minimum reserve shall be the greatest of the respective minimum reserves at that valuation date of each unexpired secondary guarantee, ignoring all other secondary guarantees. Secondary guarantees that are unilaterally changed by the insurer after issue shall be considered to have been made at issue. Reserves described in 7.1.2 and 7.1.3 below shall be recalculated from issue to reflect these changes.
7.1.3 Specified premiums mean the premiums specified in the policy, the payment of which guarantees that the policy will remain in force at the original schedule of benefits, but which otherwise would be insufficient to keep the policy in force in the absence of the guarantee if maximum mortality and expense charges and minimum interest credits were made and any applicable surrender charges were assessed.
7.1.4 For purposes of this section, the minimum premium for any policy year is the premium that, when paid into a policy with a zero account value at the beginning of the policy year, produces a zero account value at the end of the policy year. The minimum premium calculation shall use the policy cost factors (including mortality charges, loads and expense charges) and the interest crediting rate, which are all guaranteed at issue.
7.1.5 The one-year valuation premium means the net one-year premium based upon the original schedule of benefits for a given policy year. The one-year valuation premiums for all policy years are calculated at issue. The select mortality factors defined in sections 5.2.2, 5.2.3 and 5.2.4 may not be used to calculate the one-year valuation premiums.
7.1.6 The one-year valuation premium should reflect the frequency of fund processing, as well as the distribution of deaths assumption employed in the calculation of the monthly mortality charges to the fund.
7.2 Basic reserves for the secondary guarantees shall be the segmented reserves for the secondary guarantee period. In calculating the segments and the segmented reserves, the gross premiums shall be set equal to the specified premiums, if any, or otherwise to the minimum premiums, that keep the policy in force and the segments will be determined according to the contract segmentation method as defined in section 4.1.2.
7.3 Deficiency reserves, if any, for the secondary guarantees shall be calculated for the secondary guarantee period in the same manner as described in section 6.2 with gross premiums set equal to the specified premiums, if any, or otherwise to the minimum premiums that keep the policy in force.
7.4 The minimum reserves during the secondary guarantee period are the greater of:
7.4.1 The basic reserves for the secondary guarantee plus the deficiency reserve, if any, for the secondary guarantees; or
7.4.2 The minimum reserves required by other rules or regulations governing universal life plans.
5 DE Reg. 1470 (1/1/02)
13 DE Reg. 408 (09/01/09)
8.0 Effective Date
This regulation shall become effective ten days after publication in the Register of Regulations for valuations on or after December 31, 2008.
5 DE Reg. 1470 (1/1/02)
13 DE Reg. 408 (09/01/09)
1213 Recognition Of The 2001 CSO Mortality Table For Use In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits
18 Del. Admin. Code § 1213 Recognition Of The 2001 CSO Mortality Table For Use In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits
1213 Recognition Of The 2001 CSO Mortality Table For Use In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits
1.0 Authority
1.1 This regulation is promulgated by the Commissioner of Insurance pursuant to 18 Del.C. §§311, 1111, 1113, 2929 and 29 Del.C. Ch. 101.
2.0 Purpose
2.1 The purpose of this Regulation is to recognize, permit and prescribe the use of the 2001 Commissioners Standard Ordinary (CSO) Mortality Table in accordance with 18 Del.C. §§ 1111, 1113 and 2929.
3.0 Definitions
“2001 CSO Mortality Table” means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, the “2001 CSO Mortality Table” includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables.
“2001 CSO Mortality Table (F)” means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.
“2001 CSO Mortality Table (M)” means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.
“Composite mortality tables” means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.
“Smoker and nonsmoker mortality tables” means mortality tables with separate rates of mortality for smokers and nonsmokers.
4.0 2001 CSO Mortality Table
4.1 At the election of the company for any one or more specified plans of insurance and subject to the conditions stated in this regulation, the 2001 CSO Mortality Table may be used as the minimum standard for policies issued on or after January 1, 2004 and before the date specified in section 4.2 to which 18 Del.C. §§1111, 1113(b)(1)a.3, and 2929(g)(8)f and Regulation 1212 sections 5.1 and 5.2 are applicable. If the company elects to use the 2001 CSO Mortality Table, it shall do so for both valuation and nonforfeiture purposes.
4.2 Subject to the conditions stated in this regulation, the 2001 CSO Mortality Table shall be used in determining minimum standards for policies issued on and after January 1, 2009, to which 18 Del.C. §§1111,113(b)(1)a.3 and 2929(g)(8)f and Regulation 1212 sections 5.1 and 5.2 are applicable.
5.0 Conditions
5.1 For each plan of insurance with separate rates for smokers and nonsmokers an insurer may use:
5.1.1 Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;
5.1.2 Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by 18 Del.C. §§1111 and 1113 and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or
5.1.3 Smoker and nonsmoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.
5.2 For plans of insurance without separate rates for smokers and nonsmokers the composite mortality tables shall be used.
5.3 For the purpose of determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, the 2001 CSO Mortality Table may, at the option of the company for each plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of section 6 hereof and Regulation 1212 relative to use of the select and ultimate form.
5.4 When the 2001 CSO Mortality Table is the minimum reserve standard for any plan for a company, the actuarial opinion in the annual statement filed with the commissioner shall be based on an asset adequacy analysis as specified in 18 Del.C. §1111(c). A commissioner may exempt a company from this requirement if it only does business in this state and in no other state.
6.0 Applicability of the 2001 CSO Mortality Table to Regulation 1212
6.1 The 2001 CSO Mortality Table may be used in applying Regulation 1212 in the following manner, subject to the transition dates for use of the 2001 CSO Mortality Table in section 4 of this regulation (unless otherwise noted, the references in this section are to Regulation 1212):
6.1.1 Section 3.2.2.2: The net level reserve premium is based on the ultimate mortality rates in the 2001 CSO Mortality Table.
6.1.2 Section 4.1.2: All calculations are made using the 2001 CSO Mortality Rate, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in section 6.1.4 of this regulation. The value of “qx+k+t-1” is the valuation mortality rate for deficiency reserves in policy year k+t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.
6.1.3 Section 5.1: The 2001 CSO Mortality Table is the minimum standard for basic reserves.
6.1.4 Section 5.2: The 2001 CSO Mortality Table is the minimum standard for deficiency reserves. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in sections 5.2.3.1 through 5.2.3.9. In demonstrating compliance with those conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO Mortality Table with those tests that utilize the 2001 CSO Mortality Table, unless the combination is explicitly required by regulation or necessary to be in compliance with relevant Actuarial Standards of Practice.
6.1.5 Section 4.1.9: The valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO Mortality Table.
6.1.6 Section 6.5.4: The calculations specified in section 6.5 shall use the ultimate mortality rates in the 2001 CSO Mortality Table.
6.1.7 Section 6.6.4: The calculations specified in section 6.6 shall use the ultimate mortality rates in the 2001 CSO Mortality Table.
6.1.8 Section 6.7.2: The calculations specified in section 6.7 shall use the ultimate mortality rates in the 2001 CSO Mortality Table.
6.1.9 Section 7.1.1.2: The one-year valuation premium shall be calculated using the ultimate mortality rates in the 2001 CSO Mortality Table.
6.2 Nothing in this section shall be construed to expand the applicability of Regulation 1212 to include life insurance policies exempted under section 3.2 of Regulation 1212.
7.0 Gender-Blended Tables
7.1 For any ordinary life insurance policy delivered or issued for delivery in this state on and after January 1, 2004, that utilizes the same premium rates and charges for male and female lives or is issued in circumstances where applicable law does not permit distinctions on the basis of gender, a mortality table that is a blend of the 2001 CSO Mortality Table (M) and the 2001 CSO Mortality Table (F) may, at the option of the company for each plan of insurance, be substituted for the 2001 CSO Mortality Table for use in determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits. No change in minimum valuation standards is implied by this subsection of the regulation.
7.2 The company may choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002.
7.3 It shall not, in and of itself, be a violation of 18 Del.C. Ch. 23 for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.
8.0 Separability
If any provision of this regulation or its application to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of the provision to other persons or circumstances shall not be affected.
9.0 Effective Date
The effective date of this regulation is January 1, 2004.
7 DE Reg. 783 (12/1/03)
1214 Suitability In Annuity Transactions
18 Del. Admin. Code § 1214-1.0 Purpose, Scope and Authority
1.1 The purpose of this regulation is to require producers, as defined in this regulation, to act in the best interest of the consumer when making a recommendation of an annuity and to require insurers to establish and maintain a system to supervise recommendations so that the insurance needs and financial objectives of consumers at the time of the transaction are effectively addressed.
1.2 Nothing herein shall be construed to create or imply a private cause of action for a violation of this regulation or to subject a producer to civil liability under the best interest standard of care outlined in Section 4.0 of this regulation or under standards governing the conduct of a fiduciary or a fiduciary relationship.
1.3 This regulation shall apply to any sale or recommendation of an annuity.
1.4 This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311, 2304 and 2312. It is promulgated in accordance with 29 Del.C. Ch. 101.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-2.0 Exemptions
2.1 Unless otherwise specifically included, this regulation shall not apply to transactions involving:
2.1.1 Direct response solicitations where there is no recommendation based on information collected from the consumer pursuant to this regulation;
2.1.2 Contracts used to fund:
2.1.2.1 An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);
2.1.2.2 A plan described by sections 401(a), 401(k), 403(b), 408(k) or 408(p) of the Internal Revenue Code (IRC), as amended, if established or maintained by an employer;
2.1.2.3 A government or church plan defined in section 414 of the IRC, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax-exempt organization under section 457 of the IRC; or
2.1.2.4 A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;
2.1.3 Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or
2.1.4 Formal prepaid funeral contracts.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-3.0 Definitions
The following words and terms, when used in this regulation, have the following meaning unless the context clearly indicates otherwise:
“Annuity” means an annuity that is an insurance product under State law that is individually solicited, whether the product is classified as an individual or group annuity.
"Cash compensation" means any discount, concession, fee, service fee, commission, sales charge, loan, override, or cash benefit received by a producer in connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from the consumer.
"Consumer profile information" means information that is reasonably appropriate to determine whether a recommendation addresses the consumer's financial situation, insurance needs and financial objectives, including, at a minimum, the following:
-
Age;
-
Annual income;
-
Financial situation and needs including debts and other obligations;
-
Financial experience;
-
Insurance needs;
-
Financial objectives;
-
Intended use of the annuity;
-
Financial time horizon;
-
Existing assets or financial products, including investment, annuity and insurance holdings;
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Liquidity needs;
-
Liquid net worth;
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Risk tolerance, including but not limited to, willingness to accept non-guaranteed elements in the annuity;
-
Financial resources used to fund the annuity; and
-
Tax status.
“Continuing education credit” or “CE credit” means one continuing education credit as defined in 18 DE Admin. Code 504, Section 2.0.
“Continuing education provider” or “CE Provider” means an individual or entity that is approved to offer continuing education courses pursuant to 18 DE Admin. Code 504, Section 2.0.
“FINRA” means the Financial Industry Regulatory Authority or a succeeding agency.
“Insurer” means a company required to be licensed under the laws of this state to provide insurance products, including annuities.
"Intermediary" means an entity contracted directly with an insurer or with another entity contracted with an insurer to facilitate the sale of the insurer's annuities by producers.
"Material conflict of interest" means a financial interest of the producer in the sale of an annuity that a reasonable person would expect to influence the impartiality of a recommendation. “Material conflict of interest" does not include cash compensation or non-cash compensation.
"Non-cash compensation" means any form of compensation that is not cash compensation, including, but not limited to, health insurance, office rent, office support and retirement benefits.
"Non-guaranteed elements" means the premiums, credited interest rates (including any bonus), benefits, values, dividends, non-interest based credits, charges or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue. An element is considered non-guaranteed if any of the underlying non-guaranteed elements are used in its calculation.
"Producer" means a person or entity required to be licensed under the laws of this state to sell, solicit or negotiate insurance, including annuities. For purposes of this regulation, "producer" includes an insurer where no producer is involved.
“Recommendation” means advice provided by a producer to an individual consumer that was intended to result or does result in a purchase, an exchange or a replacement of an annuity in accordance with that advice. "Recommendation" does not include general communication to the public, generalized customer services assistance or administrative support, general educational information and tools, prospectuses, or other product and sales material.
“Replacement” means a transaction in which a new annuity is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer whether or not a producer is involved, that by reason of the transaction, an existing annuity or other insurance policy has been or is to be any of the following:
(1) Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated;
(2) Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values;
(3) Amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid;
(4) Reissued with any reduction in cash value; or
(5) Used in a financed purchase.
"SEC" means the United States Securities and Exchange Commission.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-4.0 Duties of Insurers and Producers
4.1 Best Interest Obligations. A producer, when making a recommendation of an annuity, shall act in the best interest of the consumer under the circumstances known at the time the recommendation is made, without placing the producer's or the insurer's financial interest ahead of the consumer's interest. A producer has acted in the best interest of the consumer if they have satisfied the obligations regarding care, disclosure, conflict of interest and documentation set forth in subsections 4.2 through 4.5 of this regulation.
4.2 Care Obligation.
4.2.1 The producer, in making a recommendation, shall exercise reasonable diligence, care and skill to:
4.2.1.1 Know the consumer's financial situation, insurance needs and financial objectives;
4.2.1.2 Understand the available recommendation options after making a reasonable inquiry into options available to the producer;
4.2.1.3 Have a reasonable basis to believe the recommended option effectively addresses the consumer's financial situation, insurance needs and financial objectives over the life of the product, as evaluated in light of the consumer profile information; and
4.2.1.4 Communicate the basis or bases of the recommendation.
4.2.2 The requirements under subsection 4.2.1 of this regulation:
4.2.2.1 Include making reasonable efforts to obtain consumer profile information from the consumer prior to the recommendation of an annuity;
4.2.2.2 Require a producer to consider the types of products the producer is authorized and licensed to recommend or sell that address the consumer's financial situation, insurance needs and financial objectives. This does not require analysis or consideration of any products outside the authority and license of the producer or other possible alternative products or strategies available in the market at the time of the recommendation. Producers shall be held to standards applicable to producers with similar authority and licensure;
4.2.2.3 Do not create a fiduciary obligation or relationship and only create a regulatory obligation as established in this regulation;
4.2.2.4 Include having a reasonable basis to believe the consumer would benefit from certain features of the annuity, such as annuitization, death or living benefit or other insurance-related features;
4.2.2.5 Apply to the particular annuity as a whole and the underlying subaccounts to which funds are allocated at the time of purchase or exchange of an annuity, and riders and similar producer enhancements, if any;
4.2.2.6 Do not mean the annuity with the lowest one-time or multiple occurrence compensation structure shall necessarily be recommended;
4.2.2.7 Do not mean the producer has ongoing monitoring obligations under the care obligation under this paragraph, although such an obligation may be separately owed under the terms of a fiduciary, consulting, investment advising or financial planning agreement between the consumer and the producer.
4.2.3 The consumer profile information, characteristics of the insurer, and product costs, rates, benefits and features are those factors generally relevant in making a determination whether an annuity effectively addresses the consumer's financial situation, insurance needs and financial objectives, but the level of importance of each factor under the care obligation of subsection 4.2 of this regulation may vary depending on the facts and circumstances of a particular case. However, each factor may not be considered in isolation.
4.2.4 In the case of an exchange or replacement of an annuity, the producer shall consider the whole transaction, which includes taking into consideration whether:
4.2.4.1 The consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits, such as death, living or other contractual benefits, or be subject to increased fees, investment advisory fees or charges for riders and similar product enhancements;
4.2.4.2 The replacing product would substantially benefit the consumer in comparison to the replaced product over the life of the product; and
4.2.4.3 The consumer has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding 60 months.
4.2.5 Nothing in this regulation should be construed to require a producer to obtain any license other than a producer license with the appropriate line of authority to sell, solicit or negotiate insurance in this state, including but not limited to any securities license, in order to fulfill the duties and obligations contained in this regulation; provided the producer does not give advice or provide services that are otherwise subject to securities laws or engage in any other activity requiring other professional licenses.
4.3 Disclosure obligation.
4.3.1 Prior to the recommendation or sale of an annuity, the producer shall prominently disclose to the consumer on a form substantially similar to Appendix A:
4.3.1.1 A description of the scope and terms of the relationship with the consumer and the role of the producer in the transaction;
4.3.1.2 An affirmative statement on whether the producer is licensed and authorized to sell the following products:
4.3.1.2.1 Fixed annuities;
4.3.1.2.2 Fixed indexed annuities;
4.3.1.2.3 Variable annuities;
4.3.1.2.4 Life insurance;
4.3.1.2.5 Mutual funds;
4.3.1.2.6 Stocks and bonds; and
4.3.1.2.7 Certificates of deposit.
4.3.1.3 An affirmative statement describing the insurers for whom the producer is authorized, contracted (or appointed), or otherwise able to sell insurance products, using the following descriptions:
4.3.1.3.1 From one insurer;
4.3.1.3.2 From two or more insurers; or
4.3.1.3.3 From two or more insurers although primarily contracted with one insurer.
4.3.1.4 A description of the sources and types of cash compensation and non-cash compensation to be received by the producer, including whether the producer is to be compensated for the sale of a recommended annuity by commission as part of premium or other remuneration received from the insurer, intermediary or other producer or by fee as a result of a contract for advice or consulting services; and
4.3.1.5 A notice of the consumer's right to request additional information regarding cash compensation described in subsection 4.3.2 of this regulation.
4.3.2 Upon request of the consumer or the consumer's designated representative, the producer shall disclose:
4.3.2.1 A reasonable estimate of the amount of cash compensation to be received by the producer, which may be stated as a range of amounts or percentages; and
4.3.2.2 Whether the cash compensation is a one-time or multiple occurrence amount, and if a multiple occurrence amount, the frequency and amount of the occurrence, which may be stated as a range of amounts or percentages; and
4.3.3 Prior to or at the time of the recommendation or sale of an annuity, the producer shall have a reasonable basis to believe the consumer has been informed of various features of the annuity, such as the potential surrender period and surrender charge, potential tax penalty if the consumer sells, exchanges, surrenders or annuitizes the annuity, mortality and expense fees, investment advisory fees, any annual fees, potential charges for and features of riders or other options of the annuity, limitations on interest returns, potential changes in non-guaranteed elements of the annuity, insurance and investment components and market risk.
4.4 Conflict of interest obligation. A producer shall identify and avoid or reasonably manage and disclose material conflicts of interest, including material conflicts of interest related to an ownership interest.
4.5 Documentation obligation. A producer shall, at the time of recommendation or sale:
4.5.1 Make a written record of any recommendation and the basis for the recommendation subject to this regulation;
4.5.2 Obtain a consumer signed statement on a form substantially similar to Appendix B documenting:
4.5.2.1 A customer's refusal to provide the consumer profile information, if any; and
4.5.2.2 A customer's understanding of the ramifications of not providing the customer's consumer profile information or providing insufficient consumer profile information; and
4.5.3 Obtain a consumer signed statement on a form substantially similar to Appendix C acknowledging the annuity transaction is not recommended if a customer decides to enter into an annuity transaction that is not based on the producer's recommendation.
4.6 Application of the best interest obligation. Any requirement applicable to a producer under subsections 4.1 through 4.5 of this regulation shall apply to every producer who has exercised material control or influence in the making of a recommendation and has received direct compensation as a result of the recommendation or sale, regardless of whether the producer has had any direct contact with the consumer. Activities such as providing or delivering marketing or educational materials, product wholesaling or other back office product support, and general supervision of a producer do not, in and of themselves, constitute material control or influence.
4.7 Transactions not based on a recommendation.
4.7.1 Except as provided under subsection 4.7.2 of this regulation, a producer shall have no obligation to a consumer under subsection 4.2 of this regulation related to any annuity transaction if:
4.7.1.1 No recommendation is made;
4.7.1.2 A recommendation was made and was later found to have been prepared based on materially inaccurate information provided by the consumer;
4.7.1.3 A consumer refuses to provide relevant consumer profile information and the annuity transaction is not recommended; or
4.7.1.4 A consumer decides to enter into an annuity transaction that is not based on a recommendation of the producer.
4.7.2 An insurer’s issuance of an annuity subject to subsection 4.7.1 of this regulation shall be reasonable under all the circumstances actually known to the insurer at the time the annuity is issued.
4.8 Supervision system.
4.8.1 Except as permitted under subsection 4.7 of this regulation, an insurer may not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity would effectively address the particular consumer's financial situation, insurance needs and financial objectives based on the consumer's consumer profile information.
4.8.2 An insurer shall establish and maintain a supervision system that is reasonably designed to achieve the insurer’s and its producers’ compliance with this regulation, including, but not limited to, the following:
4.8.2.1 The insurer shall establish and maintain reasonable procedures to inform its producers of the requirements of this regulation and shall incorporate the requirements of this regulation into relevant producer training manuals;
4.8.2.2 The insurer shall establish and maintain standards for producer product training and shall establish and maintain reasonable procedures to require its producers to comply with the requirements of Section 5.0 of this regulation;
4.8.2.3 The insurer shall provide product-specific training and training materials which explain all material features of its annuity products to its producers;
4.8.2.4 The insurer shall establish and maintain procedures for the review of each recommendation prior to issuance of an annuity that are designed to ensure that there is a reasonable basis to determine that the recommended annuity would effectively address the particular consumer's financial situation, insurance needs and financial objectives. The review procedures may apply a screening system for the purpose of identifying selected transactions for additional review and may be accomplished electronically or through other means including, but not limited to, physical review. The electronic or other system may be designed to require additional review only of those transactions identified for additional review by the selection criteria;
4.8.2.5 The insurer shall establish and maintain reasonable procedures to detect recommendations that are not in compliance with subsections 4.2, 4.3, 4.5 and 4.6 of this regulation. This may include, but is not limited to, confirmation of the consumer’s consumer profile information, systematic customer surveys, producer and consumer interviews, confirmation letters, producer statements or attestations and programs of internal monitoring. Nothing in this subsection prevents an insurer from complying with this subsection by applying sampling procedures, or by confirming the consumer profile information or other required information under Section 4.0 of this regulation after issuance or delivery of the annuity;
4.8.2.6 The insurer shall establish and maintain reasonable procedures to assess, prior to or upon issuance or delivery of an annuity, whether a producer has provided to the consumer the information required to be provided under Section 4.0 of this regulation;
4.8.2.7 The insurer shall establish and maintain reasonable procedures to identify and address suspicious consumer refusals to provide consumer profile information;
4.8.2.8 The insurer shall establish and maintain reasonable procedures to identify and eliminate any sales contests, sales quotas, bonuses, and non-cash compensation that are based on the sales of specific annuities within a limited period of time. The requirements of this subparagraph are not intended to prohibit the receipt of health insurance, office rent, office support, retirement benefits or other employee benefits by employees as long as those benefits are not based upon the volume of sales of a specific annuity within a limited period of time; and
4.8.2.9 The insurer shall annually provide a written report to senior management, including to the senior manager responsible for audit functions, which details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.
4.8.3 Nothing in subsection 4.8 of this regulation restricts an insurer from contracting for performance of a function (including maintenance of procedures) required under subsection 4.8 of this regulation. An insurer is responsible for taking appropriate corrective action and may be subject to sanctions and penalties pursuant to Section 6.0 of this regulation regardless of whether the insurer contracts for performance of a function and regardless of the insurer’s compliance with subsection 4.8.4 of this regulation.
4.8.4 An insurer’s supervision system under subsection 4.8 of this regulation shall include supervision of contractual performance, including but not limited to the following:
4.8.4.1 Monitoring and, as appropriate, conducting audits to assure that the contracted function is properly performed; and
4.8.4.2 Annually obtaining a certification from a senior manager who has responsibility for the contracted function that the manager has a reasonable basis to represent, and does represent, that the function is properly performed.
4.8.5 An insurer is not required to include in its system of supervision:
4.8.5.1 A producer's recommendation to consumers of products other than the annuities offered by the insurer; or
4.8.5.2 Consideration of or comparison to options available to the producer or compensation relating to those options other than annuities or other products offered by the insurer.
4.9 Prohibited Practices. Neither a producer nor an insurer shall dissuade, or attempt to dissuade, a consumer from:
4.9.1 Truthfully responding to an insurer’s request for confirmation of the consumer profile information;
4.9.2 Filing a complaint; or
4.9.3 Cooperating with the investigation of a complaint.
4.10 Safe harbor.
4.10.1 Recommendations and sales of annuities made in compliance with comparable standards as defined in subsection 4.10.5 of this regulation shall satisfy the requirements under this regulation. This subsection applies to all recommendations and sales of annuities made by financial professionals in compliance with business rules, controls and procedures that satisfy a comparable standard even if such standard would not otherwise apply to the product or recommendation at issue. However, nothing in this subsection shall limit the Insurance Commissioner’s ability to investigate and enforce the provisions of this regulation.
4.10.2 Nothing in subsection 4.10.1. of this regulation shall limit the insurer's obligation to comply with subsection 4.8.1 of this regulation, although the insurer may base its analysis on information received from either the financial professional or the entity supervising the financial professional.
4.10.3 For subsection 4.10.1 of this regulation to apply, an insurer shall:
4.10.3.1 Monitor the relevant conduct of the financial professional seeking to rely on subsection 4.10.1 of this regulation or the entity responsible for supervising the financial professional, such as the financial professional's broker-dealer or an investment adviser registered under federal or state securities laws, using information collected in the normal course of an insurer’s business; and
4.10.3.2 Provide to entity responsible for supervising the financial professional seeking to rely on subsection 4.10.1 of this regulation, such as the financial professional's broker-dealer or investment adviser registered under federal or state securities laws, information and reports that are reasonably appropriate to assist the entity to maintain its supervision system.
4.10.4 For purposes of subsection 4.10 of this regulation, "financial professional" means a producer that is regulated and acting as:
4.10.4.1 A broker-dealer registered under federal or state securities laws or a registered representative of a broker-dealer;
4.10.4.2 An investment adviser registered under federal or state securities laws or an investment adviser representative associated with the federal or state registered investment adviser; or
4.10.4.3 A plan fiduciary under Section 3(21) of the Employee Retirement Income Security Act of 1974 (ERISA) or fiduciary under Section 4975(e)(3) of the Internal Revenue Code (IRC) or any amendments or successor statutes thereto.
4.10.5 For purposes of subsection 4.10 of this regulation, "comparable standards" means:
4.10.5.1 With respect to broker-dealers and registered representatives of broker-dealers, applicable SEC and FINRA rules pertaining to best interest obligations and supervision of annuity recommendations and sales, including, but not limited to, Regulation Best Interest and any amendments or successor regulations thereto;
4.10.5.2 With respect to investment advisers registered under federal or state securities laws or investment adviser representatives, the fiduciary duties and all other requirements imposed on such investment advisers or investment adviser representatives by contract or under the Investment Advisers Act of 1940 or applicable state securities laws including but not limited to, the Form ADV and interpretations; and
4.10.5.3 With respect to plan fiduciaries or fiduciaries, the duties, obligations, prohibitions and all other requirements attendant to such status under ERISA or the IRC and any amendments or successor statutes thereto.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-5.0 Producer Training
5.1 A producer shall not solicit the sale of an annuity product unless the producer has adequate knowledge of the product to recommend the annuity and the producer is in compliance with the insurer’s standards for product training. A producer may rely on insurer-provided product-specific training standards and materials to comply with this subsection.
5.2 A producer who engages in the sale of annuity products shall complete a one-time four (4) credit training course approved by the Department of Insurance and provided by the Department of Insurance-approved education provider.
5.2.1 Producers who hold a life insurance line of authority on the effective date of this regulation and who desire to sell annuities shall complete the requirements of this subsection within six (6) months after the effective date of this regulation. Individuals who obtain a life insurance line of authority on or after the effective date of this regulation may not engage in the sale of annuities until the annuity training course required under this subsection has been completed.
5.2.2 The minimum length of the training required under this subsection shall be sufficient to qualify for at least four (4) CE credits but may be longer.
5.2.3 The training required under this subsection shall include information on the following topics:
5.2.3.1 The types of annuities and various classifications of annuities;
5.2.3.2 Identification of the parties to an annuity;
5.2.3.3 How product specific annuity contract features affect consumers;
5.2.3.4 The application of income taxation of qualified and non-qualified annuities;
5.2.3.5 The primary uses of annuities; and
5.2.3.6 Appropriate standard of conduct, sales practices, replacement and disclosure requirements.
5.2.4 Providers of courses intended to comply with this subsection shall cover all topics listed in the prescribed outline and shall not present any marketing information or provide training on sales techniques or provide specific information about a particular insurer’s products. Additional topics may be offered in conjunction with and in addition to the required outline.
5.2.5 A provider of an annuity training course intended to comply with this subsection shall register as a CE provider in this State and comply with the rules and guidelines applicable to producer continuing education courses as set forth in 18 DE Admin. Code 504, Section 2.0.
5.2.6 A producer who has completed an annuity training course approved by the Department of Insurance prior to August 1, 2021 shall, within six (6) months after August 1, 2021, complete either:
5.2.6.1 A new four (4) credit training course approved by the Department of Insurance after August 1, 2021; or
5.2.6.2 An additional one-time one (1) credit training course approved by the Department of Insurance and provided by the Department of Insurance-approved education provider on appropriate sales practices, replacement and disclosure requirements under this amended regulation.
5.2.7 Annuity training courses may be conducted and completed by classroom or self-study methods in accordance with 18 DE Admin. Code 504, Section 2.0.
5.2.8 Providers of annuity training shall comply with the reporting requirements and shall issue certificates of completion in accordance with 18 DE Admin. Code 504, Section 2.0.
5.2.9 The satisfaction of the training requirements of another State that are substantially similar to the provisions of this subsection shall be deemed to satisfy the training requirements of this subsection in this State.
5.2.10 The satisfaction of the components of the training requirements of any course or courses with components substantially similar to the provisions of this subsection shall be deemed to satisfy the training requirements of this subsection in this State.
5.2.11 An insurer shall verify that a producer has completed the annuity training course required under this subsection before allowing the producer to sell an annuity product for that insurer. An insurer may satisfy its responsibility under this subsection by obtaining certificates of completion of the training course or obtaining reports provided by Commissioner-sponsored database systems or vendors or from a reasonably reliable commercial database vendor that has a reporting arrangement with approved insurance education providers.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-6.0 Compliance Mitigation; Penalties; Enforcement
6.1 An insurer is responsible for compliance with this regulation. If a violation occurs, either because of the action or inaction of the insurer or its producer, the Commissioner may order:
6.1.1 An insurer to take reasonably appropriate corrective action for any consumer harmed by a failure to comply with this regulation by the insurer; an entity contracted to perform the insurer’s supervisory duties or by the producer;
6.1.2 A general agency, independent agency or the producer to take reasonably appropriate corrective action for any consumer harmed by the producer’s violation of this regulation; and
6.1.3 Appropriate penalties and sanctions.
6.2 Any applicable penalty under 18 Del.C. Chapters 3, 17 or 23 for a violation of this regulation may be reduced or eliminated if corrective action for the consumer was taken promptly after a violation was discovered or the violation was not part of a pattern or practice.
6.3 The authority to enforce compliance with this regulation is vested exclusively with the Commissioner.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-7.0 Recordkeeping
7.1 Insurers, general agents, independent agencies and producers shall maintain or be able to make available to the Commissioner records of the information collected from the consumer, disclosures made to the consumer, including summaries of oral disclosures, and other information used in making the recommendations that were the basis for insurance transactions for five (5) years after the insurance transaction is completed by the insurer. An insurer is permitted, but shall not be required, to maintain documentation on behalf of a producer.
7.2 Records required to be maintained by this regulation may be maintained in paper, photographic, microprocess, magnetic, mechanical or electronic media or by any process that accurately reproduces the actual document.
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
18 Del. Admin. Code § 1214-8.0 Effective Date
This regulation was first published on January 1, 2006 and first became effective on July 1, 2006, six months after the date the regulation was first published. The 2016 amendments to this regulation took effect on July 1, 2017, six (6) months after the date the amendments to the regulation were published as final. The 2021 amendments to this regulation shall become effective on August 1, 2021, which date is six (6) months after the date the amendments to the regulation are published as final.
APPENDIX A
INSURANCE AGENT (PRODUCER) DISCLOSURE FOR ANNUITIES
Do Not Sign Unless You Have Read and Understand the Information in this Form
Date:
INSURANCE AGENT (PRODUCER) INFORMATION ("Me", "I", "My")
First Name: Last Name:
Business\Agency Name: Website:
Business Mailing Address:
Business Telephone Number:
Email Address:
National Producer Number in [state]:
CUSTOMER INFORMATION ("You", "Your")
First Name: Last Name:
What Types of Products Can I Sell You?
I am licensed to sell annuities to you in accordance with state law. If I recommend that You buy an annuity, it means I believe that it effectively meets Your financial situation, insurance needs, and financial objectives. Other financial products, such as life insurance or stocks, bonds and mutual funds, also may meet Your needs.
I offer the following products:
Fixed or Fixed Indexed Annuities
Variable Annuities
Life Insurance
I need a separate license to provide advice about or to sell non-insurance financial products. I have checked below any non-insurance financial products that I am licensed and authorized to provide advice about or to sell.
Mutual Funds
Stocks/Bonds
Certificates of Deposits
Whose Annuities Can I Sell to You?
I am authorized to sell:
How I'm Paid for My Work:
It's important for You to understand how I'm paid for my work. Depending on the particular annuity You purchase, I may be paid a commission or a fee. Commissions are generally paid to Me by the insurance company while fees are generally paid to Me by the consumer. If You have questions about how I'm paid, please ask Me.
Depending on the particular annuity You buy, I will or may be paid cash compensation as follows:
Commission, which is usually paid by the insurance company or other sources. If other sources, describe:
.
Fees (such as a fixed amount, an hourly rate, or a percentage of your payment), which are usually paid directly by the customer.
Other (Describe): .
I may also receive other indirect compensation resulting from this transaction (sometimes called "non-cash" compensation), such as health or retirement benefits, office rent and support, or other incentives from the insurance company or other sources.
Drafting Note: This disclosure may be adapted to fit the particular business model of the producer. As an example, if the producer only receives commission or only receives a fee from the consumer, the disclosure may be refined to fit that particular situation. This form is intended to provide an example of how to communicate producer compensation, but compliance with the regulation may also be achieved with more precise disclosure, including a written consulting, advising or financial planning agreement.
Drafting Note: The acknowledgement and signature should be in immediate proximity to the disclosure language.
By signing below, you acknowledge that you have read and understand the information provided to you in this document.
Customer Signature
Date
Agent (Producer) Signature
Date
APPENDIX B
CONSUMER REFUSAL TO PROVIDE INFORMATION
Do Not Sign Unless You Have Read and Understand the Information in this Form
Why are you being given this form?
You're buying a financial product - an annuity.
To recommend a product that effectively meets your needs, objectives and situation, the agent, broker, or company needs information about you, your financial situation, insurance needs and financial objectives.
If you sign this form, it means you have not given the agent, broker, or company some or all the information needed to decide if the annuity effectively meets your needs, objectives and situation. You may lose protections under the Insurance Code of [this state] if you sign this form or provide inaccurate information.
Statement of Purchaser:
I REFUSE to provide this information at this time.
I have chosen to provide LIMITED information at this time.
Customer Signature
Date
APPENDIX C
Consumer Decision to Purchase an Annuity NOT Based on a Recommendation
Do Not Sign This Form Unless You Have Read and Understand It.
Why are you being given this form? You are buying a financial product - an annuity.
To recommend a product that effectively meets your needs, objectives and situation, the agent, broker, or company has the responsibility to learn about you, your financial situation, insurance needs and financial objectives.
If you sign this form, it means you know that you're buying an annuity that was not recommended.
Statement of Purchaser:
I understand that I am buying an annuity, but the agent, broker or company did not recommend that I buy it. If I buy it
without a recommendation, I understand I may lose protections under the Insurance Code of [this state].
Customer Signature
Date
Agent/Producer Signature
Date
History
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 9 DE Reg. 1081 (01/01/06)
- 20 DE Reg. 456 (12/01/16)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
- 24 DE Reg. 798 (02/01/21)
1215 Recognition of Preferred Mortality Tables for use in Determining Minimum Reserve Liabilities
18 Del. Admin. Code § 1215 Recognition of Preferred Mortality Tables for use in Determining Minimum Reserve Liabilities
1215 Recognition of Preferred Mortality Tables for use in Determining Minimum Reserve Liabilities
1.0 Authority
1.1 This regulation is promulgated by the Commissioner of Insurance pursuant to 18 Del.C. §§311 and 1113 and Sections 5.1 and 5.2 of 18 DE Admin. Code 1212 (referred to as “Regulation 1212”).
2.0 Purpose
2.1 The purpose of this regulation is to recognize, permit and prescribe the use of mortality tables that reflect differences in mortality between preferred and standard lives in determining minimum reserve liabilities in accordance with 18 Del.C. §§311 and 1113 and Sections 5.1 and 5.2 of Regulation 1212.
3.0 Definitions
“2001 CSO Mortality Table” means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002) and supplemented by the 2001 CSO Preferred Class Structure Mortality Table defined below. Unless the context indicates otherwise, the “2001 CSO Mortality Table” includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables. Mortality tables in the 2001 CSO Mortality Table include the following:
(1) “2001 CSO Mortality Table (F)” means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.
(2) “2001 CSO Mortality Table (M)” means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.
(3) “Composite mortality tables” means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.
(4) “Smoker and nonsmoker mortality tables” means mortality tables with separate rates of mortality for smokers and nonsmokers.
“2001 CSO Preferred Class Structure Mortality Table” means mortality tables with separate rates of mortality for Super Preferred Nonsmokers, Preferred Nonsmokers, Residual Standard Nonsmokers, Preferred Smokers, and Residual Standard Smoker splits of the 2001 CSO Nonsmoker and Smoker tables as adopted by the NAIC at the September, 2006 national meeting and published in the NAIC Proceedings {3rd Quarter 2006}. Unless the context indicates otherwise, the “2001 CSO Preferred Class Structure Mortality Table” includes both the ultimate form of that table and the select and ultimate form of that table. It includes both the smoker and nonsmoker mortality tables. It includes both the male and female mortality tables and the gender composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality table.
“Statistical agent” means an entity with proven systems for protecting the confidentiality of individual insured and insurer information; demonstrated resources for and history of ongoing electronic communications and data transfer ensuring data integrity with insurers, which are its members or subscribers; and a history of and means for aggregation of data and accurate promulgation of the experience modifications in a timely manner.
4.0 2001 CSO Preferred Class Structure Table
4.1 At the election of the company, for each calendar year of issue, for any one or more specified plans of insurance and subject to satisfying the conditions stated in this regulation, the 2001 CSO Preferred Class Structure Mortality Table may be substituted in place of the 2001 CSO Smoker or Nonsmoker Mortality Table as the minimum valuation standard for policies issued on or after January 1, 2007, or with the consent of the Commissioner, January 1, 2004. No such election shall be made until the company demonstrates at least 20% of the business to be valued on this table is in one or more of the preferred classes. A table from the 2001 CSO Preferred Class Structure Mortality Table used in place of a 2001 CSO Mortality Table, pursuant to the requirements of this rule, will be treated as part of the 2001 CSO Mortality Table only for purposes of reserve valuation pursuant to the requirements of the NAIC model regulation, “Recognition of the 2001 CSO Mortality Table For Use In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits Model Regulation.”
13 E Reg. 409 (09/01/09)
5.0 Conditions
5.1 For each plan of insurance with separate rates for Preferred and Standard Nonsmoker lives, an insurer may use the Super Preferred Nonsmoker, Preferred Nonsmoker, and Residual Standard Nonsmoker tables to substitute for the Nonsmoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time of election and annually thereafter, except for business valued under the Residual Standard Nonsmoker Table, the appointed actuary shall certify that:
5.1.1 The present value of death benefits over the next ten years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class.
5.1.2 The present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class.
5.2 For each plan of insurance with separate rates for Preferred and Standard Smoker lives, an insurer may use the Preferred Smoker and Residual Standard Smoker tables to substitute for the Smoker mortality table found in the 2001 CSO Mortality Table to determine minimum reserves. At the time of election and annually thereafter, for business valued under the Preferred Smoker Table, the appointed actuary shall certify that:
5.2.1 The present value of death benefits over the next ten years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the Preferred Smoker valuation basis table corresponding to the valuation table being used for that class.
5.2.2 The present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the Preferred Smoker valuation basic table.
5.3 Unless exempted by the commissioner, every authorized insurer using the 2001 CSO Preferred Class Structure Table shall annually file with the commissioner, with the NAIC, or with a statistical agent designated by the NAIC and acceptable to the commissioner, statistical reports showing mortality and such other information as the commissioner may deem necessary or expedient for the administration of the provisions of this regulation. The form of the reports shall be established by the commissioner or the commissioner may require the use of a form established by the NAIC or by a statistical agent designated by the NAIC and acceptable to the commissioner.
6.0 Separability
6.1 If any provision of this regulation or its application to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of the provision to other persons or circumstances shall not be affected.
7.0 Effective Date
7.1 The effective date of this regulation shall be 10 days after execution by the Commissioner and effective for valuations on and after December 31, 2008.
10 DE Reg. 1306 (02/01/07)
13 DE Reg. 409 (09/01/09)
1216 Military Sales Practices
18 Del. Admin. Code § 1216 Military Sales Practices
1216 Military Sales Practices
1.0 Purpose
1.1 The purpose of this regulation is to set forth standards to protect active duty service members of the United States Armed Forces from dishonest and predatory insurance sales practices by declaring certain identified practices to be false, misleading, deceptive or unfair.
1.2 Nothing herein shall be construed to create or imply a private cause of action for a violation of this regulation.
2.0 Scope
2.1 This regulation shall apply only to the solicitation or sale of any life insurance or annuity product by an insurer or insurance producer to an active duty service member of the United States Armed Forces.
3.0 Authority
3.1 This regulation is issued under the authority of 18 Del.C. §§311, 2307, 2312 and 29 Del.C. Chapter 101.
4.0 Exemptions
4.1 This regulation shall not apply to solicitations or sales involving:
4.1.1 Credit insurance;
4.1.2 Group life insurance or group annuities where there is no in-person, face-to-face solicitation of individuals by an insurance producer or where the contract or certificate does not include a side fund;
4.1.3 An application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the commissioner; or, when a term conversion privilege is exercised among corporate affiliates;
4.1.4 Individual stand-alone health policies, including disability income policies;
4.1.5 Contracts offered by Servicemembers’ Group Life Insurance (SGLI) or Veterans’ Group Life Insurance (VGLI), as authorized by 38 U.S.C. Section 1965 et seq.;
4.1.6 Life insurance contracts offered through or by a non-profit military association, qualifying under Section 501 (c) (23) of the Internal Revenue Code (IRC), and which are not underwritten by an insurer; or
4.1.7 Contracts used to fund:
4.1.7.1 An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA);
4.1.7.2 A plan described by Sections 401(a), 401(k), 403(b), 408(k) or 408(p) of the IRC, as amended, if established or maintained by an employer;
4.1.7.3 A government or church plan defined in Section 414 of the IRC, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457 of the IRC;
4.1.7.4 A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor;
4.1.7.5 Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or
4.1.7.6 Prearranged funeral contracts.
4.2 Nothing herein shall be construed to abrogate the ability of nonprofit organizations (and/or other organizations) to educate members of the United States Armed Forces in accordance with Department of Defense DoD Instruction 1344.07 – Personal Commercial Solicitation on DoD Installations or successor directive.
4.3 For purposes of this regulation, general advertisements, direct mail and internet marketing shall not constitute “solicitation.” Telephone marketing shall not constitute "solicitation" provided the caller explicitly and conspicuously discloses that the product concerned is life insurance and makes no statements that avoid a clear and unequivocal statement that life insurance is the subject matter of the solicitation. Provided however, nothing in this subsection shall be construed to exempt an insurer or insurance producer from this regulation in any in-person, face-to-face meeting established as a result of the “solicitation” exemptions identified in this subsection.
5.0 Definitions
5.1 “Active Duty” means full-time duty in the active military service of the United States and includes members of the reserve component (National Guard and Reserve) while serving under published orders for active duty or full-time training. The term does not include members of the reserve component who are performing active duty or active duty for training under military calls or orders specifying periods of less than 31 calendar days.
5.2 “Department of Defense (DoD) Personnel” means all active duty service members and all civilian employees, including nonappropriated fund employees and special government employees, of the Department of Defense.
5.3 “Door to Door” means a solicitation or sales method whereby an insurance producer proceeds randomly or selectively from household to household without prior specific appointment.
5.4 “General Advertisement” means an advertisement having as its sole purpose the promotion of the reader's or viewer's interest in the concept of insurance, or the promotion of the insurer or the insurance producer.
5.5 “Insurer” means an insurance company required to be licensed under the laws of this state to provide life insurance products, including annuities.
5.6 “Insurance producer” means a person required to be licensed under the laws of this state to sell, solicit or negotiate life insurance, including annuities.
5.7 “Known” or “Knowingly” means, depending on its use herein, the insurance producer or insurer had actual awareness, or in the exercise of ordinary care should have known, at the time of the act or practice complained of, that the person solicited:
5.7.1 Is a service member; or
5.7.2 Is a service member with a pay grade of E-4 or below.
5.8 “Life Insurance” means insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income and unless otherwise specifically excluded, includes individually issued annuities.
5.9 “Military Installation” means any federally owned, leased, or operated base, reservation, post, camp, building, or other facility to which service members are assigned for duty, including barracks, transient housing, and family quarters.
5.10 “MyPay” is a Defense Finance and Accounting Service (DFAS) web-based system that enables service members to process certain discretionary pay transactions or provide updates to personal information data elements without using paper forms.
5.11 “Service Member” means any active duty officer (commissioned and warrant) or enlisted member of the United States Armed Forces.
5.12 “Side Fund” means a fund or reserve that is part of or otherwise attached to a life insurance policy (excluding individually issued annuities) by rider, endorsement or other mechanism which accumulates premium or deposits with interest or by other means. The term does not include:
5.12.1 Accumulated value or cash value or secondary guarantees provided by a universal life policy;
5.12.2 Cash values provided by a whole life policy which are subject to standard nonforfeiture law for life insurance; or
5.12.3 A premium deposit fund which:
5.12.3.1 Contains only premiums paid in advance which accumulate at interest;
5.12.3.2 Imposes no penalty for withdrawal;
5.12.3.3 Does not permit funding beyond future required premiums;
5.12.3.4 Is not marketed or intended as an investment; and
5.12.3.5 Does not carry a commission, either paid or calculated.
5.13 “Specific Appointment” means a prearranged appointment agreed upon by both parties and definite as to place and time.
5.14 “United States Armed Forces” means all components of the Army, Navy, Air Force, Marine Corps, and Coast Guard.
6.0 Practices Declared False, Misleading, Deceptive or Unfair on a Military Installation
6.1 The following acts or practices when committed on a military installation by an insurer or insurance producer with respect to the in-person, face-to-face solicitation of life insurance are declared to be false, misleading, deceptive or unfair:
6.1.1 Knowingly soliciting the purchase of any life insurance product “door to door” or without first establishing a specific appointment for each meeting with the prospective purchaser.
6.1.2 Soliciting service members in a group or “mass” audience or in a “captive” audience where attendance is not voluntary.
6.1.3 Knowingly making appointments with or soliciting service members during their normally scheduled duty hours.
6.1.4 Making appointments with or soliciting service members in barracks, day rooms, unit areas, or transient personnel housing or other areas where the installation commander has prohibited solicitation.
6.1.5 Soliciting the sale of life insurance without first obtaining permission from the installation commander or the commander’s designee.
6.1.6 Posting unauthorized bulletins, notices or advertisements.
6.1.7 Failing to present DD Form 2885, Personal Commercial Solicitation Evaluation, to service members solicited or encouraging service members solicited not to complete or submit a DD Form 2885.
6.1.8 Knowingly accepting an application for life insurance or issuing a policy of life insurance on the life of an enlisted member of the United States Armed Forces without first obtaining for the insurer’s files a completed copy of any required form which confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance established by regulations, directives or rules of the DoD or any branch of the Armed Forces.
6.2 The following acts or practices when committed on a military installation by an insurer or insurance producer constitute corrupt practices, improper influences or inducements and are declared to be false, misleading, deceptive or unfair:
6.2.1 Using DoD personnel, directly or indirectly, as a representative or agent in any official or business capacity with or without compensation with respect to the solicitation or sale of life insurance to service members.
6.2.2 Using an insurance producer to participate in any United States Armed Forces sponsored education or orientation program.
7.0 Practices Declared False, Misleading, Deceptive or Unfair Regardless of Location
7.1 The following acts or practices by an insurer or insurance producer constitute corrupt practices, improper influences or inducements and are declared to be false, misleading, deceptive or unfair:
7.1.1 Submitting, processing or assisting in the submission or processing of any allotment form or similar device used by the United States Armed Forces to direct a service member’s pay to a third party for the purchase of life insurance. The foregoing includes, but is not limited to, using or assisting in using a service member's “MyPay” account or other similar internet or electronic medium for such purposes. This subsection does not prohibit assisting a service member by providing insurer or premium information necessary to complete any allotment form.
7.1.2 Knowingly receiving funds from a service member for the payment of premium from a depository institution with which the service member has no formal banking relationship. For purposes of this section, a formal banking relationship is established when the depository institution:
7.1.2.1 Provides the service member a deposit agreement and periodic statements and makes the disclosures required by the Truth in Savings Act, 12 U.S.C. § 4301 et seq. and the regulations promulgated thereunder; and
7.1.2.2 Permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums.
7.1.3 Employing any device or method or entering into any agreement whereby funds received from a service member by allotment for the payment of insurance premiums are identified on the service member’s Leave and Earnings Statement or equivalent or successor form as “Savings” or “Checking” and where the service member has no formal banking relationship as defined in subsection 7 (A)(2).
7.1.4 Entering into any agreement with a depository institution for the purpose of receiving funds from a service member whereby the depository institution, with or without compensation, agrees to accept direct deposits from a service member with whom it has no formal banking relationship.
7.1.5 Using DoD personnel, directly or indirectly, as a representative or agent in any official or unofficial capacity with or without compensation with respect to the solicitation or sale of life insurance to service members who are junior in rank or grade, or to the family members of such personnel.
7.1.6 Offering or giving anything of value, directly or indirectly, to DoD personnel to procure their assistance in encouraging, assisting or facilitating the solicitation or sale of life insurance to another service member.
7.1.7 Knowingly offering or giving anything of value to a service member with a pay grade of E-4 or below for his or her attendance to any event where an application for life insurance is solicited.
7.1.8 Advising a service member with a pay grade of E-4 or below to change his or her income tax withholding or State of legal residence for the sole purpose of increasing disposable income to purchase life insurance.
7.2 The following acts or practices by an insurer or insurance producer lead to confusion regarding source, sponsorship, approval or affiliation and are declared to be false, misleading, deceptive or unfair:
7.2.1 Making any representation, or using any device, title, descriptive name or identifier that has the tendency or capacity to confuse or mislead a service member into believing that the insurer, insurance producer or product offered is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, the United States Armed Forces, or any state or federal agency or government entity. Examples of prohibited insurance producer titles include, but are not limited to, "Battalion Insurance Counselor," "Unit Insurance Advisor," "Servicemen's Group Life Insurance Conversion Consultant" or “Veteran’s Benefits Counselor.”
7.2.1.1 Nothing herein shall be construed to prohibit a person from using a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an accredited institution of higher learning. Such designations include, but are not limited to, Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC), Certified Financial Planner (CFP), Master of Science In Financial Services (MSFS), or Masters of Science Financial Planning (MS).
7.2.2 Soliciting the purchase of any life insurance product through the use of or in conjunction with any third party organization that promotes the welfare of or assists members of the United States Armed Forces in a manner that has the tendency or capacity to confuse or mislead a service member into believing that either the insurer, insurance producer or insurance product is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, or the United States Armed Forces.
7.3 The following acts or practices by an insurer or insurance producer lead to confusion regarding premiums, costs or investment returns and are declared to be false, misleading, deceptive or unfair:
7.3.1 Using or describing the credited interest rate on a life insurance policy in a manner that implies that the credited interest rate is a net return on premium paid.
7.3.2 Excluding individually issued annuities, misrepresenting the mortality costs of a life insurance product, including stating or implying that the product "costs nothing" or is "free."
7.4 The following acts or practices by an insurer or insurance producer regarding SGLI or VGLI are declared to be false, misleading, deceptive or unfair:
7.4.1 Making any representation regarding the availability, suitability, amount, cost, exclusions or limitations to coverage provided to a service member or dependents by SGLI or VGLI, which is false, misleading or deceptive.
7.4.2 Making any representation regarding conversion requirements, including the costs of coverage, or exclusions or limitations to coverage of SGLI or VGLI to private insurers which is false, misleading or deceptive.
7.4.3 Suggesting, recommending or encouraging a service member to cancel or terminate his or her SGLI policy or issuing a life insurance policy which replaces an existing SGLI policy unless the replacement shall take effect upon or after the service member’s separation from the United States Armed Forces.
7.5 The following acts or practices by an insurer and or insurance producer regarding disclosure are declared to be false, misleading, deceptive or unfair:
7.5.1 Deploying, using or contracting for any lead generating materials designed exclusively for use with service members that do not clearly and conspicuously disclose that the recipient will be contacted by an insurance producer, if that is the case, for the purpose of soliciting the purchase of life insurance.
7.5.2 Failing to disclose that a solicitation for the sale of life insurance will be made when establishing a specific appointment for an in-person, face-to-face meeting with a prospective purchaser.
7.5.3 Excluding individually issued annuities, failing to clearly and conspicuously disclose the fact that the product being sold is life insurance.
7.5.4 Failing to make, at the time of sale or offer to an individual known to be a service member, the written disclosures required by Section 10 of the “Military Personnel Financial Services Protection Act,” Pub. L. No. 109-290, p.16.
7.5.5 Excluding individually issued annuities, when the sale is conducted in-person face-to-face with an individual known to be a service member, failing to provide the applicant at the time the application is taken:
7.5.5.1 An explanation of any free look period with instructions on how to cancel if a policy is issued; and
7.5.5.2 Either a copy of the application or a written disclosure. The copy of the application or the written disclosure shall clearly and concisely set out the type of life insurance, the death benefit applied for and its expected first year cost. A basic illustration that meets the requirements of [insert reference to state’s illustration or disclosure regulation] shall be deemed sufficient to meet this requirement for a written disclosure.
7.6 The following acts or practices by an insurer or insurance producer with respect to the sale of certain life insurance products are declared to be false, misleading, deceptive or unfair:
7.6.1 Excluding individually issued annuities, recommending the purchase of any life insurance product which includes a side fund to a service member in pay grades E-4 and below unless the insurer has reasonable grounds for believing that the life insurance death benefit, standing alone, is suitable.
7.6.2 Offering for sale or selling a life insurance product which includes a side fund to a service member in pay grades E-4 and below who is currently enrolled in SGLI, is presumed unsuitable unless, after the completion of a needs assessment, the insurer demonstrates that the applicant’s SGLI death benefit, together with any other military survivor benefits, savings and investments, survivor income, and other life insurance are insufficient to meet the applicant’s insurable needs for life insurance.
7.6.2.1 “Insurable needs” are the risks associated with premature death taking into consideration the financial obligations and immediate and future cash needs of the applicant’s estate and/or survivors or dependents.
7.6.2.2 “Other military survivor benefits” include, but are not limited to: the Death Gratuity, Funeral Reimbursement, Transition Assistance, Survivor and Dependents’ Educational Assistance, Dependency and Indemnity Compensation, TRICARE Healthcare benefits, Survivor Housing Benefits and Allowances, Federal Income Tax Forgiveness, and Social Security Survivor Benefits.
7.6.3 Excluding individually issued annuities, offering for sale or selling any life insurance contract which includes a side fund:
7.6.3.1 Unless interest credited accrues from the date of deposit to the date of withdrawal and permits withdrawals without limit or penalty;
7.6.3.2 Unless the applicant has been provided with a schedule of effective rates of return based upon cash flows of the combined product. For this disclosure, the effective rate of return will consider all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender values available to the policyholder in addition to life insurance coverage. This schedule will be provided for at least each policy year from one (1) to ten (10) and for every fifth policy year thereafter ending at age 100, policy maturity or final expiration; and
7.6.3.3 Which by default diverts or transfers funds accumulated in the side fund to pay, reduce or offset any premiums due.
7.6.4 Excluding individually issued annuities, offering for sale or selling any life insurance contract which after considering all policy benefits, including but not limited to endowment, return of premium or persistency, does not comply with standard nonforfeiture law for life insurance.
7.6.5 Selling any life insurance product to an individual known to be a service member that excludes coverage if the insured’s death is related to war, declared or undeclared, or any act related to military service except for an accidental death coverage, e.g., double indemnity, which may be excluded.
8.0 Severability
If any provision of these sections or the application thereof to any person or circumstance is held invalid for any reason, the invalidity shall not affect the other provisions or any other application of these sections which can be given effect without the invalid provisions or application. To this end all provisions of these sections are declared to be severable.
9.0 Effective Date
This regulation shall become effective September 11, 2007.
11 DE Reg. 333 (09/01/07)
1217 Unfair Discrimination in Life Insurance, Annuities and Health Insurance on the Basis of Physical or Mental Impairment
18 Del. Admin. Code § 1217 Unfair Discrimination in Life Insurance, Annuities and Health Insurance on the Basis of Physical or Mental Impairment
1217 Unfair Discrimination in Life Insurance, Annuities and Health Insurance on the Basis of Physical or Mental Impairment
1.0 Authority
1.1 This regulation is promulgated pursuant to the authority granted by 18 Del.C. §§311, 2312 and 29 Del.C. Chapter 101.
2.0 Purpose
2.1 The purpose of this regulation is to identify specific acts or practices in life insurance, annuities, and health insurance which are prohibited by 18 Del.C. §2304(13).
3.0 Unfairly Discriminatory Acts or Practices
3.1 The following are hereby identified as acts or practices in life and health insurance and annuities which constitute unfair discrimination between individuals of the same class: Refusing to insure, or refusing to continue to insure, or limiting the amount, extent or kind of coverage available to an individual, or charging a different rate for the same coverage solely because of a physical or mental impairment, except where the refusal, limitation or rate differential is based on sound actuarial principles or is related to actual or reasonably anticipated experience.
4.0 Effective Date
4.1 This regulation shall become effective October 1, 2007.
1218 Determining Reserve Liabilities For Credit Life Insurance
18 Del. Admin. Code § 1218 Determining Reserve Liabilities For Credit Life Insurance
1218 Determining Reserve Liabilities For Credit Life Insurance
1.0 Authority
This regulation is promulgated by the Commissioner of Insurance pursuant to 18 Del.C. §§1111, 1113, 1213, 1701 and 29 Del.C. Ch. 101 (Administrative Procedures Act).
2.0 Scope
This regulation applies to credit life insurance policies and certificates, and those similar policies and certificates where there is no identifiable charge made to the debtor.
3.0 Purpose
The purpose of this regulation is to:
3.1 Recognize the 2001 CSO Male Composite Ultimate Mortality Table for use in determining the minimum standard of valuation.
3.2 Specify the interest rate and method to be used in determining the minimum standard of valuation.
4.0 Definitions
"2001 CSO Mortality Table" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002). Unless the context indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables.
"Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.
"Credit life insurance" means life insurance as defined in 18 Del.C. §3702.
5.0 2001 CSO Male Composite Ultimate Mortality Table
5.1 The minimum standard for both male and female insureds shall be 2001 CSO Male Composite Ultimate Mortality Table.
5.2 Where the credit life insurance policy or certificate insures two lives, the minimum standard shall be twice the mortality in the 2001 CSO Male Composite Ultimate Mortality Table based on the age of the older insured.
6.0 Minimum Standards
6.1 18 Del.C. §1212 shall not apply to credit life insurance.
6.2 The interest rates used in determining the minimum standard for valuation shall be the calendar year statutory valuation interest rates as defined in 18 Del.C. §1113.
6.3 The method used in determining the minimum standard for valuation shall be the Commissioners Reserve Valuation Method as defined in 18 Del.C. §1113.
7.0 Effective Date
This regulation is applicable to credit life policies and certificates issued on or after January 1, 2010 and effective 10 days after publication of the final Order signed by the Commissioner.
14 DE Reg. 50 (07/01/10)
1300 Health Insurance General Provisions
1301 Internal Review and Independent Utilization Review of Health Insurance Claims
18 Del. Admin. Code § 1301-1.0 Purpose and Statutory Authority
The purpose of this Regulation is to implement 18 Del.C. §§332, 6408, 6416 and 6417 which require health insurance carriers to establish a procedure for internal review of a carrier’s adverse coverage determination and which require the Delaware Insurance Department to establish and administer procedures for independent utilization review upon completion of the carrier’s internal review process. This Regulation is promulgated pursuant to 18 Del.C. §§311, 332, 6408, 6416, and 6417 and 29 Del.C. Ch. 101. This Regulation should not be construed to create any cause of action not otherwise existing at law.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-2.0 Definitions
The following words and terms, when used in this regulation, should have the following meaning unless the context clearly indicates otherwise:
“Adverse determination” means a decision by a carrier to deny (in whole or in part), reduce, limit or terminate health insurance benefits or a determination that an admission or continued stay, or course of treatment, or other covered health service does not satisfy the insurance policy’s clinical requirements for appropriateness, necessity, health care setting and/or level of care.
“Appeal” means a request for external review of a carrier’s final coverage decision through the Independent Health Care Appeals Program.
“Appropriateness of services” means an appeal classification for adverse determinations that are made based on identification of treatment as cosmetic, investigational, experimental or not an appropriate or preferred treatment method or setting for the condition for which treatment is sought.
“Authorized representative” means an individual whom a covered person willingly acknowledges to represent his interests during the internal review process and/or an appeal through the arbitration process or the Independent Health Care Appeals Program, including but not limited to a provider to whom a covered person has assigned the right to collect sums due from a carrier for health care services rendered by the provider to the covered person. A carrier may require the covered person to submit written verification of his consent to be represented. If a covered person has been determined by a physician to be incapable of assigning the right of representation, the covered person may be represented by a family member or a legal representative.
“Carrier” means any entity that provides health insurance in this State. Carrier includes an insurance company, health service corporation, managed care organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. Carrier also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health insurance.
“Covered person” means an individual and/or family who has entered into a contractual arrangement, or on whose behalf a contractual arrangement has been entered into, with a carrier, pursuant to which the carrier provides health insurance for such person or persons.
“Department” means the Delaware Insurance Department.
“Final coverage decision” means the decision by a carrier at the conclusion of its internal review process upholding, modifying or reversing its adverse determination.
“Grievance” means a request by a covered person or his authorized representative that a carrier review an adverse determination by means of the carrier’s internal review process.
“Health care services” means any services or supplies included in the furnishing to any individual of medical care, or hospitalization or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any individual of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury, disability or disease.
“Health insurance” means a plan or policy issued by a carrier for the payment for, provision of, or reimbursement for health care services.
“Independent Health Care Appeals Program (“IHCAP”)” means a program administered by the Department that provides for an external review by an Independent Utilization Review Organization of a carrier’s final coverage decision based on medical necessity or appropriateness of services.
“Independent Utilization Review Organization (“IURO”)” means an entity that conducts independent external reviews of a carrier’s final coverage decisions resulting in a denial, termination, or other limitation of covered health care services based on medical necessity or appropriateness of services.
“Internal review process (“IRP”)” means a procedure established by a carrier for internal review of an adverse determination.
“Medical necessity” means providing of health care services or products that a prudent physician would provide to a patient for the purpose of diagnosing or treating an illness, injury, disease or its symptoms in a manner that is:
A. In accordance with generally accepted standards of medical practice;
B. Consistent with the symptoms or treatment of the condition; and
C. Not solely for anyone’s convenience.
“Pre-Authorization” is a requirement by a carrier or health insurance plan that states physicians need to submit a treatment plan or service request to the carrier for evaluation of appropriateness of the plan or service before treatment is rendered. It lets the insured and physician know in advance which procedures are covered.
“Provider” means an individual or entity, including without limitation, a licensed physician, a licensed nurse, a licensed physician assistant and a licensed nurse practitioner, a licensed diagnostic facility, a licensed clinical facility, and a licensed hospital, who or which provides health care services in this State.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-3.0 Minimum Requirements for an Internal Review Process (IRP)
3.1 In addition to the requirements set forth in 18 Del.C. §332, the provisions of this section shall govern the internal review process of all carriers offering health insurance in Delaware:
3.2 All written procedures and forms utilized by a carrier shall be readable and understandable by a person of average intelligence and education. All such documents shall meet the following criteria:
3.2.1 The type size shall not be smaller than 11 point;
3.2.2 The type style selection shall be at the discretion of the carrier but shall be of a type that is clear and legible;
3.2.3 Captions or headings shall be designed to stand out clearly;
3.2.4 White space separating subjects or sections should be distinct;
3.2.5 There must be included a table of contents sufficient to guide and assist the covered person or his authorized representative;
3.2.6 Where appropriate, definitions shall be included, shall be sufficient to clearly apply to the usage intended, and shall not conflict with the definitions contained in this regulation; and
3.2.7 The forms shall be written in everyday, conversational language to the extent possible to preserve the legal meaning.
3.2.8 Short familiar words shall be used and sentences shall be kept as short and simple as possible.
3.3 The carrier shall provide all forms relating to grievances, appeals, arbitration or other procedures relating to IRP as examples along with the written notice of IRP provided to the covered person.
3.4 Written notice.
3.4.1 For any IRP not previously approved by the Department, the carrier shall provide written notice of the IRP to all covered persons within 30 days of approval by the Department.
3.4.2 The carrier shall provide the notice required by 18 Del.C. §332(c)(1) to covered persons following any adverse determination, and annually, either upon the policy renewal date, open enrollment date, or a set date for all covered persons, in the carrier’s discretion. In addition to the requirements set forth in 18 Del.C. §332(c)(1), the notice shall also, at a minimum, provide as follows:
3.4.2.1 You have the right to seek a review of a claim reduction or denial through this insurer’s internal review process.
3.4.3 For every new policy issued after the Department’s approval of the IRP, the carrier shall provide covered persons with a copy of the IRP at the time, or prior to the time, the carrier sends identification cards, member handbooks or similar member materials to newly covered persons.
3.4.4 When a covered person’s dependents are also covered, a single notice to the principal covered person shall be sufficient under this section.
3.5 Under circumstances where an oral or written grievance may not contain sufficient information and the carrier requests additional information, such request shall not be burdensome or require such information as the carrier might reasonably be expected to obtain through its normal claims process.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-4.0 Notice Requirements for Appeal of a Carrier’s Final Coverage Decision
At the time a carrier provides to a covered person written notice of a carrier's final coverage decision, if the final coverage decision does not authorize payment of the claim in its entirety, the carrier shall provide the covered person with a written notice of the process by which a covered person may appeal the carrier's final coverage decision. The notice shall include a statement that mediation services are offered by the Department. Such notice may be separate from or a part of the written notice of the carrier's decision.
The notice provided to a covered person shall, at a minimum, contain the following language:
“You have the right to seek a review of a claim reduction or denial through the Delaware Insurance Department. The Delaware Insurance Department provides free informal mediation services which are in addition to, but do not replace, your right to a review of this decision through an external review or through the Department's arbitration program, as applicable. You can contact the Delaware Insurance Department for information about claim denial review or mediation by calling the Consumer Services Division at 800‑282‑8611 or 302-674-7310.
Your decision to pursue mediation with the Department does not change the deadlines imposed for filing a request for an external review (set by Section 5.0 of this regulation) or arbitration (set by Regulation 1315 of Delaware Administrative Code Chapter 18, 18 DE Admin. Code 1315).
All requests for review through the Department’s arbitration program must be filed with the Department within 60 days from the date you receive this carrier’s notice, otherwise, this decision will be final. All requests for external review must be filed with this carrier within four months of your receipt of this final coverage decision.”
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-5.0 IHCAP Procedure
5.1 A covered person or his authorized representative may request review of a final coverage decision based, in whole or in part, on medical necessity or appropriateness of services by filing an appeal with the carrier within 4 months of receipt of the final coverage decision.
5.2 Upon receipt of an appeal, the carrier shall transmit the appeal electronically to the Department as soon as possible, but within no more than 3 business days.
5.3 Within 5 calendar days of receipt of an appeal, the Department shall assign an approved, impartial Independent Utilization Review Organization to review the final coverage decision and shall notify the carrier.
5.4 The assigned IURO shall, within 5 calendar days of assignment, notify the covered person or his authorized representative in writing by certified or registered mail that the appeal has been accepted for external review.
5.4.1 The notice shall include a provision stating that the covered person or his authorized representative may submit additional written information and supporting documentation that the IURO shall consider when conducting the external review.
5.4.2 The covered person or his authorized representative shall submit such written documentation to the IURO within 7 calendar days following the date of receipt of the notice.
5.4.3 Upon receipt of any information submitted by the covered person or his authorized representative, the assigned IURO shall as soon as possible, but within no more than 2 business days, forward the information to the carrier.
5.4.4 The IURO must accept additional documentation submitted by the carrier in response to additional written information and supporting documentation from the covered person or his authorized representative.
5.5 Within 7 calendar days after the receipt of the notification required in subsection 5.3 of this regulation, the carrier shall provide to the assigned IURO the documents and any information considered in making the final coverage decision.
5.5.1 If the carrier fails to submit documentation and information or fails to participate within the time specified, the assigned IURO may terminate the external review and make a decision, with the approval of the Department, to reverse the final coverage decision.
5.6 The external review may be terminated if the carrier decides to reverse its final coverage decision and provide coverage or payment for the health care service that is the subject of the appeal.
5.6.1 Immediately upon making the decision to reverse its final coverage decision, the carrier shall notify the covered person or his authorized representative, the assigned IURO, and the Department in writing of its decision. The assigned IURO shall terminate the external review upon receipt of the written notice from the carrier.
5.7 Within 45 days after the IURO’s receipt of an appeal, the assigned IURO shall provide written notice of its decision to uphold or reverse the final coverage decision to the covered person or his authorized representative, the carrier and the Department, which notice shall include the following information:
5.7.1 The qualifications of the members of the review panel;
5.7.2 A general description of the reason for the request for external review;
5.7.3 The date the IURO received the assignment from the Department to conduct the external review;
5.7.4 The date(s) the external review was conducted;
5.7.5 The date of its decision;
5.7.6 The principal reason(s) for its decision; and
5.7.7 References to the evidence or documentation, including practice guidelines and clinical review criteria, considered in reaching its decision.
5.8 The decision of the IURO is binding upon the carrier except as provided in 18 Del.C. §6416(b).
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-6.0 Expedited IHCAP Procedure
6.1 A covered person or his authorized representative may request an expedited appeal at the time the carrier issues its final coverage decision if the covered person suffers from a condition that poses an imminent, emergent or serious threat or has an emergency medical condition.
6.1.1 For an emergency medical condition, the claimant may file for an external review without having already exhausted the internal appeal process. To the extent the State process requires exhaustion of an internal claims and appeals process, exhaustion must be unnecessary where the carrier (or, if applicable, the plan) has waived the requirement, the carrier (or the plan) is considered to have exhausted the internal claims and appeals process under applicable law (including by failing to comply with any of the requirements for the internal appeal process, as outlined in 45 CFR 147.136(b)(2) and (3)), or the claimant has applied for expedited external review at the same time as applying for an expedited internal appeal.
6.2 At the time the carrier receives a request for an expedited appeal, the carrier shall immediately transmit the appeal electronically to the Department, but within no more than 3 business days.
6.3 If the Department determines that the review meets the criteria for expedited review, the Department shall assign an approved, impartial IURO to conduct the external review and shall notify the carrier.
6.4 At the time the carrier receives the notification of the assigned IURO, the carrier shall provide or transmit all necessary documents and information considered in making its final coverage decision to the assigned IURO electronically, by telephone, by facsimile or any other available expeditious method.
6.5 As expeditiously as the covered person’s medical condition permits or circumstances require, but in no event more than 72 hours after the IURO’s receipt of the expedited appeal, the IURO shall make a decision to uphold or reverse the final coverage decision and immediately notify the covered person or his authorized representative, the carrier, and the Department of the decision.
6.6 Within 1 calendar day of the immediate notification, the assigned IURO shall provide written confirmation of its decision to the covered person or his authorized representative, the carrier, and the Department.
6.7 The decision of the IURO is binding upon the carrier except as provided in 18 Del.C. §6416(b).
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-7.0 Refusal or Dismissal of IHCAP Appeal
7.1 The Department may refuse to accept any appeal that is not timely filed or does not otherwise meet the criteria for IHCAP review. If the subject of the appeal is appropriate for arbitration, the Department shall advise the covered person or his authorized representative of the arbitration procedure. If the subject of the appeal is appropriate for arbitration, the appeal shall be treated as a petition for arbitration.
7.2 Carrier’s motion to dismiss an IHCAP appeal.
7.2.1 A carrier may move to dismiss an IHCAP appeal if the carrier believes the appeal:
7.2.1.1 Concerns a benefit that is the subject of an express written exclusion from the covered person’s health insurance;
7.2.1.2 Is appropriate for arbitration; or
7.2.1.3 Should be dismissed because it is inappropriate for IHCAP review as explained in a sworn statement by an officer of the carrier.
7.2.2 The carrier’s motion to dismiss must be made in writing at the time the carrier transmits the appeal to the Department and must include any necessary supporting documentation.
7.2.3 The Department shall review the appeal and motion for dismissal and may, in its discretion:
7.2.3.1 Dismiss the appeal and notify the covered person or his authorized representative in writing that the appeal is inappropriate for the IHCAP; or
7.2.3.2 Appoint an IURO to conduct a full external review.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-8.0 IHCAP Costs
8.1 All costs for IHCAP review by an IURO, whether the review is preliminary, or partially or fully completed, shall be borne by the carrier.
8.1.1 These costs shall include a $75 administration fee for processing and handling by the Department.
8.2 The carrier shall reimburse the Department for the cost of the IHCAP review within 90 calendar days of receipt of the decision by the IURO or within 90 days of termination of review by the IURO by other means.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-9.0 Approval of Independent Utilization Review Organizations
9.1 The Department shall approve IUROs eligible to be assigned to conduct IHCAP reviews as provided in 18 Del.C. §6417(a).
9.2 An IURO seeking approval to conduct IHCAP reviews shall submit an application to the Department that includes the information required by 18 Del.C. §§6417(c)(1), 6417(c)(2), 6417(c)(4), and a copy of its certification by URAC or other nationally recognized certification organization.
9.3 The Department shall maintain a current list of approved IUROs.
9.4 In connection with each external review, neither the expert reviewer, nor the independent review organization, shall have any material professional, familial or financial conflict of interest with any of the following:
9.4.1 The plan;
9.4.2 Any officer, director or management of the plan;
9.4.3 The physician, the physician’s medical group or the independent practice association proposing the service or treatment;
9.4.4 The institution at which the service or treatment would be provided;
9.4.5 The development or manufacture of the principal drug, device, procedure or other therapy proposed for the covered person whose treatment is under review;
9.4.6 The covered person; or
9.4.7 Any national, state or local trade association of health benefit plans or health-care providers.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-10.0 Recordkeeping and Reporting Requirements
10.1 A carrier and IURO shall maintain written or electronic records for five years, after completion of the appeal process, documenting all grievances and appeals for IHCAP review including, at a minimum, the following information:
10.1.1 For each grievance:
10.1.1.1 The date received;
10.1.1.2 Name and plan identification number of the covered person on whose behalf the grievance was filed;
10.1.1.3 A general description of the reason for the grievance; and
10.1.1.4 The date and description of the final coverage decision.
10.1.2 For each appeal for IHCAP review:
10.1.2.1 The date received;
10.1.2.2 Name and plan identification number of the covered person on whose behalf the appeal was filed;
10.1.2.3 A general description of the reason for the appeal; and
10.1.2.4 Date and description of the IURO’s decision or other disposition of the appeal.
10.2 A carrier shall file with its annual report to the Department the following information:
10.2.1 The total number grievances filed; and
10.2.2 The total number of IHCAP appeals filed, with a breakdown showing the total number of final coverage decisions:
10.2.2.1 Upheld through IHCAP; and
10.2.2.2 Reversed through IHCAP.
10.3 A carrier shall make available to the Department upon request any of the information specified in the foregoing subsections 10.1 and 10.2 of this regulation, and other information regarding its internal review process including but not limited to the written IRP procedures and forms the carrier distributes to covered persons.
10.4 An IURO shall make available to the Department upon request any of the information specified in the foregoing subsections 10.1 and 10.2 of this regulation to the extent within the IURO’s records.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-11.0 Non-Retaliation
11.1 A carrier shall not disenroll, terminate or in any way penalize a covered person who exercises his or her rights to file a grievance or appeal for IHCAP review solely on the basis of such filing.
11.2 A carrier shall not terminate or in any way penalize a provider with whom it has a contractual relationship and who exercises, on behalf of a covered person, the right to file a grievance or appeal for IHCAP review solely on the basis of such filing.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-12.0 Confidentiality of Health Information
Nothing in this Regulation shall supersede any federal or state law or regulation governing the privacy of health information.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-13.0 Computation of Time
In computing any period of time prescribed or allowed by this Regulation, the day of the act or event after which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday or Sunday, or other legal holiday, or other day on which the Department is closed, in which event the period shall run until the end of the next day on which the Department is open. When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and other legal holidays shall be excluded in the computation. As used in this section, "legal holidays" shall be those days provided by statute or appointed by the Governor or the Chief Justice of the State of Delaware.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
18 Del. Admin. Code § 1301-14.0 Effective Date
This regulation became effective July 11, 2007, 10 days after being published as a final regulation. The amendments to Sections 3.0 and 4.0 of this regulation and to the definition of "Authorized representative," became effective January 11, 2018. The current amendments to Sections 3.0 and 4.0 of this regulation and to the definition of "Authorized representative" shall become effective 10 days after being published in the Register of Regulations.
History
- 19 DE Reg. 923 (04/01/16)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 19 DE Reg. 923 (04/01/16)
- 11 DE Reg. 68 (07/01/07)
- 12 DE Reg. 974 (01/01/09)
- 19 DE Reg. 923 (04/01/16)
- 21 DE Reg. 580 (01/01/18)
- 26 DE Reg. 873 (04/01/23)
1302 Accident and Sickness Insurance Advertisements [Formerly Regulation 12]
18 Del. Admin. Code § 1302 Accident and Sickness Insurance Advertisements [Formerly Regulation 12]
1302 Accident and Sickness Insurance Advertisements [Formerly Regulation 12]
1.0 Authority
The following Departmental Regulation is hereby promulgated and published pursuant to the authority vested in the Insurance Commissioner by 18 Del.C. §314, relative to the advertisement of Accident and Sickness insurance.
2.0 Purpose
The purpose of these regulations is to assure truthful and adequate disclosure of all material and relevant information in the advertising of accident and sickness insurance. This purpose is intended to be accomplished by the establishment of, and adherence to, certain minimum standards and guidelines of conduct in the advertising of accident and sickness insurance in a manner which prevents unfair competition among insurers and is conducive to the accurate presentation and description to the insurance buying public of a policy of such insurance offered through various advertising media. 18 Del.C. §§2302, 2303 and 2304 (hereinafter "Section") preclude the transmitting or use of information in the form of advertisements or otherwise in this State in such a manner or of such substance that the insurance buying public may be deceived or misled. Since such Sections establish only general standards, these regulations establish specific standards for advertisements relating to individual, group, blanket and selected group (franchise) accident and sickness insurance. These regulations are applicable to all persons and entities specified in 18 Del.C. §505 authorized to transact accident and sickness insurance in this State. The following specific standards for advertisements of accident and sickness insurance are hereby adopted.
3.0 Applicability
3.1 These regulations shall apply to any accident and sickness insurance "advertisement" as that term is hereinafter defined, intended for presentation, distribution or dissemination in this State when such presentation, distribution or dissemination is made either directly or indirectly by or on behalf of an insurer, agent, broker or solicitor as those terms are defined in the Insurance Code and these regulations.
3.2 Every insurer shall establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its policies. All such advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the insurer whose policies are so advertised.
4.0 Definitions
“Advertisement” for the purpose of these regulations shall include:
• printed and published material, audio visual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, TV scripts, billboards and similar displays; and
• descriptive literature and sales aids of all kinds issued by an insurer, agent or broker for presentation to members of the insurance buying public, including but not limited to circulars, leaflets, booklets, depictions, illustrations and form letters; and
• prepared sales talks, presentations and material for use by agents, brokers and solicitors.
"Exception" for the purpose of these regulations shall mean any provision in a policy whereby coverage for a specified hazard is entirely eliminated; it is a statement of a risk not assumed under the policy.
"Insurer" for the purpose of these regulations shall include any individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyd's, fraternal benefit society, and any other legal entity which is defined as an "insurer" in the Insurance Code of this State and is engaged in the advertisement of a policy as "policy" is defined in these regulations.
"Limitation" for the purpose of these regulations shall mean any provision which restricts coverage under the policy other than an exception or a reduction.
"Policy" for the purpose of these regulations shall include any policy, plan, certificate, contract, agreement, statement of coverage, rider or endorsement which provides accident and sickness benefits, or medical, surgical or hospital expense benefits, whether on an indemnity, reimbursement, service or prepaid basis, except when issued in connection with another kind of insurance other than life, and except accident and sickness, waiver of premium and double indemnity benefits included in life insurance and annuity contracts.
"Reduction" for the purpose of these regulations shall mean any provision which reduces the amount of the benefit; a risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period less than would be otherwise payable had such reduction not been used.
5.0 Method of Disclosure of Required Information
All information required to be disclosed by these regulations shall be set out conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisement so as to be confusing or misleading.
6.0 Form and Content of Advertisements
6.1 The format and content of an advertisement of an accident or sickness insurance policy shall be sufficiently complete and clear to avoid deception or the capacity or tendency to mislead or deceive. Whether an advertisement has a capacity or tendency to mislead or deceive shall, pursuant to 18 Del.C. §2314, be determined by the Insurance Commissioner from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence, within the segment of the public to which it is directed.
6.2 Advertisements shall be truthful and not misleading in fact or in implication. Words or phrases, the meaning of which is clear only by implication or by familiarity with insurance terminology, shall not be used.
7.0 Advertisements of Benefits Payable, Losses Covered or Premiums Payable
7.1 Deceptive Words, Phrases or Illustrations Prohibited.
7.1.1 No advertisement shall omit information or use words, phrases, statements, references or illustrations if the omission of such information or use of such words, phrases, statements, references or illustrations has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered or premium payable. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale or an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.
7.1.2 No advertisement shall contain or use words or phrases such as, 46 all"; "full"; "complete"; "comprehensive"; "unlimited"; 44 up to"; "as high as"; "this policy will help fill some of the gaps that Medicare and your present insurance leave out"; "this policy will help to replace your income" (when used to express loss of time benefits); or similar words and phrases, in a manner which exaggerates any benefits beyond the terms of the policy.
7.1.3 An advertisement shall not contain descriptions of a policy limitation, exception, or reduction, worded in a positive manner to imply that it is a benefit, such as, describing a waiting period as a "benefit builder," or stating "even pre-existing conditions are covered after two years." Words and phrases used in an advertisement to describe such policy limitations, exceptions and reductions shall fairly and accurately describe the negative features of such limitations, exceptions and reductions of the policy offered.
7.1.4 No advertisement of a benefit for which payment is conditional upon confinement in a hospital or similar facility shall use words or phrases such as "tax free"; "extra cash"; "extra income"; “extra pay"; or substantially similar words or phrases because such words and phrases have the capacity, tendency or effect of misleading the public into believing that the policy advertised will, in some way, enable them to make a profit from being hospitalized.
7.1.5 No advertisement of a hospital or other similar facility confinement benefit shall advertise that the amount of the benefit is payable on a monthly or weekly basis when, in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement. When the policy contains a limit on the number of days of coverage provided, such limit must appear in the advertisement.
7.1.6 No advertisement of a policy covering only one disease or a list of specified diseases shall imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.
7.1.7 An advertisement for a policy providing benefits for specified illnesses only, or for specified accidents, only, such as automobile accidents, shall clearly and conspicuously on the first page in prominent type state the limited nature of the policy. The statement shall be worded in language identical to, or substantially similar to the following: "THIS IS A LIMITED POLICY"; "THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY."
7.1.8 An advertisement of a direct response insurance product shall not imply that because "no insurance agent will call and no commissions will be paid to agents" that it is "a low cost plan," or use other similar words or phrases because the cost of advertising and servicing such policies is a substantial cost in the marketing of a direct response insurance product.
7.2 Exceptions, Reductions and Limitations.
7.2.1 When an advertisement refers to either a dollar amount, or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity or tendency to mislead or deceive.
7.2.2 When a policy contains a waiting, elimination, probationary or similar time period between the effective date of coverage under the policy or a time period between the date a loss occurs and the date benefits begin to accrue for such loss, an advertisement which is subject to the requirements of the preceding paragraph shall disclose the existence of such periods in a prominent manner.
7.2.3 An advertisement shall not use the words "only"; "just"; "merely"; "minimum" or similar words or phrases to describe the applicability of any exceptions and reductions, such as: "This policy is subject to the following minimum exceptions and reductions."
7.3 Pre-Existing Conditions.
7.3.1 The form shall contain a question or statement which reflects the pre-existing condition provisions of the policy immediately preceding the blank space for the applicant's signature. For example, such an application form shall contain a question or statement substantially as follows:
7.3.1.1 "Do you understand that this policy will not pay benefits during the first _______ year(s) after the issue date for a disease or physical condition which you now have or have had in the past"? YES;
7.3.1.2 Or substantially the following statement:
7.3.1.3 "I understand that the policy applied for will not pay benefits for any loss incurred during the first ________ year(s) after the issue date on account of disease or physical condition which I now have or have had in the past."
7.3.2 An advertisement which is subject to the requirements of section 7.2 above shall, in negative terms, disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the policy. The term "pre-existing condition," or other similar terms, without an appropriate definition or description, shall not be used.
7.3.3 When a policy does not cover losses resulting from pre-existing conditions, no advertisement of the policy shall state or imply that the applicant's physical condition or medical history will not affect the issuance of the policy or payment of a claim thereunder. This prohibits the use of the phrase "no medical examination required" and phrases of similar import, but does not prohibit explaining "automatic issue." If an insurer requires a medical examination for a specified policy, the advertisement shall disclose that a medical examination is required.
7.3.4 When an advertisement contains an application form to be completed by the applicant and returned by mail for a direct response insurance product, such application.
8.0 Necessity for Disclosing Policy Provisions Relating to Renewability, Cancellability and Termination
When an advertisement refers to either a dollar amount or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, it shall disclose the provisions relating to renewability, cancellability and termination and any modification of benefits, losses covered or premiums because of age or for other reasons in a manner which shall not minimize or render obscure the qualifying conditions.
9.0 Testimonials or Endorsements by Third Parties
9.1 Testimonials used in advertisements must be genuine, represent the current opinion of the author, be relevant to the policy advertised and be accurately reproduced. The insurer, in using a testimonial, makes as its own all of the statements contained therein, and the advertisement, including such statement, is subject to all the provisions of these regulations.
9.2 If the person making a testimonial, an endorsement or an appraisal has a financial interest in the insurer or a related entity as a stockholder, director, officer, employee, or otherwise, such fact shall be disclosed in the advertisement. If a person is compensated for making a testimonial, endorsement or appraisal, such fact shall be disclosed in the advertisement by language substantially as follows: "Paid Endorsement." This does not require disclosure of union "scale" wages required by union rules if the payment is actually for such "scale" for TV or radio performances. The payment of substantial amounts in excess of actual expenses, directly or indirectly, for "travel and entertainment" for filming or recording of TV or radio advertisements remove the filming or recording from the category of an unsolicited testimonial and require disclosure of such compensation.
9.3 An advertisement shall not state or imply that an insurer or a policy has been approved or endorsed by any individual group of individuals, society, association or other organizations, unless such is the fact, and unless any proprietary relationship between an organization and the insurer is disclosed. If the entity making the endorsement or testimonial has been formed by the insurer or is owned or controlled by the insurer or the person or persons who own or control the insurer, such fact shall be contiguously disclosed in the advertisement.
9.4 When a testimonial is used and refers to benefits received under a policy, the specific claim data, including claim number, date of loss, and other pertinent information shall be retained by the insurer for inspection for a period of four years or until the filing of the next regular report on examination of the insurer, whichever is the longer period of time.
10.0 Use of Statistics
10.1 An advertisement relating to the dollar amounts of claims paid, the number of persons insured, or similar statistical information relating to any insurer or policy shall not use irrelevant facts. Such an advertisement shall not imply that such statistics are derived from the policy advertised unless such is the fact, and when applicable to other policies or plans shall specifically so state.
10.2 An advertisement shall not represent or imply that claim settlements by the insurer are "liberal" or "generous" or use words of similar import, or that claim settlements are or will be beyond the actual terms of the contract. An unusual amount paid for a unique claim for the policy advertised is misleading and shall not be used.
10.3 The source of any statistics used in an advertisement shall be identified in such advertisement.
11.0 Identification of Plan or Number of Policies
11.1 When a choice of the amount of benefits is referred to, an advertisement shall disclose that the amount of benefits provided depends upon the plan selected and that the premium will vary with the amount of the benefits selected.
11.2 When an advertisement refers to various benefits which may be contained in two or more policies, other than group master policies, the advertisement shall disclose that such benefits are provided only through a combination of such policies.
12.0 Disparaging Comparisons and Statements
An advertisement shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits or comparisons of non-comparable policies of other insurers, and shall not disparage competitors, their policies, services or business methods, and shall not disparage or unfairly minimize competing methods of marketing insurance.
13.0 Jurisdictional Licensing and Status of Insurer
13.1 An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond those limits.
13.2 An advertisement shall not create the impression directly or indirectly that the insurer, its financial condition or status, or the payment of its claims, or the merits, desirability, or advisability of its policy forms or kinds or plans of insurance are approved, endorsed, or accredited by any division or agency of this State or the United States Government.
14.0 Identity of Insurer
14.1 The name of the actual insurer and the form number or numbers of a specific policy(s) advertised shall be identified and made clear in all of its advertisements. An advertisement shall not use a trade name, any insurance group designation, name of the parent company of the insurer, name of a particular division of the insurer, service mark, slogan, symbol or other device which without disclosing the name of the actual insurer would have the capacity and tendency to mislead or deceive as to the true identity of the insurer.
14.2 No advertisement shall use any combination of words, symbols, or physical materials which by their content, phraseology, shape, color or other characteristics are so similar to combination of words, symbols, or physical materials used by agencies of the federal government or of this State, or otherwise appear to be of such a nature that it tends to confuse or mislead prospective insureds into believing that the solicitation is in some manner connected with an agency of the municipal, state, or federal government.
15.0 Group or Quasi-Group Implications
An advertisement of a particular policy shall not state or imply that prospective insureds become group or quasi-group members covered under a group policy and as such enjoy special rates or underwriting privileges, unless such is the fact.
16.0 Introductory, Initial or Special Offers
16.1 An advertisement of an individual policy shall not directly or implication represent that a contract or combination of contracts is an introductory, initial, or special offer, or that applicants will receive substantial advantages not available at a later date, or that the offer is available only to a specified group of individuals, unless such is the fact. An advertisement shall not contain phrases describing an enrollment period as "special," "limited," or use similar words or phrases when the insurer uses such enrollment periods as the usual method of advertising accident and sickness insurance.
16.2 An enrollment period during which a particular insurance product for a particular class of persons may be purchased on an individual basis shall not be offered within this State unless there has been a lapse of not less than 90 days between the close of the immediately preceding enrollment period for the same product and the opening of the new enrollment period. The advertisement shall indicate the date by which the applicant must mail the application which shall be not less than ten days and not more than forty days from the date that such enrollment period is advertised for the first time. This applies to all advertising media, i.e., mail, newspapers, radio, television, magazines and periodicals, by any one insurer. The phrase "any one insurer" includes all the affiliated companies of a group of insurance companies under common management or control. This is inapplicable to solicitations of employees or members of a particular group or association which otherwise would be eligible under specific provisions of the Insurance Code for group, blanket or franchise insurance.
16.3 This prohibits any statement or implication to the effect that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the particular policy advertised because of special advantages available in the policy, unless such is the fact.
16.4 The phrase "a particular insurance product" in 16.5 of this Section means an insurance policy which provides substantially different benefits than those contained in any other policy. Different terms of renewability; an increase or decrease in the dollar amounts of benefits; an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another policy shall not be sufficient to constitute the product being offered as a different product eligible for concurrent or overlapping enrollment periods.
16.5 An advertisement shall not-offer a policy which utilizes a reduced initial premium rate in a manner which overemphasizes the availability and the amount of the initial reduced premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, the advertisement shall not display the amount of the reduced initial premium either more frequently or more prominently than the renewal premium, and both the initial reduced premium and the renewal premium must be stated in juxtaposition in each portion of the advertisement where the initial reduced premium appears.
16.6 Special awards, such as a "safe drivers' award" shall not be used in connection with advertisements of accident and sickness insurance.
17.0 Statements About an Insurer
An advertisement shall not contain statements which are untrue in fact, or by implication misleading, with respect to the assets, corporate structure, financial standing, age or relative position of the insurer in the insurance business. An advertisement shall not contain a recommendation by any commercial rating system unless it clearly indicates the purpose of the recommendation and the limitations of the scope and extent of the recommendation.
18.0 Enforcement Procedures
18.1 Advertising File. Each insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of its individual policies and typical printed, published or prepared advertisements of its blanket, franchise and group policies hereafter disseminated in this or any other state whether or not licensed in such other state, with a notation attached to each such advertisement which shall indicate the manner and extent of distribution and the form number of any policy advertised. Such file shall be subject to regular and periodical inspection by this Department. All such advertisements shall be maintained in said file for a period of either four years or until the filing of the next regular report on examination of the insurer, whichever is the longer period of time.
18.2 Certificate of Compliance. Each insurer required to file an Annual Statement which is now or which hereafter becomes subject to the provisions of these regulations must file with this Department with its Annual Statement a Certificate of Compliance executed by an authorized officer of the insurer wherein it is stated that to the best of his knowledge, information and belief the advertisements of accident and sickness insurance which were disseminated by the insurer in this State during the preceding statement year complied or were made to comply in all respects with the provisions of these regulations and the Insurance Laws of this State as implemented and interpreted by these regulations.
19.0 Severability Provision
If any section or portion of a section of this regulation, or the applicability thereof to any person or circumstance is held invalid by a court, the remainder of the regulation, or the applicability of such provision to other persons or circumstances shall not be affected thereby.
1303 Individual Accident and Health Minimum Loss Ratio Standards [Formerly Regulation 42]
18 Del. Admin. Code § 1303 Individual Accident and Health Minimum Loss Ratio Standards [Formerly Regulation 42]
1303 Individual Accident and Health Minimum Loss Ratio Standards [Formerly Regulation 42]
1.0 Authority
This regulation is adopted and promulgated pursuant to 18 Del.C. §§2713(4), 2504(b) and 29 Del.C. Ch. 101 (Administrative Procedures Act)
2.0 Purpose
The purpose of this regulation is to establish minimum standards for determining the reasonableness of benefits provided under individual accident and health insurance policies in relation to premiums charged. Because of the different pattern of expenses inherent in group health insurance, blanket health insurance or health service plans, this regulation does not apply to these kinds of coverage.
3.0 Contents of Rate Filings
Each rate submission shall include an actuarial memorandum describing the basis on which rates were determined and shall indicate and describe the calculation of the ratio, hereinafter called "anticipated loss ratio," of the present value of the expected benefits to the present value of the expected premiums over the entire period for which rates are computed to provide coverage. Interest shall be used in the calculation of these present values only if it is a significant factor in the calculation of this loss ratio. Each rate submission must also include a certification by a qualified actuary that to the best of the actuary's knowledge and judgment the rate filing is in compliance with the applicable laws and regulations of Delaware and that the benefits are reasonable in relation to premiums.
4.0 Previously Approved Forms
4.1 Filings of rate revisions for a previously approved policy, rider or endorsement form shall also include the following:
4.1.1 A statement of the scope and reason for the revision, and an estimate of the expected average effect on premiums, including the anticipated loss ratio for the form.
4.1.2 A statement as to whether the filing applies only to new business, only to in force business, or both, and the reasons therefor.
4.1.3 A history of the experience under existing rates, including at least the data indicated in Section 5.0. The history may also include, if available and appropriate, the ratios of actual claims to the claims expected according to the assumptions underlying the existing rates. Additional data might include: substitution of actual claim runoffs for claim reserves and liabilities; determination of loss ratios with the increase in policy reserves (other than unearned premium reserves) added to benefits rather than subtracted from premiums; accumulations of experience funds; substitution of net level policy reserves for preliminary term policy reserves; adjustment of premiums to an annual mode basis; or other adjustments or schedules suited to the form and to the records of the company. All additional data must be reconciled, as appropriate, to the required data.
4.1.4 The date and magnitude of each previous rate change, if any.
5.0 Experience Records
Insurers shall maintain records of earned premiums and incurred benefits for each calendar year for each policy form, including data for rider and endorsement forms which are used with the policy form, on the same basis, including all reserves, as required for the accident and health policy experience exhibit. Separate data may be maintained for each rider or endorsement form to the extent appropriate. Experience under forms which provide substantially similar coverage may be combined. The data shall be for all years of issue combined, for each calendar year of experience since the year the form was first issued, except that data for calendar years prior to the most recent five years may be combined.
6.0 Evaluating Experience Data
6.1 In determining the credibility and appropriateness of experience data, due consideration must be given to all relevant factors, such as:
6.1.1 Statistical credibility of premiums and benefits, e.g., low exposure, low loss frequency.
6.1.2 Experienced and projected trends relative to the kind of coverage, e.g., inflation in medical expenses, economic cycles affecting disability income experience.
6.1.3 The concentration of experience at early policy durations where select morbidity and preliminary term reserves are applicable and where loss ratios are expected to be substantially lower than at later policy durations.
6.1.4 The mix of business by risk classification.
7.0 New Forms
7.1 With respect to a new form, benefits shall be deemed reasonable in relation to premiums provided the anticipated loss ratio is at least as great as shown in the following table:
Renewal Clause
Type of Coverage
OR
CR
GR
NC
Medical Expense
60%
55%
55%
50%
Loss of Income and Other
60%
55%
50%
45%
For Medicare supplement policies the anticipated loss ratio is at least 60%.
7.2 If satisfactory justification is submitted to the Department of Insurance for a policy form, including riders and endorsements, under which the expected average annual premium per policy is $100 or more but less than $200, the company may be permitted to subtract up to 5 percentage points from the numbers in the table above, or if less than $100, subtract up to 10 percentage points.
7.3 The average annual premium per policy and the average anticipated loss ratio shall be computed by the insurer based on an anticipated distribution of business by all applicable criteria having a price difference, such as age, sex, amount, dependent status, rider frequency, etc., except assuming an annual mode for all policies (i.e., the fractional premium loading shall not affect the average annual premium or anticipated loss ratio calculation).
7.4 Definitions of Renewal Clause
OR — Optionally Renewable: renewal is at the option of the insurance company.
CR — Conditionally Renewable: renewal can be declined by the insurance company only for stated reasons other than deterioration of health.
GR — Guaranteed Renewable: renewal cannot be declined by the insurance company for any reason, but the insurance company can revise rates on a class basis.
NC — Noncancellable: renewal cannot be declined nor can rates be revised by the insurance company.
8.0 Rate Revisions
8.1 With respect to filings of rate revisions for a previously approved form, benefits shall be deemed reasonable in relation to premiums provided the following standards are met:
8.1.1 With respect to policies issued on and after the effective date of the revision, the standards are the same as for new forms, except that the average annual premium shall be determined based on an actual rather than an anticipated distribution of business.
8.1.2 With respect to policies issued prior to the effective date of the revision, both 8.1.2.1 and 8.1.2.2 as follows shall be at least as great as the standards for new forms:
8.1.2.1 The anticipated loss ratio over the entire period for which the revised rates are computed to provide coverage;
8.1.2.2 The ratio of 8.1.2.2.1 and 8.1.2.2.2; where
8.1.2.2.1 is the sum of the accumulated benefits, from the later of the original effective date of the form or the effective date of this regulation to the effective date of the revision, and the present value of future benefits, and
8.1.2.2.2 is the sum of the accumulated premiums, from the later of the original effective date of the form or the effective date of this regulation to the effective date of the revision and the present value of future premiums, such present values to be taken over the entire period for which the revised rates are computed to provide coverage, and such accumulated benefits and premiums to include an explicit estimate of the actual benefits and premiums from the last date as of which an accounting has been made to the effective date of the revision. Interest shall be used in the calculation of these accumulated benefits and premiums and present values only if it is a significant factor in the calculation of this loss ratio.
8.1.3 Other methods, in addition to those in this Subsection, for new forms may be used to calculate rate revisions. However, the minimum anticipated loss ratio thus calculated must be at least as great as the standards for new forms, with consideration given to active life reserves, and such methods must be approved by the Insurance Commissioner.
9.0 Other Anticipated Loss Ratios
9.1 Anticipated loss ratios different from those indicated in Section 8.1 and 8.2 will require justification based on the special circumstances that may be applicable.
9.1.1 Examples of coverages that may receive special consideration are as follows:
9.1.1.1 accident only;
9.1.1.2 short term nonrenewable, e.g., airline trip; student accident;
9.1.1.3 specified peril, e.g., cancer, common carrier;
9.1.1.4 other special risks.
9.1.2 Examples of other factors that may receive special consideration are as follows:
9.1.2.1 marketing methods, giving due consideration to acquisition and administration costs and to premium mode;
9.1.2.2 extraordinary expenses;
9.1.2.3 high risk of claim fluctuation because of the low loss frequency or the catastrophic or experimental nature of the coverage;
9.1.2.4 product features such as long elimination periods, high deductibles and high maximum limits.
9.2 Companies are urged to review their experience periodically and to file rate revisions, as appropriate, in a timely manner to avoid the necessity of later filing of exceptionally large rate increases.
10.0 Effective Date
This regulation shall become effective December 17, 1984.
1304 Individual Accident and Sickness Insurance Minimum Standards Act [Formerly Regulation 46]
18 Del. Admin. Code § 1304 Individual Accident and Sickness Insurance Minimum Standards Act [Formerly Regulation 46]
1304 Individual Accident and Sickness Insurance Minimum Standards Act [Formerly Regulation 46]
1.0 Purpose
The purpose of this regulation is to implement 18 Del.C. Ch. 36 (Individual Accident and Sickness Insurance Minimum Standards) so as to provide reasonable standardization and simplification of terms and coverages of individual health insurance policies and individual subscriber contracts of hospital, medical and dental service corporations in order to facilitate public understanding and comparison and to eliminate provisions contained in individual health insurance policies and individual subscriber contracts of hospital, medical, and dental service corporations which may be misleading or confusing in connection either with the purchase of such coverages or with the settlement of claims and to provide for full disclosure in the sale of such coverages.
2.0 Authority
This regulation is issued pursuant to the authority vested in the Commissioner under 18 Del.C. Ch. 36 and 18 Del.C. §314.
3.0 Applicability and Scope
This regulation shall apply to all individual health insurance policies and subscriber contracts of hospital and medical and dental service corporations delivered or issued for delivery in this state on and after the effective date hereof, except it shall not apply to individual policies or contracts issued pursuant to a conversion privilege under a policy or contract of group or individual insurance when such group or individual policy or contract includes provisions which are inconsistent with the requirements of this Regulation, nor to policies being issued to employees or members as additions to franchise plans in existence on the effective date of this regulation. The requirements contained in this regulation shall be in addition to any other applicable regulations previously adopted.
4.0 Effective Date
This regulation shall be effective six months after signature by the Commissioner, and shall be applicable to all individual health insurance policies and nonprofit hospital, medical and dental service contracts delivered or issued for delivery in this state on and after such date which are not specifically exempt from this regulation. This regulation shall not apply to policies and contracts which were in effect prior to December 20, 1984.*
5.0 Policy Definitions
5.1 Except as provided hereafter, no individual health insurance policy or hospital, medical, or dental service corporation subscriber contract delivered or issued for delivery to any person in this state shall contain definitions respecting the matters set forth below unless such definitions comply with the requirements of this section.
"Accident" "Accidental Injury" "Accidental Means" shall be defined to employ "result" language and shall not include words which establish an accidental means test or use words such as "external, violent, visible wounds" or similar words of description or characterization.
• The definition shall not be more restrictive than the following: Injury or injuries, for which benefits are provided, means accidental bodily injury sustained by the insured person which are the direct cause, independent of disease or bodily infirmity or any other cause and occur while the insurance is in force.
• Such definition may provide that injuries shall not include injuries for which benefits are provided under workmen's compensation, employer's liability or similar law, motor vehicle no-fault plan, unless prohibited by law, or injuries occurring while the insured person is engaged in any activity pertaining to any trade, business, employment, or occupation for wage or profit.
"Convalescent Nursing Home" "Extended Care Facility" or "Skilled Nursing Facility" shall be defined in relation to its status, facilities, and available services.
• A definition of such home or facility shall not be more restrictive than one requiring that it:
• be operated pursuant to law;
• be primarily engaged in providing, in addition to room and board accommodations, skilled nursing care under the supervision of a duly licensed physician;
• provide continuous 24 hours a day nursing service by or under the supervision of a registered graduate professional nurse (R.N.); and
• maintains a daily medical record of each patient.
• The definition of such home or facility may provide that such term shall not be inclusive of:
• any home, facility or part thereof used primarily for rest;
• a home or facility for the aged or for the care of drug addicts or alcoholics; or
• a home or facility primarily used for the care and treatment of mental diseases, or disorders, or custodial or educational care.
"Hospital" may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Delaware State Board of Health, the Board of Health of other states, or by the recognized authorities such as the Joint Commission on Accreditation of Hospitals.
• The definition of the term "hospital" shall not be more restrictive than one requiring that the hospital:
• be an institution operated pursuant to law; and
• be primarily and continuously engaged in providing or operating, either on its premises or in facilities available to the hospital on a prearranged basis and under the supervision of a staff of duly licensed physicians, medical, diagnostic and major surgical facilities for the medical care and treatment of sick or injured persons on an in-patient basis for which a charge is made; and
• provide 24 hour nursing service by or under the supervision of registered graduate professional nurses (R.N's).
• The definition of the term "hospital" may state that such term shall not be inclusive of:
• convalescent homes, convalescent, rest, or nursing facilities; or
• facilities primarily affording custodial, educational or rehabilitory care; or
• facilities for the aged, drug addicts or alcoholics; or
• any military or veterans hospital or soldiers home or any hospital contracted for or operated by any national government or agency thereof for the treatment of members or ex-members of the armed forces, except for services rendered on an emergency basis where a legal liability exists for charges made to the individual for such services.
"Mental or Nervous Disorders" shall not be defined more restrictively than a definition including neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder of any kind.
"Nurses" may be defined so that the description of nurse is restricted to a type of nurse, such as registered graduate professional nurse (R.N.), a licensed practical nurse (L.P.N.), or a licensed vocational nurse (L.V.N.). If the words "nurse," "trained nurse" or "registered nurse" are used without specific instruction, then the use of such terms requires the insurer to recognize the services of any individual who qualifies under such terminology in accordance with the applicable statutes or administrative rules of the licensing or registry board of the state.
"One period of confinement" means consecutive days of in-hospital service received as an in-patient, or successive confinements when discharge from and readmission to the hospital occurs within a period of time not more than 90 days or three times the maximum number of days of in-hospital coverage provided by the policy to a maximum of 180 days.
"Partial Disability" shall be defined in relation to the individual's inability to perform one or more but not all of the "major," "important," or "essential" duties of employment or occupation or may be related to a 6 "percentage" of time worked or to a "specified number of hours" or to "compensation." Where a policy provides total disability benefits and partial disability benefits, only one elimination period may be required.
"Pre-existing condition" shall not be defined to be more restrictive than the following: Pre-existing condition means the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care or treatment within a five (5) year period preceding the effective date of the coverage of the insured person or a condition for which medical advice or treatment was recommended by a physician or received from a physician within a five (5) year period preceding the effective date of the coverage of the insured person.
"Physician" may be defined by including words such as "duly qualified physician" or "duly licensed physician." The use of such terms requires an insurer to recognize and to accept, to the extent of its obligation under the contract, all providers of medical care and treatment when such services are within the scope of the provider's licensed authority and are provided pursuant to applicable laws.
"Residual Disability" shall be defined in relation to the individual's reduction in earnings and may be related either to the inability to perform some part of the "major...... important," or "essential duties" of employment or occupation, or to the inability to perform all usual business duties for as long as is usually required. A policy which provides for residual disability benefits may require a qualification period, during which the insured must be continuously totally disabled before residual disability benefits are payable. The qualification period for residual benefits may be longer than the elimination period for total disability. In lieu of the term "residual disability," the insurer may use "proportionate disability" or other term of similar import which in the opinion of the Commissioner adequately and fairly describes the benefit.
"Sickness” shall not be defined to be more restrictive than the following: Sickness means sickness or disease of an insured person which first manifests itself after the effective date of insurance and while the insurance is in force. A definition of sickness may provide for a probationary period which will not exceed thirty (30) days from the effective date of the coverage of the insured person. The definition may be further modified to exclude sickness or disease for which benefits are provided under any workman's compensation, occupational disease, employer's liability or similar law."
"Total Disability"
• A general definition of total disability cannot be more restrictive than one requiring the individual to be totally disabled from engaging in any employment or occupation for which he is or becomes qualified by reason of education, training or experience and not in fact engaged in any employment or occupation for wage or profit.
• Total disability may be defined in relation to the inability of the person to perform duties but may not be based solely upon an individual's inability to: (a) Perform "any occupation whatsoever," "any occupational duty," or "any and every duty of his occupation," or (b) Engage in any training or rehabilitative program.
• An insurer may specify the requirements of the complete inability of the person to perform all of the substantial and material duties of this regular occupation or words of similar import. An insurer may require care by a physician (other than the insured or a member of the insured's immediate family).
6.0 Prohibited Policy Provisions
6.1 Except as provided in section 5.1.5, no policy shall contain provisions establishing a probationary or waiting period during which no coverage is provided under the policy subject to the further exception that a policy may specify a probationary or waiting period not to exceed six (6) months for specified diseases or conditions and losses resulting therefrom for hernia, disorder of reproduction organs, varicose veins, adenoids, appendix and tonsils. However, the permissible six (6) months exception shall not be applicable where such specified diseases or conditions are treated on an emergency basis. Accident policies shall not contain probationary or waiting periods.
6.2 No policy or rider for additional coverage may be issued as a dividend unless an equivalent cash payment is offered to the policyholder as an alternative to such dividend policy or rider. No such dividend policy or rider shall be issued for an initial term of less than 6 months.
The initial renewal subsequent to the issuance of any policy or rider as a dividend shall clearly disclose that the policyholder is renewing the coverage that was provided as a dividend for the previous term and that such renewal is optional with the policyholder.
6.3 No policy shall exclude coverage for a loss due to a pre-existing condition for a period greater than 12 months following policy issue where the application for such insurance does not seek disclosure of prior illness, disease or physical conditions or prior medical care and treatment and such pre-existing condition is not specifically excluded by the terms of the policy.
6.4 A disability income policy may contain a "return or premium" or "cash value benefit" so long as: (1) such return of premium or cash value benefit is not reduced by an amount greater than the aggregate of any claims paid under the policy; and (2) the insurer demonstrates that the reserve basis for such policies is adequate. No other policy shall provide a return of premium or cash value benefit, except return of unearned premium upon termination or suspension of coverage, retroactive waiver of premium paid during disability, payment of dividends on participating policies, or experience rating refunds.
6.5 Policies providing hospital confinement indemnity coverage shall not contain provisions excluding coverage because of confinement in a hospital operated by the federal government.
6.6 No policy shall limit or exclude coverage by type of illness, accident, treatment or medical condition, except as follows:
6.6.1 pre-existing conditions or diseases, except for congenital anomalies of a covered dependent child;
6.6.2 mental or emotional disorders, alcoholism and drug addiction;
6.6.3 pregnancy, except for complications of pregnancy, other than for policies defined in section 7.7 of this regulation;
6.6.4 illness, treatment or medical condition arising out of:
6.6.4.1 war or act of war (whether declared or undeclared); participation in a felony, riot or insurrections; service in the armed forces or units auxiliary thereto,
6.6.4.2 suicide (sane or insane), attempted suicide or intentionally self-inflicted injury,
6.6.4.3 aviation,
6.6.4.4 with respect to short-term nonrenewable policies, interscholastic sports;
6.6.5 cosmetic surgery, except that "cosmetic surgery" shall not include reconstructive surgery when such service is incidental to or follows surgery resulting from trauma, infection or other diseases of the involved part, and reconstructive surgery because of congenital disease or anomaly of a covered dependent child which has resulted in a functional defect;
6.6.6 foot care in connection with corns, calluses, flat feet, fallen arches, weak feet, chronic foot strain, or symptomatic complaints of the feet;
6.6.7 care in connection with the detection and correction by manual or mechanical means of structural imbalance, distortion, or subluxation in the human body for purposes of removing nerve interference and the effects thereof, where such interference is the result of or related to distortion, misalignment or subluxation of, or in the vertebral column;
6.6.8 treatment provided in a government hospital; benefits provided under Medicare or other governmental program (except Medicaid), any state or federal workmen's compensation, employer's liability or occupational disease law, or any motor vehicle no-fault law; services rendered by employees of hospitals, laboratories or other institutions; services performed by a member of the covered person's immediate family and services for which no charge is normally made in the absence of insurance.
6.6.9 dental care or treatment;
6.6.10 eye glasses, contact lens, hearing aids and examination for the prescription or fitting thereof;
6.6.11 rest cures, custodial care, transportation and routine physical examinations;
6.6.12 territorial limitations.
6.7 Provisions of this regulation shall not impair or limit the use of waivers to exclude, limit or reduce coverage or benefits for specifically named or described pre-existing diseases, physical condition or extra hazardous activity. Where waivers are required as a condition of issuance, renewal or reinstatement, signed acceptance by the insured is required unless on initial issuance the full text of the waiver is contained either on the first page or specification page.
6.8 Policy provisions precluded in this section shall not be constructed as a limitation on the authority of the Commissioner to disapprove other policy provisions in accordance with 18 Del.C. §3603(c) of the Individual Health Insurance Minimum Standards Act which, in the opinion of the Commissioner are unjust, or unfairly discriminatory to the policyholder, beneficiary, or any person insured under the policy.
7.0 Accidents and Sickness Minimum Standards for Benefits
7.1 The following minimum standards for benefits are prescribed for the categories of coverage noted in the following subsections. No individual policy of health insurance or nonprofit hospital, medical or dental service corporation contract shall be delivered or issued for delivery in this state which does not meet the required minimum standards for the specified categories unless the Commissioner finds that such policies or contracts are approvable as Limited Benefit Health insurance and the Outline of Coverage complies with the appropriate outline in section 8.11 of this regulation.
Nothing in this section shall preclude the issuance of any policy or contract combining two or more categories of coverage set forth in 18 Del.C. §3604 (a) and (b).
7.2 General Rules
7.2.1 A "noncancellable," "guaranteed renewable," or "noncancellable and guaranteed renewable" policy shall not provide for termination of coverage of the spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than nonpayment of premium. Such policies shall provide that in the event of the insured's death the spouse of the insured, if covered under the policy, shall become the insured.
7.2.2 The terms "noncancellable," "guaranteed renewable," and "noncancellable and guaranteed renewable" shall not be used without further explanatory language in accordance with the disclosure requirements of section 8.1. The terms "noncancellable" or "noncancellable and guaranteed renewable" may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy until the age of sixty-five (65) or to eligibility for Medicare, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force: Provided, however, any accident and health or accident only policy which provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from accident or sickness may provide that the insured has the right to continue the policy only to age sixty (60) if, at age sixty (60), the insured has the right to continue the policy in force at least to age sixty-five (65) while actively or regularly employed. Except as provided above, the term "guaranteed renewable" may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums until the age of sixty-five (65) or to eligibility for Medicare, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes: Provided, however, any accident and health or accident only policy which provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from accident or sickness may provide that the insured has the right to continue the policy only to age sixty (60) if, at age sixty (60), the insured has the right to continue the policy in force at least to age sixty-five (65) while actively and regularly employed.
7.2.3 In a family policy covering both husband and wife the age of the younger spouse must be used as the basis for meeting the age and durational requirements of the definitions of "noncancellable" or "guaranteed renewable." However, the requirement shall not prevent termination of coverage of the older spouse upon attainment of the stated age limit (e.g., age 65) so long as the policy may be continued in force as to the younger spouse to the age or for the durational period as specified in said definition.
7.2.4 When accidental death and dismemberment coverage is part of the insurance coverage offered under the contract, the insured shall have the option to include all insureds under such coverage and not just the principal insured.
7.2.5 If a policy contains a status type military service exclusion or a provision which suspends coverage during military service, the policy shall provide, upon receipt of written request, for refund of premiums as applicable to such person on a pro rata basis.
7.2.6 In the event the insurer cancels or refuses to renew, policies providing pregnancy benefits shall provide for an extension of benefits as to pregnancy commencing while the policy is in force and for which benefits would have been payable had the policy remained in force. The extension of such benefits shall be conditioned upon continuation of premium payments.
7.2.7 Policies providing convalescent or extended care benefits following hospitalization shall not condition such benefits upon admission to the convalescent or extended care facility within a period of less than fourteen (14) days after discharge from the hospital.
7.2.8 Family coverage shall continue for any dependent child who is incapable of self-sustaining employment due to mental retardation or physical handicap on the date that such child's coverage would otherwise terminate under the policy due to the attainment of a specified age limit for children and is chiefly dependent on the insured for support and maintenance. The policy may require that within 31 days of such date the company receive due proof of such incapacity in order for the insured to elect to continue the policy in force with respect to such child, or that a separate converted policy be issued.
7.2.9 Any policy providing coverage for the recipient in a transplant operation shall also provide reimbursement of any medical expenses of a live donor to the extent that benefits remain and are available under the recipient's policy, after benefits for the recipient's own expenses have been paid. The extension of such benefits to the donor may be conditioned upon the absence of other coverage available to the donor.
7.2.10 A policy may contain a provision relating to recurrent disabilities; provided however, that no such provision shall specify that a recurrent disability be separated by a period greater than six (6) months.
7.2.11 Accidental death and dismemberment benefits shall be payable if the loss occurs within ninety (90) days from the date of the accident, irrespective of total disability. Disability income benefits, if provided, shall not require the loss to commence less than thirty (30) days after the date of accident, nor shall any policy which the insurer cancels or refuses to renew require that it be in force at the time disability commences if the accident occurred while the policy was in force.
7.2.12 Specific dismemberment benefits shall not be in lieu of other benefits unless the specific benefit equals or exceeds the other benefits.
7.2.13 Any accident only policy providing benefits which vary according to type of accidental cause shall prominently set forth in the outline of coverage the circumstances under which benefits are payable which are lesser than the maximum amount payable under the policy.
7.2.14 Termination of the policy shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits.
7.3 Basic Hospital Expense Coverage
7.3.1 "Basic Hospital Expense Coverage" is a policy of accident and sickness insurance which provides coverage for a period of not less than thirty-one (31) days during any continuous hospital confinement for each person insured under the policy, for expense incurred for medically necessary treatment and services rendered as a result of accident or sickness for at least the following:
7.3.1.1 daily hospital room and board in an amount not less than the lesser of (a) 80% of the charges for semi-private room accommodations or (b) $30.00 per day;
7.3.1.2 miscellaneous hospital services for expenses incurred for the charges made by the hospital for services and supplies which are customarily rendered by the hospital and provided for use only during any one period of confinement in an amount not less than either 80% of the charges incurred up to at least $1,000.00 or ten times the daily hospital room and board benefits; and
7.3.1.3 hospital outpatient services consisting of (a) hospital services on the day surgery is performed, and (b) hospital services rendered within 72 hours after accidental injury, in an amount not less than $50.00, and (c) X-ray and laboratory tests to the extent that benefit for such services would have been provided to an extent not less than $100.00 if rendered to an in-patient of the hospital.
7.3.1.4 benefits provided under s sections 7.3.1.1 and 7.3.1.2 above, may be provided subject to a combined deductible amount not in excess of the greater of:
7.3.1.4.1 $100.00; or
7.3.1.4.2 the value of one day's hospital room.
7.4 Basic Medical-Surgical Expense Coverage
7.4.1 "Basic Medical-Surgical Expense Coverage" is a policy of accident and sickness insurance which provides coverage for each person insured under the policy for the expenses incurred for the necessary services rendered by a physician for treatment of an injury or sickness for at least the following:
7.4.1.1 Surgical services:
7.4.1.1.1 in amounts not less than those provided on a fee schedule based on the relative values contained in the state of New York certified surgical fee schedule, or the 1964 California Relative Value Schedule or other acceptable relative value scale or surgical procedures, up to a maximum of at least $500.00 for any one procedure; or
7.4.1.1.2 not less than 80% of the reasonable charges.
7.4.1.2 Anesthesia services, consisting of administration of necessary general anesthesia and related procedures in connection with covered surgical service rendered by a physician other than the physician (or his assistant) performing the surgical services;
7.4.1.2.1 in an amount not less than 80% of the reasonable charges; or
7.4.1.2.2 15% of the surgical service benefit.
7.4.1.2.3 In-hospital medical services, consisting of physician services rendered to a person who is a bed patient in a hospital for treatment of sickness or injury other than that for which surgical care is required, in an amount not less than 80% of the reasonable charges; or $5.00 per day for not less than twenty-one (21) days during one period of confinement.
7.5 Hospital Confinement Indemnity Coverage
7.5.1 "Hospital Confinement Indemnity Coverage" is a policy of accident and sickness insurance which provides daily benefits for hospital confinement on an indemnity basis in an amount not less than $30.00 per day and not less than thirty-one (31) days during any one period of confinement for each person insured under the policy.
7.6 Major Medical Expense Coverage
7.6.1 "Major medical expense coverage" is an accident and sickness insurance policy which provides hospital, medical and surgical expense coverage, to an aggregate maximum of not less than $10,000.00; co-payment by the covered person not to exceed 25% of covered charges; a deductible started on a per person, per family, per illness, per benefit period, or per year basis, or a combination of such bases not to exceed 5% of the aggregate maximum limit under the policy, unless the policy is written to complement underlying hospital and medical insurance in which case such deductible may be increased by the amount of the benefits provided by such underlying insurance, for each covered person for at least:
7.6.1.1 Daily hospital room and board expenses, prior to application of the co-payment percentage, for not less than $50.00 daily (or in lieu thereof the average daily cost of semi-private room rate in the area where the insured resides) for a period of not less than 31 days during continuous hospital confinement;
7.6.1.2 miscellaneous hospital services, prior to application of the co-payment percentage, for an aggregate maximum of not less than $1,500.00 or 15 times the daily room and board rate if specified in dollar amounts;
7.6.1.3 surgical services, prior to application of co-payment percentage to a maximum of not less than $600.00 for the most severe operation with the amounts provided for other operations reasonably related to such maximum amount;
7.6.1.4 anesthesia services prior to application of the co-payment percentage, for a maximum of not less than 15 percent of the covered surgical fees or, alternatively, if the surgical schedule is based on relative values, not less than the amount provided therein for anesthesia services at the same unit value as used for the surgical schedule;
7.6.1.5 in-hospital medical services, prior to application of the co-payment percentage, as defined in section 7.4.1.2.3;
7.6.1.6 out of hospital care prior to application of the co-payment percentage, consisting of physicians' services rendered on an ambulatory basis where coverage is not provided elsewhere in the policy for diagnosis and treatment of sickness or injury, and diagnostic x-ray, laboratory services, radiation therapy, and hemodialysis ordered by a physician; and
7.6.1.7 not fewer than three of the following additional benefits, prior to application of the co-payment percentage, for an aggregate maximum of such covered charges of not less than $1,000.00;
7.6.1.7.1 In-hospital private duty graduate registered nurse services.
7.6.1.7.2 Convalescent nursing home care as defined in section 5.1.3.1 above.
7.6.1.7.3 Diagnosis and treatment by a radiologist or physiotherapist.
7.6.1.7.4 Rental of special medical equipment, determined to be medically necessary, and which equipment is defined by the insurer in the policy.
7.6.1.7.5 Artificial limbs or eyes, casts, splints, trusses or braces.
7.6.1.7.6 Treatment for functional nervous disorders, and mental and emotional disorders.
7.6.1.7.7 Out-of-hospital prescription drugs and medications.
7.7 Disability Income Protection Coverage
7.7.1 "Disability income protection coverage" is a policy which provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from either sickness or injury or a combination thereof which:
7.7.1.1 Provides that periodic payments which are payable at ages after 62 and reduced solely on the basis of age are at least 50% of amounts payable immediately prior to 62.
7.7.1.2 Contains an elimination period no greater than:
7.7.1.2.1 Ninety (90) days in the case of a coverage providing a benefit of one (1) year or less;
7.7.1.2.2 One hundred and eighty (180) days in the case of coverage providing a benefit of more than one year but not greater than two (2) years, or
7.7.1.2.3 Three hundred sixty-five (365) days in all other cases during the continuance of disability resulting from sickness or injury.
7.7.1.3 Has a maximum period of time for which it is payable during disability of at least six (6) months except in the case of a policy covering disability arising out of pregnancy, childbirth, or miscarriage in which case the period for such disability may be one (1) month. No reduction in benefits shall be put into effect because of an increase in Social Security or similar benefits during a benefit period. Section 7.7 does not apply to those policies providing business buyout coverage.
7.8 Accident Only Coverage
7.8.1 "Accident only coverage" is a policy of accident insurance which provides coverage, singly or in combination, for death, dismemberment, disability, or hospital and medical care caused by accident. Accidental death and double dismemberment amounts under such a policy shall be at least $1,000.00 and a single dismemberment shall beat least $500.00.
7.9 Specified Disease and Specified Accident Coverage
7.9.1 "Specified disease coverage" pays benefits for the diagnosis and treatment of a specifically named disease or diseases. Any such Policy must meet the following general -- rules and one of the following sets of minimum standards for benefits; such insurance covering cancer -- whether cancer only or in conjunction with other conditions) or disease(s) -- must meet the standards of sections 7.9.2, 7.9.3, or 7.9.3.4; insurance covering specified disease(s) other than cancer must meet the standards of section 7.9.1, or 7.9.3.4.
7.9.1.1 General Rules
7.9.1.1.1 Except for cancer coverage provided on an expense-incurred basis, either as cancer-only coverage or in combination with one or more other specified diseases, the following rules shall apply to specified-disease coverages in addition to all other rules imposed by this regulation; in cases of conflict between the following and other rules, the following ones shall govern:
7.9.1.1.1.1 Policies covering a single specified disease or combination of specified diseases may not be sold or offered for sale other than as specified-disease coverage under this section.
7.9.1.1.1.2 Any policy issued pursuant to this section which conditions payment upon pathological diagnosis of a covered disease, shall also provide that if such a pathological diagnosis is medically inappropriate, a clinical diagnosis will be accepted in lieu thereof.
7.9.1.1.1.3 Notwithstanding any other provision of this regulation, specified-disease policies shall provide benefits to any covered person not only for the specified disease(s) but also for any other conditions) or disease(s), directly caused or aggravated by the specified disease(s) or the treatment of the specified disease(s).
7.9.1.1.1.4 Policies containing specified disease coverage shall be at least Guaranteed Renewable.
7.9.1.1.1.5 No policy issued pursuant to this section shall contain a waiting or probationary period greater than thirty (30) days.
7.9.1.1.1.6 Any application for specified disease coverage shall contain a statement above the signature of the applicant that no person to be covered for specified disease is also covered by any Title XIX program (Medicaid, MediCal or any similar name). Such statement may be combined with any other statement for which the insurer may require the applicant's signature.
7.9.1.1.1.7 Payments may be conditioned upon a covered person's receiving medically necessary care, given in a medically appropriate location, under a medically accepted course of diagnosis or treatment.
7.9.1.1.1.8 Except for the uniform provision regarding other insurance with this insurer, benefits for specified disease coverage shall be paid regardless of other coverage available through individual health insurance.
7.9.1.1.1.9 After the effective date of the coverage (or applicable waiting period, if any) benefits shall begin with the first day of care or confinement if such care of confinement is for a covered disease even though the diagnosis is made at some later date. The retroactive application of such coverage may not be less than ninety (90) days prior to such diagnosis.
7.9.1.2 The following minimum benefits standards apply to noncancer coverages:
7.9.1.2.1 Coverage for each person insured under the policy for a specifically named disease (or diseases) with a deductible amount not in excess of $250.00 and an overall aggregate benefit limit of no less than $5,000.00 and a benefit period of not less than two (2) years for at least the following incurred expenses:
7.9.1.2.1.1 Hospital room and board and any other hospital furnished medical services or supplies;
7.9.1.2.1.2 Treatment by a legally qualified physician or surgeon;
7.9.1.2.1.3 Private duty services of a registered nurse (R.N.);
7.9.1.2.1.4 X-ray, radium and other therapy procedures used in diagnosis and treatment;
7.9.1.2.1.5 Professional ambulance for local service to or from a local hospital;
7.9.1.2.1.6 Blood transfusions, including expense incurred for blood donors;
7.9.1.2.1.7 Drugs and medicines prescribed by a physician;
7.9.1.2.1.8 The rental of an iron lung or similar mechanical apparatus;
7.9.1.2.1.9 Brace, crutches and wheel chairs as are deemed necessary by the attending physician for the treatment of the disease;
7.9.1.2.1.10 Emergency transportation if in the opinion of the attending physician it is necessary to transport the insured to another locality for treatment of the disease; and
7.9.1.2.1.11 May include coverage of any other expenses necessarily incurred in the treatment of the disease.
7.9.1.2.2 Coverage for each person insured under the policy for a specifically named disease (or diseases) with no deductible amount, and an overall aggregate benefit limit of not less than $25,000.00 payable at the rate of not less than $50.00 a day while confined in a hospital and a benefit period of not less than 500 days.
7.9.2 A policy which provides coverage for each person insured under the policy for cancer-only coverage or in combination with one or more other specified diseases on an expense incurred basis for services, supplies, care and treatment that are ordered or prescribed by a physician as necessary for the treatment of cancer, in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of $250.00, and an overall aggregate benefit limit of not less than $10,000.00 and a benefit period of not less than three (3) years for at least the following:
7.9.2.1 Treatment by, or under the direction of, a legally qualified physician or surgeon;
7.9.2.2 X-ray, radium, chemotherapy and other therapy procedures used in diagnosis and treatment;
7.9.2.3 Hospital room and board and any other hospital furnished medical services or supplies;
7.9.2.4 Blood transfusions, and the administration thereof, including expense incurred for blood donors;
7.9.2.5 Drugs and medicines prescribed by a physician.
7.9.2.6 Professional ambulance for local service to or from a local hospital;
7.9.2.7 Private duty services of a registered nurse (R.N.) provided in a hospital; and
7.9.2.8 May include coverage of any other expenses necessarily incurred in the treatment of the disease. Provided, however, that sections 7.9.1.1.1.1, 7.9.1.1.1.2, 7.9.1.1.1.4, 7.9.1.1.1.5 and 7.9.1.1.1.6 plus at least the following shall also be included, but may be subject to co-payment by the covered person not to exceed 20% of covered charges when rendered on an outpatient basis;
7.9.2.9 Braces, crutches and wheelchairs as are deemed necessary by the attending physician for the treatment of the disease;
7.9.2.10 Emergency transportation if in the opinion of the attending physician it is necessary to transport the insured to another locality for treatment of the disease; and
7.9.2.11 * Home health care that is necessary care and treatment provided at the covered person's residence by a home health care agency or by others under arrangements made with a home health care agency. The program of treatment must be prescribed in writing by the covered person's attending physician, who must approve the program prior to its start. The physician must certify that hospital confinement would be otherwise required.
7.9.2.11.1 An agency approved under Title VIII of the Social Security Act (Medicare) or
7.9.2.11.2 is licensed to provide home health care under applicable state law, or 3) meets all of the following requirements.
7.9.2.11.2.1 It is primarily engaged in providing home health care services;
7.9.2.11.2.2 Its policies are established by a group of professional personnel (including at least one physician and one registered nurse [R.N. I);
7.9.2.11.2.3 Supervision of home health care services is provided by a physician or a registered nurse (R.N.);
7.9.2.11.2.4 It maintains clinical records on all patients; and
7.9.2.11.2.5 It has a full-time administrator.
7.9.2.11.3 Home health includes, but is not limited to:
7.9.2.11.3.1 part-time or intermittent skilled nursing services provided by a registered nurse (R.N.) or a licensed practical nurse (L.P.N.);
7.9.2.11.3.2 part-time or intermittent home health aide services which provide supportive services in the home under the supervision of a registered nurse or a physical, speech or hearing occupational therapist;
7.9.2.11.3.3 physical, occupational or speech and hearing therapy; and
7.9.2.11.3.4 medical supplies, drugs and medicines prescribed by a physician and related pharmaceutical services, and laboratory services to the extent such charges or costs would have been covered under the policy if the insured person had remained in the hospital.
7.9.2.12 Physical, speech, hearing and occupational therapy;
7.9.2.13 Special equipment including hospital bed, toilette, pulleys, wheelchairs, aspirator, chux, oxygen, surgical dressings, rubber shields, colostomy and eleostomy appliances;
7.9.2.14 Prosthetic devices including wigs and artificial breasts;
7.9.2.15 Nursing home care for noncustodial services.
7.9.3 The following minimum benefits standards apply to cancer coverages written on a per them indemnity basis. Such coverages must offer covered persons:
7.9.3.1 A fixed-sum payment of at least $100.00 for each day of hospital confinement for at least 365 days.
7.9.3.2 A fixed-sum payment equal to one-half the hospital inpatient benefit for each day of hospital or nonhospital outpatient surgery, chemo and radiation therapy, for at least 365 days of treatment, that requires the services of medical personnel or physicians.
7.9.3.3 Benefits tied to confinement in a skilled nursing home or to receipt of home health care are optional; if a policy offers these benefits, they must equal the following:
7.9.3.3.1 A fixed-sum payment equal to one-fourth the hospital inpatient benefit for each day of skilled nursing home confinement for at least 100 days.
7.9.3.3.2 A fixed-sum payment equal to one-fourth the hospital inpatient benefit for each day of home health care for at least 100 days.
7.9.3.3.3 Benefit payments shall begin with the first day of care or confinement after the effective date of coverage if such care or confinement is for a covered disease even though the diagnosis of a covered disease is made at some later date (but not retroactive more than 30 days from the date of diagnosis) if the initial care or confinement was for diagnosis or treatment of such covered disease.
7.9.3.3.4 Notwithstanding any other provision of this regulation, any restriction or limitation applied to the benefits insections 7.9.3.3.1 and 7.9.3.3.2, whether by definition or otherwise, shall be no more restrictive than those under Medicare.
7.9.3.4 The following minimum benefits standards apply to lump-sum indemnity coverage of any specified disease(s):
7.9.3.4.1 Such coverages must pay indemnity benefits on behalf of covered persons of a specifically named disease or diseases. Such benefits are payable as a fixed, one-time payment made within 30 days of submission to the insurer of proof of diagnosis of the specified disease(s). Dollar benefits shall be offered for sale only in even increments of $1,000.00.
7.9.3.4.2 Where coverage is advertised or otherwise represented to offer generic coverage of a disease or diseases, the same dollar amounts must be payable regardless of the particular subtype of the disease with one exception. In the case of clearly identifiable subtypes with significantly lower treatments costs, lesser amounts may be payable so long as the policy clearly differentiates that subtype and its benefits.
7.9.3.4.2.1 "Specified Accident Coverage" is an accident insurance policy which provides coverage for a specifically identified kind of accident (or accidents) for each person insured under the policy for accidental death or accidental death and dismemberment, combined with a benefit amount not less than $1,000.00 for accidental death, $1,000.00 for double dismemberment and $500.00 for single dismemberment.
7.10 Limited Benefit Insurance Coverage
7.10.1 "Limited Benefit Health Insurance Coverage" is any policy or contract, other than a policy or contract covering only a specified disease or diseases, which provides benefits that are less than the minimum standards for benefits required under sections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, and 7.9. A policy covering a single specified disease or combination of diseases shall meet the requirements of section 7.9 and shall not be offered for sale as a "Limited Coverage." Such policies or contracts may be delivered or issued for delivery in this state only if the outline of coverage required by section 8.11of this Regulation is completed and delivered as required by section 8.2 of this Regulation.
8.0 Required Disclosure Provisions
8.1 General Rules
8.1.1 Each individual policy of health insurance or hospital, medical, or dental service corporation subscriber contract shall include a renewal, continuation, or nonrenewal provision. The language or specification of such provision must be consistent with the type of contract to be issued. Such provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state the duration, where limited, of renewability and the duration of the term of coverage for which the policy is issued and for which it may be renewed.
8.1.2 Except for riders or endorsements by which the insurer effectuates a request made in writing by the policyholder or exercises a specifically reserved right under the policy, all riders or endorsements added to a policy after date of issue or a reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the policyholder. After date of policy issue, any rider or endorsement which increases benefits of coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage is required by law.
8.1.3 Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the policy.
8.1.4 A policy which provides for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or words of similar import shall include a definition of such terms and an explanation of such terms in its accompanying outline of coverage.
8.1.5 If a policy contains any limitations with respect to pre-existing conditions such limitations must appear as a separate paragraph of the policy and be labeled as "Pre-existing Condition Limitations."
8.1.6 All accident only policies shall contain a prominent statement on the first page of the policy or attached thereto in either contrasting color or in boldface type at least equal to the size and type used for policy captions, a prominent statement as follows: "THIS IS AN ACCIDENT ONLY POLICY AND IT DOES NOT PAY BENEFITS FOR LOSS FROM SICKNESS."
8.1.7 If age is to be used as a determining factor for reducing the maximum aggregate benefits made available in the policy as originally issued, such fact must be prominently set forth in the outline of coverage.
8.1.8 If a policy contains a conversion privilege, it shall comply, in substance, with the following: the caption of the provision shall be "Conversion Privilege," or words of similar import. The provision shall indicate the persons eligible for conversion, the circumstances applicable to the conversion privilege, including any limitations on the conversion, and the person by whom the conversion privilege may be exercised. The provision shall specify the benefits to be provided on conversion or may state that the converted coverage will be as provided on a policy form then being used by the insurer for that purpose.
8.1.9 Outlines of coverage delivered in connection with policies defined in this Regulation as Hospital Confinement Indemnity (section 8.6), Specified Disease (section 7.9) or Limited Benefit Health Insurance Coverages (section 7.10) to persons eligible for Medicare by reason of age shall contain, in addition to the requirements of sections 8.6., 8.9 and 8.10., the following language which shall be printed on or attached to the first page of the Outline of Coverage: "THIS POLICY IS NOT A MEDICARE SUPPLEMENT POLICY. If you are eligible for Medicare, review the Medicare Supplement Buyer's Guide available from the company."
8.1.10 All specified-disease policies shall contain a prominent statement on the first page of the policy or attached thereto in either contrasting color or in boldface type at least equal to the size type used for policy captions, a prominent statement as follows: CAUTION: This is a limited policy. Read it carefully with the outline of coverage.
8.2 Outline of Coverage Requirements for Individual Coverages
8.2.1 No individual health insurance policy or nonprofit hospital, medical or dental service corporation subscriber contract subject to this regulation shall be delivered or issued for delivery in this state unless an appropriate outline of coverage, as prescribed in section 8.3 through 8.11 is completed as to such policy or contract and the outline is either:
8.2.1.1 delivered with the policy; or
8.2.1.2 delivered to the applicant at the time application is made and acknowledgment of receipt or certification of delivery of such outline of coverage is provided to the insurer.
8.2.2 If an outline of coverage was delivered at the time of application and the policy or contract is issued on a basis which would require revision of the outline, a substitute outline of coverage properly describing the policy or contract must accompany the policy or contract when it is delivered and contain the following statement, in no less than twelve (12) point type, immediately above the company name: "NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued."
8.2.3 The appropriate outline of coverage for policies or contracts providing hospital coverage which only meets the standards of section 7.3 shall be that statement contained in section 8.3. The appropriate outline of coverage for policies providing coverage which meets the standards of both sections 7.3 and 7.4 shall be the statement contained in section 8.5. The appropriate outline of coverage for policies providing coverage which meets the standards of both sections 7.3 and 7.6 or sections 7.4 and 7.6 or sections 7.3, 7.4 and 7.6 shall be the statement contained in section 8.7.
8.2.4 Appropriate changes in terminology may be made in the outline of coverage in the case of contracts of hospital, medical, or dental service corporations. In any other case where the prescribed outline of coverage is inappropriate for the coverage provided by the policy or contract, an alternate outline of coverage shall be submitted to the Commissioner for prior approval.
8.3 Basic Hospital Expense Coverage (Outline of Coverage)
8.3.1 An outline of coverage, in the form prescribed below, shall be issue in connection with policies meeting the standards of section 7.3 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed:
(COMPANY NAME)
BASIC HOSPITAL EXPENSE COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
8.3.2 Basic Hospital Expense Coverage — Polices of this category are designed to provide to persons insured coverage for hospital expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, and hospital out-patient services, subject to any limitations, deductibles and co-payment requirements set forth in the policy. Coverage is not provided for physicians or surgeons fees or unlimited hospital expenses.
8.3.3 (A brief specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order:
8.3.3.1 daily hospital room and board;
8.3.3.2 miscellaneous hospital services;
8.3.3.3 hospital out-patient services; and
8.3.3.4 other benefits, if any.)
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.)
8.3.4 (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in section 8.3.3 above.)
8.3.5 (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
8.4 Basic Medical-Surgical Expense Coverage (Outline of Coverage)
8.4.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.4 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed:
(COMPANY NAME)
BASIC MEDICAL-SURGICAL EXPENSE COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control your policy. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Basic Medical-Surgical Expense Coverage — Policies of this category are designed to provide insured coverage for medical-surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for surgical services, anesthesia services, and in-hospital medical services, subject to any limitations, deductibles and co-payment requirements set forth in the policy. Coverage is not provided for hospital expenses or unlimited medical-surgical expenses.
(3) (A brief specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order:
(a) surgical services;
(b) anesthesia services;
(c) in-hospital medical services; and
(d) other benefits, if any.)
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, Emit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
8.5 Basic Hospital and Medical Surgical Expense Coverage (Outline of Coverage)
8.5.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.3 and 7.4 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
BASIC HOSPITAL AND MEDICAL SURGICAL EXPENSE COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Basic Hospital and Medical Surgical Expense Coverage — Policies of this category are designed to provide, to persons insured, coverage for hospital and medical-surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, hospital out-patient services, surgical services, anesthesia services, and in-hospital medical services, subject to any limitations, deductibles and co-payment requirements set forth in the policy. Coverage is not provided for unlimited hospital or medical-surgical expenses.
(3) (A brief specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order:
(a) daily hospital room and board;
(b) miscellaneous hospital services;
(c) hospital out-patient services;
(d) surgical services;
(e) anesthesia services;
(f) in-hospital medical services; and
(g) other benefits, if any.
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
8.6 Hospital Confinement Indemnity Coverage (Outline of Coverage)
8.6.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.5 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
HOSPITAL CONFINEMENT INDEMNITY COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Hospital Confinement Indemnity Coverage — Policies of this category are designed to provide, to persons insured, coverage in the form of a fixed daily benefit during periods of hospitalization resulting from a covered accident or sickness, subject to any limitations set forth in the policy. Such policies do not provide any benefits other than the fixed daily indemnity for hospital confinement and any additional benefit described below.
(3) (A brief specific description of the benefits contained in this policy, in the following order:
(a) daily benefit payable during hospital confinement; and
(b) duration of benefit described in (a).)
(NOTE: The above description of benefits shall be stated clearly and concisely.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
(6) Any benefits provided in addition to the daily hospital benefit.
8.7 Major Medical Expense Coverage (Outline of Coverage)
8.7.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.6 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
MAJOR MEDICAL EXPENSE COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Major Medical Expense Coverage — Policies of this category are designed to provide, to persons insured, coverage for major hospital, medical, and surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, surgical services, anesthesia services, in-hospital medical services and out-of-hospital care, subject to any deductibles, co-payment provisions or other limitations which may be set forth in the policy. Basic hospital or basic medical insurance coverage is not provided.
(3) (A brief specific description of the benefits, including dollar amounts, contained in this policy, in the following order:
(a) daily hospital room and board;
(b) miscellaneous hospital services;
(c) surgical services;
(d) anesthesia services;
(e) in-hospital medical services;
(f) out-of-hospital care;
(g) maximum dollar amount for covered charges; and
(h) other benefits, if any.)
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payments provision applicable to the benefits described.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
8.8 Disability Income Protection Coverage (Outline of Coverage)
8.8.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.7 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
DISABILITY INCOME PROTECTION COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Disability Income Protection Coverage — Policies of this category are designed to provide, to persons insured, coverage for disabilities resulting from a covered accident or sickness, subject to any limitations set forth in the policy. Coverage is not provided for basic hospital, basic medical-surgical or major medical expenses.
(3) (A brief specific description of the benefits contained in this policy.)
(NOTE: The above description of benefits shall be stated clearly and concisely.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
8.9 Accident Only Coverage (Outline of Coverage)
8.9.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.8 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
ACCIDENT ONLY COVERAGE
OUTLINE OF COVERAGE
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Accident Only Coverage — Policies of this category are designed to provide, to persons insured, coverage for certain losses resulting from a covered accident ONLY, subject to any limitations contained in the policy. Coverage is not provided for basic hospital, basic medical-surgical or major medical expenses.
(3) (A brief specific description of the benefits contained in this policy.)
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductibles or co-payment provision applicable to the benefits described. Proper disclosure of benefits which vary according to accidental cause shall be made in accordance with subsection (A)(13) of Section 7 of this Regulation.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
8.10 Specified Disease or Specified Accident Coverage (Outline of Coverage)
8.10.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of section 7.9 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
(SPECIFIED DISEASE) (SPECIFIED ACCIDENT) COVERAGE
OUTLINE OF COVERAGE
(1) This policy is designed only as a supplement to a comprehensive health insurance policy and should not be purchased unless you have this underlying coverage. It should not be purchased by persons covered under Medicaid. Read the Buyer's Guide's discussion of the possible limits on benefits in this type of policy.
(2) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(3) (Specified Disease) (Specified Accident) Coverage — Policies of this category are designed to provide, to persons insured, restricted coverage paying benefits ONLY when certain losses occur as a result of (specified diseases) or (specified accidents). Coverage is not provided for basic hospital, basic medical-surgical or major medical expenses.
(4) (A brief specific description of the benefits contained in this policy.)
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described. Proper disclosure of benefits which vary according to accidental cause shall be made in accordance with subsection(A)(13) of Section 7 of this Regulation.)
8.11 Limited Benefit Health Coverage (Outline of Coverage)
8.11.1 An outline of coverage, in the form prescribed below, shall be issued in connection with policies which do not meet the minimum standards of sections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.9 of this Regulation. The items included in the outline of coverage must appear in the sequence prescribed.
(COMPANY NAME)
LIMITED BENEFIT HEALTH COVERAGE
OUTLINE OF COVERAGE*
(1) Read Your Policy Carefully — This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
(2) Limited Benefit Health Coverage — Policies of this category are designed to provide, to person insured, limited or supplemental coverage.
(3) (A brief specific description of the benefits, including dollar amounts, contained in this policy.)
(NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described. Proper disclosure of benefits which vary according to accidental cause shall be made in accordance with subsection (A)(13) of Section 7 of this Regulation.)
(4) (A description of any policy provisions which exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (3) above.)
(5) (A description of policy provisions restricting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)
9.0 Requirements for Replacement.
9.1 Application forms shall include a question designed to elicit information as to whether the insurance to be issued is intended to replace any other accident and sickness insurance presently in force. A supplementary application or other form to be signed by the applicant containing such a question may be used.
9.2 Upon determining that a sale will involve replacement, an insurer, other than a direct response insurer, or its agent shall furnish the applicant, prior to issuance or delivery of the policy, the notice described in section 9.3. One (1) copy of such notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. A direct response insurer shall deliver to the applicant upon issuance of the policy, the notice described in section 9.4. In no event, however, will such a notice be required in the solicitation of the following types of policies: accident only and single premium nonrenewable policies.
9.3 The notice required by section 9.2 for an insurer, other than a direct response insurer, shall provide, in substantially the following form:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS INSURANCE
According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and sickness insurance and replace it with a policy to be issued by (insert Company Name) Insurance Company. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.
(1) Health conditions which you may presently have, (pre-existing conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.
(2) You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.
(3) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical/health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, re-read it carefully to be certain that all information has been properly recorded.
The above "Notice to Applicant" was delivered to me on:
(Date)
(Applicant's Signature)
9.4 The notice required by section 9.2 for a direct response insurer shall be as follows:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENTS AND SICKNESS INSURANCE
According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and sickness insurance and replace it with a policy to be issued by (insert Company Name) Insurance Company. Your new policy provides 10 days within which you may decide without cost whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.
(1) Health conditions which you may presently have, (pre-existing conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.
(2) You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.
(3) (To be included only if the application is attached to the policy.) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to (insert Company Name and Address) within 10 days if any information is not correct and complete, or if any past medical history has been left out of the application.
(Company Name)
10.0 Separability
If any provision of this Regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the Regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
1305 Rate Filing Procedures for Health Insurers and Health Service Corporations and Managed Care Organizations
18 Del. Admin. Code § 1305 Rate Filing Procedures for Health Insurers and Health Service Corporations and Managed Care Organizations
1305 Rate Filing Procedures for Health Insurers and Health Service Corporations and Managed Care Organizations
1.0 Authority
This regulation is promulgated and adopted pursuant to 18 Del.C. §311, 18 Del.C. Ch. 25 and 29 Del.C. Ch. 101.
13 DE Reg. 939 (01/01/10)
2.0 Purpose
The purpose of this regulation is to establish a procedure for all rate filings made by insurers pursuant to 18 Del.C. §2506.
13 DE Reg. 939 (01/01/10)
3.0 Scope
This regulation applies to insurers, health service corporations, and managed care organizations, as defined under “Health Benefit Plans” in 4.0 below, that deliver or issue for delivery medical and hospital expense-incurred insurance policies and plans for which rates submitted affect residents of this State. The regulation applies to individual policies and plans and all group policies and plans.
13 DE Reg. 939 (01/01/10)
4.0 Definitions
4.1 For purposes of this regulation:
"Carrier" means any entity that provides health insurance in this state. For the purposes of this chapter, carrier includes an insurance company, health service corporation, health maintenance organization, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation.
"Certificate form" means the form on which the certificate is delivered or issued for delivery by the issuer.
“Collected Premium” means the amount of premium that is unadjusted to reflect any changes in the rate level (e.g. reported or actual premium).
"Commissioner" means the Insurance Commissioner of this State.
“Earned Premium” means the portion of the total premium that corresponds to the coverage provided during a given time period.
“Experience Period” means the number of years over which the adequacy of the rates presently in effect are tested.
"Health Benefit Plan" is an individual plan or group health plan that provides, or pays the cost of, medical care, including but not limited to group health plans, health insurance issuers, health maintenance organizations, managed care organizations and health service contractors, as well as any combination of them.
“Incurred Losses” means losses that are (1) paid losses, and (2) losses that are incurred but not yet reported to the insurance claimants.
"Policy Form" means the form on which the policy is delivered or issued for delivery by the insurer.
“Protected and Reserve Incurred Losses” means losses on claims that are still open.
“Supplemental Rate Information" shall mean any manual or plan of rates, statistical plan, classification system, minimum premium, policy fee, rating rule, rate-related underwriting rule and any other information needed to determine the applicable premium for an individual insured and not otherwise inconsistent with the purposes of this chapter, as prescribed by rule of the Commissioner.
13 DE Reg. 939 (01/01/10)
5.0 Contents of Complete Filings
5.1 Each rate filing which includes the following shall be presumed a complete filing, subject to requests for time for review as the Commissioner may make:
5.1.1 General Information
5.1.1.1 Name of insurer and domiciliary state;
5.1.1.2 Policy form name and number;
5.1.1.3 Number of insured individuals or insured groups and number in group;
5.1.1.4 Amount of rate increase/decrease requested;
5.1.1.5 Date filing was made;
5.1.1.6 Other state(s) that have approved or disapproved the filing; and
5.1.1.7 A written, notarized certification of insurer's officer that the filing is made pursuant to applicable laws, regulations and subject to all penalties and that the statements made in the filing are true and correct.
5.1.2 In addition to the information listed above, the Commissioner shall identify by bulletin or circular letter additional information required to be included in a complete filing.
13 DE Reg. 939 (01/01/10)
6.0 Review Procedures
6.1 Subject to the provisions of this section, no policy form rates subject to this regulation shall be delivered or issued for delivery in this state, unless they have been filed with the Commissioner.
6.2 The Commissioner shall review and approve, provide notice of deficiencies or disapprove the initial filing within thirty (30) days of receipt. Any notice of deficiencies or disapproval shall be in writing and based only on the specific provisions of the applicable statutes, regulations or bulletins published by the Commissioner having the force and effect of law in this state and contained in the document created by the Commissioner pursuant to 5.0 of this section. The notice of deficiencies or disapproval shall contain sufficient detail for the filer to bring the policy form rate filing into compliance, and shall cite the specific statutes, regulations or bulletins upon which the notice of deficiencies or disapproval is based.
6.3 No completed filing described in this section shall be effective unless filed with the Commissioner not less than thirty (30) days prior to the proposed effective date. Such a filing shall be deemed to meet the statutory requirements unless disapproved by the Commissioner within thirty (30) days of receipt of the filing. No such filings shall be disapproved, except on the basis that the rates are inadequate, excessive or unfairly discriminatory.
6.4 A filer may resubmit a rate filing that corrects any deficiencies or resubmit a disapproved rate filing, and a revised certification, within thirty (30) days of its receipt of the Commissioner's notice of deficiencies or disapproval. Any filing not resubmitted within thirty (30) days of the notice of deficiencies shall be deemed withdrawn. Any disapproved rate filing form not resubmitted within thirty (30) days is disapproved.
6.5 At the end of the review period, the rate is deemed approved if the Commissioner has taken no action.
6.5.1 The Commissioner shall review the resubmitted filing and certification, and shall approve or disapprove it within thirty (30) days. Notice of deficiencies or disapproval shall be in writing and shall provide a detailed description of the reasons for the disapproval in sufficient detail for the filer to bring the rate filing into compliance and shall cite the specific statutes, regulation, or bulletins upon which the disapproval is based. No further extensions of time may be taken unless the filer has introduced new provisions in the resubmission, in which case the Commissioner may extend the time for review by an additional thirty (30) days. At the end of the review period, the rate filing is deemed approved if the Commissioner has taken no action.
6.5.2 The Commissioner may not disapprove a resubmitted policy form rate filing for reasons other than those initially set forth in the original notice of deficiencies or disapproval sent pursuant to section 6.0.
6.5.2.1 The Commissioner may disapprove a resubmitted rate filing for reasons other that those initially set forth in the original notice of deficiencies or disapproval sent pursuant to section 6.0 if:
6.5.2.1.1 The filer has introduced new provisions in the resubmission.
6.5.2.1.2 There has been a change in statutes, regulations or bulletins published in this state having the force and effect of law, or
6.5.2.1.3 There has been reviewer error and the written disapproval fails to state a specific provision of applicable statute, regulation or bulletin published by the Commissioner having the effect of law in this state that is necessary to have the rate filing form conform to the requirements of law.
13 DE Reg. 939 (01/01/10)
7.0 Minimum Loss Ratio Guarantee
7.1 In order to use the Minimum Loss Ratio Guarantee (MLRG) the company must satisfy the credibility definition:
7.1.1 The annual earned premium volume in Delaware under the particular policy form must be greater than two million five hundred thousand ($2,500,000) dollars.
7.1.2 This amount will be increased each year by the greater of 6.0% and the average health care premium increase from the Annual Health Care Costs Study for Major Metropolitan Areas.
7.1.3 The MLRG shall not apply to closed blocks of business.
13 DE Reg. 939 (01/01/10)
8.0 New Policy or Plan and Rate Revision Filings
8.1 With respect to new rate filings and rate revision filings, benefits shall be deemed reasonable in relation to premiums provided the anticipated loss ratio or the end of the third year is at least as great as shown in the following table:
Renewal Clause*
Type of Coverage
OR
CR
GR
NC
Medical Expense
65%
60%
60%
50%
Loss of Income and Other
60%
60%
55%
45%
For individual Medicare supplement policies, the anticipated lifetime loss ratio must equal at least 65%. For group Medicare supplement policies, the anticipated loss ratio must equal at least 75%.
13 DE Reg. 939 (01/01/10)
9.0 Minimum Loss Ratio Guarantee Option
9.1 Notwithstanding the other provisions of this Regulation, premium rates may be used upon filing with the Commissioner of a minimum loss ratio guarantee. An insurer may not elect to use the filing procedure in this section for a rate filing that does not contain the minimum loss ratio guarantee. If an insurer elects to use the filing procedure in this subsection for a rate filing, the insurer shall not use a filing of premium rates that does not provide a minimum loss ratio guarantee for that policy form or forms.
9.2 The minimum loss ratio shall be in writing and shall contain at least the following:
9.2.1 An actuarial memorandum specifying the expected loss ratio that complies with the standards as set forth in this subsection;
9.2.2 Detailed experience information concerning the rate filing;
9.2.3 A step-by-step description of the process used to develop the experience loss ratio, including demonstration with supporting data from the original policy rate filing;
9.2.4 A guarantee of a specific lifetime minimum loss ratio, that shall be greater than or equal to the loss ration in 8.0;
9.2.5 A guarantee that the actual Delaware loss ratio for the calendar year in which the new rates take effect, and for each year thereafter until new rates are filed, will meet or exceed the minimum loss ratio standards referred to in 9.2.4 of this paragraph, adjusted for duration; and
9.2.6 A guarantee that the actual Delaware lifetime loss ratio shall meet or exceed the minimum loss ratio standards referred to in 9.2.4 of this paragraph.
9.3 The insurer shall refund or credit premiums in the amount necessary to bring the actual loss ratio up to the guaranteed minimum loss ratio.
9.4 A Delaware policyholder affected by the guaranteed minimum loss ratio shall receive a portion of the premium refund or credit relative to the premium paid by the policyholder. The refund or credit shall be made to all Delaware policyholders insured under the applicable policy form during the year at issue if the refund or credit would equal ten dollars ($10) or more per policy. The refund or credit shall include statutory interest until the date of payment. Payment shall be made not later than one hundred eighty (180) days after the end of the year at issue.
9.5 Premium refunds of less than ten dollars ($10) per insured shall be aggregated by the insurer and deposited into the State Treasury.
9.6 A guarantee that the actual Delaware loss ratio results for the year at issue will be independently audited at the request of the Commissioner.
9.7 Notwithstanding the provisions of this subsection, an insurer may amend the rate filing forms used before the effective date of this regulation to provide for a minimum loss ratio guarantee allowed under this subsection for policies issued, delivered, or renewed on or after the effective date of this regulation.
13 DE Reg. 939 (01/01/10)
10.0 Rates for Large Groups
10.1 Rates for groups of more than 50 persons (hereinafter "large groups") shall be made in accordance with 18 Del.C. Ch 25.
10.2 Each carrier issuing a policy to a large group shall establish and maintain a complete record of the rates employed, rate manuals, classification plans and all related materials needed for the carrier to determine the rate developed for the policy.
10.3 The carrier's records shall be maintained in a manner that readily allows examination as the Insurance Commissioner may require.
13 DE Reg. 939 (01/01/10)
11.0 Effective Date of Regulation
This regulation shall become effective on January 11, 2010.
13 DE Reg. 939 (01/01/10)
1306 Certificate and Standards for Health Plans or Policies [Formerly Regulation 60]
18 Del. Admin. Code § 1306 Certificate and Standards for Health Plans or Policies [Formerly Regulation 60]
1306 Certificate and Standards for Health Plans or Policies [Formerly Regulation 60]
1.0 Authority
This regulation is adopted in accordance with 18 Del.C. §2312 and 18 Del.C. §3603 and promulgated in accordance with 29 Del.C. Ch. 101.
2.0 Purpose
The purpose of this regulation is to promote wellness by establishing criteria and procedures for the Delaware Insurance Commissioner's designation of insurance policies and subscriber contracts meeting or exceeding said criteria as certified health plans or policies (CHPs).
3.0 Applicability and Scope
This regulation shall apply to individual and group health insurance policies, including subscriber contracts of health service corporations, fraternal benefit societies and health maintenance organizations delivered or issued for delivery in this state on or after the effective date hereof.
4.0 Definitions
4.1 For purposes of this regulation:
"Carrier" means an insurer providing medical, hospital or surgical expense incurred health insurance policies, a non-profit health service corporation, a fraternal benefits society, and a health maintenance organization.
"Certified Health Plan or Policy" or "CHP" means a carrier's plan or policy which meets or exceeds the criteria specified in Section 5 of this regulation and has been so certified by the Delaware Insurance Commissioner.
"Insured" means the individual persons whose medical expenses are paid by a carrier's policy or contract.
5.0 Certified Health Plan Criteria
5.1 On and after the effective date hereof, no individual or group health insurance policy or subscriber contract of any carrier delivered or issued for delivery in this state shall indicate that it is a certified health plan or policy or CHP unless the Delaware Insurance Commissioner has so certified, pursuant to this regulation, that it:
5.1.1 Provides significant economic incentives to insureds designed to encourage their participation in the practice of healthy lifestyle behaviors. Such incentives may, for example, be in the form of health care insurance premium reductions, benefit enhancements, or in the case of employer-paid plans, direct financial compensation;
5.1.2 Provides significant economic disincentives and penalties to insureds who incorrectly certify participation in the practice of health lifestyle behaviors. Such disincentives and penalties may, for example, be in the form of increased deductibles and copayments, or surcharges.
5.1.3 Sets forth economic incentives and disincentives substantial enough to encourage behavior modification.
5.1.4 Provides benefits for appropriate screening examinations and designated adult immunizations.
5.2 The Delaware Insurance Commissioner shall certify a health plan or policy (CHP) that meets the following criteria or an equivalent. A plan or policy such as the one described in the following paragraphs is to be used as an example only and is not meant to limit the types of plans or policies which will be approved as Certified Health Plans under section 5.1 above by the Insurance Commissioner.
5.2.1 Includes the following healthy lifestyle behaviors and respective minimum premium credits for those insureds certifying that they adhere to the prescribed behaviors. An insured must be a nonsmoker to qualify for any credit.
5.2.1.1 No tobacco — (no use of tobacco products at least six months prior to the issuance of the CHP and while the CHP is in force) - 20% credit.
5.2.1.2 Regular exercise — (participating, three or more times per week, in an aerobic activity such as brisk walking, running, swimming, and bicycling, maintaining sixty percent of the maximum heart rate: 140—170 beats per minute for persons under 30 years of age; 130—150 beats per minute for persons between 30 and 49 years of age; and 120—140 beats per minute for persons 50 years of age and older; for twenty minutes) — 5% credit.
5.2.1.3 Moderate alcohol consumption — (no more than two drinks in any 24-hour period nor more than seven drinks in any week. A drink means twelve (12) ounces of beer, or four (4) ounces of wine, or 1.4 ounces of spirits per day) — 5% credit.
5.2.1.4 Blood pressure maintenance — (maintaining blood pressure equal to or less than 140/90 mm Hg, with or without physician-prescribed medication) — 5% credit.
5.2.1.5 Weight control — (maintaining desirable weight as determined by: 1. the 1983 Metropolitan Life Insurance Company tables; 2. lean body mass calculations; or 3. skin fold measurements) — 5% credit.
5.2.1.6 Non-abuse of drugs — (complete avoidance of substances illegal under state or federal law, and ingestion or use of legend drugs only as prescribed by a physician) — 5% credit.
5.2.1.7 Seat belt usage — (using seat belts in the manner prescribed by the manufacturer whenever riding in or driving a private passenger vehicle) — 5% credit.
5.2.1.8 Section 5.2.1.1 through 5.2.1.7 above is not intended to represent a static or fixed set of criteria. As actuarial data develops on the effects of healthy lifestyle behaviors, carriers are encouraged to creatively modify their CHPs. Some carriers may prefer to "phase in" credit levels to encourage consistent behavior.
5.2.2 Provides benefits for periodic preventive screening examinations as appropriate to the insured's age, sex, and health condition, as determined by protocol established by the Delaware Division of 40%.
5.2.5 Nothing in sections 5.2.1 through 5.2.4 above should in and of itself be viewed as a requirement of a plan or policy which will be certified by the Insurance Commissioner. Insurers are encouraged to develop and submit plans of their own design that will meet the criteria outlined in section 5.1 above. Public Health and approved by the Delaware Insurance Commissioner.
5.2.3 Provides benefits for specific adult immunizations as determined by protocol established by the Delaware Division of Public Health and approved by the Delaware Insurance Commissioner.
5.2.4 Provides that, upon determination by a carrier that an insured has incorrectly certified in a material way his or her compliance with sections 5.2.1.1 through 5.2.1.7 above, the carrier shall surcharge or increase applicable deductibles or co-payments. The surcharge per insured shall not exceed an amount equal to three (3) times the credit received as a result of the materially incorrect certification and no increases in co-payment or deductible may exceed the co-payment or deductible by more than
6.0 Implementation
6.1 Carriers may implement a CHP in such a manner that there is no effect on present or anticipated total insurance premiums collected from a group.
6.2 Carriers shall provide a certification form to all insureds under a CHP. The form, whereby the insured may certify participation in the practice of healthy lifestyle behaviors as required by the CHP, shall be filed with and approved by the Delaware Insurance Commissioner prior to use. Said form shall include notification of the applicable penalties set forth in section 5.2.4 of this regulation.
6.3 CHPs shall include a provision which contains the following form of notice:
6.3.1 "If at any time during the policy period an insured who has previously certified participation in the practice of healthy lifestyle behaviors as required by the CHP ceases to practice any or all of such behaviors, he or she shall notify the carrier in writing within thirty (30) days. Upon notice to the carrier, the insured shall repay any premium credit earned from the date the insured ceased such practice."
6.4 Carriers issuing CHPs may investigate, at any time, to verify an insured's compliance with the requirements of the CHP. Insureds shall cooperate with reasonable efforts by carriers to verify the certification under section 5.2.1 above.
7.0 Procedures for Certification
7.1 Carriers desiring to apply for the Delaware Insurance Commissioner's certification of a Health Plan or Policy as a CHP, shall file with the Delaware Insurance Department, a copy of the plan or policy together with documentation sufficient to demonstrate that it meets or exceeds the criteria specified in section 5.1 of this regulation. The Delaware Insurance Department may request additional information to support the application.
7.2 If, after thirty (30) days from the date of the application, or after fifteen (15) days from the date of submission of additional information requested by the Delaware Insurance Commissioner, whichever is later, the Delaware Insurance Department has not acted, the carrier may notify the Delaware Insurance Department by letter that the plan or policy will be deemed certified as a CHP on the tenth day following receipt of the letter.
8.0 Uncertified Plans
Nothing in this regulation shall preclude insurers, health service plans, fraternal benefit societies and health maintenance organizations from offering health plans and policies not certified by the Commissioner but otherwise meeting the requirements of law.
9.0 Separability
If any provision of this regulation shall be held invalid, the remainder of the regulation shall not be affected thereby.
10.0 Effective Date
10.1 This regulation shall become effective thirty (30) days after the issuance of the order promulgating this regulation.
10.2 This order, and the regulation herein, shall become effective thirty (30) days after the issuance of the order.
1307 Group Coordination Benefits [Formerly Regulation 61]
18 Del. Admin. Code § 1307 Group Coordination Benefits [Formerly Regulation 61]
1307 Group Coordination Benefits [Formerly Regulation 61]
1.0 Authority
1.1 This regulation is adopted and promulgated by the Insurance Commissioner pursuant to 18 Del.C. §314 and promulgated under 29 Del.C. Ch. 101.
10 DE Reg. 1828 (06/01/07)
2.0 Purpose and Applicability
2.1 The purposes of this regulation are to:
2.1.1 Permit, but not require, plans to include a coordination of benefits ("COB") provision;
2.1.2 Establish an order in which plans pay their claims;
2.1.3 Provide the authority for the orderly transfer of information needed to pay claims promptly;
2.1.4 Reduce duplication of benefits by permitting a reduction of the benefits paid by a plan when the plan, pursuant to rules established by this regulation, does not have to pay its benefits first;
2.1.5 Reduce claims payment delays; and
2.1.6 Make all contracts that contain a COB provision consistent with this regulation.
2.2 The purpose of this Regulation is to encourage coordination of benefits, and is not intended to limit in any way the right to coordinate benefits which provide health coverage.
10 DE Reg. 1828 (06/01/07)
3.0 Definitions
3.1 The following words and terms, when used in this regulation, shall have the following meanings unless the context clearly indicates otherwise.
3.2 “Allowable Expense(s)” means the necessary, reasonable and customary item of expense for health care when the item of expense is covered at least in part under any of the plans involved, except where a statute requires a different definition.
3.2.1 Notwithstanding the above definition, items of expense under coverages such as dental care, vision care, prescription drug or hearing aid programs may be excluded from the definition of Allowable Expense. A plan which provides benefits only for any such items of expense may limit its definition of Allowable Expenses to like items of expense.
3.2.2 When a plan provides benefits in the form of service, the reasonable cash value of each service will be considered as both an Allowable Expense and a benefit paid.
3.2.3 The difference between the cost of a private hospital room and the cost of a semi-private hospital room is not considered an Allowable Expense under the above definition unless the patient's stay in a private hospital room is medically necessary in terms of generally accepted medical practice.
3.2.4 When COB is restricted in its use to specific coverage in a contract (for example, major medical or dental), the definition of "Allowable Expense" must include the corresponding expenses or services to which COB applies.
3.3 “Claim” means a request that benefits of a plan be provided or paid is a claim. The benefits claimed may be in the form of:
3.3.1 services (including supplies);
3.3.2 payment for all or a portion of the expenses incurred;
3.3.3 a combination of sections 3.3.1 and 3.3.2 above; or
3.3.4 an indemnification.
3.4 “Claim Determination Period” is the period of time, which must not be less than twelve consecutive months, over which Allowable Expenses are compared with total benefits payable in the absence of COB, to determine whether overinsurance exists and how much each plan will pay or provide.
3.4.1 The Claim Determination Period is usually a calendar year, but a plan may use some other period of time that fits the coverage of the group contract. A person may be covered by a plan during a portion of a Claim Determination Period if that person's coverage starts or ends during the Claim Determination Period.
3.4.2 As each claim is submitted, each plan is to determine its liability and pay or provide benefits based upon Allowable Expenses incurred to that point in the Claim Determination Period. But that determination is subject to adjustment as later Allowable Expenses are incurred in the same Claim Determination Period.
3.5 “Coordination of Benefits” is a provision establishing an order in which plans pay their claims.
3.6 “Hospital Indemnity Benefits” are benefits not related to expenses incurred. The term does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.
3.7 “Plan” means a form of coverage with which coordination is allowed. The definition of Plan in the group contract must state the types of coverage which will be considered in applying the COB provision of that contract. The right to include a type of coverage is limited by the rest of this definition.
3.7.1 The definition shown in the Model COB Provision, attached to this rule as Appendix A, is an example of what may be used. Any definition that satisfies this subsection may be used.
3.7.2 When describing a plan, an insurer may use the term “program” or other similar term to describe the coverage under a plan.
3.7.3 Plan may include:
3.7.3.1 Group insurance and group subscriber contracts;
3.7.3.2 Uninsured arrangements of group or group-type coverage;
3.7.3.3 Group or group-type coverage through HMOs and other prepayment, group practice and individual practice plans;
3.7.3.4 Group-type contracts. Group-type contracts are contracts which are not available to the general public and can be obtained and maintained only because of membership in or connection with a particular organization or group. Group-type contracts answering this description may be included in the definition of plan, at the option of the insurer or the service provider and the contract client, whether or not uninsured arrangements or individual contract forms are used and regardless of how the group-type coverage is designated (for example, "franchise" or "blanket"). Individually underwritten and issued guaranteed renewable policies would not be considered "group-type" even savings to the insured since the insured would have the right to maintain or renew the policy independently of continued employment with the employer.
3.7.3.5 The amount by which group or group-type hospital indemnity benefits exceed $100 per day;
3.7.3.6 The medical benefits coverage in group, group-type and individual automobile "no fault" and traditional automobile "fault" type contracts; and
3.7.3.7 Medicare or other governmental benefits, except as provided in section 3.7.3.8.7 below. That part of the definition of plan may be limited to the hospital, medical and surgical benefits of the governmental program.
3.7.3.8 Plan shall not include:
3.7.3.8.1 Individual or family insurance contracts;
3.7.3.8.2 Individual or family subscriber contracts;
3.7.3.8.3 Individual or family coverage through Health Maintenance Organizations (HMOs);
3.7.3.8.4 Individual or family coverage under other prepayment, group practice and individual practice plans;
3.7.3.8.5 Group or group-type hospital indemnity benefits of $100.00 per day or less;
3.7.3.8.6 School accident-type coverages. These contracts cover grammar, high school and college students for accidents only, including athletic injuries, either on a 24-hour basis or on a "to and from school" basis; and
3.7.3.8.7 A State plan under Medicaid, and shall not include a law or plan when, by law, its benefits are in excess of those of any private insurance plan or other non-governmental plan.
3.8 “Primary Plan” is a plan whose benefits for a person's health care coverage must be determined without taking the existence of any other plan into consideration. A plan is a Primary Plan if either of the following conditions is true:
3.8.1 The plan either has no order of benefit determination rules, or it has rules which differ from those permitted by this subchapter. There may be more than one Primary Plan; or
3.8.2 All plans which cover the person use the order of benefit determination rules required by this regulation, and under those rules the plan determines its benefits first.
3.9 “Secondary Plan” is a plan which is not a Primary Plan. If a person is covered by more than one Secondary Plan, the order of benefit determination rules of this regulation decide the order in which their benefits are determined in relation to each other. The benefits of each Secondary Plan may take into consideration the benefits of the Primary Plan or plans and the benefits of any other plan which, under the rules of this regulation, has its benefits determined before those of that Secondary Plan.
3.10 “This Plan” in a COB provision, refers to the part of the group contract providing the health care benefits to which the COB provision applies and which may be reduced because of the benefits of other plans. Any other part of the group contract providing health care benefits is separate from This Plan. A group contract may apply one COB provision to certain of its benefits (such as dental benefits), coordinating only with like benefits, and may apply other separate COB provisions to coordinate other benefits.
10 DE Reg. 1828 (06/01/07)
4.0 Model Cob Contract Provision
4.1 General
4.1.1 Appendix A contains a model COB provision for use in group contracts. That use is subject to the provisions of sections 4.2, 4.3 and 5.0.
4.2 Flexibility
4.2.1 A group contract's COB provision does not have to use the words and format shown at Appendix A. Changes may be made to fit the language and style of the rest of the group contract or to reflect the difference among plans which provide services, which pay benefits for expenses incurred, and which indemnify. No other substantive changes are allowed.
4.3 Prohibited Coordination and Benefit Design.
4.3.1 A group contract may not reduce benefits on the basis that:
4.3.1.1 Another plan exists;
4.3.1.2 A person is or could have been covered under another plan, except with respect to Part B of Medicare; or
4.3.1.3 A person has elected an option under another plan providing a lower level of benefits than another option which could have been elected.
4.3.2 No contract may contain a provision that its benefits are "excess" or "always secondary" to any plan as defined in this regulation, except in accord with the rules permitted by this regulation.
10 DE Reg. 1828 (06/01/07)
5.0 Rules for Coordination of Benefits
5.1 The general order of benefits is as follows:
5.1.1 The Primary Plan must pay or provide its benefits as if the Secondary Plan or Plans did not exist. A Plan that does not include a coordination of benefits provision may not take the benefits of another Plan as defined in section 3.0 into account when it determines its benefits. There is one exception: a contract holder's coverage that is designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the plan provided by the contract holder.
5.1.2 A Secondary Plan may take the benefits of another plan into account only when, under these rules, it is Secondary to that other plan.
5.1.3 The benefits of the plan which covers the person as an employee, member or subscriber (that is, other than a dependent) are determined before those of the plan which covers the person as a dependent.
5.2 The rules for the order of benefits for a dependent child when the parents are not separated or divorced are as follows:
5.2.1 The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year;
5.2.2 If both parents have the same birthday, the benefits of the plan which covered the parent longer are determined before those of the plan which covered the other parent for a shorter period of time;
5.2.3 The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born;
5.2.4 A group contract which includes COB and which is issued or renewed, or which has an anniversary date on or after sixty days after the effective date of this subchapter shall include the substance of the provision in sections 5.2.1, 5.2.2, and 5.2.3 above. Until that provision becomes effective, the group contract may instead contain wording such as: "Except as stated in section 5.1.3, the benefits of a plan which covers the person as a dependent of a female."
5.2.5 If the other plan does not have the rule described in sections 5.2.1, 5.2.2, and 5.2.3 above but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the rule based upon the gender of the parent will determine the order of benefits.
5.3 If two or more plans cover a person as a dependent child of divorced or separated parents, benefits for the child are determined in this order:
5.3.1 First, the plan of the parent with custody of the child;
5.3.2 Then, the plan of the spouse of the parent with the custody of the child; and
5.3.3 Finally, the plan of the parent not having custody of the child.
5.3.4 If the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child, and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first. The plan of the other parent shall be the Secondary Plan. This paragraph does not apply with respect to any Claim Determination Period or Plan Year during which any benefits are actually paid or provided before the entity has that actual knowledge.
5.3.5 Upon request by either parent of a dependent child, a carrier subject to this Section 5.3 shall immediately issue an insurance card or, if it does not issue such cards to its policy holders, equivalent proof of applicable insurance for the dependent child to the parent making such request.
5.3.6 If benefits are not assigned and would be paid to an individual other than the provider, the carrier shall issue the benefits to the parent who sought the treatment for the dependent child.
5.4 The benefits of a plan that covers a person as an employee who is neither laid off nor retired (or as that employee's dependent) are determined before those of a plan which covers that person as a laid off or retired employee (or as that employee's dependent). If the other plan does not have this rule; and if, as a result, the plans do not agree on the order of benefits, this rule is ignored.
5.5 If none of the above rules determines the order of benefits, the benefits of the plan which covered an employee, member or subscriber longer are determined before those of the plan which covered that person for the shorter term.
5.5.1 To determine the length of time a person has been covered under a plan, two plans shall be treated as one if the claimant was eligible under the second within twenty-four hours after the first ended.
5.5.2 The start of a new plan does not include:
5.5.2.1 a change in the amount of scope of a plan's benefits;
5.5.2.2 a change in the entity which pays, provides or administers the plan's benefits; or
5.5.2.3 a change from one type of plan to another (such as, from a single employer plan to that of a multiple employer plan).
5.5.3 The claimant's length of time covered under a plan is measured from the claimant's first date of coverage under that plan. If that date is not readily available, the date the claimant first became a member of the group shall be used as the date from which to determine the length of time the claimant's coverage under the present plan has been in force.
10 DE Reg. 1828 (06/01/07)
6.0 Procedure to be Followed by Secondary Plan
6.1 Total Allowable Expenses
6.1.1 When it is determined, pursuant to section 5.0, that this Plan is a Secondary Plan, it may reduce its benefits so that the total benefits paid or provided by all plans during a Claim Determination Period are not more than total Allowable Expenses. The amount by which the Secondary Plan's benefits have been reduced shall be used by the Secondary Plan to pay Allowable Expenses, not otherwise paid, which were incurred during the Claim Determination Period by the person for whom the claim is made. As each claim is submitted, the Secondary Plan determines its obligation to pay for Allowable Expenses based on all claims which were submitted up to that point in time during the Claim Determination Period.
6.1.2 The benefits of the Secondary Plan will be reduced when the sum of the benefits that would be payable for the Allowable Expenses under the Secondary Plan in the absence of the COB provision and the benefits that would be payable for the Allowable Expenses under the other Plans, in the absence of provisions with a purpose like that of this COB provision, whether or not claim is made, exceeds those Allowable Expenses in a Claim Determination Period. In that case, the benefits of the Secondary Plan will be reduced so that they and the benefits payable under the other plans do not total more than those Allowable Expenses.
6.1.2.1 When the benefits of this Plan are reduced as described above, each benefit is reduced in proportion. It is then charged against any applicable benefit limit of this Plan.
6.1.2.2 Section 6.1.2.1 above may be omitted if the plan provides only one benefit, or may be altered to suit the coverage provided.
7.0 Miscellaneous Provisions
7.1 Reasonable Cash Values of Services
7.1.1 A Secondary Plan which provides benefits in the form of services may recover the reasonable cash value of providing the services from the Primary Plan, to the extent that benefits for the services are covered by the Primary Plan. Nothing in this provision shall be interpreted to require a plan to reimburse a covered person in cash for the value of services provided by a plan which provides benefits in the form of services.
7.2 Excess and Other Nonconforming Provisions
7.2.1 Some plans have order of benefit determination rules not consistent with this regulation which declare that the plan's coverage is "excess" to all others, or "always secondary." This occurs because certain plans may not be subject to insurance regulation, or because some group contracts have not yet been conformed to this regulation pursuant to section 2.0.
7.2.2 A plan with order of benefit determination rules which comply with this regulation (Complying Plan) may coordinate its benefits with a plan which is "excess" or "always secondary" or which uses order of benefit determination rules which are inconsistent with those contained in this regulation (Noncomplying Plan) on the following basis:
7.2.2.1 If the Complying Plan is the Primary Plan, it shall pay or provide its benefits on a primary basis;
7.2.2.2 If the Complying Plan is the Secondary Plan, it shall, never the less, pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the Complying Plan were the Secondary Plan. In such a situation, such payment shall be the limit of the Complying Plan's liability; and
7.2.2.3 If the Noncomplying Plan does not provide the information needed by the Complying Plan to determine its benefits within a reasonable time after it is requested to do so, the Complying Plan shall assume that the benefits of the Noncomplying Plan are identical to its own, and shall pay its benefits accordingly. However, the Complying Plan must adjust any payments it makes based on such assumption whenever information becomes available as to the actual benefits of the Noncomplying Plan.
7.2.3 If the Noncomplying Plan reduces its benefits so that the employee, subscriber, or member receives less in benefits than he or she would have received had the Complying Plan paid or provided its benefits as the Secondary Plan and the Noncomplying Plan paid or provided its benefits as the Primary Plan, and governing State law allows the right of subrogation set forth below, then the Complying Plan shall advance to or on behalf of the employee, subscriber or member an amount equal to such difference. However, in no event shall the Complying Plan advance more than the Complying Plan would have paid had it been the Primary Plan less any amount it previously paid. In consideration of such advance, the Complying Plan shall be subrogated to all rights of the employee, subscriber or member against the Noncomplying Plan. Such advance by the Complying Plan shall also be without prejudice to any claim it may have against the Noncomplying Plan in the absence of such subrogation.
7.3 Allowable Expense
7.3.1 A term such as "usual and customary ...... usual and prevailing," or "reasonable and customary," may be substituted for the term "necessary, reasonable and customary." Terms such as "medical care" or "dental care" may be substituted for "health care" to describe the coverages to which the COB provisions apply.
7.4 Subrogation
7.4.1 The COB concept clearly differs from that of subrogation. Provisions for one may be included in health care benefits contracts without compelling the inclusion of the other.
10 DE Reg. 1828 (06/01/07)
8.0 Effective Date; Compliance Dates of Existing Contracts
8.1 This regulation first became effective on October 6, 1988. The amendments hereto shall become effective on June 11, 2007.
8.2 A group contract which provides health care benefits and was issued before the effective date of this regulation shall be brought into compliance with this regulation by the later of:
8.2.1 The next anniversary date or renewal date of the group contract; or
8.2.2 The expiration of any applicable collectively bargained contract pursuant to which it was written .
10 DE Reg. 1828 (06/01/07)
APPENDIX A. MODEL COB PROVISIONS
COORDINATION OF THE GROUP CONTRACTS
BENEFITS WITH OTHER BENEFITS
I Applicability
A This Coordination of Benefits "COB" provision applies to This Plan when an employee or the employee's covered dependent has health care coverage under more than one Plan. "Plan" and "This Plan" are defined below.
B If this COB provision applies, the order of benefit determination rules should be looked at first. Those rules determine whether the benefits of This Plan are determined before or after those of another plan. The benefits of This Plan:
(1) Shall not be reduced when, under the order of benefit determination rules, This Plan determines its benefits before another plan; but
(2) May be reduced when, under the order of benefits determination rules, another plan determines its benefits first. The above reduction is described in Section IV "Effect on the Benefits of This Plan."
II. Definitions
A. "Plan" is any of these which provides benefits or services for, or because of, medical or dental care or treatment:
(1) Group insurance or group-type coverage, whether insured or uninsured. This includes prepayment, group practice or individual practice coverage. It also includes coverage other than school accident-type coverage.
(2) Coverage under a governmental plan, or coverage required or provided by law. This does not include a state plan under Medicaid (Title XIX, Grants to States for Medical Assistance Programs, of the United States Social Security Act, as amended from time to time).
(3) Each contract or other arrangement for coverage under (1) or (2) is a separate plan. Also, if an arrangement has two parts and COB rules apply only to one of the two, each of the parts is a separate plan.
B. "This Plan" is the part of the group contract that provides benefits for health care expenses.
C. "Primary Plan/Secondary Plan:" The order of benefit determination rules state whether This Plan is a Primary Plan or Secondary Plan as to another plan covering the person.
When This Plan is a Primary Plan, its benefits are determined before those of the other plan and without considering the other plan's benefits.
When This Plan is a Secondary Plan, its benefits are determined after those of the other plan and may be reduced because of the other plan's benefits.
When there are more than two plans covering the person, This Plan may be a Primary Plan as to one or more other plans, and may be a Secondary Plan as to a different plan or plans.
D. "Allowable Expense" means a necessary, reasonable and customary item of expense for health care; when the item of expense is covered at least in part by one or more plans covering the person for whom the claim is made.The difference between the cost of a private hospital room and the cost of a semi-private hospital room is not considered an Allowable Expense under the above definition unless the patient's stay in a private hospital room is medically necessary either in terms of generally accepted medical practice, or as specifically defined in the plan. When a plan provides benefits in the form of services, the reasonable cash value of each service rendered will be considered both an Allowable Expense and a benefit paid.
E. "Claim Determination Period" means a calendar year. However, it does not include any part of a year during which a person has no coverage under This Plan, or any part of a year before the date this COB provision or a similar provision takes effect.
III. Order Of Benefit Determination Rules
A. General. When there is a basis for a claim under This Plan and another plan, This Plan is a Secondary Plan which has its benefits determined after those of the other plan, unless:
(1) The other plan has rules coordinating its benefits with those of This Plan; and
(2) Both those rules and This Plan's rules, in Subsection B below, require that This Plan's benefits be determined before those of the other plan.
B. Rules. This Plan determines its order of benefits using the first of the following rules which applies:
(1) Non-Dependent/Dependent. The benefits of the plan which covers the person as an employee, member or subscriber (that is, other than as a dependent) are determined before those of the plan which covers the person as a dependent.
(2) Dependent Child/Parents not Separated or Divorced. Except as stated in Paragraph (B)(3) below, when This Plan and another plan cover the same child as a dependent of different persons, called "parents":
(a) The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; but
(b) If both parents have the same birthday, the benefits of the plan which covered one parent longer are determined before those of the plan which covered the other parent for a shorter period of time. However, if the other plan does not have the rule described in (a) immediately above, but instead has a rule based upon the gender of the parent, and if, as a result, the plans do not agree on the order of benefits, the rule in the other plan will determine the order of benefits.
(3) Dependent Child/Separated or Divorced. If two or more plans cover a person as a dependent child of divorces or separated parents, benefits for the child are determined in this order:
(a) First, the plan of the parent with custody of the child;
(b) Then, the plan of the spouse of the parent with the custody of the child; and
(c) Finally, the plan of the parent not having custody of the child.
However, if the specific terms of a court decree state that one of the parents is responsible for the health care expense of the child, and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first. The plan of the other parent shall be the Secondary Plan. This paragraph does not apply with respect to any Claim Determination Period or Plan Year during which any benefits are actually paid or provided before the entity has the actual knowledge.
(d) Upon request by either parent of a dependent child, a carrier subject to this Section 5.3 shall immediately issue an insurance card showing proof of applicable insurance for the dependent child to the parent making such request.
(e) If benefits are not assigned and would be paid to an individual other than the provider, the carrier shall issue the benefits to the parent who sought the treatment for the dependent child.
(4) Active/Inactive Employee. The benefits of a plan which covers a person as an employee who is neither laid off nor retired (or as that employee's dependent) are determined before those of a plan which covers that person as a laid off or retired employee (or as that employee's dependent). If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this Rule (4) is ignored.
(5) Longer/Shorter Length of Coverage. If none of the above rules determines the order of benefits, the benefits of the plan which covered an employee, member or subscriber longer are determined before those of the Plan which covered that person for the shorter term.
IV. Effect On The Benefits Of This Plan
A. When This Section Applies. This Section IV applies when, in accordance with Section III "Order of Benefit Determination Rules," This Plan is a Secondary Plan as to one or more other plans. In that event the benefits of This Plan may be reduced under this section. Such other plan or plans are referred to as "the other plans" in B immediately below.
B. Reduction in this Plan's Benefits. The benefits of This Plan will be reduced when the sum of:
(1) The benefits that would be payable for the Allowable Expense under This Plan in the absence of the COB provision; and
(2) The benefits that would be payable for the Allowable Expenses under the other plans, in the absence of provisions with a purpose like that of this COB provision, whether or not claim is made, exceeds those Allowable Expenses in a Claim Determination Period. In that case, the benefits of This Plan will be reduced so that they and the benefits payable under the other plans do not total more than those Allowable Expenses. When the benefits of This Plan are reduced as described above, each benefit is reduced in proportion. It is then charged against any applicable benefit limit of This Plan.
V. Right To Receive And Release Needed Information
Certain facts are needs to apply these COB rules. [Insurer] has the right to decide which facts it needs. It may get needed facts from or give them to any other organization or person. [Insurer] need not tell, or get the consent of, any person to do this. Each person claiming benefits under This Plan must give (insurer] any facts it needs to pay the claim.
10 DE Reg. 1828 (06/01/07)
1308 Small Employer Health Insurance [Formerly Regulation 72]
18 Del. Admin. Code § 1308 Small Employer Health Insurance [Formerly Regulation 72]
1308 Small Employer Health Insurance [Formerly Regulation 72]
1.0 Statement of purpose
1.1 This Regulation is intended to implement the provisions of 18 Del.C. Ch. 72, Small Employer Health Insurance. The general purposes of 18 Del.C. Ch. 72 and this Regulation are to provide for the availability of health insurance coverage to small employers, regardless of their health status or claims experience; to regulate insurer rating practices and establish limits on differences in rates between health benefit plans; to ensure renewability of coverage; to establish limitations on underwriting practices, eligibility requirements and the use of preexisting condition exclusions; to provide for development of "basic" and "standard" health insurance plans to be offered to all small employers; to provide for establishment of a reinsurance program; to direct the basis of market competition away from risk selection and toward the efficient management of health care; and to improve the overall fairness and efficiency of the small group health insurance market.
1.2 18 Del.C. Ch. 72 and this Regulation are intended to promote broader spreading of risk in the small employer marketplace. 18 Del.C. Ch. 72 and this Regulation are intended to regulate all health benefit plans sold to small employers, whether sold directly or through associations or other groupings of small employers. Carriers that provide health benefit plans to small employers are intended to be subject to all of the provisions of 18 Del.C. Ch. 72 and this Regulation.
2.0 Definitions
2.1 As used in this Regulation:
“Associate member of an employee organization" means any individual who participates in an employee benefit plan (as defined in 29 U.S.C. Section 1002(1)) that is a multi-employer plan (as defined in 29 U.S.C. Section 1002(37A)), other than the following:
• An individual (or the beneficiary of such individual) who is employed by a participating employer within a bargaining unit covered by at least one of the collective bargaining agreements under or pursuant to which the employee benefit plan is established or maintained; or
• An individual who is a present or former employee (or a beneficiary of such employee) of the sponsoring employee organization, of an employer who is or was a party to at least one of the collective bargaining agreements under or pursuant to which the employee benefit plan is established or maintained, or of the employee benefit plan (or of a related plan).
"New entrant" means an eligible employee, or the dependent of an eligible employee, who becomes part of an employer group after the initial period for enrollment in a health benefit plan.
"Risk characteristic" means the health status, claims experience, duration of coverage, or any similar characteristic related to the health status or experience of a small employer group or of any member of a small employer group.
"Risk load" means the percentage above the applicable base premium rate that is charged by a small employer carrier to a small employer to reflect the risk characteristics of the small employer group.
3.0 Applicability and scope
3.1
3.1.1 Except as provided in sections 1.1 and 14.0, this Regulation shall apply to any health benefit plan, whether provided on a group or individual basis, which:
3.1.1.1 Meets the conditions set forth in 18 Del.C. §7203;
3.1.1.2 Provides coverage to one or more employees of a small employer located in this state, without regard to whether the policy or certificate was issued in this state; and
3.1.1.3 Is in effect on or after the effective date of 18 Del.C. Ch. 72.
3.1.2 The provisions of 18 Del.C. Ch.72 and this Regulation shall not apply to an individual health insurance policy issued prior to the effective date of 18 Del.C. Ch. 72.
3.2
3.2.1 A carrier that provides individual health insurance policies to one or more of the employees of a small employer shall be considered a small employer carrier and shall be subject to the provisions of 18 Del.C. Ch. 72 and this Regulation with respect to such policies if the small employer contributes directly or indirectly to the premiums for the policies and the carrier is aware or should have been aware of such contributions.
3.2.2 In the case of a carrier that provides individual health insurance policies to one or more employees of a small employer, the small employer shall be considered to be an eligible small employer as defined in 18 Del.C. §7207(a)(3) and the small employer carrier shall be subject to 18 Del.C. §7207(a)(2) (relating to guaranteed issue of coverage) if:
3.2.2.1 The small employer has at least two (2) employees, and
3.2.2.2 The small employer contributes directly or indirectly to the premiums charged by the carrier, including, but not limited to the following conditions:
3.2.2.2.1 any portion of the premium or benefits is paid by or on behalf of the employee;
3.2.2.2.2 the health benefit plan is administered by the small employer;
3.2.2.2.3 an eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium;
3.2.2.2.4 the health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of Section 162, Section 125, or Section 106 of the United States Internal Revenue Code.
3.3 The provisions of 18 Del.C. Ch. 72 and this Regulation shall apply to a health benefit plan provided to a small employer or the employees of a small employer without regard to whether the health benefit plan is offered under or provided through a group policy or trust arrangement of any size sponsored by an association of discretionary group.
3.4 An individual health insurance policy shall not be subject to the provisions of 18 Del.C. Ch. 72 and this Regulation solely because the policyholder elects a deduction under Section 162(1) of the Internal Revenue Code.
3.5
3.5.1 If a small employer is issued a health benefit plan under the terms of 18 Del.C. Ch. 72, the provisions of 18 Del.C. Ch. 72 and this Regulation shall continue to apply to the health benefit plan in the case that the small employer subsequently employs more than twenty-five (25) eligible employees. A carrier providing coverage to such an employer shall, within sixty (60) days of becoming aware that the employer has more than twenty-five (25) eligible employees but no later than the anniversary date of the employer's health benefit plan, notify such employer that the protections provided under 18 Del.C. Ch. 72 and this Regulation shall cease to apply to the employer if such employer fails to renew its current health benefit plan or elects to enroll in a different health benefit plan.
3.5.2
3.5.2.1 If a health benefit plan is issued to an employer that is not a small employer as defined in 18 Del.C. Ch. 72, but subsequently the employer becomes a small employer (due to the loss or change of work status of one or more employees), the terms of 18 Del.C. Ch. 72 shall not apply to the health benefit plan. The carrier providing a health benefit plan to such an employer shall not become a small employer carrier under the terms of 18 Del.C. Ch. 72 solely because such carrier continues to provide coverage under the health benefit plan to the employer.
3.5.2.2 A carrier providing coverage to an employer described in section 3.5.2.1 shall, within sixty (60) days of becoming aware that the employer has twenty-five (25) or fewer eligible employees, notify such employer of the options and protections available to the employer under 18 Del.C. Ch. 72, including the employer's option to purchase a small employer health benefit plan from any small employer carrier.
3.6
3.6.1
3.6.1.1 If a small employer has employees in more than one state, the provisions of 18 Del.C. Ch. 72 and this Regulation shall apply to a health benefit plan issued to the small employer if:
3.6.1.1.1 the majority of eligible employees of such small employer are employed in this state; or
3.6.1.1.2 if no state contains a majority of the eligible employees of such small employer, the primary business location of the small employer is in this state.
3.6.1.2 In determining whether the laws of this state or another state apply to a health benefit plan issued to a small employer described in section 3.6.1.1, the provisions of such paragraph shall be applied as of the date the health benefit plan was issued to the small employer for the period that such health benefit plan remains in effect.
3.6.2 If a health benefit plan is subject to 18 Del.C. Ch. 72 and this Regulation, the provisions of 18 Del.C. Ch. 72 and this Regulation shall apply to all individuals covered under such health benefit plan, whether they reside in this state or in another state.
3.7 A carrier that is not operating as a small employer carrier in this state shall not become subject to the provisions of 18 Del.C. Ch. 72 and this regulation solely because a small employer that was issued a health benefit plan in another state by such carrier moves to this state.
4.0 Establishment of classes of business
4.1 A small employer carrier that establishes more than one class of business pursuant to the provisions of 18 Del.C. §7204 shall maintain on file for inspection by the Commissioner the following information with respect to each class of business so established:
4.1.1 A description of each criterion employed by the carrier (or any of its agents) for determining membership in the class of business;
4.1.2 A statement describing the justification for establishing the class as a separate class of business and documentation that the establishment of the class of business is intended to reflect substantial differences in expected claims experience or administrative costs related to the reasons set forth in 18 Del.C. §7204; and
4.1.3 A statement disclosing which, if any, health benefit plans are currently available for purchase in the class and any significant limitations related to the purchase of such plans.
4.2 A carrier may not directly or indirectly use group size as a criterion for establishing eligibility for a health benefit plan or for a class of business.
5.0 Transition for assumptions of business from another carrier
5.1
5.1.1 A small employer carrier shall not transfer or assume the entire insurance obligation and/or risk of a health benefit plan covering a small employer in this state unless:
5.1.1.1 The transaction has been approved by the Commissioner of the state of domicile of the assuming carrier;
5.1.1.2 The transaction has been approved by the Commissioner of the state of domicile of the ceding carrier; and
5.1.1.3 The transaction otherwise meet the requirements of this section.
5.1.2 A carrier domiciled in this state that proposes to assume or cede the entire insurance obligation and/or risk of one or more small employer health benefit plan from another carrier shall make a filing for approval with the Commissioner at least sixty (60) days prior to the date of the proposed assumption. The Commissioner may approve the transaction if the Commissioner finds that the transaction is in the best interests of the individuals insured under the health benefit plan to be transferred and is consistent with the purposes of 18 Del.C. Ch. 72, and this Regulation. The Commissioner shall not approve the transaction until at least thirty (30) days after the date of the filing; except that, if the ceding carrier is in hazardous financial condition, the Commissioner may approve the transaction as soon as the Commissioner deems reasonable after the filing.
5.1.3
5.1.3.1 The filing required under section 5.1.2 shall:
5.1.3.1.1 Describe the class of business (including any eligibility requirements) of the ceding carrier from which the health benefit plans will be ceded;
5.1.3.1.2 Describe whether the assuming carrier will maintain the assumed health benefit plans as a separate class of business (pursuant to section 5.3 or will incorporate them into an existing class of business (pursuant to section 5.4. If the assumed health benefit plans will be incorporated into an existing class of business, the filing shall describe the class of business of the assuming carrier into which the health benefit plans will be incorporated;
5.1.3.1.3 Describe whether the health benefit plans being assumed are currently available for purchase by small employers;
5.1.3.1.4 Describe the potential effect of the assumption (if any) on the benefits provided by the health benefit plans to be assumed;
5.1.3.1.5 Describe the potential effect of the assumption (if any) on the premiums for the health benefit plans to be assumed; and
5.1.3.1.6 Describe any other potential material effects of the assumption on the coverage provided to the small employers covered by the health benefit plans to be assumed.
5.1.3.1.7 Include any other information required by the Commissioner.
5.1.3.2 A small employer carrier required to make the filing under section 5.1.2 shall also make an informational filing with the Commissioner of each state in which there are small employer health benefit plans that would be included in the transaction. The informational filing to each state shall be made concurrently with the filing made under section 5.1.2 and shall include at least the information specified in section 5.1.3.1 for the small employer health benefit plans in that state.
5.1.4 A small employer carrier shall not transfer or assume the entire insurance obligation and/or risk of a health benefit plan covering a small employer in this state unless it complies with the following:
5.1.4.1 The carrier has provided notice to the Commissioner at least sixty (6) days prior to the date of the proposed assumption. The notice shall contain the information specified in section 5.1.3 for the health benefit plans covering small employers in this state.
5.1.4.2 If the assumption of the class of business would result in the assuming small employer carrier being out of compliance with the limitations related to premium rates contained in 18 Del.C. §7205(a)(1), the assuming carrier shall make a filing with the Commissioner seeking suspension of the application of 18 Del.C. §7205(a)(1).
5.1.4.3 An assuming carrier seeking suspension of the application of 18 Del.C. §7205(a)(1) shall not complete the assumption of the class of business unless the Commissioner grants the suspension requested pursuant to section 5.1.3.2.
5.1.4.4 Unless a different period is approved by the Commissioner, a suspension of the application of 18 Del.C. §7205(a)(1) shall, with respect to and assumed class of business, be for no more than fifteen (15) months and, with respect to each individual small employer, shall last only until the anniversary date of such employer's coverage (except that the period with respect to an individual small employer may be extended for a period of up to twelve (12) months if such small employer's anniversary date occurs within three (3) months of the date of assumption of the class of business).
5.2
5.2.1 Except as provided in section 5.1.2, a small employer carrier shall not cede or assume the entire insurance obligation and/or risk for a small employer health benefit plan unless the transaction includes the ceding to the assuming carrier of the entire class of business which includes such health benefit plan.
5.2.2 A small employer carrier may cede less than an entire class of business to an assuming carrier if:
5.2.2.1 One or more small employers in such class have exercised their right under contract or state law to reject (either directly or by implication) the ceding of their health benefit plans to another carrier. In such instance, the transaction shall include each health benefit plan in the class of business except those health benefit plans for which a small employer has rejected the proposed cession; or
5.2.2.2 After a written request from the transferring carrier, the Commissioner determines that the transfer of less than the entire class of business is in the best interests of the small employers insured in such class of business.
5.3 Except as provided in section 5.4, a small employer carrier that assumes one or more health benefit plans from another carrier shall maintain such health benefit plans as a separate class of business.
5.4 A small employer carrier that assumes one or more health benefit plans from another carrier may exceed the limitation contained in 18 Del.C. §7204(b) (relating to the maximum number of classes of business a carrier may establish) due solely to such assumption for up to a period of fifteen (15) months after the date of the assumption, provided that the carrier complies with the following provisions:
5.4.1 Upon assumption of the health benefit plans, such health benefit plans shall be maintained as a separate class of business. During the fifteen (15) month period following the assumption, each of the assumed small employer health benefit plans shall be transferred by the assuming small employer carrier into a single class of business operated by the assuming small employer carrier. The assuming small employer carrier shall select the class of business into which the assumed health benefit plans will be transferred in a manner such that the transfer results in the least possible change to the benefits and rating method of the assumed health benefit plans.
5.4.2 The transfers authorized in section 5.4.1 shall occur with respect to each small employer on the anniversary date of the employer's coverage, except that the period may be extended for a period that is no greater than twelve (12) months for small employers whose anniversary dates occur within three (3) months of the date of assumption of the class of business.
5.4.3 A small employer carrier making a transfer pursuant to section 5.4.1 may alter the benefits of the assumed health benefit plans to conform to the benefits currently offered by the carrier in the class of business into which the health benefits plans have been transferred.
5.4.4 The premium rate for an assumed small employer health benefit plan shall not be modified by the assuming small employer carrier until the health benefit plan is transferred pursuant to section 5.4.1. Upon such transfer, the assuming small employer carrier shall calculate a new premium rate for the health benefit plan from the rate manual established for the class of business into which the health benefit plan is transferred. In making such calculation, the risk load applied to the health benefit plan shall be no higher than the risk load applicable to such health benefit plan prior to the assumption.
5.5 During the fifteen (15) month period provided in this subsection, the transfer of small employer health benefit plans from the assumed class of business in accordance with this subsection shall not be considered a violation of the first sentence of 18 Del.C. §7204(e).
5.6 An assuming carrier may not apply eligibility requirements (including minimum participation and contribution requirements) with respect to an assumed health benefit plan (or with respect to any health benefit plan subsequently offered to a small employer covered by such an assumed health benefit plan) that are more stringent than the requirements applicable to such health benefit plan prior to the assumption.
5.7 The Commissioner may approve a longer period of transition upon application of a small employer carrier. The application shall be made within sixty (60) days after the date of assumption of the class of business and shall clearly state the justification for a longer transition period.
5.8 Nothing in this Section or in 18 Del.C. Ch. 72 is intended to:
5.8.1 Reduce or diminish any legal or contractual obligation or requirement, including any obligation provided in 18 Del.C. Ch. 9, Reinsurance, of the ceding or assuming carrier related to the transaction;
5.8.2 Authorize a carrier that is not admitted to transact the business of insurance in this state to offer or insure health benefit plans in this state; or
5.8.3 Reduce or diminish the protections related to an assumption reinsurance transaction provided in 18 Del.C. Ch. 9, or otherwise provided by law.
6.0 Restrictions relating to premium rates
6.1
6.1.1 A small employer carrier shall develop a separate rate manual for each class of business. Base premium rates and new business premium rates charged to small employers by the small employer carrier shall be computed solely from the applicable rate manual developed pursuant to this subsection. To the extent that a portion of the premium rates charged by a small employer carrier is based on the carrier's discretion, the manual shall specify the criteria and factors considered by the carrier in exercising such discretion.
6.1.2
6.1.2.1 A small employer carrier shall not modify the rating method used in the rate manual for a class of business until the change has been approved as provided in this paragraph. The Commissioner may approve a change to a rating method if the Commissioner finds that the change is reasonable, actuarially appropriate, and consistent with the purposes of 18 Del.C. Ch. 72 and this Regulation.
6.1.2.2 A carrier may modify the rating method for a class of business only with prior approval of the Commissioner. A carrier requesting to change the rating method for a class of business shall make a filing with the Commissioner at least sixty (60) days prior to the proposed date of the change. The filing shall contain at least the following information:
6.1.2.2.1 The reasons the change in rating method is being requested;
6.1.2.2.2 A complete description of each of the proposed modifications to the rating method;
6.1.2.2.3 A description of how the change in rating method would affect the premium rates currently charged to small employers in the class of business, including an estimate from a qualified actuary of the number of groups or individuals (and a description of the types of groups or individuals) whose premium rates may change by more than ten percent (10%) due to proposed change in rating method (not including general increases in premium rates applicable to all small employers in a health benefit plan);
6.1.2.2.4 A certification from a qualified actuary that the new rating method would be based on objective and credible data and would be actuarially sound and appropriate; and
6.1.2.2.5 A certification from a qualified actuary that the proposed change in rating method would not produce premium rates for small employers that would be in violation 18 Del. C. §7205.
6.1.2.3 For the purpose of this section, a change in rating method shall mean:
6.1.2.3.1 A change in the number of case characteristics used by a small employer carrier to determine premium rates for health benefit plans in a class of business;
6.1.2.3.2 A change in the manner or procedures by which insureds are assigned into categories for the purpose of applying a case characteristic to determine premium rates for health benefit plans in a class of business;
6.1.2.3.3 A change in the method of allocating expenses among health benefit plans in a class of business; or
6.1.2.3.4 A change in a rating factor with respect to any case characteristic if the change would produce a change in premium for any small employer that exceeds ten percent (10%).
6.1.2.4 For the purpose of section 6.1.2.3.1, a change in a rating factor shall mean the cumulative change with respect to such factor considered over a twelve (12) month period. If a small employer carrier changes rating factors with respect to more than one case characteristic in a twelve (12) month period, the carrier shall consider the cumulative effect of all such changes in applying the ten percent (10%) test under section 6.1.2.3.1.
6.2
6.2.1 The rate manual developed pursuant to section 6.1.1 shall specify the case characteristics and rate factors to be applied by the small employer carrier in establishing premium rates for the class of business.
6.2.2 A small employer carrier may not use case characteristics other than those specified in 18 Del.C. §7202(g) without the prior approval of the Commissioner. A small employer carrier seeking such an approval shall make a filing with the Commissioner for a change in rating method under section 6.1.2.1.
6.2.3 A small employer carrier shall use the same case characteristics in establishing premium rates for each health benefit plan in a class of business and shall apply them in the same manner in establishing premium rates for each such health benefit plan. Case characteristics shall be applied without regard to the risk characteristics of a small employer.
6.2.4 The rate manual developed pursuant to section 6.1.1 shall clearly illustrate the relationship among the base premium rates charged for each health benefit plan in the class of business. If the new business premium rate is different than the base premium rate for a health benefit plan, the rate manual shall illustrate such difference.
6.2.5 Differences among base premium rates for health benefit plans shall be based solely on the reasonable and objective differences in the design and benefits of the health benefit plans and shall not be based in any way on the actual or expected health status or claims experience of the small employer groups that choose or are expected to choose a particular health benefit plan. A small employer carrier shall apply case characteristics and rate factors within a class of business in a manner that assures that premium differences among health benefit plans for identical small employer groups vary only due to reasonable and objective differences in the design and benefits of the health benefit plans and are not due to the actual or expected health status or claims experience of the small employer groups that choose or are expected to choose a particular health benefit plan.
6.2.6 The rate manual developed pursuant to section 6.1.1 shall provide for premium rates to be developed in a two step process. In the first step, a base premium rate shall be developed for the small employer group without regard to any risk characteristics of the group. In the second step, the resulting base premium rate may be adjusted by a risk load, subject to the provisions of 18 Del.C. §7205 to reflect the risk characteristics of the group.
6.2.7
6.2.7.1 Except as provided in section 6.2.7.2, a premium charged to a small employer for a health benefit plan small employer carrier shall not include a separate application fee, underwriting fee, or any other separate fee or charge.
6.2.7.2 A carrier may charge a separate fee with respect to a health benefit plan (but only one fee with respect to such plan) provided the fee is no more than five dollars ($5.00) per month per employee and is applied in a uniform manner to each health benefit plan in a class of business.
6.2.8 A small employer carrier shall allocate administrative expenses to the basic and standard health benefit plans on no less favorable a basis than expenses allocated to other health benefit plans in the class of business. The rate manual developed pursuant to section 6.1.1 shall describe the method of allocating administrative expenses to the health benefit plans in the class of business for which the manual was developed.
6.2.9 Each rate manual developed pursuant to section 6.1.1 shall be maintained by the carrier for a period of six (6) years. Updates and changes to the manual shall be maintained with the manual.
6.2.10 The rate manual and rating practices of a small employer carrier shall comply with any guidelines issued by the Commissioner.
6.3 If group size is used as a case characteristic by a small employer carrier, the highest rate factor associated with a group size classification shall not exceed the lowest rate factor associated with such a classification by more than twenty (20%) percent.
6.4 The restrictions related to changes in premium rates in 18 Del.C. §§7205 (a)(3) and 7205 (a)(7) shall be applied as follows:
6.4.1 A small employer carrier shall revise its rate manual each rating period to reflect changes in base premium rates and changes in new business premium rates.
6.4.2
6.4.2.1 If, for any health benefit plan with respect to any rating period, the percentage change in the new business premium rate is less than or the same as the percentage change in the base premium rate, the change in the new business premium rate shall be deemed to be the change in the base premium rate for the purposes of 18 Del.C. §§7205 (a)(3)(c) and 7205 (a)(7)(a).
6.4.2.2 If, for any health benefit plan with respect to any rating period, the percentage change in the new business premium rate exceeds the percentage change in the base premium rate, the health benefit plan shall be considered a health benefit plan into which the small employer carrier is no longer enrolling new small employers for the purposes of 18 Del.C. §§7205 (a)(3) and 7205 (a)(7) of Chapter 72.
6.4.2.3 If, for any rating period, the change in the new business premium rate for a health benefit plan differs from the change in the new business premium rate for any other health benefit plan in the same class of business by more than twenty (20%) percent, the carrier shall make a filing with the Commissioner containing a complete explanation of how the respective changes in new business premium rates were established and the reason for the difference. Such filing shall be made within thirty (30) days of the beginning of such rating period.
6.4.2.4 A small employer carrier shall keep on file for a period of at least six (6) years the calculations used to determine the change in base premium rates and new business premium rates for each health benefit plan for each rating period.
6.5
6.5.1 Except as provided in sections 6.4.2.1 through 6.4.2.4, a change in premium rate for a small employer shall produce a revised premium rate that is no more than the following:
6.5.1.1 the base premium rate for the small employer (as shown in the rate manual as revised for the rating period), multiplied by
6.5.1.2 one (1) plus the sum of:
6.5.1.2.1 the risk load applicable to the small employer during the previous rating period, and
6.5.1.2.2 fifteen (15%) percent (prorated for periods of less than one year).
6.5.2 In the case of a health benefit plan into which a small employer carrier is no longer enrolling new small employers, a change in premium rate for a small employer shall produce a revised premium rate that is no more than the following:
6.5.2.1 the base premium rate for the small employer (given its present composition and as shown in the rate manual in effect for the small employer at the beginning of the previous rating period), multiplied by
6.5.2.2 one (1) plus the lesser of:
6.5.2.2.1 the change in the base rate or (ii) the percentage change in the new business premium for the most similar health benefit plan into which the small employer carrier is enrolling new small employers, multiplied by (c) one (1) plus the sum of:
6.5.2.2.1.1 the risk load applicable to the small employer during the previous rating period and
6.5.2.2.1.2 fifteen (15%) percent (prorated for periods of less than one year).
6.5.3 In the case of a health benefit plan described in 18 Del.C. §7205(a)(6), if the current premium rate for the health benefit plan exceeds the ranges set forth in 18 Del.C. §7205 (a), the formulae set forth in sections 6.5.1 and 6.5.2 will be applied as if the fifteen (15%) percent adjustment provided in section 6.5.1.2.2 and Paragraph (2)(c)(ii) (?) were a zero (0) percent adjustment.
6.5.4 Notwithstanding the provisions of section 6.5.1 and 6.5.2, a change in premium rate for a small employer shall not produce a revised premium rate that would exceed the limitations on rates provided in 18 Del.C. §7205(a)(2).
6.6
6.6.1 A representative of a Taft Hartley trust (including a carrier upon the written request of such a trust) may file in writing with the Commissioner a request for the waiver of application of the provisions of 18 Del.C. §7205 (a) with respect to such trust.
6.6.2 A request made under section 6.5.1 shall identify the provisions for which the trust is seeking the waiver and shall describe, with respect to each such provision, the extent to which application of such provision would:
6.6.2.1 adversely affect the participants and beneficiaries of the trust; and
6.6.2.2 require modifications to one or more of the collective bargaining agreements under or pursuant to which the trust was or is established or maintained.
6.6.2.3 A waiver granted under 18 Del.C. Ch. 72 shall not apply to an individual who participates in the trust because such individual is an associate member of an employee organization or the beneficiary of such an individual.
7.0 Requirement to insure entire groups
7.1
7.1.1 A small employer carrier that offers coverage to a small employer shall offer to provide coverage to each eligible employee and to each dependent of an eligible employee. Except as provided in section 7.1.2 and 7.1.3, the small employer carrier shall provide the same health benefit plan to each such employee and dependent.
7.1.2 A small employer carrier may offer the employees of a small employer the option of choosing among one or more health benefit plans, provided that each employee may choose any of the offered plans. Except as provided in 18 Del.C. §7207 (c) (with respect to exclusions for preexisting conditions) the choice among benefit plans may not be limited, restricted or conditioned based upon the risk characteristics of the employees or their dependents.
7.2
7.2.1 A small employer carrier shall require each small employer that applies for coverage, as part of the application process, to provide a complete list of eligible employees as defined in 18 Del.C. §§7202 (m) and 7202 (n). The small employer carrier shall require the small employer to provide appropriate supporting documentation (such as the W-2 Summary Wage and Tax Form) to verify the information required under this paragraph.
7.2.2 A small employer carrier shall secure a waiver with respect to each eligible employee and each dependent of an eligible employee who declines an offer of coverage under a health benefit plan provided to a small employer. A small employer carrier may issue a health benefit plan to a small employer that excludes an eligible employee or the dependent of an eligible employee only if:
7.2.2.1 The excluded individual does not have a risk characteristic or other attribute that would cause the carrier to make a decision with respect to premiums or eligibility for a health benefit plan that is adverse to the small employer, or
7.2.2.2 The excluded individual can demonstrate that he or she has waived coverage for other legitimate reasons, such as that found in 18 Del.C. §7207 (c)(4)c.
If unwillingness to make a premium contribution is the reason stated for waiver of coverage under section 7.2.2.1, the small employer carrier shall take affirmative steps to verify the voluntary nature of the waiver. The waiver shall be signed by the eligible employee (on behalf of such employee or the dependent of such employee) and shall certify that the individual who declined coverage was informed of the availability of coverage under the health benefit plan. The waiver form shall require that the reason for declining coverage be stated on the form and shall include a written warning of the penalties imposed on late enrollees. Waivers shall be maintained by the small employer carrier for a period of six (6) years.
7.2.2.3
7.2.2.3.1 A small employer carrier shall not issue coverage to a small employer that refuses to provide the list required under section 7.2.1 or a waiver required under section 7.2.2.
7.2.2.3.2
7.2.2.3.2.1 A small employer carrier shall not issue coverage to a small employer if the carrier, or a producer for such carrier, has reason to believe that the small employer has induced or pressured an eligible employee (or dependent of an eligible employee) to decline coverage due to the individual's risk characteristics.
7.2.2.3.2.2 A producer shall notify a small employer carrier, prior to submitting an application for coverage with the carrier on behalf of a small employer, of any circumstances that would indicate that the small employer has induced or pressured an eligible employee (or the dependent of an eligible employee) to decline coverage due to the individual's risk characteristics.
7.2.2.4
7.2.2.4.1 New entrants to a small employer group shall be offered an opportunity to enroll in the health benefit plan currently held by such group. A new entrant that does not exercise the opportunity to enroll in the health benefit plan within the period provided by the small employer carrier may be treated as a late enrollee by such carrier, provided that the period provided to enroll in the health benefit plan extends at least thirty (30) days after the date the new entrant is notified of his or her opportunity to enroll. If a small employer carrier has offered more than one health benefit plan to a small employer group pursuant to section 7.1.2, the new entrant shall be offered the same choice of health benefit plans as the other members of the group.
7.2.2.4.2 A small employer carrier shall not apply a waiting period, elimination period or other similar limitation of coverage (other than an exclusion for preexisting medical conditions consistent with 18 Del.C. §7207 (c)(2) with respect to a new entrant that is longer than sixty (60) days.
7.2.2.4.3 New entrants to a group shall be accepted for coverage by the small employer carrier without any restrictions or limitations on coverage related to the risk characteristics of the employees or their dependents, except that a carrier may exclude coverage for preexisting medical conditions, subject to the provisions provided in 18 Del.C. §7207 (c).
7.2.2.4.4 A small employer carrier may assess a risk load to the premium rate associated with a new entrant, consistent with the requirements of 18 Del.C. §7205. The risk load shall be at the same risk load charged to the small employer group immediately prior to acceptance of the new entrant into the group.
7.2.2.5
7.2.2.5.1
7.2.2.5.1.1 In the case of an eligible employee (or dependent of an eligible employee) who, prior to the effective date of 18 Del.C. §7207(a), was excluded from coverage or denied coverage by a small employer carrier in the process of providing a health benefit plan to an eligible small employer (as defined in 18 Del.C. §7207 (a)(3)), the small employer carrier shall provide an opportunity for the eligible employee (or dependent of such eligible employee) to enroll in the health benefit plan currently held by the small employer.
7.2.2.5.1.2 A small employer carrier may require an individual who requests enrollment under this subsection to sign a statement indicating that such individual sought coverage under the group contract (other than as a late enrollee) and that such coverage was not offered to the individual.
7.2.2.5.2 The opportunity to enroll shall meet the following requirements:
7.2.2.5.2.1 The opportunity to enroll shall begin March 31, 1992, and shall last for a period of at least three (3) months.
7.2.2.5.2.2 Eligible employees and dependents of eligible employees who are provided an opportunity to enroll pursuant to this subsection shall be treated as new entrants. Premium rates related to such individuals shall be set in accordance with section 7.2.2.4.1.
7.2.2.5.2.3 The terms of coverage offered to an individual described in section 7.2.2.5.1.1 may exclude coverage for preexisting medical conditions if the health benefit plan currently held by the small employer contains such an exclusion, provided that such exclusion period shall be reduced by the number of days between the date the individual was excluded or denied coverage and the date coverage is provided to such individual pursuant to this subsection.
7.2.2.5.2.4 A small employer carrier shall provide written notice at least forty-five (45) days prior to the opportunity to enroll provided in section 7.2.2.5.1.1 to each small employer insured under a health benefit plan offered by such carrier. The notice shall clearly describe the rights granted under this subsection to employees and dependents who were previously excluded from or denied coverage and the process for enrollment of such individuals in the employer's health benefit plan.
8.0 Consideration of industry
8.1 Except as provided in section 8.2 and 8.3, a small employer carrier may not consider the trade or occupation of the employees of a small employer or the industry or type of business in which the small employer is engaged in determining whether to issue or continue to provide coverage to the small employer.
8.2 A small employer carrier may use industry as a case characteristic in establishing premium rates, subject to 18 Del.C. §7205 (a)(6).
8.3 A small employer carrier may consider trade, occupation or industry as part of the eligibility criteria for a class of business, subject to 18 Del. C. §7207 (a)(2)b.
9.0 Application to reenter state
9.1 A carrier that has been prohibited from writing coverage for small employers in this state pursuant to 18 Del.C. §7206(b) may not resume offering health benefit plans to small employers in this state until the carrier has made a petition to the Commissioner to be reinstated as a small employer carrier and the petition has been approved by the Commissioner. In reviewing a petition, the Commissioner may ask for such information and assurances as the Commissioner finds reasonable and appropriate.
9.2 In the case of a small employer carrier doing business in only one established geographic service area of the state, if the small employer carrier elects to nonrenew a health benefit plan under 18 Del.C. §7206 (a)(6), the small employer carrier shall be prohibited from offering health benefit plans to small employers in any part of the service area for a period of five (5) years. In addition, the small employer carrier shall not offer health benefit plans to small employers carrier in any other geographic area of the state without the prior approval of the Commissioner. In considering whether to grant approval, the Commissioner may ask for such information and assurances as the Commissioner finds reasonable and appropriate.
10.0 Qualifying previous and qualifying existing coverages
10.1 In determining whether a health benefit plan or other health benefit arrangement (whether public or private) shall be considered qualifying previous coverage or qualifying existing coverage for the purposes of 18 Del.C. §§7202 (r), 7207 (c)(2) and 18 Del.C. §7207 (c)(5), a small employer carrier shall interpret the Chapter no less favorably to an insured individual than the following:
10.1.1 A health insurance policy, certificate or other health benefit arrangement shall be considered employer-based if an employer sponsors the plan or arrangement or makes a contribution to the plan or arrangement.
10.1.2 A health insurance policy, certificate or other benefit arrangement shall be considered to provide benefits similar to or exceeding the benefits provided under the basic health benefit plan if the policy, certificate or other benefit arrangement provides benefits that:
10.1.2.1 Have an actuarial value (as considered for a normal distribution of groups) that is not substantially less than the actuarial value of the basic health benefit plan; or
10.1.2.2 Provides coverage for hospitalization and physician services that is substantially similar to or exceeds the coverage for such services in the basic health benefit plan.
10.1.3 In making a determination under this subsection, a small employer carrier shall evaluate the previous or existing policy, certificate or other benefit arrangement taken as a whole and shall not base its decision solely on the fact that one portion of the previous or existing policy, certificate or benefit arrangement provides less coverage than the comparable portion of the basic health benefit plan.
10.2 For the purposes of 18 Del.C. §7207(c)(2), an individual will be considered to have qualifying previous coverage with respect to a particular service if the previous policy, certificate or other benefit arrangement covering such individual met the definition of qualifying previous coverage contained in 18 Del.C. §7202(x) and provided any benefit with respect to the service.
10.3 A small employer carrier shall ascertain the source of previous or existing coverage of each eligible employee and each dependent of an eligible employee at the time such employee or dependent initially enrolls into the health benefit plan provided by the small employer carrier. The small employer carrier shall have the responsibility to contact the source of such previous or existing coverage to resolve any questions about the benefits or limitations related to such previous or existing coverage.
11.0 Restrictive riders
11.1 A restrictive rider, endorsement or other provision that would violate the provisions of 18 Del.C. §7207 (c)(5)(b) and that was in force on the effective date of this Regulation may not remain in force beyond the first anniversary date of the health benefit plan subject to the restrictive provision that follows the effective date of this Regulation. A small employer carrier shall provide written notice to those small employers whose coverage will be changed pursuant to this subsection at least thirty (30) days prior to the required change to the health benefit plan.
11.2 Except as permitted in 18 Del.C. §7207 (c)(2), a small employer carrier shall not modify or restrict a basic or standard health benefit plan in any manner for the purposes of restricting or excluding coverage or benefits for specific diseases, medical conditions or services otherwise covered by the plan.
11.3 Except as permitted in 18 Del.C. §7207 (c)(2), a small employer carrier shall not modify or restrict any health benefit plan with respect to any eligible employee or dependent, through riders, endorsements or otherwise, for the purpose of restricting or excluding coverage or benefits for specific diseases, medical conditions or services otherwise covered by the plan.
12.0 Rules related to fair marketing
12.1
12.1.1 A small employer carrier shall actively market each of its health benefit plans to small employers in this state. A small employer carrier may not suspend the marketing or issuance of the basic and standard health benefit plans unless the carrier has good cause and has received the prior approval of the Commissioner.
12.1.2 In marketing the basic and standard health benefit plans to small employers, a small employer carrier shall use at least the same sources and methods of distribution that it uses to market other health benefit plans to small employers. Any producer authorized by a small employer carrier to market health benefit plans to small employers in the state shall also be authorized to market the basic and standard health benefit plans.
12.2
12.2.1 A small employer carrier shall offer at least the basic and standard health benefit plans, as found in Appendix A and Appendix B of this Regulation, to any small employer that applies for or makes an inquiry regarding health insurance coverage from the small employer carrier. The offer shall be in writing and shall include at least the following information:
12.2.1.1 a general description of the benefits contained in the basic and standard health benefit plans and any other health benefit plan being offered to the small employer, and
12.2.1.2 information describing how the small employer may enroll in the plans. The offer may be provided directly to the small employer or delivered through a producer.
12.2.2
12.2.2.1 A small employer carrier shall provide a price quote to a small employer (directly or through an authorized producer) within ten (10) working days of receiving a request for a quote and such information as is necessary to provide the quote. A small employer carrier shall notify a small employer (directly or through an authorized producer) within five (5) working days of receiving a request for a price quote of any additional information needed by the small employer carrier to provide the quote.
12.2.2.2 A small employer carrier may not apply more stringent or detailed requirements related to application for enrollment for the basic and standard health benefit plans than are applied for other health benefit plans offered by the carrier.
12.2.3
12.2.3.1 If a small employer carrier denies coverage under a health benefit plan to a small employer on the basis of a risk characteristic, the denial shall be in writing and shall state with specificity the reasons for the denial (subject to any restrictions related to confidentiality of medical information). The written denial shall be accompanied by a written explanation of the availability of the basic and standard health benefit plans from the small employer carrier. The explanation shall include at least the following:
12.2.3.1.1 A general description of the benefits contained in each such plan;
12.2.3.1.2 A price quote for each such plan; and (iii) Information describing how the small employer may enroll in such plans.
The written information described in this subparagraph may be provided (within the time periods provided in section 12.2.2.1 directly to the small employer or delivered through an authorized producer.
12.2.3.2 The price quote required under section 12.2.3.1.2 shall be for the lowest-priced basic and standard health benefit plan for which the small employer is eligible.
12.3 A small employer carrier shall establish and maintain a toll-free telephone service to provide information to small employers regarding the availability of small employer health benefit plans in this state. Such service shall provide information to callers on how to apply for coverage from the carrier. Such information may include the names and phone numbers of producers located geographically proximate to the caller or such other information that is reasonably designed to assist the caller to locate an authorized producer or to otherwise apply for coverage.
12.4 The small employer carrier shall not require a small employer to join or contribute to any association or group as a condition of being accepted for coverage by the small employer carrier, except that, if membership in an association or other group is a requirement for accepting a small employer into a particular health benefit plan, a small employer carrier may require the small employer to be a member of the association or group as a condition of eligibility for the health benefit plan, subject to the requirements of 18 Del.C. §7207 (a)(2)(b).
12.5 A small employer carrier may not require, as a condition to the offer or sale of a health benefit plan to a small employer, that the small employer purchase or qualify for any other insurance product or service.
12.6
12.6.1 Carriers offering individual and group health benefit plans in this state shall be responsible for determining whether the plans are subject to the requirements of 18 Del.C. Ch. 72 and this Regulation. Carriers shall elicit the following information from applicants for such plans at the time of application:
12.6.1.1 Whether or not any portion of the premium will be paid by or on behalf of a small employer, either directly or through wage adjustments or other means of reimbursement; and
12.6.1.2 Whether or not the prospective policyholder, certificateholder or any prospective insured individual intends to treat the health benefit plan as part of plan or program under Section 162 (other than Section 162(1)), Section 125 or Section 106 of the United States Internal Revenue Code.
12.6.2 If a small employer carrier fails to comply with section 12 .6.1 such small employer carrier shall be deemed to be on notice of any information that could reasonably have been gained if the small employer carrier had complied with section 12.6.1.
12.7
12.7.1 A small employer carrier shall file annually the following information with the Commissioner related to health benefit plans issued by the small employer carrier to small employers in this state:
12.7.1.1 The number of small employers that were issued health benefit plans in the previous calendar year (separated as to newly issued plans and renewals);
12.7.1.2 The number of small employers that were issued the basic health benefit plan and the standard health benefit plan in the previous calendar year (separated as to newly issued plans and renewals and as to class of business);
12.7.1.3 The number of small employer health benefit plans in force in each county (or by zip code) of the state as of December 31 of the previous calendar year;
12.7.1.4 The number of small employer health benefit plans that were voluntarily not renewed by small employers in the previous calendar year;
12.7.1.5 The number of small employer health benefit plans that were terminated or nonrenewed (for reasons other than nonpayment of premium) by the carrier in the previous calendar year; and
12.7.1.6 The number of small employer health benefit plans that were issued to small employers that were uninsured for at least the three months prior to issue.
12.7.2 The information described in section 12.7.1 shall be filed no later than March 15 of each year.
13.0 Status of carriers as small employer carriers
13.1 Within 30 days after the effective date of 18 Del.C. Ch. 72, each carrier providing health benefit plans in this state shall make a filing with the Commissioner indicating whether the carrier intends to operate as a small employer carrier in this state under the terms of this Regulation.
13.2 Subject to section 13.3, a carrier shall not offer health benefit plans to small employers, or continue to provide coverage under health benefit plans previously issued to small employers in this state, unless the filing provided pursuant to section 13.1 indicates that the carrier intends to operate as a small employer carrier in this state.
13.3
13.3.1 If the filing made pursuant to section 13.1 indicates that a carrier does not intend to operate as a small employer carrier in this state, the carrier may continue to provide coverage under health benefit plans previously issued to small employers in this state only if the carrier complies with the following provisions:
13.3.1.1 The carrier complies with the requirements of 18 Del.C. Ch. 72 (other than 18 Del.C. §§ 7208, 7209, and 7210) with respect to each of the health benefit plans previously issued to small employers by the carrier.
13.3.2 The carrier provides coverage to each new entrant to a health benefit plan previously issued to a small employer by such carrier. The provisions of 18 Del.C. Ch. 72 (other than 18 Del.C. §§7208, 7209, and 7210) and this Regulation shall apply to the coverage issued to such new entrants.
13.3.3 The carrier complies with the requirements of 18 Del.C. Ch. 72 §3 and section 11.0 of this Regulation as they apply to small employers whose coverage has been terminated by the carrier and to individuals and small employers whose coverage has been limited or restricted by the carrier.
13.4 A carrier that continues to provide coverage pursuant to this subsection shall not be eligible to participate in the reinsurance program established under 18 Del.C. §7210.
13.5 If the filing made pursuant to 13.1 indicates that a carrier does not intend to operate as a small employer carrier in this state, the carrier shall be precluded from operating as a small employer carrier in this state (except as provided for in section 13.3) for a period of five (5) years from the date of such filing. Upon a written request from such a carrier, the Commissioner may reduce the period provided for in such sentence if the Commissioner finds that permitting the carrier to operate as a small employer carrier would be in the best interests of the small employers in the state.
14.0 Restoration of coverage
14.1
14.1.1 Except as provided in section 14.1.2, a small employer carrier shall, as a condition of continuing to transact business in this state with small employers, offer to provide a health benefit plan as described in section 14.3 to any small employer whose coverage was terminated or not renewed by such small employer carrier after January 9, 1992.
14.1.2 The offer required under section 14.1.1 shall not be required with respect to a health benefit plan that was not renewed if:
14.1.2.1 The health benefit plan was not renewed for reasons permitted in 18 Del.C. §7206 (a), or
14.1.2.2 The nonrenewal was a result of the small employer voluntarily electing coverage under a separate health benefit plan.
14.2 The offer made under section 14.1 shall occur not later than thirty (30) days after a carrier indicates its intention to operate as a small employer carrier in this state pursuant to section 13.3.1. A small employer shall be given at least sixty (60) days to accept an offer made pursuant to section 14.1.
14.3 A health benefit plan provided to a terminated small employer pursuant to Subsection A shall meet the following conditions:
14.3.1 The health benefit plan shall contain benefits that are identical to the benefits in the health benefit plan that was terminated or nonrenewed.
14.3.2 The health benefit plan shall not be subject to any waiting periods (including exclusion periods for preexisting conditions) or other limitations on coverage that exceed those contained in the health benefit plan that was terminated or nonrenewed. In applying such exclusions or limitations, the health benefit plan shall be treated as if it were continuously in force from the date it was originally issued to the date that it is restored pursuant to this 18 Del.C. Ch. 72, §3.
14.3.3 The health benefit plan shall not be subject to any provision that restricts or excludes coverage or benefits for specific diseases, medical conditions or services otherwise covered by the plan.
14.3.4 The health benefit plan shall provide coverage to all employees who are eligible employees as of the date the plan is restored. The carrier shall offer coverage to each dependent of such eligible employees.
14.3.5 The premium rate for the health benefit plan shall be no more than the premium rate charged to the small employer on the date the health benefit plan was terminated or nonrenewed; provided that, if the number or case characteristics of eligible employees (or their dependents) of the small employer has changed between the date the health benefit plan was terminated or nonrenewed and the date that it is restored, the carrier may adjust the premium rates to reflect any changes in case characteristics of the small employer. If the carrier has increased premium rates for other similar groups with similar coverage to reflect general increases in health care costs and utilization, the premium rate may further be adjusted to reflect the lowest such increase given to a similar group. The premium rate for the health benefit plan may not be increased to reflect any changes in risk characteristics of the small employer group until one year after the date the health benefit plan is restored. Any such increase shall be subject to the provisions of 18 Del.C. §7205.
14.3.6 The health benefit plan shall not be eligible to be reinsured under the provisions of 18 Del.C. §7209, except that the carrier may reinsure new entrants to the health benefit plan who enroll after the restoration of coverage.
15.0 Separability
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
16.0 Effective date
This regulation shall become effective on January 4, 1993, to correspond with the effective date of 18 Del.C. Ch. 72, under which authority Regulation 1308 (Formerly Regulation 72) is promulgated. The public welfare requires the promulgation of this regulation with less than 30 days' notice, and therefore, under the emergency provisions of 29 Del.C. §10123, this regulation may become effective less than 30 days from signature.
APPENDIX A -- PLAN ONE
BASIC INDEMNITY BENEFIT PLAN
BENEFIT
BASIC INDEMNITY
Physician Services:
Prescribed Periodic Screening
Covered in full
The following primary care outpatient services are covered at the co-insurance amount after $150 of services have been provided without co-insurance or deductible application:
Prenatal & postnatal office visits
First $150 paid, then 70%/30%
Primary care visits
First $150 paid, then 70%/30%
Surgery (outpatient)
First $150 paid, then 70%/30%
Diagnostic Lab (physician's office)
First $150 paid, then 70%/30%
Inpatient visits
Covered in full after paying (Medical/surgical) deductible. Maximum 30 days per calendar year.
Outpatient surgery
Covered after deductible
Ambulatory Surgicenters
(facility charge)
Hospital Services
(No deductible)
Inpatient
70%/30%. Maximum 30 day
(Semi-private rate) per calendar year
Emergency Room
$50 co-pay per visit (waived if admitted)
Outpatient Services
Diagnostic X-ray, Diagnostic Lab
Covered after deductible
Chemotherapy, Radiation therapy, Physical therapy
Covered after deductible; limit 20 visits per calendar year. Condition must be subject to significant improvement.
Mental Health
Inpatient: 70%/30% Maximum $500
Outpatient: $50 max per visit; five visit maximum. Ambulance 70%/30% (emergency only)
Home Health Care
In place of hospitalization, 30 days, 70%/30%
Outpatient Prescription drugs
Not covered
Substance abuse, allergy tests,
allergy treatment, Other Conditions:
$250 deductible, two person maximum
Coinsurance limit $3000, two person maximum
Uut-of-pocket maximum $3250, two person maximum
Coinsurance: carrier pays 70%, patient pays 30%, up to out-of-pocket maximum, then carrier pays 100% per calendar year
$50,000 maximum benefit per member per calendar year. All limits are calendar year limits. All hospital inpatient benefits are paid at the prevailing semi-private rate. Physician benefits paid at the providers' usual and customary charge.
Pre-admission testing required for non-emergency admissions.
Pre-certification required for all non-emergency admissions.
APPENDIX A -- PLAN TWO
STANDARD INDEMNITY BENEFIT PLAN
BENEFITS
STANDARD INDEMNITY
Physician Services
Prescribed periodic screening
Covered in full
THE FOLLOWING PRIMARY CARE OUTPATIENT SERVICES ARE COVERED AT THE COINSURANCE AMOUNT AFTER $150 OF SERVICES HAVE BEEN PROVIDED WITHOUT CO-INSURANCE OR DEDUCTIBLE APPLICATION:
Prenatal & postnatal office visits
First $150 paid, then 80%/20%
Primary care visits
First $150 paid, then 80%/20%
Office visit to referral provider
First $150 paid, then 80%/20%
Surgery (outpatient)
First $150 paid, then 80%/20%
Diagnostic Lab (Phys. office)
First $150 paid, then 80%/20%
Inpatient visits
Covered in full after (Medical/surgical) deductible met. Maximum 30 days per calendar year.
Outpatient surgery
Covered after deductible Ambulatory Surgicenters (facility charges)
Hospital Services
(No deductible)
Inpatient (semi-private room)
80%/20%; maximum 30 days per calendar year.
Emergency Room
$50 co-pay/visit (waived if admitted)
Outpatient Services
THE FOLLOWING SERVICES ARE COVERED AT THE CO-INSURANCE AMOUNT AFTER THE DEDUCTIBLE:
Diagnostic X-ray, Diagnostic lab
Covered after deductible
chemotherapy, radiation therapy
Physical therapy
Covered after deductible; limit 20 visits per calendar year. Condition must be subject to significant improvement.
Mental health
Inpatient 80%/20%; max $5000. Outpatient $50 max per visit, 20 visit max per cal. year.
Ambulance (emergency only)
80%/20%
Home health care
In place of hospitalization: 30 days, 80%/20%
Outpatient Prescription drugs
Co-pay the greater of $5 or 25% of the drug cost, to a max of $500 per calendar year.
Substance Abuse
Covered as mental health benefit
Allergy tests
Covered as phys. office visit
Allergy treatment
Covered as phys. office visit
Other Conditions:
$150 deductible, two person maximum
Coinsurance limit: $2500, two person maximum
Out-of-pocket maximum: $2650, two person maximum
Coinsurance: carrier pays 80%, patient pays 20%, up to out-of-pocket, then carrier pays 100% per calendar year
All limits are calendar year limits; except mental health
Lifetime maximum - $1,000,000
Mental health lifetime maximum - $20,000
All hospital inpatient benefits paid at the prevailing semi-private rate
Physician benefits paid at the providers' usual and customary charge
Pre-admission testing required for non-emergency admissions
Pre-certification required for all non-emergency admissions
PLAN EXCLUSIONS
(Applicable to both Basic and Standard Indemnity Benefit Plans):
There are no benefits available for the following services, supplies or charges:
-
Which are not medically necessary.
-
Which are determined to be experimental or investigational in nature; including any service, supply, procedure or treatment directly related to an experimental or investigational treatment.
-
For any condition, disease, illness or bodily injury which occurs in the course of employment if benefits or compensation is available, in whole or in part, under the provisions of any legislation of any government unit. This exclusion applies whether or not the member claims the benefits or compensation.
-
To the extent benefits are provided by any governmental unit except as required by federal law for treatment of veterans in Veterans Administration or armed forces facilities for non-service-related medical conditions.
-
For any illness or injury suffered as a result of any act of war or while in the military service.
-
For which the member would have no legal obligation to pay in the absence of this or similar coverage.
-
Received from any dental or medial department maintained by or on behalf of an employer, labor union, trust or similar person or group
-
Surgery and any related services intended solely to improve appearance, but not to restore bodily function or to correct deformity resulting from disease, trauma, congenital or developmental anomalies.
-
Incurred prior to the member's effective date.
-
Incurred after the member's termination date.
-
For telephone consultations, charges for failing to keep an appointment, charges for completion of forms or charges for medical information.
-
For inpatient visits primarily for diagnostic studies.
-
For whole blood, blood components and blood derivatives which are not classified as drugs.
-
For custodial, domiciliary care or rest cures.
-
For reverse sterilization.
-
For dental work or treatment which includes hospital or professional care when performed in conjunction with: - an operation or treatment for the fitting or wearing of dentures - orthodontic care of treatment for malocclusion - operations on or treatment of or to the teeth or supporting tissues of the teeth except for removal of malignant tumors and cysts.
-
For treatment of weak, strained or flat feet, including orthopedic shoes or other supportive devices, or for the cutting, removal or treatment of corns, calluses or nails, other than with corrective surgery, or for the metabolic or peripheral vascular disease.
-
For eye glasses or contact lenses and the vision examination for prescribing or fitting of eye glasses or contact lenses, except for aphakic patients; and soft lenses or scleral shells intended for use and when used for the treatment of disease or injury.
-
For hearing aids and supplies, tinnitus maskers, or examinations for the prescription or fitting of hearing aids.
-
For radial keratotomy, myopic keratomileusis and any surgery which involves corneal tissue for the purpose of altering, modifying or correcting myopia, hyperopia or stigmatic error.
-
For inpatient admissions which are primarily for physical therapy.
-
For any treatment leading to or in conjunction with transsexualism, sex changes or modification, including but not limited to surgery.
-
For treatment of sexual dysfunction not related to organic disease.
-
For conditions related to autistic disease of childhood, hyperkinetic syndromes, learning disabilities, behavioral problems, mental retardation, or for inpatient confinement for environmental change.
-
For services or supplies for or related to fertility testing, treatment of infertility and conception by artificial means, including but not limited to: artificial insemination, in vitro fertilization, ovum or embryo placement or transfer, gamete intra-fallopian tube transfer, or cryogenic or other preservation techniques in such or similar procedures.
-
For travel whether or not recommended by a physician.
-
For complications or side effects arising from services, procedures or treatments excluded by this policy.
-
For private duty nursing.
-
For skilled nursing facility, unless specifically provided for in this contract.
-
For home health care, unless specifically provided for in this contract.
-
For durable medical equipment, unless specifically provided for in this contract.
-
For prescription drugs, unless specifically provided for in this contract.
-
For the care and treatment of an injury due to the commission of, or an intent to commit, an assault or a felony or an injury or illness incurred while engaging in an illegal act or occupation.
-
For wigs.
-
For weekend admission charges, except for emergencies or maternity.
-
For speech therapy except to restore speech abilities which were lost due to an injury or illness.
-
For treatment of Temporomandibular Joint Dysfunction (TMJ) and Craniomandibular Pain Syndrome (CPS).
APPENDIX B -- PLAN ONE
BASIC HMO BENEFIT PLAN
BENEFITS
BASIC HMO BENEFITS
All care must be provided by or authorized by the primary care physician
Physician services
Prescribed Periodic Screening
Covered in full
Prenatal & postnatal office visits
$10 copay per visit
Primary care visits
$10 copay per visit
Office visit to referral provider
$20 copay per visit
Surgical care in physicians office
$50 copay per procedure
Inpatient visits Medical/surgical
Same as referral office visits
Outpatient surgery
$100 copay per procedure
Hospital Services
Inpatient (Semi private rate)
$250 per day days 1-5
balance paid at 100%
Emergency Room
$100 copay/visit (waived if admitted)
Outpatient services
Outpatient non-surgical care
Covered in full (including lab and xray)
Mental Health
$250 per day
- Inpatient
3 days per calendar year
- Outpatient
$20 copay per visit
5 visit per calendar year
Ambulance
$25 copay (emergency only)
Home Health Care, Outpatient
Not covered
Prescription drugs, Substance Abuse, Maternity Care
Same as all other illness
Other conditions;
No deductible
Maximum out of pocket limit 200% of annual premium
all limits are calendar year limits
All hospital inpatient benefits paid at the prevailing semi-private rate
Physician benefits paid at the providers usual and customary charge
Pre-admission testing required for non-emergency admissions
Pre-certification required for all non-emergency admissions
All Managed care utilization controls apply
APPENDIX B -- PLAN TWO
STANDARD HMO BENEFIT PLAN
BENEFITS
STANDARD HMO BENEFITS
All care must be provided by or authorized by the primary care physician
Physician services
Prescribed Periodic Screening
Covered in full
Prenatal & postnatal office visits
$10 copay per visit
Primary care visits
$10 copay per visit
Office visit to referral provider
$10 copay per visit
Surgical care in physicians office
$25 copay per procedure
Inpatient visits Medical/surgical
Same as referral office visits
Outpatient surgery
$50 copay per procedure
Hospital Services
Inpatient (Semi private rate)
$100 per day days 1-5
balance paid at 100%
Emergency Room
$50 copay/visit (waived if admitted)
Outpatient services
Outpatient non-surgical care
Covered in full (including lab and xray)
Mental Health
$100 per day
-Inpatient
10 days per calendar year
-Outpatient
$10 copay per visit
20 visit per calendar year
Ambulance
$25 copay (emergency only)
Home Health Care
$10 copay per visit
Outpatient prescription drugs
The greater of $5 copay or 25% of the cost of the drug
Substance Abuse
Not covered
Maternity Care
Same as all other illness
Other conditions;
No deductible
Maximum out of pocket limit 200% of annual premium
all limits are calendar year limits
All hospital inpatient benefits paid at the prevailing semi-private rate
Physician benefits paid at the providers usual and customary charge
Pre-admission testing required for non-emergency admissions
Pre-certification required for all non-emergency admissions
All Managed care utilization controls apply
PLAN EXCLUSIONS
(Applicable to both Basic and Standard HMO Benefit Plans):
There are no benefits available for the following services, supplies or charges;
**All services must be provided by or authorized by the patients primary care physician.
-
Which are not medically necessary
-
Which are determined to be experimental or investigational in nature; including any service, supply, procedure or treatment directly related to an experimental or investigational treatment
-
For any condition, disease, illness or bodily injury which occurs in the course of employment if benefits or compensation is available, in whole or in part, under the provisions of any legislation or any governmental unit. This exclusion applies whether or not the member claims the benefits or compensation
-
To the extant benefits are provided by any governmental unit except as required by federal law for treatment of veterans in Veterans Administration or armed forces facilities for non- service related medical conditions.
-
For any illness or injury suffered as a result of any act of war or while in military service
-
For which the member would have no legal obligation to pay in the absence of this or similar coverage.
-
Received from any dental or medical department maintained by or on behalf of an employer, labor union, trust or similar person or group.
-
Surgery and any related services intended solely to improve appearance, but not to restore bodily function or to correct deformity resulting from disease, trauma, congenital or developmental anomalies
-
Incurred prior to the members effective date
-
Incurred after the members termination date
-
For telephone consultations, charges for failing to keep an appointment, charges for completion of forms or charges for medical information
-
For inpatient visits primarily for diagnostic studies
-
For whole blood, blood components and blood derivatives which are not classified as drugs
-
For custodial, domiciliary care or rest cures
-
For reverse sterilization
-
For dental work or treatment which includes hospital or professional care when performed in conjunction with; - an operation or treatment for the fitting or wearing of dentures - Orthodontic care of treatment for malocclusion - operations on or treatment of or to the teeth or supporting tissues of the teeth except for; . removal of malignant tumors and cysts
-
For treatment of weak, strained or flat feet, including orthopedic shoes or other supportive devices, or for the cutting, removal or treatment of corns, calluses or nails, other than with corrective surgery, or for metabolic or peripheral vascular disease
-
For eye glasses or contact lenses and the vision examination for prescribing or fitting of eye glasses or contact lenses; except for aphakic patients and soft lenses or scleral shells intended for use and when used for the treatment of disease or injury
-
For hearing aids and supplies, tinnitus maskers, or examinations for the prescription or fitting of hearing aids
-
For radial keratotomy, myopic keratomileusis and any surgery which involves corneal tissue for the purpose of altering, modifying or correcting myopia, hyperopia or stigmatic error
-
For inpatient admissions which are primarily for physical therapy
-
For any treatment leading to or in conjunction with transsexualism, sex changes or modification, including but not limited to surgery
-
For treatment of sexual dysfunction not related to organic disease
-
For conditions related to autistic disease of childhood, hyperkinetic syndromes, learning disabilities, behavioral problems, mental retardation, or for inpatient confinement for environmental change
-
For services or supplies for or related to fertility testing, treatment of infertility and conception by artificial means, including but not limited to; artificial insemination, in vitro fertilization, ovum or embryo placement or transfer, gamete intra-fallopian tube transfer, or cryogenic or other preservation techniques in such or similar procedures
-
For travel whether or not recommended by a physician
-
For complications or side effects arising from services, procedures or treatments excluded by this policy
-
For private duty nursing
-
For skilled nursing facility, unless specifically provided for in this contract
-
For home health care, unless specifically provided for in this contract
-
For Durable Medical equipment, unless specifically provided for in this contract
-
For Prescription drugs, unless specifically provided for in this contract
-
For the care or treatment of an injury due to the commission of, or an intent to commit, an assault or a felony or an injury or illness incurred while engaging in an illegal act or occupation
-
For wigs
-
For weekend admission charges, except for emergencies or maternity
-
For speech therapy except to restore speech abilities which were lost due to injury or illness
-
For the treatment of Temporomandibular Joint Dysfunction (TMJ) and Craniomandibular Pain Syndrome (CPS).
1309 Non-cancelable and Guaranteed Renewable Group Health Terminology Defined [Formerly Regulation 76]
18 Del. Admin. Code § 1309 Non-cancelable and Guaranteed Renewable Group Health Terminology Defined [Formerly Regulation 76]
1309 Non-cancelable and Guaranteed Renewable Group Health Terminology Defined [Formerly Regulation 76]
1.0 Authority
This regulation has been adopted and promulgated in accordance with 18 Del.C. 314, which provides authority for the Commissioner to establish reasonable rules and regulations for the implementation of any provisions of the Delaware Insurance Code.
2.0 Purpose
The purpose of this regulation is to define the terminology for Guaranteed Renewable/Non-Cancelable Group Health Insurance Policies.
3.0 Applicability and Scope
This regulation will apply to all group health insurance contracts providing benefits solely for retirees and their eligible dependents delivered in this State on or after the effective date of this regulation. The definitions in this section shall not apply to Small Employer Groups, Medicare or individual health policies.
4.0 Non-cancelable or non-cancelable and guaranteed renewable group health policy defined
4.1 The terms "non-cancelable" or "non-cancelable guaranteed renewable" may be used only in a group health policy under which the policyholder has the right to continue coverage in force as to each covered person by the timely payment of premiums set forth in the policy (1) until that covered person has reached at least age 50, or (2) in the case of coverage becoming effective as to a covered person after age 44, for at least five years from the date coverage becomes effective, during which period the insurer has no right to make unilaterally any change in any provision of the policy as to that covered person while the policy is in force.
5.0 Guaranteed renewable group health policies defined
5.1 Except as provided above, the term "guaranteed renewal" may be used only in a group health policy under which the policyholder has the right to continue coverage in force as to any covered person by the timely payment of premiums (1) until that covered person has reached at least age 50, or (2) in the case of coverage becoming effective as to a covered person after age 44, for at least five years from the date coverage becomes effective, during which period the insurer has no right to make unilaterally any change in any provision of the policy as to that covered person while the policy is in force, except that the insurer may make changes in premium rates by classes.
5.2 The foregoing limitation on the use of the term "non-cancelable" shall also apply to any synonymous term such as "guaranteed continuable."
5.3 Nothing herein contained is intended to restrict the development of policies having other guarantees of renewability, to prevent the accurate description of their terms of renewability or the classification of such policies as guaranteed renewable or non-cancelable for any period during which they may actually be such, provided the terms used to describe them in policy contracts and advertising are not such as may readily be confused with the above terms.
1310 Standards for Prompt, Fair and Equitable Settlement of Claims for Health Care Services
18 Del. Admin. Code § 1310 Standards for Prompt, Fair and Equitable Settlement of Claims for Health Care Services
1310 Standards for Prompt, Fair and Equitable Settlement of Claims for Health Care Services
1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311, 2304(16), and 2312. It is promulgated in accordance with 29 Del.C. Ch. 101.
7 DE Reg. 100 (7/1/03)
2.0 Scope
This regulation shall apply to all carriers as defined herein. Exempted from the provisions of this regulation are policies of insurance that provide coverage for accident-only, credit, Medicaid plans, Medicare supplement plans, long-term care or disability income insurance, coverage issued as a supplement to liability insurance, worker's compensation or similar insurance or automobile medical payment insurance.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
3.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
“Carrier” means any entity that provides health insurance in this State. For the purposes of this regulation, carrier includes a health insurance company, health service corporation, health maintenance organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. "Carrier" also includes any 3rd-party administrator or other entity that adjusts, administers or settles claims in connection with health benefit plans.
“Days” means calendar days.
“Institutional Provider” means a hospital, nursing home, or any other medical or health-related service facility caring for the sick or injured or providing care or other coverage which may be provided in a health insurance policy. An entity must be a Provider under this Regulation in order to be an Institutional Provider.
“Policyholder,” “Insured,” or “Subscriber” means a person covered under a health insurance policy or a representative (other than a provider) designated by such person and entitled to make claims on his behalf.
“Provider” means any entity or individual licensed, certified, or otherwise permitted by law pursuant to Titles 16 or 24 of the Delaware Code to provide health care services, irrespective of whether the entity or the individual is a participating provider pursuant to a written agreement with the carrier. When used alone, the term “provider” shall include individual providers and institutional providers.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
4.0 Clean Claim Defined
4.1 A nonelectronic claim by a provider, other than an institutional provider, is a clean claim if the claim is submitted using the Centers for Medicare and Medicaid Services (CMS) Form 1500 or, if approved by the Commissioner or CMS, a successor to that form. Data for all relevant fields must be provided in the format called for by the form in order for the claim to constitute a clean claim.
4.2 A nonelectronic claim submitted by an institutional provider is a clean claim if the claim is submitted using the CMS Form UB-92, or, if approved by the Commissioner or CMS, a successor to that form. Data for all relevant fields must be provided in the format called for by the form in order for the claim to constitute a clean claim.
4.3 An electronic claim by a provider, including an institutional provider, is a clean claim if the claim is submitted using the appropriate ASC X12N 837 format in compliance with the standards specified at 45 CFR §162.1102 or any successor regulation.
4.4 If allowed by federal law, a carrier and provider may agree by contract to use fewer data elements than are required by the relevant form or format.
4.5 An otherwise clean claim submitted by a provider that includes additional fields, data elements, or other information not required by this Regulation is considered to be a clean claim for the purposes of this Regulation.
4.6 A claim by a policyholder that is submitted in the carrier’s standard form using information called for by said forms, with all of the required fields completed, is a clean claim.
4.7 Any claim submitted by a provider or policyholder that includes an unspecified, unclassified or miscellaneous code or data element to constitute a clean claim shall also include appropriate supporting documentation or narrative which explains the unspecified, unclassified or miscellaneous code and describes the diagnosis and treatment or service rendered.
4.8 A claim for the same health care service provided to a particular individual on a particular date of service that was included in a previously submitted claim is a duplicate claim and does not constitute a clean claim.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
5.0 Means of Submission of Clean Claim
5.1 A provider or policyholder may, as appropriate, make delivery of a claim to a carrier as follows:
5.1.1 mail a claim by United States mail, first class;
5.1.2 submit a claim by delivery service;
5.1.3 submit a claim electronically;
5.1.4 fax a claim; or
5.1.5 hand delivery of a claim.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
6.0 Processing of Clean Claim
6.1 No more than 30 days after receipt of a clean claim from a provider or policyholder, a carrier shall take one of the following four actions:
6.1.1 if the entire claim is deemed payable, pay the total allowed amount of the claim;
6.1.2 if a portion of the claim is deemed payable, pay the allowable portion of the claim that is deemed payable and specifically notify the provider or policyholder in writing why the remaining portion of the claim will not be paid;
6.1.3 if the entire claim is deemed not payable, specifically notify the provider or policyholder in writing why the claim will not be paid;
6.1.4 if the carrier needs additional information from a provider or policyholder who is submitting the claim to determine the propriety of payment of a claim, the carrier shall request in writing that the provider or policyholder provide documentation that is relevant and necessary for clarification of the claim.
6.2 The request pursuant to section 6.1.4 must describe with specificity the clinical information requested and relate only to information the carrier can demonstrate is specific to the claim or the claim’s related episode of care. A provider is not required to provide information that is not contained in, or is not in the process of being incorporated into, the patient’s medical or billing record maintained by the provider whose services are the subject of inquiry. A carrier may make only one request under this subsection in connection with a claim. A carrier who requests information under this subsection shall take action under sections 6.1.1 through 6.1.3 within 15 days of receiving properly requested information.
6.3 A carrier shall be limited to one request on the same claim beyond that provided for in section 6.2 as may be necessary to:
6.3.1 administer a coordination of benefits provision; or
6.3.2 determine whether a claim is a duplicate.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
7.0 Unfair Practice
Within a 36 month period, three instances of a carrier’s failure to comply with Section 6 of this Regulation shall give rise to a rebuttable presumption that the carrier has engaged in an unfair practice in violation of 18 Del.C. §2304.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
8.0 Interest
The Commissioner may order a carrier found to have violated Section 6 of this Regulation to pay to a provider or policyholder the amount of the claim or bill plus interest at the maximum rate allowable to lenders under Delaware law. Such interest shall be computed from the date the claim or bill for services was first required to be paid. The remedy permitted by this Section is in addition to, and does not supplant, any other remedies available to the Commissioner or the provider.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
9.0 Waiver
The provisions of this regulation may not be waived, voided, or nullified by contract.
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
10.0 Causes of Action
This regulation shall not create a private cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a carrier or its representative based upon a violation of 18 Del.C. §2304(16).
7 DE Reg. 100 (7/1/03)
9 DE Reg. 242 (8/1/05)
11.0 Separability
If any provision of this regulation, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of such provisions, and the application of such provisions to any person or circumstance other than those as to which it is held invalid, shall not be affected.
9 DE Reg. 242 (8/1/05)
12.0 Effective Date
This regulation, as amended shall become effective for all claims submitted for payment on or after November 1, 2005. All claims for payment submitted for payment prior to November 1, 2005 shall be governed by this regulation amended effective August 1, 2003.
9 DE Reg. 242 (8/1/05)
1311 Standards of Payment for Multiple Surgical Procedures [Formerly Regulation 82]
18 Del. Admin. Code § 1311-1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311, 2304(16) and 2312. It is promulgated in accordance with 29 Del.C. Ch. 101.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-2.0 Definitions
2.1 For the purpose of this regulation, the following definitions shall apply:
“Fee schedule” means the monetary allowance payable to a healthcare provider for services rendered as provided for by agreement between the health care provider and the health insurer.
“Health Care Provider” means any entity or individual licensed, certified or otherwise permitted by law to provide health care in the ordinary course of business, practice or profession.
“Health insurer” means health insurance companies, health maintenance organizations, health service corporations and any other entity providing a plan of health insurance or benefits subject to state insurance regulations.
“Policyholder or Certificate Holder” means a person covered under such policy or a representative designated by such person and entitled to services provided in the policy.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-3.0 Scope
This regulation shall apply to all health insurers as defined in section 2.0 above, and shall apply to all contracts for insurance and certificates of coverage issued by such entities.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-4.0 Purpose
The purpose of this regulation is to ensure that health insurers provide proper payment to health care providers when more than one surgical service is performed on the same patient, by the same physician, on the same day.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-5.0 Procedure for payment of multiple surgical services
5.1 When more than one surgical service is performed on the same patient, by the same physician and on the same day, insurers shall make payment to the providers as follows:
5.1.1 One hundred per cent (100%) of the fee schedule for the procedure which has the highest regular fee schedule amount; and
5.1.2 For each additional procedure, performed through the same incision or separate incisions, as set forth in the National Correct Coding Manual established by Administar Federal under contract with the Health Care Financing Administration, not less than fifty per cent (50%) of the fee schedule amount.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-6.0 General Business Practice
6.1 Within a 36 month period, three instances of a health insurer’s failure to pay a claim or bill for services as defined in section 5.0 above and in accordance with Insurance Department regulation governing the timeliness of claims handling, shall give rise to a rebuttable presumption that the insurer is in violation of 18 Del.C. §2304(16)(f).
6.2 The 36 month period established in section 6.1 above shall be measured based upon the date the complaints are received at the Department. Each claim or bill, or portion of a claim or bill, pertaining to a single medical treatment or procedure provided to an individual policyholder that is processed in violation of this regulation shall constitute an “instance” as described in section 6.1 above.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-7.0 Penalties
7.1 In addition to the imposition of penalties in accordance with 18 Del.C. §2312(b), any health insurer that fails to adhere to the standards contained in this regulation may be required by order of the Commissioner to pay to the health care provider or claimant, in full settlement of the claim or bill for health care services, the amount of the claim or bill plus interest at the maximum rate allowable to lenders under 6 Del.C. §2301(a). Such interest shall be computed from the date the claim or bill for services first became due.
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-8.0 Causes of Action and Defenses
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a health insurer or its representative based upon a violation of 18 Del.C. §2304(16). In the same manner, nothing in this regulation shall establish a defense for any party to any cause of action based upon a violation of 18 Del.C. §2304(16).
History
- 3 DE Reg 636 (11/1/99)
18 Del. Admin. Code § 1311-9.0 Effective Date
This regulation shall become effective on January 1, 2000.
History
- 3 DE Reg 636 (11/1/99)
1312 Standards of payment for Assistants at Surgery [Formerly Regulation 83]
18 Del. Admin. Code § 1312-1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311, 2304(16) and 2312. It is promulgated in accordance with 29 Del.C. Ch. 101.
18 Del. Admin. Code § 1312-2.0 Definitions
2.1 For the purpose of this regulation, the following definitions shall apply:
“Assistant at Surgery” means a physician, nurse practitioner, clinical nurse specialist, or physician assistant who is licensed and actively assists the physician in charge of a case in performing a surgical procedure.
“Fee schedule” means the monetary allowance payable to a healthcare provider for services rendered as provided for by agreement between the health care provider and the health insurer.
“Health Care Provider” means any entity or individual licensed, certified or otherwise permitted by law to provide health care in the ordinary course of business, practice or profession.
“Health insurer” means health insurance companies, health maintenance organizations, health service corporations and any other entity providing a plan of health insurance or benefits subject to state insurance regulations.
“Policyholder or Certificate Holder” means a person covered under such policy or a representative designated by such person and entitled to services provided in the policy.
18 Del. Admin. Code § 1312-3.0 Scope
This regulation shall apply to all health insurers as defined in section 2.0 above, and shall apply to all contracts for insurance and certificates of coverage issued by such entities.
18 Del. Admin. Code § 1312-4.0 Purpose
Some surgical procedures require a primary surgeon and an assistant surgeon. Federal law sets forth guidelines for the payment, under Medicare Part B, for the services of assistants at surgery. No such guidelines exist in Delaware law, and in many cases health insurers will not pay for such services. The purpose of this regulation is to require that health insurers make payment for the services of assistants at surgery in the same manner as provided for under Medicare Part B.
18 Del. Admin. Code § 1312-5.0 Guidelines for payment for the services of assistants at surgery
5.1 A health insurer shall be required to make payment for the professional services of assistants at surgery. Such payment shall be made in the same manner set as forth in the Balanced Budget Act of 1997 and applicable publications issued by the Health Care Financing Administration (HCFA), including but not limited to HCFA’s regulations, the Medicare Part B Physician/Supplier Handbook, and Medicare Part B newsletters.
5.2 Medicare rules governing the following aspects of claims for services of assistants at surgery shall be observed:
5.2.1 the percentage of fee schedule (as “fee schedule” is defined herein) for physicians acting as assistants at surgery;
5.2.2 the percentage of fee schedule (as “fee schedule” is defined herein) for non physicians acting as assistants at surgery; and
5.2.3 whether the surgical procedure in question is eligible for assistant at surgery services.
18 Del. Admin. Code § 1312-6.0 General Business Practice
6.1 Within a 36 month period, three instances of a health insurer’s failure to pay a claim or bill for services promptly, as defined in section 5 above, shall give rise to a rebuttable presumption that the insurer is in violation of 18 Del.C. §2304(16)(f).
6.2 The 36 month period established in section 6.1 above shall be measured based upon the date the complaints are received at the Department. Each claim or bill, or portion of a claim or bill, pertaining to a single medical treatment or procedure provided to an individual policyholder that is processed in violation of this regulation shall constitute an “instance” as described in 6.1above.
18 Del. Admin. Code § 1312-7.0 Penalties
In addition to the imposition of penalties in accordance with 18 Del.C. §2312(b), any health insurer that fails to adhere to the standards contained in this regulation may be required by order of the Commissioner to pay to the health care provider or claimant, in full settlement of the claim or bill for health care services, the amount of the claim or bill plus interest at the maximum rate allowable to lenders under 6 Del.C. §2301(a). Such interest shall be computed from the date the claim or bill for services first became due.
18 Del. Admin. Code § 1312-8.0 Causes of Action and Defenses
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a health insurer or its representative based upon a violation of 18 Del.C. §2304(16). In the same manner, nothing in this regulation shall establish a defense for any party to any cause of action based upon a violation of 18 Del.C. §2304(16).
18 Del. Admin. Code § 1312-9.0 Effective Date
This regulation shall become effective on January 1, 2000.
1313 Arbitration of Health Insurance Disputes Between Carriers and Providers
18 Del. Admin. Code § 1313-1.0 Purpose and Statutory Authority
The purpose of this Regulation is to implement 18 Del.C. §§333, 3370A and 3571S, which require health insurance carriers to submit to arbitration any dispute with a health care provider regarding reimbursement for an individual claim, procedure or service upon a request for arbitration by the health care provider. This Regulation is promulgated pursuant to 18 Del.C. §§311, 333, 3370A and 3571S and 29 Del.C. Ch. 101. This Regulation should not be construed to create any cause of action not otherwise existing at law.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-2.0 Definitions
"Carrier" or "insurance carrier" means any entity that provides health insurance in this State. Carrier includes an insurance company, health service corporation, managed care organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. Carrier also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health insurance.
“Department” means the Delaware Insurance Department.
"Health care provider" or "provider" shall have the same meaning as defined at 18 Del.C. §333(a)(1).
“Health care services” means any services or supplies included in the furnishing to any individual of medical care, or hospitalization or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any individual of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury, disability or disease.
“Health insurance” means a plan or policy issued by a carrier for the payment for, provision of, or reimbursement for health care services.
“Petition filing” means either each patient or each procedure code, determined by the basis of the filing.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-3.0 Notice
3.1 At the time a carrier provides to a health care provider written notice of a carrier’s final decision regarding reimbursement for an individual claim, procedure or service, if the decision does not authorize reimbursement of the provider's charge in its entirety, the carrier shall give the provider written notice of the provider's right to arbitration. Such notice may be separate from or a part of the written notice of the carrier’s decision. Any such notice given to a provider shall, at a minimum, contain the following language:
“You have the right to seek review of our decision regarding the amount of your reimbursement. The Delaware Insurance Department provides claim arbitration services which are in addition to, but do not replace, any other legal or equitable right you may have to review of this decision or any right of review based on your contract with us. You can contact the Delaware Insurance Department for information about arbitration by calling the Arbitration Secretary at 302-674-7322 or by sending an email to: DOI-arbitration@delaware.gov. All requests for arbitration must be filed within 60 days from the date you receive this notice; otherwise, this decision will be final.”
3.2 Such notice is not required if the Commissioner has determined, pursuant to Section 6.0 of this regulation, that the insurance carrier has a program that is substantially similar to the arbitration procedure provided pursuant to 18 Del.C. §333 and this Regulation.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-4.0 Procedure
4.1 Petition for Arbitration
4.1.1 A health care provider or his authorized representative may request review of a carrier’s final reimbursement decision through arbitration by delivering a Petition for Arbitration and all supporting documentation to the Department so that it is received by the Department no later than 60 days after the receipt of the carrier’s final reimbursement decision. The Department shall make available, by mail and on its web site, a standardized form for a Petition for Arbitration.
4.1.2 A health care provider or his authorized representative must deliver to the Department an original and one copy of the Petition for Arbitration.
4.1.3 At the time of delivering the Petition for Arbitration to the Department, a health care provider or his authorized representative must also:
4.1.3.1 Send a copy of the Petition and supporting documentation to the carrier by certified mail, return receipt requested;
4.1.3.2 Deliver to the Department a Proof of Service confirming that a copy of the Petition has been sent to the carrier by certified mail, return receipt requested; and
4.1.3.3 Deliver to the Department a non-refundable filing fee. The fee shall be $50 for claims of $1,000 or less, in all other cases the fee shall be $100.
4.1.4 The Department may refuse to accept any Petition that is not timely filed or does not otherwise meet the criteria for arbitration, including the disputes described in 18 Del.C. §333(j)(1) - (3).
4.2 Response to Petition for Arbitration
4.2.1 Within 20 days of receipt of the Petition, the carrier must deliver to the Department an original and one copy of a Response with supporting documents or other evidence attached.
4.2.2 At the time of delivering the Response to the Department, the carrier must also:
4.2.2.1 Send a copy of the Response and supporting documentation to the health care provider or his authorized representative by first class U.S. mail, postage prepaid; and
4.2.2.2 Deliver to the Department a Proof of Service confirming that a copy of the Response was mailed to the health care provider or his authorized representative.
4.2.3 The Department may return any non-conforming Response to the carrier.
4.2.4 If the carrier fails to deliver a Response to the Department in a timely fashion, the Department, after verifying proper service, and with written notice to the parties, may assign the matter to the next scheduled Arbitrator for summary disposition.
4.2.4.1 The Arbitrator may determine the matter in the nature of a default judgment after establishing that the Petition is properly supported and was properly served on the carrier.
4.2.4.2 The Arbitrator may allow the re-opening of the matter to prevent a manifest injustice. A request for re-opening must be made no later than fifteen (15) days after notice of the default judgment.
4.3 Summary Dismissal of Petition by the Arbitrator
4.3.1 If the Arbitrator determines that the subject of the Petition is not appropriate for arbitration or is meritless on its face, the Arbitrator may summarily dismiss the Petition and provide notice of such dismissal to the parties.
4.4 Appointment of Arbitrator
4.4.1 Upon receipt of a petition filed in proper form, the Department shall assign an Arbitrator who shall schedule the matter for a hearing so that the Arbitrator can render a written decision within 45 days of the delivery to the Department of the Petition for Arbitration.
4.4.2 The Arbitrator shall be of suitable background and experience to decide the matter in dispute and shall not be affiliated with any of the parties or with the patient whose care is at issue in the dispute.
4.5 Arbitration Hearing
4.5.1 The Arbitrator shall give notice of the arbitration hearing date to the parties at least 10 days prior to the hearing. The parties are not required to appear and may rely on the papers delivered to the Department.
4.5.2 The arbitration hearing is to be limited, to the maximum extent possible, to each party being given the opportunity to explain their view of the previously submitted evidence and to answer questions by the Arbitrator.
4.5.3 If the Arbitrator allows any brief testimony, the Arbitrator shall allow brief cross-examination or other response by the opposing party.
4.5.4 The Delaware Uniform Rules of Evidence will be used for general guidance but will not be strictly applied.
4.5.5 Because the testimony may involve evidence relating to personal health information that is confidential and protected by state or federal laws from public disclosure, the arbitration hearing shall be closed.
4.5.6 The Arbitrator may contact, with the parties' consent, individuals or entities identified in the papers by telephone in or outside of the parties' presence for information to resolve the matter.
4.5.7 The Arbitrator is to consider the matter based on the submissions of the parties and information otherwise obtained by the Arbitrator in accordance with this regulation. The Arbitrator shall not consider any matter not contained in the original or supplemental submissions of the parties that has not been provided to the opposing party with at least five days notice, except claims of a continuing nature that are set out in the filed papers.
4.6 Arbitrator’s Written Decision.
4.6.1 The Arbitrator shall render his decision and mail a copy of the decision to the parties within 45 days of the filing of the Petition.
4.6.2 The Arbitrator’s decision is binding upon the parties except as provided in 18 Del.C. §333(f).
4.7 Arbitration Costs
4.7.1 In arbitrations commenced pursuant to 18 Del.C. §§333, 3370A and 3571S, the Arbitrator shall allocate to each party a percentage of the costs of arbitration. The arbitrator may award to the health care provider the filing fee, if the health care provider should prevail.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-5.0 Carrier Recordkeeping Reporting Requirements
5.1 A carrier shall maintain written or electronic records for five years, after completion of the arbitration process, documenting all Petitions for Arbitration including, at a minimum, the following information:
5.1.1 The date the petition was filed;
5.1.2 The name and identifying information of the health care provider on whose behalf the petition was filed;
5.1.3 A general description of the reason for the petition; and
5.1.4 The date and description of the Arbitration decision or other disposition of the petition.
5.2 A carrier shall file with its annual report to the Department the total number of Petitions for Arbitration filed, with a breakdown showing:
5.2.1 The total number of final reimbursement decisions upheld through arbitration; and
5.2.2 The total number of final reimbursement decisions reversed through arbitration.
5.3 A carrier shall make available to the Department upon request any of the information specified in the foregoing subsections 4.1 and 4.2.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-6.0 Exemption from Arbitration Requirement
Any carrier having a dispute resolution method established by contract with its providers which method the carrier believes to be substantially similar to the arbitration method described by this regulation may submit information regarding said method to the Insurance Commissioner for a determination as to whether the carrier should be exempted from the arbitration requirement of 18 Del.C. §333. The information submitted shall include a copy of the contractual language as well as any other information the carrier believes is relevant to the Insurance Commissioner's decision.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-7.0 Non-Retaliation
A carrier shall not terminate or in any way penalize a provider with whom it has a contractual relationship and who exercises the right to file a Petition for Arbitration solely on the basis of such filing.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-8.0 Confidentiality of Health Information
Nothing in this Regulation shall supersede any federal or state law or regulation governing the privacy of health information.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-9.0 Additional Provisions for Arbitrations Conducted Pursuant to 18 Del.C. §§3370A and 3571S
9.1 Arbitrations conducted pursuant to 18 Del.C. §§3370A and 3571S shall reflect the objectives of those statutory provisions of protecting consumers from surprise bills and not creating incentives for providers to be out-of-network.
9.1.1 In addition to any other documentation required by this regulation, the parties to these arbitrations may present documentation or arguments during arbitration regarding how a particular award or request for reimbursement may incentivize providers to become out-of-network providers, and the Arbitrator shall consider such documentation and/or arguments in rendering a final decision.
9.1.2 Notwithstanding anything herein to the contrary, an arbitration award in favor of a provider that exceeds the opposing carrier's in-network reimbursement rate shall not be considered prima facie evidence of an incentive for providers to be out-of-network.
9.1.3 The provisions of this Regulation 1313 shall not apply to arbitration which is subject to Regulation 1316 as authorized in 18 Del.C. §3349(b) and 18 Del.C. §3565(b).
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-10.0 Computation of Time
In computing any period of time prescribed or allowed by this Regulation, the day of the act or event after which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday or Sunday, or other legal holiday, or other day on which the Department is closed, in which event the period shall run until the end of the next day on which the Department is open. When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and other legal holidays shall be excluded in the computation. As used in this section, "legal holidays" shall be those days provided by statute or appointed by the Governor or the Chief Justice of the State of Delaware.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
18 Del. Admin. Code § 1313-11.0 Effective Date
This Regulation shall become effective 10 days after being published as a final regulation.
History
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 11 DE Reg. 1061 (02/01/08)
- 19 DE Reg. 924 (04/01/16)
- 20 DE Reg. 372 (11/01/16)
- 20 DE Reg. 457 (12/01/16)
- 23 DE Reg. 312 (10/01/19)
1314 Health Premium Consumer Comparison
18 Del. Admin. Code § 1314 Health Premium Consumer Comparison
1314 Health Premium Consumer Comparison
1.0 Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311 and 2501 and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
2.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
"Health Insurance" means a plan or policy issued by a carrier for the payment for, provision of, or reimbursement for health care services.
"Insurer" means every insurer, health service corporation, and managed care organization licensed to offer and sell health insurance in the state of Delaware (and does not include limited benefit plans, vision only, dental, Medicare supplement, or long term care).
"Rate estimates" means the estimates of annual insurance premiums produced for the Department's rate survey.
"Rate survey" means a request by the Department that insurers calculate estimated annual insurance premiums based on hypothetical consumer profiles. The rate survey shall include estimated premiums for zip codes or other geographic area identified by the Department.
3.0 Scope
3.1 Insurers that market health insurance in this state shall be required to complete the full rate survey required by this regulation.
3.2 The provisions of this regulation shall not apply to policies of insurance providing health benefit plans identified as not included under 18 Del.C. §3602(10)b, §3572(4) or §7202(18).
4.0 Insurer Information
Each insurer will be provided with an account on the Department's website to provide basic company information and to administer the submission of rate survey data.
5.0 Survey Completion Deadline
5.1 In 2012, all required rate survey data from insurers must be submitted to the Department on or before May 1st. In all subsequent years (except in 2012), all required rate survey data from insurers must be submitted to the Department on or before September 1st of each year.
5.2 The Department of Insurance shall make available the rate survey request format with hypothetical consumer profiles, coverage levels, and other information necessary for calculating rate estimates on the Department's website no later than September 15th of each year (and on May 15, 2012).
5.3 Rate survey data that is incomplete or not reported according to the Department's instructions will be returned to the insurer for correction and must be resubmitted within 10 business days.
6.0 Survey Format
6.1 Insurers shall provide rate estimates based on rates in effect as of August 31st of the year when the rate survey is being completed (and as of March 1, 2012, to comply with section 5.1 above).
6.2 All rate estimates shall be rounded to the nearest dollar.
6.3 Insurers shall submit rate data utilizing an electronic spreadsheet provided by the Department or by other means specified by the Department. Insurers shall be required to upload the data to the Department via the Internet.
7.0 Responsibility for Information and Data
Insurers shall be responsible for the accuracy of company information and rate data submitted to the Department for publication. As part of the submission process, insurers will be subject to examination to verify the accuracy of the data being submitted.
8.0 Consumer Quote Requests
8.1 Insurers shall provide a single electronic mail message to the Department for the purpose of allowing consumers to request a personalized health insurance premium quote as part of the rate comparison process.
8.2 The insurer shall provide a direct email response to the consumer, confirming receipt of the quote request and providing the requested information.
8.3 The insurer shall be required to maintain a log of all email responses to consumer requests for rate quotes for a period of one year after the request. The log shall be capable of being transferred to the Department upon request.
9.0 Penalties
Insurers that do not comply with this regulation are subject to the provisions of 18 Del.C. §329.
10.0 Severability
If any provision of this regulation or the application of any such provision to any person or circumstance shall be held invalid, the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected.
11.0 Effective Date
This regulation shall become effective on February 15, 2012.
15 DE Reg. 1164 (02/01/12)
1315 Arbitration of Health Insurance Disputes Between Individuals and Carriers
18 Del. Admin. Code § 1315-1.0 Purpose and Statutory Authority
The purpose of this Regulation is to implement 18 Del.C. §332, which requires health insurance carriers to submit to arbitration disputes with a covered person or authorized representative regarding adverse determinations upon a request for arbitration by the covered person. This Regulation is promulgated pursuant to 18 Del.C. §§311 and 332; and 29 Del.C. Ch. 101. This Regulation should not be construed to create any cause of action not otherwise existing at law.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-2.0 Definitions
"Adverse determination" means a decision by a carrier to deny (in whole or in part), reduce, or terminate health insurance benefits or a determination that an admission or continued stay, or course of treatment, or other covered health service does not satisfy the insurance policy's clinical requirements for appropriateness, necessity, health care setting and/or level of care.
“Authorized representative” means an individual whom a covered person willingly acknowledges to represent his interests during the internal review process and/or an appeal through the arbitration process or the Independent Health Care Appeals Program, including but not limited to a provider to whom a covered person has assigned the right to collect sums due from a carrier for health care services rendered by the provider to the covered person. A carrier may require the covered person to submit written verification of his consent to be represented. If a covered person has been determined by a physician to be incapable of assigning the right of representation, the covered person may be represented by a family member or a legal representative.
“Carrier” means any entity that provides health insurance in this State. Carrier includes an insurance company, health service corporation, managed care organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. Carrier also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health insurance.
“Covered person” means an individual and/or family who has entered into a contractual arrangement, or on whose behalf a contractual arrangement has been entered into, with a carrier, pursuant to which the carrier provides health insurance for such person or persons.
“Department” means the Delaware Insurance Department.
"Duration of an Emergency Medical Condition" means a period of time that begins with an Emergency Medical Condition and ends when the Emergency Medical Condition is either treated or stabilized as such stabilization is evidenced by post stabilization care [as referenced in 18 Del.C. §§3349(c)(3) and 3565(c)(3)] in a hospital where such post stabilization care is not within the definition of emergency care services.
“Emergency care provider” means a provider of emergency care services including a provider who also provides health care services that aren't emergency care services.
“Emergency care services” means those services identified in 18 Del.C. §§3349(d) and 3565(d) performed at any time during the Duration of an Emergency Medical Condition, including any covered service providing for the transportation of a patient to a hospital emergency facility for an emergency medical condition including air and sea ambulances so long as medical necessity criteria are met.
“Emergency Medical Condition” shall have the meaning assigned to it by 18 Del.C. §§3349(e) and 3565(e).
“Final coverage decision” means the decision by a carrier at the conclusion of its internal review process upholding, modifying or reversing its adverse determination.
“Grievance” means a request by a covered person or his authorized representative that a carrier review an adverse determination by means of the carrier’s internal review process.
“Health care services” means any services or supplies included in the furnishing to any individual of medical care or hospitalization, or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any individual of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury, disability or disease.
“Health insurance” means a plan or policy issued by a carrier for the payment for, provision of, or reimbursement for health care services.
“Network Emergency Care Provider” is a provider who has a written participation agreement with the carrier to provide emergency care services or governing payment of emergency care services.
"Non-Network Emergency Care Provider" is a provider who is not a Network Emergency Care Provider.
“Provider” means an individual or entity, including without limitation, a licensed physician, a licensed nurse, a licensed physician assistant and a licensed nurse practitioner, a licensed diagnostic facility, a licensed clinical facility, and a licensed hospital, who or which provides health care services in this State.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-3.0 Arbitration Procedure to Review a Carrier’s Final Coverage Decision
3.1 Petition for Arbitration
3.1.1 A covered person or his authorized representative may request review of a carrier’s final coverage decision through arbitration by delivering a Petition for Arbitration, using the standardized form available from the Department by mail and on its web site, and all supporting documentation to the Department so that the request for review is received by the Department within 60 days of receipt by the covered person of written notice of the carrier’s final coverage decision.
3.1.2 A covered person or his authorized representative must deliver to the Department an original and 1 copy of the Petition for Arbitration and all supporting documentation.
3.1.3 At the time of delivering the Petition for Arbitration and supporting documentation to the Department, a covered person or his authorized representative must also:
3.1.3.1 Send a copy of the Petition for Arbitration and supporting documentation to the carrier by certified mail, return receipt requested;
3.1.3.2 Deliver to the Department a Proof of Service confirming that a copy of the Petition was mailed to the carrier by certified mail, return receipt requested; and
3.1.3.3 Deliver to the Department a $75 filing fee.
3.1.4 The Department may refuse to accept any Petition that is not timely filed or does not otherwise meet the criteria for arbitration. If the subject of the Petition is appropriate for review through IHCAP (refer to Independent Health Care Appeal Program, Regulation 1301), the Department shall advise the covered person or his authorized representative of the procedure to obtain IHCAP review. If the subject of the Petition is appropriate for IHCAP review, the Petition for Arbitration will be treated as an IHCAP appeal for purposes of determining whether the IHCAP appeal is timely filed in accordance with subsection 5.1 of Regulation 1301.
3.2 Response to Petition for Arbitration
3.2.1 Within 20 days of receipt of the Petition, the carrier must deliver to the Department an original and 1 copy of a Response with supporting documents or other evidence attached.
3.2.2 At the time of delivering the Response to the Department, the carrier must also:
3.2.2.1 Send a copy of the Response and supporting documentation to the covered person or his authorized representative by certified mail, return receipt requested;
3.2.2.2 Deliver to the Department a proof of service confirming that a copy of the Response was mailed to the covered person or his authorized representative by certified mail, return receipt requested; and
3.2.2.3 Deliver to the Department a $75 filing fee.
3.2.3 The Department may return any non-conforming Response to the carrier.
3.2.4 If the carrier fails to deliver a Response to the Department in a timely fashion, the Department, after verifying proper service, and with written notice to the parties, may assign the matter to the next scheduled Arbitrator for summary disposition. The Arbitrator may:
3.2.4.1 Determine the matter in the nature of a default judgment after establishing that the Petition is properly supported and was properly served on the carrier; and
3.2.4.2 Allow the matter to be reopened to prevent a manifest injustice. A request for re-opening must be made by the covered person or his authorized representative no later than 7 days after notice of the default judgment.
3.3 Summary Dismissal of Petition by the Arbitrator
3.3.1 If the Arbitrator determines that the subject of the Petition is not appropriate for arbitration or IHCAP or is meritless on its face, the Arbitrator may summarily dismiss the Petition and provide notice of such dismissal to the parties.
3.4 Appointment of Arbitrator
3.4.1 Upon receipt of a Response that conforms with the requirements of this regulation, the Department shall assign an Arbitrator from a panel of Arbitrators and shall schedule the matter for a hearing so that the Arbitrator can render a written decision within 45 days of the delivery to the Department of the Petition for Arbitration.
3.4.2 The Arbitrator shall be of suitable background and experience to decide the matter in dispute and shall not be affiliated with any of the parties or with the provider whose service is at issue in the dispute.
3.5 Arbitration Hearing
3.5.1 The Arbitrator shall give notice of the arbitration hearing date to the parties at least 10 days prior to the hearing. The parties are not required to appear and may rely on the papers delivered to the Department.
3.5.2 The arbitration hearing is to be limited, to the maximum extent possible, to each party being given the opportunity to explain their view of the previously submitted evidence and to answer questions presented to the parties by the Arbitrator.
3.5.3 If the Arbitrator allows any brief testimony, the Arbitrator shall allow brief cross-examination or other response by the opposing party.
3.5.4 The Delaware Uniform Rules of Evidence will be used for general guidance but will not be strictly applied.
3.5.5 Because the testimony may involve evidence relating to personal health information that is confidential and protected by state or federal laws from public disclosure, the arbitration hearing shall be closed unless otherwise agreed by the parties.
3.5.6 The Arbitrator may contact, with the parties' consent, individuals or entities identified in the papers by telephone in or outside of the parties' presence for information to resolve the matter.
3.5.7 The Arbitrator is to consider the matter based on the submissions of the parties and information otherwise obtained by the Arbitrator in accordance with this regulation. The Arbitrator shall not consider any matter not contained in the original or supplemental submissions of the parties, other than information otherwise obtained by the Arbitrator pursuant to this Regulation, that has not been provided to the opposing party with at least 5 days’ notice, except claims of a continuing nature that are set out in the filed papers.
3.6 Arbitrator’s Written Decision.
3.6.1 The Arbitrator shall render his decision and mail a copy of the decision to the parties within 45 days of the filing of the Petition.
3.6.2 The Arbitrator’s decision shall include allowable charges and payments for each service subject to arbitration for a period that will end on the 360th day after the date of the Arbitrator’s decision.
3.6.3 The Arbitrator’s decision is binding upon the carrier except as provided in 18 Del.C. §332(g).
3.7 Arbitration Costs.
3.7.1 In arbitrations commenced pursuant to 18 Del.C. §332 and Section 3.0 of this Regulation, the carrier shall pay the costs of arbitration, any compensation paid to the arbitrator not to exceed $250, and any additional related fees which exceed the filing fee of $75 required to commence arbitration. In the event the covered person prevails, the $75 filing fee paid by the covered person will be refunded by the carrier.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-4.0 Carrier Recordkeeping and Reporting Requirements
4.1 A carrier shall maintain written or electronic records documenting all grievances and Petitions for Arbitration including, at a minimum, the following information:
4.1.1 For each grievance:
4.1.1.1 The date received;
4.1.1.2 Name and plan identification number of the covered person on whose behalf the grievance was filed;
4.1.1.3 A general description of the reason for the grievance; and
4.1.1.4 The date and description of the final coverage decision.
4.1.2 For each Petition for Arbitration:
4.1.2.1 The date the Petition was filed;
4.1.2.2 Name and plan identification number of the covered person on whose behalf the Petition was filed;
4.1.2.3 A general description of the reason for the Petition; and
4.1.2.4 Date and description of the Arbitrator’s decision or other disposition of the Petition.
4.2 A carrier shall file with its annual report to the Department the following information:
4.2.1 The total number grievances filed.
4.2.2 The total number of Petitions for Arbitration filed, with a breakdown showing:
4.2.2.1 The total number of final coverage decisions upheld through arbitration; and
4.2.2.2 The total number of final coverage decisions reversed through arbitration.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-5.0 Non-Retaliation
5.1 A carrier shall not disenroll, terminate or in any way penalize a covered person who exercises his rights to file a grievance or Petition for Arbitration solely on the basis of such filing.
5.2 A carrier shall not terminate or in any way penalize a provider with whom it has a contractual relationship and who exercises, on behalf of a covered person, the right to file a grievance, or Petition for Arbitration solely on the basis of such filing.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-6.0 Confidentiality of Health Information
Nothing in this Regulation shall supersede any federal or state law or regulation governing the privacy of health information.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-7.0 Computation of Time
In computing any period of time prescribed or allowed by this Regulation, the day of the act or event after which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday or Sunday, or other legal holiday, or other day on which the Department is closed, in which event the period shall run until the end of the next day on which the Department is open. When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and other legal holidays shall be excluded in the computation. As used in this section, "legal holidays" shall be those days provided by statute or appointed by the Governor or the Chief Justice of the State of Delaware.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
18 Del. Admin. Code § 1315-8.0 Effective Date
This Regulation became effective on April 11, 2016, 10 days after being published as a final regulation. The amendment to the definition of "authorized representative" became effective January 11, 2018. The current amendment to the definition of "authorized representative" shall become effective 10 days after being published in the Register of Regulations.
History
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
- 21 DE Reg. 581 (01/01/18)
- 19 DE Reg. 925 (04/01/16)
- 21 DE Reg. 581 (01/01/18)
- 26 DE Reg. 701 (02/01/23)
1316 Arbitration of Health Insurance Disputes Between Carriers And Non-Network Providers of Emergency Care Services
18 Del. Admin. Code § 1316-1.0 Purpose and Statutory Authority
The purpose of this Regulation is to implement 18 Del.C. §§3349 and 3565, which require the Delaware Insurance Department to establish and administer procedures for arbitration of disputes between health insurance carriers and non-network providers of emergency care services. This Regulation is promulgated pursuant to 18 Del.C. §§311, 3349, and 3565; and 29 Del.C. Ch. 101. This Regulation should not be construed to create any cause of action not otherwise existing at law.
History
- 27 DE Reg. 113 (08/01/23)
- 27 DE Reg. 113 (08/01/23)
- 19 DE Reg. 926 (04/01/16)
- 27 DE Reg. 113 (08/01/23)
18 Del. Admin. Code § 1316-2.0 Definitions
The following words and terms, when used in this regulation, have the following meaning:
”Carrier” means any entity that provides health insurance in this State. Carrier includes an insurance company, health service corporation, managed care organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. Carrier also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health insurance.
“Covered person” means an individual and/or family who has entered into a contractual arrangement, or on whose behalf a contractual arrangement has been entered into, with a carrier, pursuant to which the carrier provides health insurance for such person or persons.
“Department” means the Delaware Insurance Department.
“Duration of an Emergency Medical Condition” means a period of time that begins with an Emergency Medical Condition and ends when the Emergency Medical Condition is either treated or stabilized as such stabilization is evidenced by post stabilization care, as referenced in 18 Del.C. §§3349(d)(3) and 3565(d)(3), in a hospital where such post stabilization care is not within the definition of emergency care services.
“Emergency care provider” means a provider of emergency care services including a provider who also provides health care services that aren't emergency care services.
“Emergency care services” means those services identified in 18 Del.C. §§3349(d) and 3565(d) performed at any time during the Duration of an Emergency Medical Condition, including any covered service providing for the transportation of a patient to a hospital emergency facility for an emergency medical condition including air and sea ambulances so long as medical necessity criteria are met.
“Emergency Medical Condition” shall have the meaning assigned to it by 18 Del.C. §§3349(e) and 3565(e).
“Health care services” means any services or supplies included in the furnishing to any individual of medical care or hospitalization, or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any individual of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury, disability or disease.
“Health insurance” means a plan or policy issued by a carrier for the payment for, provision of, or reimbursement for health care services.
“Network carrier” is a carrier that has a written participation agreement with a provider to pay for emergency care services.
“Network Emergency Care Provider” is a provider who has a written participation agreement with the carrier to provide emergency care services or governing payment of emergency care services.
"Non-Network Emergency Care Provider” is a provider who is not a Network Emergency Care Provider.
“Provider” means an individual or entity, including without limitation, a licensed physician, a licensed nurse, a licensed physician assistant and a licensed nurse practitioner, a licensed diagnostic facility, a licensed clinical facility, and a licensed hospital, who or which provides health care services in this State.
History
- 27 DE Reg. 113 (08/01/23)
- 27 DE Reg. 113 (08/01/23)
- 19 DE Reg. 926 (04/01/16)
- 27 DE Reg. 113 (08/01/23)
18 Del. Admin. Code § 1316-3.0 Provisions Applicable to Arbitration Pursuant to 18 Del.C. §§3349 and 3565
3.1 If a carrier and a non-network emergency care provider cannot agree on payment to the provider for emergency care services, within 30 days after the carrier has received from the provider clean claims, as defined in Section 4.0 of 18 DE Admin. Code 1310, for such services, either the carrier or the non-network emergency care provider (the "Petitioner") may petition for arbitration pursuant to this Section 3.0 and 18 Del.C. §§3349 or 3565 and the other party (the "Respondent") shall submit to such arbitration.
3.2 Prior to the Arbitration Hearing, the Arbitrator shall at a minimum receive the following written evidence from the parties:
3.2.1 The highest allowable charge for each emergency care service subject to arbitration allowed by the carrier for any other network or non-network emergency care provider during the full 12-month period immediately prior to the date the Petition for Arbitration was filed with the Department;
3.2.2 If subsection 3.4.1 of this regulation applies, the carrier's highest allowable charge for each emergency care service subject to arbitration pursuant to the non-network provider's most recent participation agreement with the carrier;
3.2.3 The highest allowable charge for each emergency care service subject to arbitration received by the non-network emergency care provider from any other carrier during a full 12-month period immediately prior to the date the Petition for Arbitration was filed with the Department; and
3.2.4 The highest allowable charge for each emergency care service subject to arbitration received by the non-network emergency care provider from any network carrier during a full 12-month period immediately prior to the date the Petition for Arbitration was filed with the Department.
3.2.5 Each party shall also submit in writing the allowable charge each party would accept for each emergency care service subject to arbitration and each party's history of the negotiations between the parties relating to each such emergency care service.
3.2.6 Each party shall also submit a written list of all emergency care services subject to arbitration and the date each service was delivered to the patient. The Arbitrator's decision shall apply to each such service from the date of each service and the date of all other emergency care service subject to arbitration through the date provided for in subsection 3.12.2 of this regulation.
3.2.7 A copy of all information submitted to the Arbitrator by a party pursuant to this Section 3.0 will also be given to the other party except for information submitted by the provider pursuant to subsections 3.2.3 and 3.2.4 of this regulation. Subsection 3.2.3 and subsection 3.2.4 information will be redacted by the Arbitrator and given to the carrier to ensure that the carrier cannot determine pricing information relating specifically to other carriers.
3.3 All information specified in subsection 3.2 of this regulation provided to the Arbitrator shall presumptively be considered trade secret or confidential financial information under the Delaware Freedom of Information Act and shall not be disclosed to or available at any time to any person, firm or entity not involved in the arbitration.
3.4 The Arbitrator shall follow the guidelines listed in this subsection 3.4 as a basis for determining the carrier's payment to the non-network emergency care provider for each emergency care service subject to arbitration unless the evidence adduced at arbitration supports a different payment. All payments pursuant to this section are subject to reduction based on the insured's obligation for co-payments or deductibles.
3.4.1 Payments for emergency care services to a non-network emergency care provider who was a network emergency care provider at any time prior to the date the provider delivered the emergency care services which are the subject of the arbitration. The Arbitrator shall direct the carrier to pay the non-network emergency care provider based on an allowable charge for each emergency care service subject to arbitration within the following range:
3.4.1.1 The allowable charges submitted to the Arbitrator pursuant to subsection 3.2.2 of this regulation, subject to COLA adjustments as may be published in bulletins by the Commissioner from time to time; and
3.4.1.2 The allowable charges submitted to the Arbitrator pursuant to subsection 3.2.3 of this regulation.
3.4.2 Payments for emergency care services to a provider who was never a network emergency care provider with the carrier. The Arbitrator shall direct the carrier to pay the non-network emergency care provider who was never a network emergency care provider based on an allowable charge for each emergency care service subject to arbitration within the following range:
3.4.2.1 The allowable charges submitted to the carrier pursuant to subsection 3.2.1 of this regulation; and
3.4.2.2 The allowable charges submitted to the Arbitrator pursuant to subsection 3.2.3 of this regulation.
3.5 Changes in the membership of a provider group will not affect the remaining group member or members insofar as the application of this Section 3.0. In the absence of a contract provision to the contrary, a physician's existing network status and payment rights shall not be transferable to that physician's new group or practice.
3.6 Carrier Payments Prior to Arbitration.
3.6.1 Prior to Arbitrator's decision pursuant to subsection 3.12 of this regulation, the carrier will pay directly to the non-network emergency care provider the highest amount provided for in subsection 3.2.1 of this regulation for each emergency care service subject to arbitration.
3.6.2 All payments due the non-network provider pursuant to subsection 3.6.1 of this regulation will be paid within 30 days after the carrier has received from the provider a clean claim, as defined in Section 4.0 of 18 DE Admin. Code 1310, for each emergency care service subject to arbitration.
3.6.3 The Arbitrator will direct the carrier and the provider to pay, in the case of the carrier, or refund in the case of the provider, the difference between payments made pursuant to this subsection 3.6 and the payments determined by the Arbitrator pursuant to subsection 3.4 of this regulation.
3.7 Procedures for Arbitration Pursuant to this Section 3.0.
3.7.1 Either the non-network emergency care provider or his authorized representative or the carrier, after the carrier pays the provider pursuant to subsection 3.6.1 of this regulation, may request arbitration by delivering to the Department an original and one copy of the Petition for Arbitration, (with all applicable information required by subsection 3.2 of this regulation attached) so that the Petition is received by the Department no later than 60 days from the date the carrier was required to pay the provider pursuant to subsection 3.6.1 of this regulation.
3.7.2 At the time of delivering the Petition for Arbitration to the Department, the Petitioner or his authorized representative must also:
3.7.2.1 Send a copy of the Petition and supporting documentation to the Respondent by certified mail, return receipt requested, except as provided by subsection 3.2.7 of this regulation;
3.7.2.2 Deliver to the Department a Proof of Service confirming that a copy of the Petition has been sent to the Respondent by certified mail, return receipt requested; and
3.7.2.3 Deliver to the Department a $75.00 filing fee.
3.7.3 The Department may refuse to accept any Petition that is not timely filed or does not otherwise meet the criteria for arbitration.
3.8 Response to Petition for Arbitration
3.8.1 Within 20 days of receipt of the Petition, the Respondent or the Respondent’s authorized representative must deliver to the Department an original and one copy of a Response with all information required by subsection 3.2 of this regulation attached.
3.8.2 At the time of delivering the Response to the Department, the Respondent must also:
3.8.2.1 Send a copy of the Response and supporting documentation to the Petitioner or the Petitioner’s authorized representative by certified mail, postage prepaid, except as provided by subsection 3.2.7 of this regulation; and
3.8.2.2 Deliver to the Department a Proof of Service confirming that a copy of the Response was mailed to the Petitioner or the Petitioner’s authorized representative.
3.8.3 The Department may return any non-conforming Response to Respondent.
3.8.4 If the Respondent fails to deliver a Response to the Department in a timely fashion, the Department, after verifying proper service, and with written notice to the parties, may assign the matter to the next scheduled Arbitrator for summary disposition.
3.8.4.1 The Arbitrator may determine the matter in the nature of a default judgment after establishing that the Petition is properly supported and was properly served on the Respondent.
3.8.4.2 The Arbitrator may allow the re-opening of the matter to prevent a manifest injustice. A request for re-opening must be made no later than 7 days after notice of the default judgment.
3.9 Summary Dismissal of Petition by the Arbitrator. If the Arbitrator determines that the subject of the Petition is not appropriate for arbitration, the Arbitrator may summarily dismiss the Petition and provide notice of such dismissal to the parties.
3.10 Appointment of Arbitrator
3.10.1 Upon receipt of a proper Response, the Department shall assign an Arbitrator who shall schedule the matter for a hearing so that the Arbitrator can render a written decision within 45 days of the delivery to the Department of the Petition for Arbitration.
3.10.2 The Arbitrator shall be of suitable background and experience to decide the matter in dispute and shall not be affiliated with any of the parties.
3.11 Arbitration Hearing
3.11.1 The Arbitrator shall give notice of the arbitration hearing date to the parties at least 10 days prior to the hearing. The parties are not required to appear and may rely on the papers delivered to the Department.
3.11.2 The arbitration hearing is to be limited, to the maximum extent possible, to each party being given the opportunity to explain their view of the previously submitted evidence and to answer questions by the Arbitrator.
3.11.3 If the Arbitrator allows any brief testimony, the Arbitrator shall allow brief cross-examination or other response by the opposing party.
3.11.4 The Delaware Uniform Rules of Evidence will be used for general guidance but will not be strictly applied.
3.11.5 Because the testimony may involve evidence relating to personal health information that is confidential and protected by state or federal laws from public disclosure, the arbitration hearing shall be closed.
3.11.6 The Arbitrator may contact, with the parties' consent, individuals or entities identified in the papers by telephone in or outside of the parties' presence for information to resolve the matter.
3.11.7 The Arbitrator is to consider the matter based on the submissions of the parties and information otherwise obtained by the Arbitrator in accordance with this Section 3.0. The Arbitrator shall not consider any matter not contained in the original or supplemental submissions of the parties that has not been provided to the opposing party with at least five days notice, except claims of a continuing nature that are set out in the filed papers.
3.12 Arbitrator's Written Decision.
3.12.1 The Arbitrator shall render his decision and mail a copy of the decision to the parties within 45 days of the filing of the Petition.
3.12.2 The Arbitrator's decision is binding upon the parties with respect to allowable charges and payments for each emergency care service subject to arbitration for a period that will end on the 360th day after the date of the Arbitrator's decision.
3.13 Arbitration Costs. The non-prevailing party at arbitration shall reimburse the Commissioner for the expenses related to the arbitration process.
3.14 Arbitrations subject to this regulation shall not be subject to the provisions of 18 DE Admin. Code 1313.
3.15 Exemption from Arbitration. 18 Del.C. §§3349(b) and 3565(b) shall not apply to health insurance policies exempt from state regulation under federal law or regulation.
3.16 A carrier and a non-network emergency care provider can mutually agree in writing to submit to arbitration pursuant to Section 3.0 payment disputes relating to the delivery of emergency care services to patients covered by a plan otherwise exempt from arbitration, except that such agreement will only apply to the plan and the services stated therein.
3.17 The provisions of this regulation shall not apply to Medicaid or any other health insurance program where the review of coverage determinations is otherwise regulated by the provisions of other state or federal laws or regulations.
History
- 27 DE Reg. 113 (08/01/23)
- 27 DE Reg. 113 (08/01/23)
- 19 DE Reg. 926 (04/01/16)
- 27 DE Reg. 113 (08/01/23)
18 Del. Admin. Code § 1316-4.0 Confidentiality of Health Information
Nothing in this Regulation shall supersede any federal or state law or regulation governing the privacy of health information.
History
- 27 DE Reg. 113 (08/01/23)
- 27 DE Reg. 113 (08/01/23)
- 19 DE Reg. 926 (04/01/16)
- 27 DE Reg. 113 (08/01/23)
18 Del. Admin. Code § 1316-5.0 Computation of Time
In computing any period of time prescribed or allowed by this Regulation, the day of the act or event after which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday or Sunday, or other legal holiday, or other day on which the Department is closed, in which event the period shall run until the end of the next day on which the Department is open. When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and other legal holidays shall be excluded in the computation. As used in this section, "legal holidays" shall be those days provided by statute or appointed by the Governor or the Chief Justice of the State of Delaware.
History
- 27 DE Reg. 113 (08/01/23)
- 27 DE Reg. 113 (08/01/23)
- 19 DE Reg. 926 (04/01/16)
- 27 DE Reg. 113 (08/01/23)
18 Del. Admin. Code § 1316-6.0 Effective Date
This Regulation became effective on April 11, 2016. The amendments to this regulation shall become effective 10 days after being published as a final regulation.
History
- 27 DE Reg. 113 (08/01/23)
- 27 DE Reg. 113 (08/01/23)
- 19 DE Reg. 926 (04/01/16)
- 27 DE Reg. 113 (08/01/23)
1317 Network Disclosure and Transparency
18 Del. Admin. Code § 1317-1.0 Purpose and Statutory Authority
1.1 The purpose of this Regulation is to implement 18 Del.C. §§3370A and 3571S, which require (1) health insurers to maintain accurate and complete provider directories, to update provider directories frequently, to audit the accuracy and completeness of such directories and make the directories easily accessible to covered persons in a variety of formats, and (2) facility-based providers and non-network providers to provide timely written out-of-network disclosures to patients that fully inform such patients of the potential that out-of-network providers may be rendering care and the associated costs thereof. This Regulation is promulgated pursuant to 18 Del.C. §§3370A and 3571S; and 29 Del.C. Ch. 101. This Regulation should not be construed to create any cause of action not otherwise existing at law.
1.2 Consistent with 18 Del.C. §§3370A and 3571S, this regulation applies to every policy or contract of health insurance which is delivered or issued for delivery in this State, including each policy or contract issued by a health-service corporation, which provides medical, major medical, or similar comprehensive-type coverage, and which designates network physicians or providers (hereinafter referred to collectively as “network providers”). However, this regulation applies only to items, services or conditions for which coverage is provided by those policies or contracts (hereinafter referred to as “covered services”).
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-2.0 Definitions
“Facility-based provider” means a provider who provides health care services to covered persons who are in an in-patient or ambulatory facility, including services such as pathology, anesthesiology, or radiology.
“Health care provider” means any provider who provides health care services to covered person who are not in a facility-based setting, and includes a provider who provides health care services to a covered person based upon a referral from another provider without the knowledge of or input from the covered person.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-3.0 Network Disclosure Requirements by Facility-Based Providers
3.1 When a facility-based provider schedules a procedure, seeks prior authorization from a health insurer for the provision of non-emergency covered services to a covered person, or prior to the provision of any non-emergency covered services, the facility shall ensure that the covered person has received a timely, written out-of-network disclosure required by 18 Del.C. §§3370A or 3571S, as applicable, in the form attached hereto as Appendix 1 (the “facility-based provider disclosure”). The provision of the facility-based provider disclosure shall be considered timely if it is provided to the covered person within (3) business days after such procedure is scheduled if the medical necessity of a procedure allows such time, and if not, in as timely a manner as possible.
3.2 The facility-based provider shall, prior to the provision of services, obtain from the covered person a signed copy of the written consent form included with the facility-based provider disclosure. A copy of the completed form, including the signed written consent, should be given to the covered person, and the original placed in his or her medical file.
3.3 The facility-based provider disclosure shall not be required if the facility and all facility-based providers participate in the covered person’s network.
3.4 If a covered person requests from an out-of-network provider an estimate of the range of charges for any out-of-network services for which the covered person may be responsible, the out-of-network provider shall provide the estimate in writing to the covered person within three business days of the request if the medical necessity of a procedure allows such time, and if not, in as timely a manner as possible. Failure to provide such estimate within the required timeframe shall be considered a failure to comply with the disclosure requirements set forth in this Section 3.0 and shall result in the balance billing prohibition set forth in Section 6.0.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-4.0 Network Disclosure Requirements by Health Care Providers
4.1 Prior to the provision of any non-emergency covered services, the health care provider shall ensure that the covered person has received a timely, written out-of-network disclosure required by 18 Del.C. §§3370A or 3571S, as applicable, in the form attached hereto as Appendix 2 (the “health care provider disclosure”). The provision of the health care provider disclosure shall be considered timely if it is provided to the covered person within three (3) business days after the services are scheduled if the medical necessity of a procedure allows such time, and if not, in as timely a manner as possible.
4.2 The health care provider shall, prior to the provision of services, obtain from the covered person a signed copy of the written consent form included with the health care provider disclosure. A copy of the completed form, including the signed written consent, should be given to the covered person, and the original placed in his or her medical file.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-5.0 Laboratory Services
When a facility-based provider or a health care provider requests a laboratory service for a covered person that does not require an in-person visit, that provider must provide disclosure to the covered person if the facility being utilized is an out-of-network facility. If the requesting provider does not provide the required disclosure to the covered person, the covered person shall not be subject to any balance billing of the out-of-network service(s). If the laboratory service being requested requires an in-person visit, the laboratory must provide the covered person written disclosure of the out-of-network service(s) and a consent form prior to rendering any service(s). If the laboratory does not provide the required disclosure to the covered person, the covered person shall not be subject to any balance billing.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-6.0 Balance Billing Prohibition
6.1 A facility-based provider may not balance bill a covered person for health care services not covered by an insured’s health insurance contract if the facility-based provider fails to provide the facility-based provider disclosure or fails to obtain the signed copy of the written consent form included with the facility-based provider disclosure prior to rendering services.
6.2 A health care provider may not balance bill a covered person for health care services not covered by an insured’s health insurance contract if the health care provider fails to provide the health care provider disclosure or fails to obtain the signed copy of the written consent form included with the health care provider disclosure prior to rendering services.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-7.0 Provider Directory Requirements
7.1 Network provider directories shall be updated pursuant to the requirements set forth in this section. A provider directory, whether in electronic or print format, shall accommodate the communication needs of individuals with disabilities, and include a link to or information regarding available assistance for persons with limited English proficiency.
7.2 An insurer shall post its current network provider directory or directories on its internet website and inform its covered persons of the availably of the network provider directory or directories through its coverage materials. The information provided on the website shall be updated weekly. All network provider directories shall be available online to both covered persons and consumers shopping for coverage without requirements to log on or enter a password or a policy number.
7.3 An insurer shall allow insureds, potential insureds, providers, and members of the public to request a printed copy of the online network provider directory or directories by contacting the insurer through the insurer’s toll free telephone number, electronically, or in writing. The availability of such printed materials must be posted on the insurer’s website and noticed in its coverage materials.
7.4 All provider directories shall identify providers who are currently accepting new patients.
7.5 An insurer must process any claim for services provided by a provider whose status has changed from in-network to out-of-network as an in-network claim if the service was provided after the network change went into effect but before the change was posted as required under this regulation unless the insurer notified the covered person of the network change prior to the service being provided. This paragraph does not apply if the insurer is able to verify that the insurer’s website displayed the correct provider network status at the time the service was provided.
7.6 An insurer shall make it clear in both its electronic and print directories which provider directory applies to which network plan, such as including the specific name of the network plan as marketed and issued in this State.
7.7 Insurers shall include in both their electronic and print directories a customer service email address and telephone number or electronic link that covered persons or the general public may use to notify the insurer of inaccurate provider directory information.
7.8 Insurer shall, either in its provider directory or other coverage materials, inform covered persons in writing of their right not to be balanced billed by a non-network provider if the non-network provider or the facility-based provider employing non-network facility-based providers fails to provide the covered person with the network disclosures required by this regulation.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-8.0 Computation of Time
In computing any period of time prescribed or allowed by this Regulation, the day of the act or event after which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday or Sunday, or other legal holiday, or other day on which the Department is closed, in which event the period shall run until the end of the next day on which the Department is open. When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and other legal holidays shall be excluded in the computation. As used in this section, "legal holidays" shall be those days provided by statute or appointed by the Governor or the Chief Justice of the State of Delaware.
History
- 20 DE Reg. 645 (02/01/17)
18 Del. Admin. Code § 1317-9.0 Effective Date
This Regulation shall become effective ten days after being published as a final regulation.
APPENDIX 1 – FORM OF FACILITY-BASED PROVIDER DISCLOSURE
Network Disclosure Statement for [Insert Facility Name]
PLEASE RETURN THIS FORM TO [INSERT FACILITY NAME] ON OR PRIOR TO YOUR DATE OF SERVICE
This Facility-Based Provider Disclosure is designed to help ensure that patients receiving medical care from [Insert Facility Name] or any of its facility-based providers have the necessary information to make an informed decision about their medical benefits and care. “Facility-based provider” means a provider who provides health care services to covered persons who are in an in-patient or ambulatory facility, including services such as pathology, anesthesiology, or radiology.
In connection with your upcoming scheduled appointment, [Insert Facility Name] hereby provides the following disclosures:
-
[Insert Facility Name] [is/is not] a participating provider with your current health insurer.
-
Certain facility-based providers may be called upon to render care to you during the course of treatment.
-
Those facility-based providers may not have a contract with your health insurer and are therefore considered to be out-of-network.
-
Services that are provided by an out-of-network provider will be provided on an out-of-network basis, which may result in additional charges for which you may be responsible. These charges are in addition to any coinsurance, deductibles and copayments applicable under your health insurance policy.
-
The following is a list of those facility-based providers that may be called upon to render care to you during the course of treatment. You should contact your health insurer to determine the network status of these facility-based providers:
a. [Include list of relevant facility-based providers, including contact information]
-
An estimate of the range of charges charged by an out-of-network provider for any out-of-network services for which you may be responsible may be requested from, and will be timely provided by, the out-of-network provider. The provision of the estimate of range of charges shall be considered timely if it is provided to the covered person within three (3) business days of such request if the medical necessity of a procedure allows such time, and if not, in as timely a manner as possible.
-
You may contact your health insurer for additional assistance or may rely on whatever other rights and remedies may be available under state or federal law.
-
A facility-based provider may not balance bill you for health care services not covered by your insurance policy if the facility-based provider fails to provide you with a copy of this Facility-Based Provider Disclosure and obtain your below-printed consent prior to rendering any services.
PATIENT ACKNOWLEDGEMENT/CONSENT
I hereby acknowledge that a provider rendering services to me may be an out-of-network provider and that the services provided by that out-of-network provider may not be covered by my insurance policy. I further acknowledge that I have been informed of my right to request from the out-of-network providers an estimate of the range of charges for any out-of-network services for which I may be responsible. I affirmatively elect to obtain the services and agree to accept and pay the charges for the out-of-network services not covered by my insurance policy.
Name of Patient: ______________ ___________________________________________
Signature of Patient or Authorized Representative: ___ ____________________________
Relationship to Patient: ___ ____________________________
Date: ____________________________________ ___
APPENDIX 2 – FORM OF HEALTH CARE PROVIDER DISCLOSURE
Network Disclosure Statement for [Health Care Provider]
PLEASE RETURN THIS FORM TO [HEALTH CARE PROVIDER] ON OR PRIOR TO YOUR DATE OF SERVICE
This Health Care Provider Disclosure is designed to help ensure that patients receiving medical care from [Insert Health Care Provider Name] have the necessary information to make an informed decision about their medical benefits and care. “Health care provider” means any provider who provides health care services to covered person who are not in a facility-based setting, and includes a provider who provides health care services to a covered person based upon a referral from another provider without the knowledge of or input from the covered person.
In connection with your upcoming scheduled appointment, [Insert Health Care Provider Name] hereby provides the following disclosures:
-
[Insert Health Care Provider Name] is not a participating provider with your current health insurer and, therefore, the services provided to you will be provided on an out-of-network basis.
-
Services provided on an out-of-network basis may result in additional charges for which you may be responsible. These charges are in addition to any coinsurance, deductibles and copayments applicable under your health insurance policy.
-
The following is a list of the range of charges charged by [Insert Health Care Provider Name] for any out-of-network services for which you may be responsible:
a. [Insert List of Range of Charges]
-
You may contact your health insurer for additional assistance or may rely on whatever other rights and remedies may be available under state or federal law.
-
[Insert Health Care Provider Name] may not balance bill you for health care services not covered by your insurance policy if [Insert Health Care Provider Name] fails to provide you with a copy of this Health Care Provider Disclosure and obtain your below-printed consent prior to rendering any services.
PATIENT ACKNOWLEDGEMENT/CONSENT
I hereby acknowledge that [Insert Health Care Provider Name] may be an out-of-network provider and that the services provided by [Insert Health Care Provider Name] may not be covered by my insurance policy. I further acknowledge receipt of the range of charges for any out-of-network services for which I may be responsible. I affirmatively elect to obtain the services and agree to accept and pay the charges for the out-of-network services not covered by my insurance policy.
Name of Patient: ______________ ___________________________________________
Signature of Patient or Authorized Representative: ___ ____________________________
Relationship to Patient: ___ ____________________________
Date: ____________ ___________________________
History
- 20 DE Reg. 645 (02/01/17)
1318 Compensation for Chiropractic Services
18 Del. Admin. Code § 1318-1.0 Authority
This regulation is adopted pursuant to 18 Del.C. §§102, 311 and 329 and 24 Del.C. §716 and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-2.0 Purpose
The purpose of this regulation is to implement 24 Del.C. §716.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-3.0 Scope
3.1 This regulation shall apply to all carriers and to all third party administrators as defined herein.
3.2 This regulation shall not apply to personal injury protection automobile insurance that is required under 21 Del.C. Ch. 21.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-4.0 Definitions
The following words and terms, when used in this regulation, should have the following meaning unless the context clearly indicates otherwise:
"Administrator" or "third party administrator" or "TPA" means "Administrator" or "third party administrator" or "TPA" as those terms are defined at 18 DE Admin. Code 1406-2.1.
"Carrier" means any entity that provides health insurance in this State. For the purposes of this regulation, carrier includes a health insurance company, health service corporation, health maintenance organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. "Carrier" also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health benefit plans.
"Chiropractic" means "Chiropractic" as defined in 24 Del.C. §701 and in 24 DE Admin. Code 700.
"Chiropractic care or services" means those practices that a licensed doctor of chiropractic is licensed to provide pursuant to 24 Del.C. Ch. 7 and 24 DE Admin. Code 700.
"Commissioner" means the Commissioner of the Delaware Department of Insurance.
"Doctor of chiropractic" means a person who is licensed to administer chiropractic care or services pursuant to 24 Del.C. Ch. 7 and 24 DE Admin. Code 700.
"Medically necessary" means the providing of health care services or products that a prudent physician would provide to a patient for the purpose of diagnosing or treating an illness, injury, disease or its symptoms in a manner that is:
A. In accordance with generally accepted standards of medical practice;
B. Consistent with the symptoms or treatment of the condition; and
C. Not solely for anyone's convenience.
"Physician" means, for purposes of this regulation, anyone who is licensed as a physician pursuant to 24 Del.C. Ch. 17 or as a doctor of chiropractic pursuant to 24 Del.C. Ch. 7.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-5.0 Unreasonable and Discriminatory Access to Chiropractic Care or Services Prohibited
5.1 No carrier shall include in any insurance policy or contract delivered or issued for delivery in Delaware or in any certificate issued under such a policy or contract any provision that unreasonably discriminates against access to chiropractic care or services, including but not limited to:
5.1.1 A cost containment or managed care provision that denies or restricts access to chiropractic care or services in a manner that is more restrictive than a cost containment or managed care provision placed on a provider who is not licensed as a doctor of chiropractic but who is otherwise licensed to perform the same or substantially similar service, for the treatment of a patient with a condition that is within the scope of chiropractic practice;
5.1.2 A provision that classifies chiropractic care or services as "maintenance care" or "not medically necessary," solely for the purpose of denying access to chiropractic care or services;
5.1.3 A provision that requires a patient to pay a higher copay or deductible when being treated by a doctor of chiropractic than that patient would otherwise be required to pay for the same or substantially similar care or services had that care or services been rendered by a provider who is not licensed as a doctor of chiropractic but who is otherwise licensed to render that or a substantially similar care or service;
5.1.4 A provision that requires a patient to pay a copayment or coinsurance that is more than 25 percent of the fee due or to be paid to a doctor of chiropractic for chiropractic care or services;
5.1.5 A provision that contains a utilization or compensation restriction or practice for a doctor of chiropractic that is more restrictive than a utilization or compensation restriction or practice placed on a provider who is not licensed as a doctor of chiropractic but who is otherwise licensed to perform the same or substantially similar care or service for the treatment of patients with conditions within the scope of chiropractic care or services, including but not limited to:
5.1.5.1 Unreasonable or discriminatory restrictions on the number of compensated visits per condition, or per episode, year, or other period; or
5.1.5.2 Unreasonable or discriminatory precertification requirements and allowances for initial or subsequent visits, or for the determination of medical necessity; or
5.1.6 Including a provision that would unreasonably deny coverage for a chiropractic technique, method or diagnostic procedure if that chiropractic technique, method or diagnostic procedure is taught by a Chiropractic College or University accredited by the Council on Chiropractic Education (CCE), or has been approved by the Delaware Board of Chiropractic.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-6.0 Unreasonable and Discriminatory Compensation Prohibited
6.1 No carrier or TPA shall discriminate against or unreasonably deny a doctor of chiropractic compensation for a chiropractic service rendered by that doctor of chiropractic if the carrier would otherwise compensate a provider who is not licensed as a doctor of chiropractic but who is otherwise licensed to perform that same or substantially similar service.
6.2 Every carrier or TPA shall utilize nondiscriminatory cost containment and managed care payment strategies to provide payment for chiropractic care or services, regardless of whether the care or services were delivered by a licensed doctor of chiropractic or by a provider who is not licensed as a doctor of chiropractic but who is otherwise licensed to perform the same or substantially similar service.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-7.0 Reasonable and Nondiscriminatory Provisions
Nothing in this regulation shall prohibit a carrier or a TPA from implementing reasonable and nondiscriminatory cost containment or managed care provisions as permitted by 24 Del.C. §716(b).
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-8.0 Waiver not permitted
The provisions of this regulation may not be waived, voided, or nullified by contract.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-9.0 Causes of Action
This regulation shall not create a private cause of action for any person or entity other than the Commissioner against a carrier or its representative based upon a violation of 24 Del.C. §716 or any provision of this regulation.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
18 Del. Admin. Code § 1318-10.0 Effective Date
This regulation shall become effective on January 1, 2019.
History
- 22 DE Reg. 1019 (06/01/19)
- 22 DE Reg. 164 (08/01/18)
- 22 DE Reg. 1019 (06/01/19)
1319 Arbitration of Disputes Between Carriers and Primary Care and Chronic Care Management Providers
18 Del. Admin. Code § 1319-1.0 Purpose and Statutory Authority
1.1 The purpose of this regulation is to implement 18 Del.C. §§3342B and 3556A, which require health insurance carriers to submit to arbitration any dispute with a provider regarding a carrier’s final reimbursement decision for primary care and chronic care management services.
1.2 This regulation is promulgated pursuant to 18 Del.C. §§311, 3342B, and 3556A and 29 Del.C. Ch. 101. This regulation should not be construed to create any cause of action not otherwise existing at law.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-2.0 Definitions
"Carrier" or "insurance carrier" means any entity that provides health insurance in this State. "Carrier" includes an insurance company, health service corporation, health maintenance organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. "Carrier" also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health benefit plans.
"Chronic care management" means the services in the Chronic Care Management Services program, as administered by the Centers for Medicare and Medicaid Services, and includes Current Procedural Terminology ("CPT") codes 99487, 99489, and 99490.
"Department" means the Delaware Department of Insurance.
"Medicare" means the federal Medicare Program (U.S. Public Law 89-87, as amended) [42 USCS, Ch. 7, XVIII USCS].
"Primary care" means health care provided by a primary care provider.
"Primary care provider" means any physician or individual licensed under Title 24 of the Delaware Code to provide health care, with whom the patient has initial contact and by whom the patient may be referred to a specialist. Examples of a primary care provider include primary care physicians (including an obstetrician - gynecologist pursuant to 18 Del.C. §§3342 and 3556, to the extent that provider is serving in the role as a primary care provider), certified nurse practitioners, physician assistants, and other front-line practitioners for chronic care management and primary care who provide primary care in a family, pediatrics, internal medicine, or a geriatrics practice.
"Provider" means a provider of chronic care management or a primary care provider.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-3.0 Notice of Final Reimbursement Decision
3.1 A carrier shall notify a provider, in writing, of a carrier's final decision regarding reimbursement for an individual claim, procedure or service, if the decision does not authorize reimbursement of the provider's charge in accordance with 18 Del.C. §§3342B and 3556A. Such notice may be separate from or a part of the written notice of the carrier's decision.
3.2 Any notice given to a provider pursuant to subsection 3.1 shall:
3.2.1 Be in writing; and
3.2.2 Give the provider notice of the provider's right to arbitration through the Department's arbitration program, by including, at a minimum, the following language:
"You have the right to seek review of our decision regarding the amount of your reimbursement. The Delaware Insurance Department provides claim arbitration services which are in addition to, but do not replace, any other legal or equitable right you may have to a review of this decision or any right of review based on your contract with us. You can contact the Delaware Insurance Department for information about arbitration by calling the Arbitration Secretary at 302-674-7322 or by sending an email to: DOI-arbitration@delaware.gov. All requests for arbitration must be filed within 60 days from the date you receive this notice; otherwise, this decision will be final."
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-4.0 Arbitration Procedures
4.1 Provider Petition for Arbitration.
4.1.1 A provider or a provider’s authorized representative may request that the Department review a carrier's final reimbursement decision through arbitration by complying with the following requirements:
4.1.1.1 Complete in full the Department's standard Petition for Arbitration form, which may be downloaded from the Department's website;
4.1.1.2 Attach to the completed Petition for Arbitration all supporting documentation;
4.1.1.3 Include a filing fee in the form of a check that is made payable to the Department of Insurance, which shall be in the amount of $75 and which shall be maintained by the Department in a special fund identified as the “Arbitration Fund”;
4.1.1.4 File the original and one copy of the Petition for Arbitration and the appropriate filing fee with the Department, at the following address:
Delaware Department of Insurance
ATTN: Arbitration Secretary
1351 West North Street, Suite 101
Dover, DE 19904
4.1.1.5 Ensure that the Petition for Arbitration is timely submitted so that it is received by the Department no later than 60 days after the provider received the carrier's final reimbursement decision.
4.1.2 A provider who requests Department review under subsection 4.1.1 shall also:
4.1.2.1 Send a copy of the petition and supporting documentation to the carrier by certified mail, return receipt requested; and
4.1.2.2 Deliver to the Department a proof of service confirming that a copy of the petition was sent to the carrier by certified mail, return receipt requested.
4.1.3 The Department may refuse to accept any petition that is not timely filed or does not otherwise meet the criteria for arbitration.
4.2 Carrier Response to Petition for Arbitration
4.2.1 Within 20 days of receipt of the Petition for Arbitration, the carrier shall deliver to the Department an original and one copy of a response to the Petition for Arbitration, to which it shall attach all supporting documents or other evidence.
4.2.2 At the time of delivering the response to the Department, the carrier shall also:
4.2.2.1 Send a copy of the response and supporting documentation to the provider or the provider’s authorized representative by first class U.S. mail, postage prepaid;
4.2.2.2 Deliver to the Department a proof of service confirming that a copy of the response was mailed to the health care provider or the health care provider’s authorized representative; and
4.2.2.3 Deliver to the Department a $75.00 filing fee, which shall be maintained by the Department in the Arbitration Fund.
4.2.3 The Department may return any non-conforming response to the carrier.
4.3 Appointment of Arbitrator
4.3.1 Upon receipt of a petition filed in proper form, the Department shall assign an arbitrator.
4.3.2 The arbitrator shall be of suitable background and experience to decide the matter in dispute and shall not be affiliated with any of the parties or with the patient whose care is at issue in the dispute.
4.4 Summary Disposition of Petition by the Arbitrator
4.4.1 An arbitrator may summarily dispose of a petition if:
4.4.1.1 The carrier fails to timely deliver a response; or
4.4.1.2 The arbitrator determines that the petition is meritless on its face or that the subject of the petition is not appropriate for arbitration under this regulation.
4.4.2 If the carrier fails to timely respond to a Petition for Arbitration, the Department may, after verifying proper service and with written notice to the parties, assign the matter to the next scheduled arbitrator for summary disposition.
4.4.2.1 The arbitrator may determine the matter by issuing a default judgment after establishing that the petition is properly supported and was properly served on the carrier.
4.4.2.2 The arbitrator may allow the re-opening of the matter to prevent a manifest injustice. A carrier must make a request for re-opening no later than fifteen days after notice of the default judgment.
4.4.3 If the arbitrator determines that the subject of the petition is not appropriate for arbitration under this regulation or is meritless on its face, the arbitrator may summarily dismiss the petition and provide notice of such dismissal to the parties.
4.5 Arbitration Hearing
4.5.1 The arbitrator shall schedule the matter for a hearing in a timeframe that will allow the arbitrator to render a written decision within 45 days after the delivery to the Department of the Petition for Arbitration. The arbitrator shall give notice of the arbitration hearing date to the parties at least 10 days prior to the hearing. The parties are not required to appear and may rely on the papers delivered to the Department.
4.5.2 Testimony at the arbitration hearing is to be limited, to the maximum extent possible, to statements by each party in which they are afforded the opportunity to explain their view of the previously submitted evidence and to answer any questions posed by the arbitrator.
4.5.3 If the arbitrator allows any testimony in addition to that provided for in subsection 4.5.2 of this regulation, the arbitrator shall allow brief cross-examination or other response by the opposing party.
4.5.4 The “Delaware Uniform Rules of Evidence” will be used for general guidance but will not be strictly applied.
4.5.5 Because the testimony may involve evidence relating to personal health information that is confidential and protected by state or federal laws from public disclosure, the arbitration hearing shall be closed to the public.
4.5.6 The arbitrator may contact, with the parties' consent, individuals or entities identified in the papers by telephone, in or outside of the parties' presence, for information the arbitrator deems necessary to resolve the matter.
4.5.7 The arbitrator shall consider the matter based on the submissions of the parties and information otherwise obtained by the arbitrator in accordance with this regulation. The arbitrator shall not consider any matter not contained in the original or supplemental submissions of the parties that has not been provided to the opposing party with at least five days notice, except claims of a continuing nature that are set out in the filed papers.
4.6 Arbitrator's Written Decision
4.6.1 The arbitrator shall render the arbitrator’s decision in writing and shall mail a copy of the decision to each of the parties and to the Department within 45 days of the filing of the petition.
4.6.2 If the arbitrator determines that the carrier's final reimbursement decision provides reimbursement to the provider in an insufficient amount, the carrier shall reimburse the provider in the amount that the arbitrator so determines, within 45 days from the date of the arbitrator’s decision.
4.7 Arbitration Costs
4.7.1 The Department shall pay the arbitrator $100 for each arbitration, which shall be payable from the Arbitration Fund.
4.7.2 The arbitrator may award to the health care provider the filing fee, if the health care provider is the prevailing party in the arbitration.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-5.0 Carrier Recordkeeping and Reporting Requirements
5.1 A carrier shall maintain written or electronic records for five years after completion of each arbitration case, documentation of each Petition for Arbitration including, at a minimum, the following information:
5.1.1 The date the petition was filed;
5.1.2 The name and identifying information of the health care provider on whose behalf the petition was filed;
5.1.3 A general description of the reason for the petition; and
5.1.4 The date and description of the arbitration decision or other disposition of the petition.
5.2 A carrier shall file with its annual report to the Department the total number of Petitions for Arbitration filed, with a breakdown showing:
5.2.1 The total number of final reimbursement decisions upheld through arbitration; and
5.2.2 The total number of final reimbursement decisions reversed through arbitration.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-6.0 Non-Retaliation
A carrier shall not terminate or in any way penalize a provider with whom it has a contractual relationship and who exercises the right to file a Petition for Arbitration, solely on the basis of such filing.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-7.0 Confidentiality of Health Information
Nothing in this regulation shall supersede any federal or state law or regulation governing the privacy of health information.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-8.0 Computation of Time
8.1 In computing any period of time prescribed or allowed by this regulation, the day of the act or event after which the designated period of time begins to run shall not be included.
8.2 The last day of the period so computed shall be included, unless it is a Saturday or Sunday, or other legal holiday, or other day on which the Department is closed, in which event the period shall run until the end of the next day on which the Department is open.
8.3 When the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and other legal holidays shall be excluded in the computation.
8.4 As used in this section, "legal holidays" means those days provided by statute or appointed by the Governor or the Chief Justice of the State of Delaware.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
18 Del. Admin. Code § 1319-9.0 Effective Date and Expiration Date
This regulation shall become effective upon adoption and shall expire on August 29, 2021, unless otherwise readopted, with or without amendments. The amendments to this regulation shall become effective July 11, 2020.
History
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 23 DE Reg. 314 (10/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 24 DE Reg. 56 (07/01/20)
- 22 DE Reg. 605 (01/01/19)
- 23 DE Reg. 314 (10/01/19)
- 24 DE Reg. 56 (07/01/20)
1320 Minimum Standards for Short-Term, Limited Duration Health Insurance Plans
18 Del. Admin. Code § 1320-1.0 Purpose
1.1 The purpose of this regulation is to:
1.1.1 Ensure that any short-term, limited duration health insurance policy that is offered in this state complies with certain minimum requirements;
1.1.2 Set forth the requirements on producers and agents who offer short-term health insurance policies to this State's consumers; and
1.1.3 Provide for full disclosure and notice in the sale of short-term, limited duration health insurance policies, as defined in this regulation.
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-2.0 Authority
This regulation is issued pursuant to the authority vested in the Commissioner pursuant to 18 Del.C. §311, 18 Del.C. §1720,18 Del.C. Chs. 33, 35 and 36, 29 Del.C. Ch. 101 and in response to 26 CFR 54.9833-1, 29 CFR 2590.736, 45 CFR 146.125 and 45 CFR 148.120.
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-3.0 Applicability and Scope
3.1 This regulation shall apply to short-term, limited-duration health insurance coverage offered for sale in this state. The requirements contained in this regulation shall be in addition to any other applicable regulations previously adopted.
3.2 This regulation shall not apply to:
3.2.1 Medicare supplement policies subject to 18 Del.C. Ch. 34; or
3.2.2 Long-term care insurance policies subject to 18 Del.C. Ch. 71.
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-4.0 Definitions
The following words and terms shall have the following meaning unless the context clearly indicates otherwise:
"Carrier" means any entity that provides health insurance in this State. Carrier includes an insurance company, health service corporation, managed care organization and any other entity providing a plan of health insurance or health benefits subject to State insurance regulation. Carrier also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health insurance.
"Certificate" means a statement of the coverage and provisions of a policy of either individual or group accident and sickness insurance, which has been delivered or issued for delivery in this state and includes riders, endorsements and enrollment forms, if attached to the policy.
"Commissioner" means the Delaware Insurance Commissioner.
"Direct response solicitation" means a communication through a sponsoring or endorsing entity or individually through mail, telephone, the internet or other mass communication media.
"Health care services" means any services or supplies included in the furnishing to any individual of medical care, or hospitalization or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any individual of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury, disability or disease.
"Short-term, limited duration health insurance" means health insurance coverage provided pursuant to a contract with a health carrier that has an expiration date specified in the contract that is less than or equal to 3 months after the original effective date of the contract and has a duration of no longer than 3 months in total.
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-5.0 Minimum Policy Standards
5.1 No carrier shall advertise, sell or otherwise offer for sale or cause to be offered for sale a policy that it purports to be a short-term, limited duration health insurance policy, unless that policy meets the definition of short-term, limited duration health insurance policy as defined in Section 4.0 of this regulation and the policy meets the following minimum standards:
5.1.1 The policy may not be issued for a period longer than three months;
5.1.2 The three-month policy term limit set in subsection 5.1.1 is a single occurrence limit and may not be effectively extended by issuing the same policy for successive back-to-back terms or by issuing a different short-term, limited duration policy to the same policy holder more than once in any given year;
5.1.3 The carrier shall apply the same underwriting standards to all applicants, regardless of whether they have previously been covered by short-term, limited duration health insurance;
5.1.4 The policy contains the notice required in federal law as dictated in Section 6.0 of this regulation; and
5.1.5 The policy shall be offered at a rate that has an actuarially expected loss ratio of at least 60 percent.
5.2 Every carrier who offers a short-term, limited duration health insurance policy shall obtain the approval of the terms and conditions of that policy from the Commissioner before such policy may be offered for sale in this state.
5.3 The Commissioner reserves the right to reject for approval a short-term, limited duration health insurance policy that, in the opinion of the Commissioner, is unjust, unfair, or unfairly discriminatory to the policyholder, a person insured under the policy, or to a beneficiary of the policy.
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-6.0 Disclosure and Notice Requirements
6.1 Except as provided in subsection 6.2, a carrier shall, at time of sale, enclose with every short-term, limited duration health insurance policy an outline of coverage of such policy delivered or issued for delivery in this state, in accordance with the following:
6.1.1 If the sale of a policy occurs through an agent, the outline of coverage shall be delivered to the applicant at the time of application or to the certificate holder at the time of enrollment;
6.1.2 If the sale of a policy occurs through direct response solicitation, the outline of coverage shall be delivered no later than in conjunction with the issuance of the policy or delivery of the certificate;
6.1.3 If the outline of coverage required in this section is not delivered at the time of application or enrollment, the advertising materials delivered to the applicant or enrollee shall contain all the information required in subsection 6.1;
6.1.4 If the outline of coverage is delivered to the applicant or enrollee at the time of application or enrollment, the carrier shall collect an acknowledgment of receipt or certificate of delivery of the outline of coverage and the carrier shall maintain evidence of the delivery; and
6.1.5 If coverage is issued on a basis other than as applied for, an outline of coverage properly describing the coverage or contract actually issued shall be delivered with the policy or certificate to the applicant or enrollee.
6.2 An outline of coverage for short-term, limited duration health insurance shall not be required to be delivered by the carrier if the certificate contains a brief description of:
6.2.1 Benefits;
6.2.2 Provisions that exclude, eliminate, restrict, limit, delay or in any other manner operate to qualify payment of the benefits;
6.2.3 Non-renewability provisions; and
6.2.4 The notice requirements as provided in subsection 6.5.
6.3 Coverage outlines provided pursuant to subsection 6.1 shall include:
6.3.1 A statement identifying the applicable category or categories of coverage;
6.3.2 A description of the principal benefits and coverage provided;
6.3.3 A statement of the exceptions, reductions and limitations;
6.3.4 A statement that the policy is not renewable; and
6.3.5 A statement that the outline is a summary of the policy or certificate issued or applied for and that the policy or certificate should be consulted to determine governing policy provisions.
6.4 With respect to a policy having a coverage start date before January 1, 2019, a carrier shall display prominently in the application materials provided in connection with enrollment a notice, in at least 14 point type, that includes the following language in the following format:
6.5 With respect to policies having a coverage start date on or after January 1, 2019, a carrier shall display prominently in the application materials provided in connection with enrollment a notice, in at least 14 point bolded type, that includes the following language:
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-7.0 Requirements for Replacement
7.1 Application forms shall include a question designed to elicit information as to whether the insurance to be issued is intended to replace any other accident and sickness insurance presently in force. A supplementary application or other form to be signed by the applicant containing such a question may be used.
7.2 Upon determining that a sale will involve replacement, a carrier, other than a direct response carrier, or its agent, shall furnish the applicant, prior to issuance or delivery of the policy, the notice described in subsection 7.3. One copy of such notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the carrier. A direct response carrier shall deliver to the applicant upon issuance of the policy, the notice described in subsection 7.4. In no event, however, will such a notice be required in the solicitation of the following types of policies: accident only and single premium nonrenewable policies.
7.3 The notice required by subsection 7.2 for a carrier, other than a direct response carrier, shall provide, in substantially the following form:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS INSURANCE
According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and sickness insurance and replace it with a policy to be issued by (insert Company Name) Insurance Company. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.
(1) Health conditions which you may presently have (pre-existing conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under the policy you are replacing with this policy.
(2) You may wish to secure the advice of your present carrier or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.
(3) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical/health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, re-read it carefully to be certain that all information has been properly recorded.
The above "Notice to Applicant" was delivered to me on:
(Date)
(Applicant's Signature)
7.4 The notice required by subsection 7.2 for a direct response carrier shall be as follows:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS INSURANCE
According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and sickness insurance and replace it with a policy to be issued by (insert Company Name) Insurance Company. Your new policy provides 10 days within which you may decide without cost whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.
(1) Health conditions which you may presently have (pre-existing conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under the policy you are replacing with this policy.
(2) You may wish to secure the advice of your present carrier or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.
(3) (To be included only if the application is attached to the policy.) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to (insert Company Name and Address) within 10 days if any information is not correct and complete, or if any past medical history has been left out of the application.
(Company Name)
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-8.0 Severability
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the Regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
History
- 22 DE Reg. 607 (01/01/19)
18 Del. Admin. Code § 1320-9.0 Effective Date
This regulation shall take effect 10 days after final publication in the Delaware Register of Regulations.
History
- 22 DE Reg. 607 (01/01/19)
1321 Compensation for Physical Therapy Services
18 Del. Admin. Code § 1321-1.0 Authority
This regulation is adopted pursuant to 18 Del.C. §311 and 24 Del.C. §2621 and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-2.0 Purpose
The purpose of this regulation is to implement 24 Del.C. §2621.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-3.0 Scope
3.1 This regulation shall apply to all carriers and to all third party administrators as defined herein.
3.2 This regulation shall not apply to personal injury protection automobile insurance that is required under 21 Del.C. Ch. 21.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-4.0 Definitions
The following words and terms, when used in this regulation, should have the following meaning unless the context clearly indicates otherwise:
"Administrator" or "third party administrator" or "TPA" means "Administrator" or "third party administrator" or "TPA" as those terms are defined at 18 DE Admin. Code 1406-2.1.
"Carrier" means any entity that provides health insurance in this State. For the purposes of this regulation, carrier includes a health insurance company, health service corporation, health maintenance organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. "Carrier" also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health benefit plans.
"Commissioner" means the Commissioner of the Delaware Department of Insurance.
"Medically necessary" means the providing of health care services or products that a prudent physician would provide to a patient for the purpose of diagnosing or treating an illness, injury, disease or its symptoms in a manner that is:
A. In accordance with generally accepted standards of medical practice;
B. Consistent with the symptoms or treatment of the condition; and
C. Not solely for anyone's convenience.
"Physical Therapist" means a person who is licensed to administer physical therapy care or services pursuant to 24 Del.C. Ch. 26 and 24 DE Admin. Code 2600.
"Physical therapy" means "practice of physical therapy" as defined in 24 Del.C. §2602.
"Physical therapy care or services" means those practices that a licensed Physical Therapist is licensed to provide pursuant to 24 Del.C. Ch. 26 and 24 DE Admin. Code 2600.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-5.0 Unreasonable and Discriminatory Access to Physical Therapy Care or Services Prohibited
5.1 No carrier shall include in any insurance policy or contract delivered or issued for delivery in Delaware or in any certificate issued under such a policy or contract any provision that unreasonably discriminates against access to physical therapy care or services, including but not limited to:
5.1.1 A cost containment or managed care provision that denies or restricts access to physical therapy care or services in a manner that is more restrictive than a cost containment or managed care provision placed on a provider who is not licensed as a physical therapist but who is otherwise licensed to perform the same or substantially similar service, for the treatment of a patient with a condition that is within the scope of physical therapy practice;
5.1.2 A provision that classifies physical therapy care or services as "maintenance care" or "not medically necessary," solely for the purpose of denying access to physical therapy care or services;
5.1.3 A provision that requires a patient to pay a higher copay or deductible when being treated by a physical therapist than that patient would otherwise be require to pay for the same or substantially similar care or services had that care or services been rendered by a provider who is not licensed as a physical therapist but who is otherwise licensed to render that or a substantially similar care or service;
5.1.4 A provision that requires a patient to pay a copayment or coinsurance that is more than 25 percent of the fee due or to be paid to a physical therapist for physical therapy care or services;
5.1.5 A provision that contains a utilization or compensation restriction or practice for a physical therapist that is more restrictive than a utilization or compensation restriction or practice placed on a provider who is not licensed as a physical therapist but who is otherwise licensed to perform the same or substantially similar care or service for the treatment of patients with conditions within the scope of physical therapy care or services, including but not limited to:
5.1.5.1 Unreasonable or discriminatory restrictions on the number of compensated visits per condition, or per episode, year, or other period; or
5.1.5.2 Unreasonable or discriminatory precertification requirements and allowances for initial or subsequent visits, or for the determination of medical necessity; or
5.1.6 Including a provision that would unreasonably deny coverage for a physical therapy technique, method or diagnostic procedure if that physical therapy technique, method or diagnostic procedure is taught by an educational program described in 24 Del.C. §2606(a)(1), or has been approved by the Delaware Examining Board of Physical Therapists and Athletic Trainers.
5.2 No carrier shall include in any insurance policy or contract delivered or issued for delivery in Delaware or in any certificate issued under such a policy or contract any provision that places any annual or lifetime numerical limits on physical therapy visits for the treatment of back pain.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-6.0 Unreasonable and Discriminatory Compensation Prohibited
6.1 No carrier or TPA shall discriminate against or unreasonably deny a physical therapist compensation for a physical therapy service rendered by that physical therapist if the carrier would otherwise compensate a provider who is not licensed as a physical therapist but who is otherwise licensed to perform that same or substantially similar service.
6.2 Every carrier or TPA shall utilize nondiscriminatory cost containment and managed care payment strategies to provide payment for physical therapy care or services, regardless of whether the care or services were delivered by a licensed physical therapist or by a provider who is not licensed as a physical therapist but who is otherwise licensed to perform the same or substantially similar service.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-7.0 Reasonable and Nondiscriminatory Provisions
Nothing in this regulation shall prohibit a carrier or a TPA from implementing reasonable and nondiscriminatory cost containment or managed care provisions as permitted by 24 Del.C. §2621(b).
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-8.0 Waiver not permitted
The provisions of this regulation may not be waived, voided, or nullified by contract.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-9.0 Causes of Action
This regulation shall not create a private cause of action for any person or entity other than the Commissioner against a carrier or its representative based upon a violation of 24 Del.C. §2621 or any provision of this regulation.
History
- 22 DE Reg. 1021 (06/01/19)
18 Del. Admin. Code § 1321-10.0 Effective Date
This regulation shall be effective 10 days after the date of publication of the notice of adoption in the Register of Regulations.
History
- 22 DE Reg. 1021 (06/01/19)
1322 Requirements for Mandatory Minimum Payment Innovations in Health Insurance
18 Del. Admin. Code § 1322-1.0 Authority
This regulation is promulgated and adopted pursuant to the authority granted in 18 Del.C. §§311, 334, 2503, 3342B and 3556A, and in accordance with 29 Del.C. Ch. 101.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-2.0 Purpose
The purpose of this regulation is to establish a process through which carriers must demonstrate compliance with requirements for mandatory minimum payment innovations, including alternative payment models, provider price increases, carrier investment in primary care, and other activities deemed necessary to support a robust system of primary care by January 1, 2026, pursuant to 18 Del.C. §334.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-3.0 Scope
This regulation applies to insurers, health service corporations, and managed care organizations that deliver or issue for delivery in this State individual and group insurance policies or plans subject to regulation under Title 18 of the Delaware Code.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-4.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
"Accountable care organization" means an organization formed when a group or groups of doctors, hospitals, and other health care providers come together voluntarily to give coordinated high-quality care to their patients.
"Ambulatory Payment Classification" or "APC" means the classification system described in 42 CFR 419.31 that is the basis of Medicare's reimbursement system for outpatient hospital services.
"Annual notice" means the bulletins issued by the Commissioner that establish the format and supporting information that carriers must use to comply with the reporting requirements of this regulation. Such notices will be issued not later than 90 days prior to annual premium rate filing deadlines established under 18 Del.C. §2503.
"Capitated Services" means services paid through a fixed amount of money per patient per unit of time paid in advance for the delivery of health care services. The actual amount of money paid is determined by the ranges of services that are provided, the number of patients involved, and the period of time during which the services are provided.
"Carrier" has the meaning set forth in 18 Del.C. §334(b)(2).
"Chronic care management services" means the specific services included in the Chronic Care Management Services program, as administered by the Centers for Medicare and Medicaid Services (CMS) and includes Current Procedural Terminology ("CPT") codes 99487, 99489, and 99490.
"Commissioner" means the Commissioner of the Delaware Department of Insurance.
"Comprehensive Primary Care Plus" or “CPC+” means the national advanced primary care medical home model contemplated by Section 3021 of the Patient Protection and Affordable Care Act that aims to strengthen primary care through regionally-based multi-payer payment reform and care delivery transformation.
"Comprehensive Primary Care Plus Track 1" or "CPC+ Track 1" means the version of the CPC+ program in which providers are reimbursed the full Medicare Physician Fee Schedule as well as a risk-adjusted care management fee, with an opportunity to earn a performance-based incentive payment.
"Comprehensive Primary Care Plus Track 2" or "CPC+ Track 2" means the version of the CPC+ program in which providers are reimbursed less than the full Medicare Physician Fee Schedule in exchange for receiving higher non-fee-for-service payments than in CPC+ Track 1.
"Core CPI" means the average of the 12 preceding bimonthly indices calculating the over-the-year changes of the Consumer Price Index for All Urban Consumers in the Philadelphia-Camden-Wilmington Area, All Items Less Food & Energy, developed by the United States Bureau of Labor Statistics.
"Delaware Health Information Network Health Care Claims Database" or "DHIN HCCD" means the data base in which health care claims data that are collected from commercial and public payers under regulations promulgated pursuant to 16 Del.C. §10306 are stored.
"Department" means the Delaware Department of Insurance.
"Diagnosis Related Groups" or "DRGs" means the patient classification scheme set forth in 42 CFR 412.60.
"Episode-based payments" means a discounted payment or pre-determined price against which actual payments are retrospectively reconciled that is specific to conditions for a discrete timeframe and that are initiated by combinations of diagnoses, procedures, and drugs furnished to a patient.
"Facility" means a place where healthcare is delivered, including by way of example only, a hospital, outpatient clinic or nursing home.
"Health benefit plan" has the meaning set forth in 18 Del.C. §§3342A(a)(3)a. and 3559(a)(3)a.
"Inpatient hospital services" means non-capitated facility services for medical, surgical, maternity, skilled nursing, and other services provided in an inpatient facility setting and billed by the facility and categorized as such as part of development of the Unified Rate Review Template, excluding services to treat individuals with a primary diagnosis of a behavioral health condition including mental health conditions and substance use disorder conditions.
"Medicare Shared Savings Program Pathways to Success" or "MSSP Pathways" means the CMS alternative payment model program adopted by the Federal Centers for Medicare & Medicaid Services in the "Pathways to Success" Final Rule, 83 FR 67816 (December 31, 2018), and codified in 42 CFR 425.
"Nonprofessional services" means services categorized as such as part of development of the Unified Rate Review Template as inpatient hospital, outpatient hospital, and other medical services.
"Other medical services" means non-capitated ambulance, home health care, durable medical equipment, prosthetics, supplies, and the facility component of vision exams, dental services, and other services when billed separately from professional services and categorized as such as part of development of the Unified Rate Review Template, excluding services to treat individuals with a primary diagnosis of a behavioral health condition including mental health conditions and substance use disorder conditions.
"Outpatient hospital services" means non-capitated facility services for surgery, emergency services, lab, radiology, therapy, observation, and other services provided in an outpatient facility setting and billed by the facility and categorized as such as part of development of the Unified Rate Review Template, excluding services to treat individuals with a primary diagnosis of a behavioral health condition including mental health conditions and substance use disorder conditions.
"Population-based payment" means an arrangement in which a provider entity accepts responsibility for delivering covered services to a group of patients for a predetermined payment amount.
"Primary Care First" or "PCF" means the CMS five-year alternative payment model program established under the authority of Section 1115A of the Social Security Act that aims to reward value and quality by offering an innovative payment structure to support delivery of advanced primary care.
"Primary Care Place of Service" means a care delivery location where primary care services are frequently provided, including by way of example only, each of the following locations as defined by their CMS place of service code:
"Primary Care Provider" or "PCP" means an individual licensed under Title 24 of the Delaware Code to provide health care, with whom the patient has initial contact and by whom the patient may be referred to a specialist. This definition includes family practice, pediatrics, internal medicine, and geriatrics, including by way of example only, the following taxonomy codes::
"Primary care services" or "primary care" means the provision of integrated, accessible health care services by primary care providers and their health care teams who are accountable for addressing a large majority of personal health care needs, developing a sustained partnership with patients, and practicing in the context of family and community. The care is person-centered, team-based, community-aligned, and designed to achieve better health, better care, and lower costs.
Primary care services include the following non-exhaustive list of categories of Current Procedure Terminology (CPT) codes, which is intended for guidance purposes only and is not intended to be an all-inclusive list of the types of services that may be included in the definition of "primary care services" or "primary care," when provided by primary care providers in a primary care place of service:
Primary care also includes services reimbursed via non-fee-for-service payments. Categories of non-fee-for-service payments are aligned with definitions developed for Delaware's Health Care Spending and Quality Benchmarks. The following categories of non-fee-for-service payments shall be included as primary care:
"Professional services" includes services categorized as such as part of development of the Unified Rate Review Template including primary care, dental, specialist, therapy, the professional component of laboratory and radiology, and similar services, other than the facility fee component of hospital-based services.
"Total cost of medical care" means the sum of all payments by carriers, including fee-for-service and non-fee-for-service payments, for medical services paid to healthcare providers on behalf of patients and excludes spending on pharmaceutical products categorized as "pharmacy" as part of development of the Unified Rate Review Template.
"Unified Rate Review Template" means a form that summarizes the data used to determine rate increases for the entire single risk pool. The form and instructions to support its completion are released each year by CMS' Center for Consumer Information and Insurance Oversight (CCIIO).
"Year" means the calendar year in which rates are filed with the Department and applicable to the following plan year.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-5.0 Coverage for Primary Care and Chronic Care Management Services
5.1 A carrier shall reimburse a contracted primary care provider, the provider's care teams and the provider's organizations for primary care and chronic care management services furnished to Delaware residents on a fee-for-service basis according to the following:
5.1.1 The reimbursement rate shall be greater than or equal to the non-facility Delaware Medicare fee schedule that is in effect at the time the service is billed and that can be found in the Medicare Physician Fee Schedule published online at CMS.gov; and
5.1.2 A carrier shall not use business rules or any other mechanism to discount a reimbursement rate such that the resulting payment would be less than the Medicare payment that would have been made had the Medicare rate been utilized.
5.2 A carrier shall reimburse a contracted primary care provider, the provider's care team, and organizations for primary care and chronic care management services provided to Delaware residents on a non-fee-for-service basis by offering the primary care provider the opportunity to participate in one or more of the following primary care incentive programs:
5.2.1 A program in which non-fee-for-service reimbursement is greater than or equal to primary care incentive programs offered by Medicare (including by way of example only, Comprehensive Primary Care Plus (CPC+) Track 1) adjusted for the age, gender, and health status of the population, as defined by the contract. A carrier that offers a program under subsection 5.2.1 of this regulation shall ensure that the total reimbursement available to a primary care provider, the provider's care teams and organizations, is greater than or equal to the total reimbursement that would be provided according to the methodology of such program, as adjusted for the age, gender, and health status of the population;
5.2.2 A primary care incentive program (including by way of example only, the Medicare Primary Care First Program or CPC+ Track 2) in which non-fee-for-service payments comprise a larger proportion of total provider reimbursement. A carrier that offers a program under subsection 5.2.2 of this regulation shall ensure that the total reimbursement made to a participating primary care provider, the provider's care teams and organizations, is greater than or equal to the total reimbursement that would be provided according to the methodology of such program, as adjusted for the age, gender and health status of the population, as defined by the contract;
5.2.3 A carrier-designed primary care incentive program that transitions a portion of fee-for-service payment to non-fee-for-service payment, provided that:
5.2.3.1 The total PCP reimbursement under the carrier-designed program is greater than or equal to what would be paid by Medicare, adjusted for age, gender, and health status; and
5.2.3.2 The carrier has applied for approval to use the program pursuant to subsection 5.2.4 of this regulation and the Department has granted its approval; or
5.2.4 Any other qualifying primary care incentive program as may be determined by the Department and communicated annually to carriers by annual notice.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-6.0 Primary Care Spending Requirements for Rate Filings
6.1 No carrier shall submit a rate filing for a health benefit plan to the Department for approval unless the rate filing reflects the following primary care spending minimums for the applicable plan year to which the rate filing pertains:
6.1.1 In 2022, at least 8.5 percent of the total cost of medical care will be expended on primary care during plan year 2023.
6.1.2 In 2023, at least 10 percent of the total cost of medical care will be expended on primary care during plan year 2024.
6.1.3 In 2024, at least 11.5 percent of the total cost of medical care will be expended on primary care during plan year 2025.
6.2 Each carrier rate filing shall include the following:
6.2.1 A report on primary care expenses using a template supplied by the Department. The report shall include prospective and retrospective data on eligible fee-for-service and non-fee-for-service payments as well as other information as required by the Department. A carrier may submit a request to the Department for a determination on whether an expense qualifies as a primary care expense for purposes of fulfilling the reporting requirements of subsection 6.2.1 of this regulation;
6.2.2 A written demonstration of the carrier's compliance with the primary care spending minimums set forth in subsection 6.1 of this regulation that is based on eligible fee-for-service and non-fee-for-service payments for Delaware residents who are attributed patients of contracted primary care providers, care teams and organizations participating in care transformation activities, and in accordance with the following:
6.2.2.1 In 2022 rate filings for the 2023 plan year, a carrier shall file a plan per instructions issued in an annual notice that describes how the carrier will make progress towards achieving 75 percent of Delaware primary care providers and care team members with attributed patients participating in eligible care transformation activities by 2026;
6.2.2.2 In 2023 and 2024, rate filings for plan years 2024 and 2025, respectively, a carrier shall include a report on progress toward achieving 75 percent of Delaware primary care providers and care team members with attributed patients participating in eligible care transformation activities by 2026. A carrier may submit a request to the Department for a determination on whether a care transformation activity meets the standards of programs in this subsection; and
6.2.2.3 Eligible activities under subsection 6.2.2 of this regulation include meeting the standards of:
6.2.2.3.1 A carrier primary care incentive program;
6.2.2.3.2 The Delaware Primary Care Model established by the Primary Care Reform Collaborative under the authority of 16 Del.C. §9903(a)(1);
6.2.2.3.3 The National Committee for Quality Assurance Patient-Centered Medical Home certification program as detailed at NCQA.org; or
6.2.2.3.4 Any other standards as may be added by the Department and communicated annually to carriers by annual notice.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-7.0 Price Growth Limits for Non-Professional Services
7.1 No carrier shall submit a rate filing for a health benefit plan that includes aggregate unit price growth for nonprofessional services that exceeds the following:
7.1.1 In 2022, the greater of 3 percent or Core CPI plus 1 percent;
7.1.2 In 2023, the greater of 2.5 percent or Core CPI plus 1 percent; and
7.1.3 In 2024, 2025, and 2026, the greater of 2 percent or Core CPI plus 1 percent.
7.2 Each carrier rate filing for a health benefit plan for each plan year shall be based on fee schedules and reimbursement structures that include increases that are no greater than the limits set forth in subsection 7.1 of this regulation.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-8.0 Alternative Payment Model Adoption
8.1 By 2023, each carrier rate filing for a health benefit plan shall reflect fee schedules and reimbursement structures for inpatient and outpatient hospital facility services delivered in Delaware that are based on a fixed payment, episode-based or population-based payment methodology (e.g., not a percent of charges), including, by way of example, but not limited to:
8.1.1 DRGs for inpatient hospital services; and
8.1.2 APCs for outpatient hospital services.
8.2 By 2023, each carrier's rate filing for a health benefit plan with more than 10,000 Delaware residents enrolled across all fully-insured products shall reflect 50 percent of total cost of care of those Delaware residents tied to an alternative payment model contract that qualifies as a Health Care Payment Learning and Action Network (HCP-LAN) Category 3 shared savings or shared savings with downside risk, with a minimum of 25 percent total cost of care of those Delaware residents covered by an alternative payment model contract that qualifies as HCP-LAN Category 3B, which includes only contracts with downside risk, and in accordance with the following:
8.2.1 For a program to qualify as HCP-LAN Category 3A in 2023 and 2024, the program must offer provider organizations the ability to receive shared savings at a minimum split of 30 percent to the accountable care organizations and 70 percent to the carrier. For a program to qualify as HCP-LAN Category 3A in 2025, it must offer provider organizations the ability to receive shared savings at a minimum split of 40 percent to the accountable care organizations and 60 percent to the carrier;
8.2.2 For a program to qualify as HCP-LAN Category 3B in 2023 and 2024, the program must require accountable care organizations to be responsible for at least 30 percent of losses, or 15 percent of losses if the accountable care organization would be considered low revenue by CMS. For a program to qualify as HCP-LAN Category 3B in 2025, it must require accountable care organizations to be responsible for at least 40 percent of losses, or 20 percent of losses if the accountable care organization would be considered low revenue by CMS; and
8.2.3 Program design elements regarding risk corridors (i.e., minimum shared savings rate and minimum loss rate) and loss sharing limits shall be consistent with the MSSP Pathways model. A carrier may submit a request to the Department for a determination on whether a program design element is consistent with the MSSP Pathways.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-9.0 Enforcement
9.1 The Department shall monitor carrier compliance with the requirements of this regulation through an annual review of any or all of the following:
9.1.1 Carrier-specific and Medicare fee-for-service data from the DHIN HCCD;
9.1.2 Carrier-submitted templates that report information such as: fee-for-service payments, non-fee-for-service payments, and primary care incentive programs, requirements, numbers of participating providers, performance metrics, price, utilization and total cost trends and other information, as required in this regulation and as identified in annual notices. Carriers shall use templates supplied by the department to provide prospective and retrospective information to confirm carrier requirements were met; and
9.1.3 As necessary, a market conduct exam of a carrier that may include a review of carrier contracts with healthcare providers and additional information as necessary. Any market conduct exam pursuant to this regulation shall be conducted in accordance with the provisions of 18 Del.C. §§318-321.
9.2 The Department may report on carrier compliance with this regulation by carrier and by market segment.
9.3 The Commissioner may deem carriers as non-compliant for failure to:
9.3.1 Submit a rate filing that conforms to the requirements of this regulation;
9.3.2 Timely remediate filing deficiencies; or
9.3.3 Achieve any of the requirements of this regulation and as approved in annual rate filings.
9.4 The Commissioner may elect to take one or more of the following actions for non-compliant carriers:
9.4.1 Return a rate filing to the carrier for amendments and correction of deficiencies;
9.4.2 Require the carrier to submit a corrective action plan;
9.4.3 Create carrier-specific, ongoing, additional reporting and monitoring requirements starting immediately and continuing through the following two plan years; and
9.4.4 Impose administrative penalties, after notice and hearing as specified in 18 Del.C. Chapter 3 including but not limited to:
9.4.4.1 Daily fines of up to $10,000 per day for failure to submit initial, revised or final filing documents per established timelines or department instructions; and
9.4.4.2 Fines equal to each plan year's value of the deficiency in reimbursement, payment and cost growth limits as set forth in Section 9.0 of this regulation.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
18 Del. Admin. Code § 1322-10.0 Effective Date of Regulation
This regulation shall become effective on May 11, 2022.
History
- 26 DE Reg. 116 (08/01/22)
- 25 DE Reg. 1028 (05/01/22)
- 26 DE Reg. 116 (08/01/22)
1400 Health Insurance Specific Provisions
1401 Medical Malpractice Review Panel Rules [Formerly Regulation 20] (repealed)
18 Del. Admin. Code § 1401 Medical Malpractice Review Panel Rules [Formerly Regulation 20] (repealed)
This regulation was repealed, effective May 11, 2025.
History
- 28 DE Reg. 813 (05/01/25)
1402 Dental Plan Organization [Formerly Regulation 39]
18 Del. Admin. Code § 1402 Dental Plan Organization [Formerly Regulation 39]
1402 Dental Plan Organization [Formerly Regulation 39]
*See also Interim Regulation No. 39-S1, page 2384 (Interim Regulation 39-S1)
1.0 Authority
This regulation has been adopted and promulgated in accordance with 18 Del.C. §314 which provides authority for the Commissioner to establish reasonable rules and regulations for the implementation of any provisions of the Delaware Insurance Code; 18 Del.C. Ch. 38 (Dental Plan Organization Act) which establishes the authority for operation of licensed dental plans in Delaware and contains the criteria for licensing and regulation; and 29 Del.C. Ch. 101 (Administrative Procedures Act) which establishes the procedure for adopting a regulation.
2.0 Purpose
The purpose of this regulation is to disseminate the criteria for licensing a dental plan as established by 18 Del.C. Ch. 38 and to establish the procedure for obtaining and maintaining a certificate of authority. At present no dental plans are licensed in Delaware although the cited statute requires registration on or before November 24, 1981.
3.0 Definitions
3.1 Definitions as used in 18 Del.C. §3802:
"Dental plan" means any contractual arrangement for dental services provided directly or arranged for or administered directly on a prepaid or postpaid individual or group capitation basis;
"Dental plan organization" means any person who undertakes to provide directly or to arrange for or administer one or more dental plans providing dental services;
"Dental services" means services included in the practice of dentistry as defined in 24 Del.C. §1121;
"Enrollee" means an individual and his dependents who are enrolled in a dental plan organization; and
"Evidence of coverage" means any certificate, agreement or contract issued to an enrollee setting out the dental services to which the enrollee is entitled.
4.0 Exclusion
This regulation shall not apply to a health service corporation or an insurer authorized to transact business under a certificate of authority issued by the Commissioner when such health service corporation or insurer operates a dental plan or a dental organization. Any subsidiary or any other entity established by a health service corporation or an insurer meeting the aforementioned requirement which does not possess a certificate of authority and which operates a dental plan or dental plan organization shall obtain a certificate of authority pursuant to this regulation.
5.0 Application procedure
5.1 Applicants for a certificate of authority as a dental plan organization shall, within 90 days of the effective date of this regulation, submit a letter of request to the Commissioner as described in 18 Del.C. §3803.
5.2 The letter to the Commissioner requesting a certificate of authority to operate a dental service plan in Delaware shall include section 5.2.1 to 5.2.10 as listed below. The request shall be signed by an officer of the corporation, by a partner or the sole proprietor as applicable and be accompanied by:
5.2.1 Registration fee of $100.00;
5.2.2 Articles of incorporation, partnership agreement or applicable documents;
5.2.3 Corporate by-laws or other documents describing the procedure for internal control and operation of the business entity;
5.2.4 Name, address, title or nature of affiliation of each member of the board of directors, officers partners or sole proprietors involved in the direct operation of the dental service plan;
5.2.5 A synopsis of the dental plan organization including an outline of the contract for services provided consumers, the physical plant; an outline of the contract between the plan and servicing dentists, administrative staff and procedures, areas to be served, primary market target, recruiting and training of administrative staff. This synopsis shall contain sufficient details of the proposed dental service to allow the Commissioner to determine that the proposal will, if approved, provide for adequate care and be reasonably available to the consumer;
5.2.6 A financial projection covering three years (one year for currently operating plans) reviewing initial source of capital, projected operating results;
5.2.7 A current financial report certified by an independent CPA;
5.2.8 Copies of proposed contracts between dental plan and employer, union or other groups; between dental plan and individuals, if individual service is contemplated; between dental plan and dental practitioners; between plan and any service facility or administrator;
5.2.9 A certificate by the chief executive officer that the bond and malpractice coverage required by 18 Del.C. §§3806, 3807 has been provided. Each dentist shall have, as a minimum, $50,000 professional liability/medical malpractice insurance. Each officer, director or partner who receives, collects or invests money on behalf of the dental plan shall be bonded in the amount of $50,000; and
5.2.10 A biographical affidavit of each corporate officer, member of the board of directors, partner or sole proprietor.
6.0 Effective Date
This regulation shall become effective on December 1, 1982.
Editorial Note: Interim Regulation No. 39-81 which supplements the procedures established by Regulation No. 39, follows.
Interim Regulation 1402 (Formerly Interim Regulation 39-81) Dental Plan Organizations
1.0 Authority
This regulation is adopted on an interim basis in accordance with 29 Del.C. §§10111 et seq. which provides authority for the Commissioner to establish rules and regulations for implementation of any provisions of the Delaware Insurance Code; and 18 Del.C. Ch. 38 (as amended by H. B. 102) which requires that the Commissioner establish interim rules and regulations to apply to all new dental plans and to all existing dental plans.
2.0 Purpose
The purpose of this interim regulation is to supplement the procedures established by Regulation 1402 (Formerly Regulation 39) "Dental Plan Organizations" to include provisions for alternative dental plans for certain dental service consumers, pending adoption of a revised Regulation 1402 (Formerly Regulation 39).
3.0 Definitions
3.1 As used in this interim regulation:
"Alternative Dental Plan" means a dental insurance plan or policy which is traditional insurance or an open panel HMO, and which provides for payment or contribution to an employee's or member's costs for dental services in lieu of a closed-panel HMO-type dental plan;
"Covered Persons" means employees and organization members and their dependents eligible for participation in a dental plan organization;
"Dental Plan Organization" means any person who undertakes to provide directly or to arrange for or administer one or more dental plans providing dental services.
"Employer" means any person, corporation, or entity which employs 25 or more persons and which contributes to an HMO-type dental plan for those employees and employees' eligible dependents;
"HMO-Type Dental Plan" means any contractual arrangements for dental services which requires utilization of a single dentist or closed panel of dentists;
"Organization" means any profit or not for profit group or voluntary association with at least 25 members which contributes to an HMO-type dental plan for its members and its members' eligible dependents;
4.0 Compliance With Existing Law
To the extent not superseded or modified by this interim regulation, dental plan organizations shall continue to be governed by Regulation 1402 (Formerly Regulation 39).
5.0 Requirements; Notice Of Availability Of Alternative Dental Plan Coverage
5.1 All employers and organizations shall offer their employees, and eligible dependents' and members and members' eligible dependents at the time an HMO-type dental plan is offered or renewed, an alternative plan which permits covered persons to obtain dental services from any licensed dentist. Each employer shall pay or contribute toward the provision of an alternative dental plan an amount equal to the premium or cost which it pays or contributes to the HMO-type dental plan contract.
5.2 Each employer or organization covered by this interim regulation, after the effective date of this regulation and at least 30 days prior to the offer or renewal of a dental plan, shall notify their employees or members of their right to select alternative dental plan coverage. This notice shall be in substantially the following form:
5.3 "Legislation adopted by the General Assembly of the State of Delaware requires that all employers and organizations providing an HMO-type dental plan for their employees or members which restricts the choice of dentists also must offer an alternative plan which allows participants to choose the dentist of their choice. An employer or organization must contribute to the alternative dental plan an amount equal to the contribution to the HMO-type dental plan.
5.4 Please contact [insert name of proper department or person] if you want to learn more about the alternative dental plan coverage."
6.0 Minimum Standards Of Alternative Dental Plans
An employer or other organization shall pay or contribute to an alternative dental plan for an employee, employee's eligible dependent, member, or member's eligible dependent an amount equal to the premium or cost which it pays or contributes to the HMO-type dental plan organization. The alternative dental plan must allow a covered person to choose any licensed dentist for their dental care.
7.0 Violation
Any violation of this section shall be initiated by a complaint from an employee or member who is a covered person under this regulation. Upon the finding of a violation, the Insurance Commissioner shall ask the Attorney General's office to enjoin said violation of this section.
8.0 Effective date
This interim regulation call become effective 30 days after the signature of the Commissioner. (Signed by the Commissioner December 31, 1987.)
1403 Managed Care Organizations
18 Del. Admin. Code § 1403 Managed Care Organizations
1403 Managed Care Organizations
1.0 Purpose and Statutory Authority
1.1 The purpose of this Regulation is to implement 18 Del.C. Ch. 64, as amended effective July 6, 2006, which transferred regulatory authority over Managed Care Organizations from the Department of Health and Social Services to the Department of Insurance. This Regulation is promulgated pursuant to 18 Del.C. §6408 and 29 Del.C. Ch. 101.
2.0 Definitions
The following words and terms, when used in this regulation, should have the following meaning unless the context clearly indicates otherwise:
“Adverse determination” means a decision by an MCO to deny (in whole or in part), reduce, limit or terminate benefits under a health care contract.
“Appeal” means a request for external review of an MCO’s determination resulting in a denial, termination or other limitations of covered health services based on medical necessity or appropriateness of services
“Appropriateness of services” means an appeal classification for adverse determinations that are made based on identification of treatment as cosmetic, investigational, experimental or not an appropriate or preferred treatment method or setting for the condition for which treatment is sought.
“Balance billing” means a health care provider’s demand that a patient pay a greater amount for a given service than the amount the individual’s insurer, managed care organization, or health service corporation has paid or will pay for the service.
“Basic Health Services” means a range of health care services, including at least the following:
A. Physician services, including consultant and referral services, by a physician licensed by the State of Delaware;
B. At least 365 days of inpatient hospital services;
C. Medically necessary emergency health services;
D. Diagnostic laboratory services;
E. Diagnostic and therapeutic radiological services;
F. Preventive health services; and
G. Emergency out-of-area and out-of-network coverage.
“Carrier” means any entity that provides health insurance in this State. Carrier includes an insurance company, health service corporation, managed care organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. Carrier also includes any third-party administrator or other entity that adjusts, administers or settles claims in connection with health insurance.
“Certificate of Authority” means the authorization by the Department to operate the MCO. This certificate shall be deemed to be a license to operate such an organization.
“Chief Executive Officer” means the individual employed to manage and direct the activities of the MCO.
“Covered health services” means services that are included in the enrollee’s health care contract with the carrier.
“Covered Person”: see “Enrollee.”
“Department” means the Delaware Department of Insurance.
“Emergency care” means health care items or services furnished or required to evaluate or treat an emergency medical condition.
“Emergency medical condition” means a medical or behavioral condition, the onset of which is sudden, that manifests itself by symptoms of sufficient severity including, but not limited to, severe pain, that a prudent layperson, possessing an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in:
A. Placing the health of the individual afflicted with such condition (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy, or in the case of a behavioral condition, placing the health of such person or others in serious jeopardy;
B. Serious impairment to bodily functions;
C. Serious impairment or dysfunction of any bodily organ or part; or
D. Serious disfigurement of such person.
“Enrollee” means an individual and/or family who has entered into a contractual arrangement, or on whose behalf a contractual arrangement has been entered into with the MCO, under which the MCO assumes the responsibility to provide to such person(s) coverage for basic health services and such supplemental health services as are enumerated in the health care contract.
“Geographically accessible” means a location no greater than 30 miles or 40 minutes driving time from 90% of enrollees within MCO’s geographic service area.
“Geographic service area” means the stated primary geographical area served by an MCO. The primary area served shall be a radius of not more than 20 miles or more than 30 minutes driving time from a primary care office operated or contracted by the MCO.
“Grievance” means a request by an enrollee that an MCO review an adverse determination by means of the MCO’s internal review process.
“Health care contract” means any agreement between an MCO and an enrollee or group plan which sets forth the services to be supplied to the enrollee in exchange for payments made by the enrollee or group plan.
“Health care professional” means an individual engaged in the delivery of health care services as licensed or certified by the State of Delaware.
“Health care services” means any services included in the furnishing to any individual of medical or dental care, or hospitalization or incidental to the furnishing of such care or hospitalization, as well as the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing or healing human illness, injury or physical disability.
“Independent Health Care Appeals Program” means a program administered by the Department which provides for a review by an Independent Utilization Review Organization.
“Independent Utilization Review Organization (IURO)” means an entity that conducts independent external reviews of a carrier’s determinations resulting in a denial, termination, or other limitation of covered health care services based on medical necessity or appropriateness of services.
“Intermediary” means a person authorized to negotiate and execute provider contracts with MCOs on behalf of health care providers or on behalf of a network.
“Internal review process” means a procedure established by an MCO for internal review of an adverse determination.
“Level 1 trauma center” means a regional resource trauma center that has the capability of providing leadership and comprehensive, definitive care for every aspect of injury from prevention through rehabilitation.
“Level 2 trauma center” means a regional trauma center with the capability to provide initial care for all trauma patients. Most patients would continue to be cared for in this center; there may be some complex cases which would require transfer for the depth of services of a regional Level 1 or specialty center.
“Managed Care Organization (MCO)” means a public or private organization, organized under the laws of any state, which:
A. Provides or otherwise makes available to enrollees health care services, including at least the basic health services defined in this section;
B. Is primarily compensated (except for co-payment) for the provision of basic health services to enrollee on a predetermined periodic rate basis; and
C. Provides physician services.
An MCO may also arrange for health care services on a prepayment or other financial basis.
“Medical necessity” means providing of covered health services or products that a prudent physician would provide to a patient for the purpose of diagnosing, or treating an illness, injury, disease or its symptoms in a manner that is:
A. In accordance with generally accepted standards of medical practice;
B. Consistent with the symptoms or treatment of the condition; and
C. Not solely for anyone’s convenience.
“Network” means the participating providers delivering services to enrollees.
“Office” means any facility where enrollees receive primary care or other health care services.
“Out of area coverage” means health care services provided outside the MCO’s geographic service areas with appropriate limitations and guidelines acceptable to the Department. At a minimum, such coverage must include emergency care.
“Participating provider” means a provider who, under a contract with the MCO or with its contractor or sub contractor, has agreed to provide health care services to enrollees with an expectation of receiving payment, other than coinsurance, co-payments or deductibles, directly or indirectly from the MCO.
“Premium” means payment(s) called for in the health care contract which must be:
A. Paid or arranged for by, or on behalf of, the enrollee before health care services are rendered by the MCO;
B. Paid on a periodic basis without regard to the date on which health care services are rendered; and
C. With respect to an individual enrollee, are fixed without regard to frequency, extent or cost of health services actually furnished.
“Primary care physician (PCP)” means a participating physician chosen by the enrollee and designated by the MCO to supervise, coordinate, or provide initial care or continuing care to an enrollee, and who may be required by the MCO to initiate a referral for specialty care and maintain supervision of health care services rendered to the enrollee.
“Provider” means a health care professional or facility.
“Staff Model MCO” means an MCO in which physicians are employed directly by the MCO or in which the MCO directly operates facilities which provide health care services to enrollees.
“Tertiary services” means health care services provided for the intensive treatment of critically ill patients who require extraordinary care on a concentrated basis in special diagnostic categories (e.g., burns, cardiovascular, neonatal, pediatric, oncology, transplants, etc.).
“Utilization review” means a set of formal techniques designed to monitor the use of, or evaluate the clinical necessity, efficacy, and/or efficiency of, health care services, procedures or settings. Techniques may include ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, or retrospective review.
3.0 Certificate of Authority
3.1 Each application for a Certificate of Authority as a Managed Care Organization shall be made on Form No. H-1 entitled "Application for Certificate of Authority as a Managed Care Organization" (Exhibit A to this regulation). The application shall be accompanied by the following:
3.1.1 The information specified in 18 Del.C. §6404(a);
3.1.2 Evidence of accreditation by a nationally-recognized managed care accrediting organization such as the National Committee for Quality Assurance (NCQA), the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), or similar organization;
3.1.3 For Staff Model MCOs, evidence that the MCO satisfies the physical plant requirements of a hospital as specified by the Delaware Department of Health and Social Services;
3.1.4 Copies of management, agency or administrative contracts;
3.1.5 Equifax Reports on Officers/Directors; and/or NAIC biographical or other similar biographical forms, as directed by the Department;
3.1.6 Proof of $50,000 bond for each officer, director, partner, or other individual who receives, collects or invests money;
3.1.7 “Admittance Questionnaire for Certificate of Authority for Managed Care Organization,” Form No. H-2 (Exhibit B to this regulation);
3.1.8 “Designation of official authorized to appoint and remove agents,” Form No. H-3 (Exhibit C to this regulation);
3.1.9 “Designation of person to receive bulletins, regulations, etc.,” Form No. H-4 (Exhibit D to this regulation);
3.1.10 “Designation of person to receive service of process,” Form No. H-5 (Exhibit E to this regulation);
3.1.11 “Biographical Affidavit of Officers and Directors” (Exhibit F to this regulation); and
3.1.12 “Power of Attorney Form” (Exhibit G to this regulation).
3.2 Each application for a Certificate of Authority as a Managed Care Organization shall be accompanied by a $750 filing fee in accordance with 18 Del.C. §6409.
3.3 Each application for a Certificate of Authority as a Managed Care Organization shall be accompanied by a deposit of $100,000 in accordance with 18 Del.C. §513(f).
3.4 All of the items and information specified in the foregoing sections 3.1 through 3.3 must be submitted in order for the Department to review an application for a Certificate of Authority.
3.5 Denial of Application for Certificate of Authority
3.5.1 If, within 60 days after a complete application for a Certificate of Authority has been filed, the Department has not issued such certificate, the Department shall immediately notify the applicant, in writing, of the reasons why such certificate has not been issued, and the applicant shall be entitled to request a hearing on the application.
3.5.2 The hearing shall be held within 60 days of the Department’s receipt of the applicant’s written request therefor. Proceedings in regard to such hearing shall be conducted in accordance with provisions for case decisions as set forth in the Administrative Procedures Act, Chapter 101 of Title 29, and in accordance with applicable rules and regulations of the Department.
4.0 Capital Funds Required
4.1 Each MCO that obtains a Certificate of Authority shall have and maintain unimpaired capital stock or unimpaired basic surplus of at least $300,000 and free surplus of at least $150,000 or the minimum capital and free surplus as may be required by legislative changes adopted by the General Assembly from time to time. These capital and surplus requirements are in addition to the deposit requirements of 18 Del.C. §513(f).
4.2 Each MCO that obtains a Certificate of Authority shall demonstrate that it has provider contracts which require that the provider agrees in the event of non-payment by the MCO that the provider will not seek compensation or have any recourse against an enrollee, as described in section 7.0 of this regulation. In the event that the MCO has not entered into such agreements with all providers, the MCO must demonstrate to the Department's satisfaction that it has made a good faith effort to enter into these agreements. In lieu of these executed provider agreements, the Department, at its discretion, may allow the MCO to engage in the business of a managed care organization if the MCO establishes reserves equal to 25% of the total projected annual incurred claims or benefits payments attributable to the provider which or who has not agreed to enter into a provider agreement.
4.3 Annually, at the time of filing the annual report on June 1, each MCO which has a current Certificate of Authority shall demonstrate that it is in compliance with the requirements of Sections 4.1 and 4.2 of this regulation.
5.0 Reinsurance Requirement
5.1 Each MCO shall secure insurance reinsurance protection to provide to the MCO in the event of catastrophic or unusual losses which would be in excess of the levels of loss which the MCO assumes in the basis of its calculation of premium charges.
6.0 Special Requirement in the Event of Financial Impairment/Insolvency
6.1 In the event of the financial impairment or insolvency of an MCO doing business in this State, each MCO doing business in this State shall permit a 60-day "open enrollment" period for existing enrollees of the impaired/insolvent MCO to enroll in a solvent MCO.
6.2 Each such solvent licensed MCO shall be required to accept within the "open enrollment" period any enrollee who wishes to enroll at the rates or costs and benefits which are then in effect at the chosen MCO for the class or grouping represented by the enrollee.
6.3 Each such solvent licensed MCO shall accept such enrollee without any waiting periods or pre-existing conditions exclusions and such acceptance both as to premium as well as delivery of service shall be retroactive to the date on which a court of competent jurisdiction has declared the predecessor MCO financially impaired.
7.0 Required Contractual Provisions
7.1 Every contract between an MCO and a participating provider shall contain the following language:
7.1.1 “Provider agrees that in no event, including but not limited to nonpayment by the MCO or intermediary, insolvency of the MCO or intermediary, or breach of this agreement, shall the provider bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against an enrollee or a person (other than the MCO or intermediary) acting on behalf of the enrollee for services provided pursuant to this agreement. This agreement does not prohibit the provider from collecting coinsurance, deductibles or co-payments, as specifically provided in the evidence of coverage, or fees for uncovered services delivered on a fee-for-service basis to enrollees.”
7.1.2 “In the event of an MCO or intermediary insolvency or other cessation of operations, covered services to enrollees will continue through the period for which a premium has been paid to the MCO on behalf of the enrollee or until the enrollee’s discharge from an inpatient facility, whichever time is greater. Covered benefits to enrollees confined in an inpatient facility on the date of insolvency or other cessation of operations will continue until their continued confinement in an inpatient facility is no longer medically necessary.”
7.2 The contract provisions that satisfy the requirements of Section 7.1 above shall be construed in favor of the enrollee, shall survive the termination of the contract regardless of the reason for termination, including the insolvency of the MCO, and shall supersede any oral or written contrary agreement between a participating provider and an enrollee or the representative of an enrollee if the contrary agreement is inconsistent with the hold harmless and continuation of covered services provisions required by Section 7.1 above.
7.3 A contract between an MCO and a participating provider shall not contain definitions or other provisions that conflict with the definitions or provisions contained in this regulation.
8.0 Enrollee Rights and Responsibilities
8.1 The MCO shall establish and implement written policies and procedures regarding the rights of enrollees and the implementation of these rights.
8.2 The MCO shall disclose to each new enrollee, and any enrollee upon request, in a format and language understandable to a layperson, the following minimum information:
8.2.1 Benefits covered and exclusions or limitations, including restrictions related to preexisting conditions;
8.2.2 Out-of-pocket costs to the enrollee;
8.2.3 Lists of participating providers;
8.2.4 Policies on the use of primary care physicians, referrals, use of out of network providers, and out of area services;
8.2.5 Policies governing the provision of emergency and urgent care;
8.2.6 Written explanation of the internal and external review processes;
8.2.7 For staff model MCOs, the location and hours of its inpatient and outpatient health services;
8.2.8 A statement of enrollee’s rights that includes at least the right:
8.2.8.1 To available and accessible services when medically necessary, including availability of care 24 hours a day, seven days a week for urgent or emergency conditions;
8.2.8.2 To be treated with courtesy and consideration, and with respect for the enrollee’s dignity and need for privacy;
8.2.8.3 To be provided with information concerning the MCO’s policies and procedures regarding products, services, providers, grievance procedures and other information about the organization and the care provided;
8.2.8.4 To choose a primary care provider within the limits of the covered benefits and plan network, including the right to refuse care of specific practitioners;
8.2.8.5 To receive from the enrollee’s physician(s) or provider, in terms that the enrollee understands, an explanation of his complete medical condition, recommended treatment, risk(s) of the treatment, expected results and reasonable medical alternatives. If the enrollee is not capable of understanding the information, the explanation shall be provided to his next of kin or guardian and documented in the enrollee’s medical record;
8.2.8.6 To formulate advance directives;
8.2.8.7 To all the rights afforded by law or regulation as a patient in a licensed health care facility, including the right to refuse medication and treatment after possible consequences of this decision have been explained in language the enrollee understands;
8.2.8.8 To prompt notification of termination or changes in benefits, services or provider network;
8.2.8.9 To file a grievance with the MCO and to receive a response to the grievance within a reasonable period of time; and
8.2.8.10 To file a petition for arbitration or appeal for review by an Independent Utilization Review Organization, as appropriate.
8.2.9 A complete statement of responsibilities of enrollees.
8.3 In the case of nonpayment by the MCO to a participating provider for a covered service in accordance with the enrollee’s health care contract, the provider may not bill the enrollee. This does not prohibit the provider from collecting coinsurance, deductibles or co-payments as determined by the MCO. This does not prohibit the provider and enrollee from agreeing to continue services solely at the expense of the enrollee, as long as the provider clearly informs the enrollee that the MCO will not cover these services.
9.0 Provider Relations
9.1 An MCO shall establish a mechanism by which participating providers will be notified on an ongoing basis of the specific covered health services for which the provider will be responsible, including any limitations or conditions on services.
9.2 An MCO shall establish procedures for resolution of administrative, payment or other disputes between providers and the MCO.
9.3 The MCO shall establish a policy governing termination of providers. The policy shall include at least:
9.3.1 Written notification to each enrollee six weeks prior to the termination or withdrawal from the MCO’s provider network of an enrollee’s primary care physician except in cases where termination was due to unsafe health care practices; and
9.3.2 Except in cases where termination was due to unsafe health care practices that compromise the health or safety of enrollees, assurance of continued coverage of services at the contract price by a terminated provider for up to 120 calendar days after notification of termination in cases where it is medically necessary for the enrollee to continue treatment with the terminated provider. In cases of the pregnancy of an enrollee, medical necessity shall be deemed to have been demonstrated and coverage shall continue to completion of postpartum care.
10.0 Prohibited Practices
10.1 An MCO shall not offer incentives to a participating provider to provide less than medically necessary services to an enrollee.
10.2 An MCO shall not penalize a participating provider because the provider, in good faith, reports to State authorities any act or practice by the MCO that jeopardizes patient health or welfare.
10.3 An MCO shall not engage in any other practices prohibited by applicable provisions of Title 18 of the Delaware Code and regulations promulgated thereunder.
11.0 Quality Assurance and Operations
11.1 Medical Director’s Duties. The medical director shall be responsible for the direction, provision and quality of health care services provided to enrollees, including but not limited to the following:
11.1.1 Establishing policies and procedures covering all health care services provided to enrollees;
11.1.2 Coordinating, supervising and overseeing the functioning of professional services;
11.1.3 Providing clinical direction and leadership to the continuous quality improvement and utilization management programs;
11.1.4 Providing clinical direction to physicians responsible for utilization management determinations;
11.1.5 Establishing a committee responsible for delineating qualifications of participating providers and reviewing and verifying credentials of participating providers;
11.1.6 Evaluating the medical aspects of provider contracts; and
11.1.7 Overseeing the continuing in-service education of professional staff.
11.2 Health Care Professional Credentialing
11.2.1 General Responsibilities. An MCO shall:
11.2.1.1 Establish written policies and procedures for credentialing verification of all health care professionals with whom the MCO contracts and apply these standards consistently;
11.2.1.2 Verify the credentials of a health care professional before entering into a contract with that health care professional;
11.2.1.3 Make available for review by the applying health care professional upon written request all application and credentialing verification policies and procedures;
11.2.1.4 Retain all records and documents relating to a health care professional’s credentialing verification process for not less than four years; and
11.2.1.5 Keep confidential all information obtained in the credentialing verification process, except as otherwise provided by law.
11.2.2 Selection standards for participating providers shall be developed for primary care professionals and each health care professional discipline. The standards shall be used in determining the selection of health care professionals by the MCO, its intermediaries and any provider networks with which it contracts. Selection criteria shall not be established in a manner:
11.2.2.1 That would allow an MCO to avoid high-risk populations by excluding providers because they are located in geographic areas that contain populations or providers presenting a risk of higher than average claims, losses or health services utilization; or
11.2.2.2 That would exclude providers because they treat or specialize in treating populations presenting a risk of higher than average claims, losses or health services utilization.
11.2.3 Nothing in these regulations shall be construed to require an MCO to select a provider as a participating provider solely because the provider meets the MCO’s credentialing verification standards, or to prevent the MCO from utilizing separate or additional criteria in selecting the health care professionals with whom it contracts.
11.2.4 Verification Responsibilities. An MCO shall:
11.2.4.1 Obtain primary verification of at least the following information about the applicant:
11.2.4.1.1 current license, certification, or registration to render health care in Delaware and history of same;
11.2.4.1.2 current level of professional liability coverage, if applicable;
11.2.4.1.3 status of hospital privileges, if applicable;
11.2.4.1.4 specialty board certification status, if applicable; and
11.2.4.1.5 current Drug Enforcement Agency (DEA) registration certificate, if applicable.
11.2.4.2 Obtain, subject to either primary or secondary verification:
11.2.4.2.1 the health care professional’s record from the National Practitioner Data Bank; and
11.2.4.2.2 the health care professional’s malpractice history.
11.2.4.3 Not less than every three years obtain primary verification of a participating health care professional’s:
11.2.4.3.1 current license or certification to render health care in Delaware;
11.2.4.3.2 current level of professional liability coverage, if applicable;
11.2.4.3.3 status of hospital privileges, if applicable;
11.2.4.3.4 current DEA registration certificate, if applicable; and
11.2.4.3.5 specialty board certification status, if applicable.
11.2.4.4 Require all participating providers to notify the MCO of changes in the status of any of the items listed in this section 11.2.4 at any time and identify for participating providers the individual to whom they should report changes in the status of an item listed in this section 11.2.4.
11.2.5 Health Care Professional’s Right to Review Credentialing Verification Information. An MCO shall provide a health care professional the opportunity to review and correct information submitted in support of that health care professional’s credentialing verification application.
11.3 Provider Network Adequacy
11.3.1 Primary, Specialty and Ancillary Providers
11.3.1.1 The MCO shall maintain an adequate network of primary care providers, specialists, and other ancillary health care resources to serve enrollees at all times.
11.3.1.2 If a plan has an insufficient number of providers that are geographically accessible and available within a reasonable period of time to provide covered health services to enrollees, the MCO shall cover non-network providers, and shall prohibit balance billing.
11.3.1.3 The MCO shall allow referral to a non-network provider, upon the request of a network provider, when medically necessary covered health services are not available through network providers, or the network providers are not available within a reasonable period of time. The MCO shall make acceptable service arrangements with the provider and enrollee, and shall prohibit balance billing.
11.3.2 Facility and Ancillary Health Care Services
11.3.2.1 The MCO shall maintain contracts or other arrangements acceptable to the Department with institutional providers which have the capability to provide covered health services to enrollees and are geographically accessible.
11.3.2.2 The MCO shall make acceptable service arrangements with the provider and enrollee, and shall prohibit balance billing, if the appropriate level of service is not geographically accessible. These services will not be limited to the State of Delaware. These services could include but are not limited to tertiary services, burn units and transplant services.
11.3.3 Emergency and Urgent Care Services
11.3.3.1 The MCO shall establish written policies and procedures governing the provision of emergency and urgent care which shall be distributed to each enrollee at the time of initial enrollment and after any revisions are made. These policies shall be easily understood by a layperson.
11.3.3.2 When emergency care services are performed by non-network providers, the MCO shall make acceptable service arrangements with the provider and enrollee, and shall prohibit balance billing. In those cases where the MCO and the provider cannot agree upon the appropriate charge, the provider may petition the Department for arbitration.
11.3.3.3 Enrollees shall have access to emergency care 24 hours per day, seven days per week. The MCO shall cover emergency care necessary to screen and stabilize an enrollee and shall not require prior authorization of such services if a prudent lay person acting reasonably would have believed that an emergency medical condition existed.
11.3.3.4 Emergency and urgent care services shall include but are not limited to:
11.3.3.4.1 medical and psychiatric care, which shall be available 24 hours a day, seven days a week;
11.3.3.4.2 trauma services at any designated Level I or II trauma center as medically necessary. Such coverage shall continue at least until the enrollee is medically stable, no longer requires critical care, and can be safely transferred to another facility, in the judgment of the treating physician. If the MCO requests transfer to a hospital participating in the MCO network, the patient must be stabilized and the transfer effected in accordance with federal regulations at 42 CFR 489.20 and 42 CFR 489.24;
11.3.3.4.3 out of area health care for urgent or emergency conditions where the enrollee cannot reasonably access in-network services;
11.3.3.4.4 hospital services for emergency care; and
11.3.3.4.5 upon arrival in a hospital, a medical screening examination, as required under federal law, as necessary to determine whether an emergency medical condition exists.
11.3.3.5 When an enrollee has received emergency care from a non-network provider and is stabilized, the enrollee or the provider must request approval from the MCO for continued post-stabilization care by a non-network provider. The MCO is required to approve or disapprove coverage of post-stabilization care as requested by a treating physician or provider within the time appropriate to the circumstances relating to the delivery of services and the condition of the enrollee, but in no case to exceed one hour from the time of the request.
11.3.4 The MCO shall submit evidence of network adequacy to the Department upon request. If the Department receives a complaint regarding an MCO’s network adequacy, the burden shall be on the MCO to prove network adequacy to the satisfaction of the Department.
11.4 Utilization Management
11.4.1 The MCO shall establish and implement a comprehensive utilization management program to monitor access to and appropriate utilization of health care and services. The program shall be under the direction of a designated physician and shall be based on a written plan that is reviewed at least annually.
11.4.2 Utilization management determinations shall be based on written clinical criteria and protocols reviewed and approved by practicing physicians and other licensed health care providers within the network. These criteria and protocols shall be periodically reviewed and updated, and shall, with the exception of internal or proprietary quantitative thresholds for utilization management, be readily available, upon request, to affected providers and enrollees.
11.4.3 All materials including internal or proprietary materials for utilization management shall be available to the Department upon request.
11.4.4 Compensation to persons providing utilization review services for an MCO shall not contain incentives, direct or indirect, for these persons to make inappropriate review decisions. Compensation to any such persons may not be based, directly or indirectly, on the quantity or type of adverse determinations rendered.
11.4.5 Utilization Management Staff Availability
11.4.5.1 At a minimum, appropriately qualified staff shall be immediately available by telephone, during routine provider work hours, to render utilization management determinations for providers.
11.4.5.2 The MCO shall provide enrollees with a toll free telephone number by which to contact customer service staff on at least a five day, 40 hours a week basis.
11.4.5.3 The MCO shall supply providers with a toll free telephone number by which to contact utilization management staff on at least a five day, 40 hours a week basis.
11.4.5.4 The MCO must have policies and procedures addressing response to inquiries concerning emergency or urgent care when a PCP or his authorized on call back up provider is unavailable.
11.4.6 Utilization Management Determinations
11.4.6.1 All determinations to authorize services shall be rendered by appropriately qualified staff.
11.4.6.2 All determinations to deny or limit an admission, service, procedure or extension of stay shall be rendered by a physician. The physician shall be under the clinical direction of the medical director responsible for medical services provided to the MCO’s Delaware enrollees. Such determinations shall be made in accordance with clinical and medical criteria and standards and shall take into account the individualized needs of the enrollee for whom the service, admission, procedure or extension is requested.
11.4.6.3 All determinations shall be made on a timely basis as required by the exigencies of the situation.
11.4.6.4 An MCO may not retroactively deny reimbursement for a covered health service provided to an enrollee by a provider who relied upon the written or verbal authorization of the MCO or its agents prior to providing the service to the enrollee, except in cases where the MCO can show that there was material misrepresentation, fraud or the patient was found not to have coverage.
11.4.6.5 An enrollee must receive written notice of all determinations to deny coverage or authorization for services required and the basis for the denial.
11.5 Quality Assessment and Improvement
11.5.1 Continuous Quality Improvement
11.5.1.1 Under the direction of the Medical Director or his designated physician, the MCO shall have a system-wide continuous quality improvement program to monitor the quality and appropriateness of care and services provided to enrollees. This program shall be based on a written plan which is reviewed at least semi-annually and revised as necessary.
11.5.1.2 The MCO shall assure that participating providers have the opportunity to participate in developing, implementing and evaluating the quality improvement system.
11.5.1.3 The MCO shall provide enrollees the opportunity to comment on the quality improvement process.
11.5.1.4 The MCO shall follow up on findings from the program to assure that effective corrective actions have been taken, including at least policy revisions, procedural changes and implementation of educational activities for enrollees and providers.
11.5.1.5 The MCO shall make documentation regarding the quality improvement program available to the Department upon request.
11.5.2 External Quality Audit
11.5.2.1 Each MCO shall submit, as a part of its annual report due June 1, evidence of its most recent external quality audit that has been conducted or of acceptable accreditation status.
11.5.2.2 The report of the external quality audit must describe in detail the MCO’s conformance to performance standards and the rules within this regulation. The report shall also describe in detail any corrective actions proposed and/or undertaken by the MCO.
11.5.2.3 External quality audits must be completed no less frequently than once every three years. Such audit shall be performed by a nationally known accreditation organization or an independent quality review organization acceptable to the Department.
11.5.2.4 In lieu of the external quality audit, the Department may accept evidence that an MCO has received and has maintained the appropriate accreditation from a nationally known accreditation organization or independent quality review organization.
11.5.3 Reporting and Disclosure Requirements
11.5.3.1 An MCO shall document and communicate information about its quality assessment program and its quality improvement program, and shall:
11.5.3.1.1 include a summary of its quality assessment and quality improvement programs in marketing materials;
11.5.3.1.2 include a description of its quality assessment and quality improvement programs and a statement of enrollee rights and responsibilities with respect to those programs in the materials or handbook provided to enrollees; and
11.5.3.1.3 make available annually to participating providers and enrollees findings from its quality assessment and quality improvement programs and information about its progress in meeting internal goals and external standards, where available. The reports shall include a description of the methods used to assess each specific area and an explanation of how any assumptions affect the findings.
11.5.3.2 An MCO shall submit to the Department such performance and outcome data as the Department may request.
12.0 Recordkeeping and Reporting Requirements
12.1 Medical Records Retention
12.1.1 The MCO must maintain or provide for the maintenance of a medical records system which meets the accepted standards of the health care industry and State and federal regulations.
12.1.1.1 The MCO shall provide sufficient space and equipment for the processing and the safe storage of records.
12.1.1.2 Medical records shall be protected from loss, damage and unauthorized use.
12.1.2 Retention and Destruction
12.1.2.1 With the exception of medical records of minors (individuals under the age of 18 years), medical records shall be preserved as original records, on microfilm or electronically stored for no less than five years after the most recent patient care usage, after which time records may be destroyed at the discretion of the MCO.
12.1.2.2 Medical records of minors shall be preserved for the period of minority plus five years (i.e., 23 years) or as otherwise required by State law.
12.1.2.3 An MCO shall establish procedures for notification to patients whose records are to be destroyed prior to the destruction of such records.
12.1.3 The Department shall have access to medical records for purposes of monitoring and review of MCO practices.
12.2 Reporting Requirements and Statistics
12.2.1 Annual reports. In addition to the information required to be included in an MCO’s annual report as specified in 18 Del.C. §6406 or elsewhere in this regulation, an MCO shall submit the following information to the Department on an annual basis:
12.2.1.1 A statistical summary evaluating the network adequacy and accessibility to the enrolled population;
12.2.1.2 Annual appeal report of all grievances, petitions for arbitration and appeals under the Independent Health Care Appeals Program as required under Department Regulation 1301.
12.2.1.3 Evidence of compliance with the capital funds requirements of section 4.0 of this regulation.
12.2.2 An MCO shall submit the following information to the Department whenever there is a change:
12.2.2.1 Substantial changes in organization, bylaws, or governing board
12.2.2.2 Full name of the Chief Executive Officer
12.2.2.3 Full name of the Medical Director
12.2.2.4 Substantial changes in marketing materials, grievance procedures or the utilization management program
12.2.2.5 Any significant amendment to or revision relating to the text or subtext of an approved provider contract shall be submitted to and approved by the Department prior to the execution of an amended or revised contract with the providers of an MCO.
13.0 Compliance with Regulation
13.1 The MCO is responsible for meeting each requirement of this regulation. If the MCO chooses to utilize contract support or to contract functions under this regulation, the MCO retains responsibility for ensuring that the requirements of this regulation are met.
13.2 The Department may require a corrective action plan from an MCO when the Department determines that the MCO is not in compliance with applicable provisions of Title 18 of the Delaware Code or regulations promulgated thereunder.
14.0 Separability Provisions
14.1 If any provision of this regulation shall be held invalid, the remainder of the regulation shall not be affected thereby.
11 DE Reg. 73 (07/01/07)
1404 Long-Term Care Insurance
18 Del. Admin. Code § 1404-1.0 Purpose
The purpose of this regulation is to implement 18 Del.C. Ch. 71, to promote the public interest, to promote the availability of long-term care insurance coverage, to protect applicants for long-term care insurance, from unfair or deceptive sales or enrollment practices, to facilitate public understanding and comparison of long-term care insurance coverages, regulate rescission, and to facilitate flexibility and innovation in the development of long-term care insurance.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-2.0 Authority
This regulation is issued pursuant to the authority vested in the Commissioner under 18 Del.C. §§311, 7105 and 7107.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-3.0 Applicability and Scope
Except as otherwise specifically provided, this regulation applies to all long-term care insurance policies and certificates delivered or issued for delivery in this state on or after the effective date hereof, by insurers; fraternal benefit societies; nonprofit health, hospital and medical service corporations; prepaid health plans; health maintenance organizations and all similar organizations.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-4.0 Definitions
4.1 For the purpose of this regulation, the terms "Department," "long-term care insurance," "Commissioner," "applicant," "policy" and "certificate" shall have the meanings set forth in 18 Del.C. §§102 and 7103.
4.2 The following additional terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
"Benefit Trigger", means a contractual provision in the insured's policy of long-term care insurance conditioning the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. For purposed of a tax-qualified long-term care insurance contract, as defined in Section 7702B of the Internal Revenue Code of 1986, as amended, "benefit trigger" shall include a determination by a licensed health care practitioner that an insured is a chronically ill individual.
"Exceptional increase" means only those increases filed by an insurer as exceptional for which the Commissioner determines the need for the premium rate increase is justified:
"Incidental," as used in subsection 20.10 of this regulation, means that the value of the long-term care benefits provided is less than 10% of the total value of the benefits provided over the life of the policy. These values shall be measured as of the date of issue.
"Qualified actuary" means a member in good standing of the American Academy of Actuaries.
"Similar policy forms" means all of the long-term care insurance policies and certificates issued by an insurer in the same long-term care benefit classification as the policy form being considered. Certificates of groups that meet the definition in 18 Del.C. §7103(4)a are not considered similar to certificates or policies otherwise issued as long-term care insurance, but are similar to other comparable certificates with the same long-term care benefit classifications. For purposes of determining similar policy forms, long-term care benefit classifications are defined as follows: institutional long-term care benefits only, non-institutional long-term care benefits only, or comprehensive long-term care benefits.
All providers of services, including but not limited to "skilled nursing facility", "extended care facility", "convalescent nursing home", "personal care facility", "specialized care providers", "assisted living facilities", and "home care agency" shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider must meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the provider of services under another name.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-5.0 Policy Definitions
No long-term care insurance policy delivered or issued for delivery in this state shall use the terms set forth below, or terms of like or similar meaning, unless the terms are defined in the policy and the definitions satisfy the following requirements:
“Activities of daily living” means at least bathing, continence, dressing, eating, toileting and transferring.
"Acute Condition" means that the individual is medically unstable. Such an individual requires frequent monitoring by medical professionals, such as physicians and registered nurses, in order to maintain their health status.
"Adult day care" means a program for 6 or more individuals, of social and health-related services provided during the day in a community group setting for the purpose of supporting frail, impaired elderly or other disabled adults who can benefit from care in a group setting outside the home.
"Bathing" means washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.
“Chronically ill” means any individual who has been certified by a Licensed Health Care Practitioner as being unable to perform, without substantial assistance from another individual, at least 2 activities of daily living for a period of at least 90 days; or who requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.
“Cognitive impairment” means a deficiency in a person’s short-term or long-term memory, orientation as to person, place, and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.
"Continence" means the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag).
"Dressing" means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.
"Eating" means feeding oneself by getting food into the body from a receptacle or by feeding tube or intravenously.
"Hands-on Assistance" means physical assistance without which the individual would not be able to perform the activity of daily living.
"Home health care services" means medical and nonmedical services provided to ill, disabled or infirm persons in their residences. Such services may include homemaker services, assistance with activities of daily living and respite care services.
"Medicare" means "The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended," or "Title I, Part I of Public Law 89-97, as enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof," or words of similar import.
“Mental or nervous disorder" shall not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.
"Personal care" means the provision of hands-on services to assist an individual with activities of daily living (such as bathing, eating, dressing, transferring and toileting).
"Preexisting Conditions" shall be defined in accordance with 18 Del.C. §7105(c).
“Qualified Long-Term Care Insurance Policy” means a policy that provides coverage for qualified long-term care services that is intended to meet the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended.
“Qualified Long-Term Care Services” means necessary diagnostic, preventive therapeutic, curing, treating, mitigating and rehabilitative services and Maintenance or Personal Care Services which are required by a Chronically Ill Individual and are provided pursuant to a Plan of Care prescribed by a Licensed Health Care Practitioner.
"Skilled nursing care", "intermediate care", "personal care", "home care", and other services shall be defined in relation to the level of skill required, nature of the care and the setting in which care must be delivered.
"Toileting" means getting to and from the toilet, getting on and off the toilet, and performing associated functions.
"Transferring" means moving into or out of a bed, chair, or wheelchair.
All providers of services, including but not limited to "skilled nursing facility", "extended care facility", "intermediate care facility", "convalescent nursing home", "personal care facility", and "home care agency" shall be defined in relation to the services and facilities required to be available and the licensure or degree status of those providing or supervising the services. The definition may require that the provider be appropriately licensed or certified.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-6.0 Policy Practices and Provisions
6.1 Renewability. The terms "guaranteed renewable" and "noncancellable" shall not be used in any individual long-term care insurance policy without providing further explanatory language in accordance with the disclosure requirements of Section 7.0 of this regulation.
6.1.1 No such policy issued to an individual shall contain renewal provisions less favorable to the insured than "guaranteed renewable." However, the Commissioner may authorize nonrenewal on a statewide basis, on terms and conditions deemed necessary by the Commissioner, to best protect the interests of the insureds, if the insurer demonstrates: That renewal will jeopardize the insurer's solvency.
6.1.2 The term "guaranteed renewable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums, during which period the insurer has no unilateral right to make any change in any provision of the policy or rider, and cannot decline to renew and cannot revise rates except on a class basis in accordance with subsection 6.1.4 of this regulation. This cost disclosure must be approved by the Commissioner and included in any solicitation and also prominently displayed on the initial policy.
6.1.3 Every long-term care insurance policy or certificate issued or delivered in this State must be "guaranteed renewable" as defined in subsection 6.1.2 of this regulation, and contain a cost disclosure section as defined section 6.1.6 below, and as further defined by Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended.
6.1.4 The term "noncancellable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums during which period the insurer has no right to unilaterally make any change in any provision of the insurance or in the premium rate.
6.1.5 The term "level premium" may only be used when the insurer does not have the right to change the premium.
6.1.6 Cost Disclosure Information.
6.1.6.1 The following cost disclosure information shall appear in bold print on the cover page of every individual policy and Outline of Coverage issued or delivered in this state: "This policy provides only the following price protection, and no more. Your premiums may not increase by more than X% during any given calendar year and your benefits may not decrease. Any representations that these increases will not take place are unauthorized and shall not be relied upon."
6.1.6.2 The following cost disclosure information shall appear in bold print on the cover page of every certificate and Outline of Coverage issued or delivered in this state: "This policy provides only the following price protection, and no more. Your premiums are guaranteed to remain the same for the first 3 years this policy is in force. Your premiums may not increase by more than X% during any three year rating period. Insurers will be allowed a carry forward of the initially disclosed maximum premium increase, but said carry forward is lost within 24 months if not utilized." Any additional language that appears under the cost disclosure section must be approved in advance by the Delaware Insurance Department. The purpose of this cost disclosure section is twofold: first, to make crystal clear to the purchaser what the maximum cost will be from year to year, and second, to prohibit the practice of low pricing during the early years of a policy followed by dramatic increases designed to produce a high ratio of cancellations when the group insured reaches that age at which its members are more likely to file claims. Therefore, this section does not permit annual increases to be accumulated and applied all at once. For example, if the price is $100 in the initial year of the policy and 10% is the represented annual maximum increase, then during the second year of the policy, the maximum allowable price is $110, the third year of the policy the maximum allowable price is not more than 110% of the price actually charges during year 2 of the policy. It is not permissible to charge $121 during the third year of the policy unless $110 had actually been charged during year 2 of the policy. In other words, any permitted annual price increase not implemented during a calendar year is thereafter waived and may not be considered in calculating future prices.
6.1.7 In addition to other requirements of subsection 6.1 of this regulation, a qualified long-term care insurance contract shall be guaranteed renewable.
6.2 Limitations and Exclusions. No policy may be delivered or issued for delivery in this state as long-term care insurance if such policy limits or excludes coverage by type of illness, treatment, medical condition or accident, except as follows:
6.2.1 Preexisting conditions;
6.2.2 Mental or nervous disorders; however, this shall not permit exclusion or limitation of benefits on the basis of Alzheimer's Disease;
6.2.3 Alcoholism and drug addiction;
6.2.4 Illness, treatment or medical condition arising out of:
6.2.4.1 War or act of war (whether declared or undeclared);
6.2.4.2 Participation in a felony, riot or insurrection;
6.2.4.3 Service in the armed forces or units auxiliary thereto;
6.2.4.4 Suicide (sane or insane), attempted suicide or intentionally self-inflicted injury; or
6.2.4.5 Aviation (this exclusion applies only to non-fare-paying passengers).
6.2.5 Treatment provided in a government facility (unless otherwise required by law), services for which benefits are available under Medicare or other governmental program (except Medicaid), any state or federal workers' compensation, employer's liability or occupational disease law, or any motor vehicle no-fault law, services provided by a member of the covered person's immediate family and services for which no charge is normally made in the absence of insurance.
6.2.6 No territorial limitations are permissible, except that nothing herein shall preclude limiting benefits for specific services to a specific dollar amount, or to that dollar amount which is reasonable and prevailing in a particular geographic area which is defined and clearly delineated in the original offering or solicitation and the initial policy or certificate, or to specific providers within a particular geographic area. Moreover, nothing herein shall prohibit the limitation of services to a particular geographic area when the insured elects to receive services within that specific geographical area. For purposes of this clause, the location of receipt of services must be within 50 miles of the domicile of the insured at the time of entry therein or that area, including the nearest 3 nursing homes, whichever distance is greater.
6.2.7 Expenses for services or items available or paid under another long-term care insurance or health insurance policy.
6.2.8 In the case of a qualified long-term care insurance contract expenses for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act or would be so reimbursable but for the application of a deductible or coinsurance amount.
6.2.9 Subsection 6.2 of this regulation is not intended to prohibit exclusions and limitations by type of provider. However, no long-term care issuer may deny a claim because services are provided in a state other than the state of policy issued under the following conditions:
6.2.9.1 When the state other than the state of policy issue does not have the provider licensing, certification or registration required in the policy, but where the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification or registration; or
6.2.9.2 When the state other than the state of policy issue licenses, certifies or registers the provider under another name.
6.3 Extension of Benefits. Termination of long-term care insurance shall be without prejudice to any benefits payable for institutionalization which began while the long-term care insurance was in force and continues without interruption after termination. Such extension of benefits beyond the period the long-term care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy waiting period, and all other applicable provisions of the policy.
6.4 Continuation or Conversion.
6.4.1 Group long-term care insurance issued in this state on or after the effective date of Section 6.0 of this regulation shall provide covered individuals with a basis for continuation or conversion of coverage.
6.4.2 For the purposes of Section 6.0 of this regulation, "a basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when such coverage would otherwise terminate and which is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to certain providers or facilities, or that contain incentives to use certain providers or facilities, may provide continuation benefits that are substantially equivalent to the benefits under the existing policy. The Commissioner shall make a determination as to the substantial equivalency of benefits, and in so doing, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
6.4.3 For the purposes of Section 6.0 of this regulation, "a basis for conversion of coverage" means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy (and any group policy which it replaced), for at least 6 months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy he or she is covered, without evidence of insurability.
6.4.4 For the purposes of Section 6.0 of this regulation, "converted policy" means an individual policy of long-term care insurance providing benefits identical to or determined by the Commissioner to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made.
6.4.4.1 Where the group policy from which conversion is made restricts provision of benefits and services to certain providers or facilities, or contains incentives to use certain providers or facilities, the Commissioner, in making a determination as to the substantial equivalency of benefits, shall take into consideration the differences between managed care and non-managed care plans, including, but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity. When the policyholder or certificate holder is no longer in the geographical area of the provider system or available services, the insurer must calculate the financial worth of the group policy and make a cash contribution toward the purchase of any health insurance policy the policyholder may select.
6.4.5 Written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed by the insurer no later than 31 days after termination of coverage under the group policy. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be renewable annually.
6.4.6 Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy from which conversion is made. Where the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy replaced.
6.4.7 Continuation of coverage or issuance of a converted policy shall be mandatory, except where:
6.4.7.1 Termination of group coverage resulted from an individual's failure to make any required payment of premium or contribution when due; or
6.4.7.2 The terminating coverage is replaced no later than 31 days after termination, by group coverage effective on the day following the termination of coverage:
6.4.7.2.1 Providing benefits identical to or benefits determined by the Commissioner to be substantially equivalent to or in excess of those provided by the terminating coverage; and
6.4.7.2.2 The premium for which is calculated in a manner consistent with the requirements of Section 6.0 of this regulation.
6.4.8 Notwithstanding any other provision of Section 6.0 of this regulation, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy which provides benefits on the basis of incurred expenses, may contain a provision which results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100% of incurred expenses. Such provision shall only be included in the converted policy if the converted policy also provides for a premium decrease or refund which reflects the reduction in benefits payable.
6.4.9 The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, shall not exceed those that would have been payable had the individual's coverage under the group policy remained in force and effect.
6.4.10 Notwithstanding any other provision of Section 6.0 of this regulation, any insured individual whose eligibility for group long-term care coverage is based upon the relationship of the insured individual to another person, shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.
6.4.11 For the purposes of Section 6.0 of this regulation: a "Managed-Care Plan" is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.
6.5 Discontinuance and Replacement. If a group long-term care insurance policy is replaced by another group long-term care policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy on its date of termination. Coverage provided or offered to individuals by the insurer and the premiums charged under the new group policy:
6.5.1 Shall not result in any exclusion for pre-existing conditions that would have been covered under the group policy being replaced; and
6.5.2 Shall not vary or otherwise depend on the individual's health or disability status, claim experience or use of long-term care services.
6.6 The premiums charged to an insured for long-term care insurance shall not increase due to either:
6.6.1 The increasing age of the insured at ages beyond 65; or
6.6.2 The duration the insured has been covered under the policy.
6.7 The purchase of additional coverage shall not be considered a premium rate increase, but for purposes of calculation required under this regulation, the portion of the premium attributable to the additional coverage shall be added to and considered a part of the initial annual premium.
6.8 A reduction in benefits shall not be considered a premium change, but for purpose of the calculation required under this regulation, the initial annual premium shall be based on the reduced benefits.
6.9 Electronic Enrollment for Group Policies
6.9.1 In the case of a group defined in 18 Del.C. §7103(4)a any requirement that a signature of an insured be obtained by an agent or insurer shall be deemed satisfied if:
6.9.1.1 The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. A verification of enrollment information shall be provided to the enrollee;
6.9.1.2 The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records; and
6.9.1.3 The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information is maintained.
6.9.2 The insurer shall make available, upon request of the Commissioner, records that will demonstrate the insurer’s ability to confirm enrollment and coverage amounts.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-7.0 Required Disclosure Provisions
7.1 Renewability. Individual long-term care insurance policies shall contain a renewability provision consistent herewith. Such provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state the duration, where limited, of renewability and the duration of the term of coverage for which the policy is issued and for which it may be renewed, subject to subsection 6.1 of this regulation. This provision shall not apply to policies which do not contain a renewability provision, and under which the right to nonrenew is reserved solely to the policyholder.
7.2 Riders and Endorsements. Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care insurance policy after date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the individual insured. After the date of policy issue, any rider or endorsement which increases benefits or cover-age with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage are required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the policy, rider or endorsement.
7.3 Payment of Benefits. A long-term care insurance policy which provides for the payment of benefits based on standards described as "usual and customary", "reasonable and customary", "reasonable and prevailing", or words of similar import shall include a definition of such terms and an explanation of such terms in its outline of coverage.
7.4 Limitations. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, such limitations shall appear as a separate paragraph of the policy or certificate and shall be labeled as "Preexisting Condition Limitations".
7.5 Other Limitations or Conditions on Eligibility for Benefits. A long-term care insurance policy or certificate containing any limitations or conditions for eligibility, except in accordance with 18 Del.C. §7105, shall set forth a description of such limitations or conditions, including any required number of days or confinement, in a separate paragraph of the policy or certificate and shall label such paragraph "Limitations or Conditions of Eligibility for Benefits".
7.6 Disclosure of Tax Consequences.
7.6.1 With regard to life insurance policies which provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. Subsection 7.6.1 of this regulation shall not apply to qualified long-term care insurance contracts.
7.6.2 With regard to qualified long-term care insurance policies a disclosure statement shall appear in bold print on the face of the policy and outline of coverage indicating the policy is intended to be a qualified long-term care policy under Section 7702B(b) of the Internal Revenue Code of 1996.
7.7 Benefit Triggers. Activities of daily living and cognitive impairment shall be used to measure an insured’s need for long term care and shall be described in the policy or certificate in a separate paragraph and shall be labeled “Eligibility for the Payment of Benefits.” Any additional benefit triggers shall also be explained in Section 7.0 of this regulation. If these triggers differ for different benefits, explanation of the trigger shall accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too shall be specified.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-8.0 Required Disclosure of Rating Practices to Consumers and Agent of Record
8.1 Subsection 8.1 shall apply as follows:
8.1.1 Except as provided in subsection 8.1.2 of this regulation, Section 8.0 of this regulation applies to any long-term care policy or certificate issued in this state on or after March 1, 2005.
8.1.2 For certificates issued on or after the effective date of this amended regulation under a group long-term care insurance policy as defined in 18 Del.C. §7103(4)a, which policy was in force at the time this amended regulation became effective, the provisions of Section 8.0 of this regulation shall apply on the policy anniversary following January 1, 2006.
8.2 Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in subsection 8.2 of this regulation to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, an insurer shall provide all of the information listed in Section 8.0 of this regulation to the applicant no later than at the time of delivery of the policy or certificate.
8.2.1 A statement that the policy may be subject to rate increases in the future;
8.2.2 An explanation of potential future premium rate revisions, and the policyholder’s or certificate holder’s option in the event of a premium rate revision;
8.2.3 The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;
8.2.4 A general explanation for applying premium rate or rate schedule adjustments that shall include:
8.2.4.1 A description of when premium rate or rate schedule adjustments will be effective (e.g., next anniversary date, next billing date, etc.); and
8.2.4.2 The right to a revised premium rate or rate schedule as provided in subsection 8.2.3 of this regulation if the premium rate or rate schedule is changed;
8.2.5 Premium rate increase information
8.2.5.1 Information regarding each premium rate increase on this policy form or similar policy forms over the past 10 years for this state or any other state that, at a minimum, identifies:
8.2.5.1.1 The policy forms for which premium rates have been increased;
8.2.5.1.2 The calendar years when the form was available for purchase; and
8.2.5.1.3 The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase, and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.
8.2.5.2 The insurer may, in a fair manner, provide additional explanatory information related to the rate increases.
8.2.5.3 An insurer shall have the right to exclude from the disclosure premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.
8.2.5.4 If an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of the effective date of Section 8.0 of this regulation or the end of a 24-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling company shall include the disclosure of that rate increase in accordance with subsection 8.2.5.1 of this regulation.
8.2.5.5 If the acquiring insurer in subsection 8.2.5.4 of this regulation files for a subsequent rate increase, even within the 24-month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers referenced in subsection 8.2.5.4 of this regulation, the acquiring insurer shall make all disclosures required by subsections 8.2.5 and 8.5 of this regulation, including disclosure of the earlier rate increase referenced in subsection 8.2.5.4 of this regulation.
8.3 An applicant shall sign an acknowledgement at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under subsections 8.2.1 and 8.2.5 of this regulation. If due to the method of application the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign no later than at the time of delivery of the policy or certificate.
8.4 An insurer shall use the forms in Appendices B and F to comply with the requirements of subsections 8.2 and 8.3 of this regulation.
8.5 An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least 45 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by subsection 8.2 of this regulation when the rate increase is implemented, along with the following additional information:
8.5.1 The current daily, monthly, or other periodic benefit amount under the policy or certificate, along with customer service contact information where the policyholder or certificate holder can obtain additional information regarding these benefits;
8.5.2 A reasonable list consisting of no less than three available reduced benefit options, and the impact on the current premium for each listed reduced benefit option, along with customer contact information where the policyholder or certificate holder can obtain additional information regarding these benefit options. Upon the request of a policyholder or certificate holder, an insurer shall provide a comprehensive list of available reduced daily benefits options and the impact on the current premium for each listed reduced benefit option or a statement similar in substance to the following: "You have the right to reduce your periodic benefit amount to [any amount down to $XX/period in $YY increments"]; and
8.5.3 A description of the contingent non-forfeiture benefit available on lapse, along with customer service contact information where the policyholder or certificate holder can obtain additional information regarding this benefit.
8.6 Either prior to or concurrently as notice is being sent to the policyholder or certificate holder, the insurer shall notify the agent of record of any policy changes and premium rate increases, either by providing the agent with a copy of the notice packet being sent to the policyholder or providing the same information in a condensed format.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-9.0 Unintentional Lapse
9.1 Each insurer offering long-term care insurance shall, as a protection against unintentional lapse, comply with the following:
9.1.1 Notice before lapse or termination. No individual long-term care policy or certificate shall be issued until the insurer has received from the applicant either a written designation of at least 1 person, in addition to the applicant, who is to receive notice of lapse or termination of the policy or certificate for nonpayment of premium, or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice. The applicant has the right to designate at least 1 person who is to receive the notice of termination, in addition to the insured. Designation shall not constitute acceptance of any liability on the third party for services provided to the insured. The form used for the written designation must provide space clearly designated for listing at least 1 person. The designation shall include each person’s full name and home address. In the case of an applicant who elects not to designate an additional person, the waiver shall state: “Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate a person to receive this notice.”
9.1.1.1 The insurer shall notify the insured of the right to change this written designation, no less often than once every 2 years.
9.1.2 When the policyholder or certificate holder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in subsection 9.1.1.1 of this regulation need not be met until 60 days after the policyholder or certificate holder is no longer on such a payment plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.
9.1.3 Lapse or termination for nonpayment of premium. No individual long-term care policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated pursuant to subsection 9.1.1.1 of this regulation, at the address provided by the insured for purposes of receiving notice of lapse or termination. Notice shall be given by first class United States mail, postage prepaid; and notice may not be given until 30 days after a premium is due and unpaid. Notice shall be deemed to have been given as of 5 days after the date of mailing.
9.2 Reinstatement. In addition to the requirement in subsection 9.1.1 of this regulation, a long-term care insurance policy or certificate shall include a provision that provides for reinstatement of coverage, in the event of lapse if the insurer is provided proof that the policyholder or certificate holder was cognitively impaired or had a loss of functional capacity before the grace period contained in the policy expired. This option shall be available to the insured if requested within 5 months after termination and shall allow for the collection of past due premium, where appropriate. The standard of proof of cognitive impairment or loss of functional capacity shall not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity contained in the policy and certificate.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-10.0 Initial Filing Requirements
10.1 An insurer shall provide the information listed in this subsection to the commissioner 30 days prior to making a long-term care insurance form available for sale.
10.1.1 A copy of the disclosure documents required in Section 8.0 of this regulation; and
10.1.2 An actuarial certification consisting of at least the following:
10.1.2.1 A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;
10.1.2.2 A statement that the policy design and coverage provided have been reviewed and taken into consideration;
10.1.2.3 A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration;
10.1.2.4 A complete description of the basis for contract reserves that are anticipated to be held under the form, to include:
10.1.2.4.1 Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;
10.1.2.4.2 A statement that the assumptions used for reserves contain reasonable margins for adverse experience;
10.1.2.4.3 A statement that the net valuation premium for renewal years does not increase (except for attained-age rating where permitted); and
10.1.2.4.4 A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur;
10.1.2.4.4.1 An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship;
10.1.2.4.4.2 If the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under subsection 10.3 of this regulation based on a standard age distribution; and
10.1.2.4.5 Premium schedules.
10.1.2.4.5.1 A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefits; or
10.1.2.4.5.2 A comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.
10.2 Actuarial information.
10.2.1 The commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and credible data from other studies, or both.
10.2.2 In the event the commissioner asks for additional information under this provision, the period in subsection 10.2 of this regulation does not include the period during which the insurer is preparing the requested information.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-11.0 Prohibition Against Post-Claims Underwriting
11.1 All applications for long-term care insurance policies or certificates except those which are guaranteed issue shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.
11.2 If an application for long-term care insurance contains a question which asks whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed.
11.2.1 If the medications listed in such application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the policy or certificate shall not be rescinded for that condition.
11.3 Except for policies or certificates which are guaranteed issue:
11.3.1 The following language shall be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long-term care insurance policy or certificate: Caution: If your answers on this application are incorrect or untrue [company] has the right to deny benefits or rescind your policy.
11.3.2 The following language, or language substantially similar to the following, shall be set out conspicuously on the long-term care insurance policy or certificate at the time of delivery: Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address].
11.3.3 Prior to issuance of a long-term care insurance policy or certificate to an applicant age 80 or older, the insurer shall obtain 1 of the following:
11.3.3.1 A report of a physical examination;
11.3.3.2 An assessment of functional capacity;
11.3.3.3 An attending physician's statement; or
11.3.3.4 Copies of medical records.
11.4 A copy of the completed application or enrollment form (whichever is applicable) shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.
11.5 Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those which the insured voluntarily effectuated and shall annually furnish this information to the Insurance Commissioner in the form prescribed by the National Association of Insurance Commissioners.
11.6 An insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of a misrepresentation that is material to the acceptance for coverage.
11.7 For a policy or certificate that has been in force for at least 6 months but less than 2 years, an insurer may rescind a long-term care insurance policy or certificate upon a showing of a misrepresentation that is material to the acceptance for coverage and also pertains to the condition for which benefits are sought.
11.8 After a policy or certificate has been in force for 2 years, the policy or certificate is not contestable upon the ground of misrepresentation alone. The policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.
11.9 A long-term care insurance policy or certificate may be field issued if the compensation to the field issuer is not based on the number of policies or certificates issued. A policy or certificate is field issued for the purposes of this subsection if the policy or certificate is issued by an insurance producer or a third party administrator pursuant to underwriting authority granted to the insurance producer or third-party administrator by an insurer and using the insurer's underwriting guidelines.
11.10 If an insurer has paid benefits under the long-term care insurance policy or certificate, the insurer may not recover the benefit payments in the event that the policy or certificate is rescinded.
11.11 This section does not apply to the remaining death benefit of a life insurance policy in the event of the death of the insured if the policy accelerates benefits for long-term care. In this situation, the remaining death benefits under the life insurance policy are governed by 18 Del.C. §2929. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-12.0 Minimum Standards for Home Health and Community Care Benefits in Long-Term Care Insurance Policies
12.1 A long-term care insurance policy or certificate shall not, if it provides benefits for home health or community care services, limit or exclude benefits by:
12.1.1 Requiring that the insured/claimant would need skilled care in a skilled nursing facility if home health care services were not provided;
12.1.2 Requiring that the insured/claimant first or simultaneously receive nursing or therapeutic services or both in a home, community or institutional setting before home health care services are covered;
12.1.3 Limiting eligible services to services provided by registered nurses or licensed practical nurses;
12.1.4 Requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide, or other licensed or certified home care worker acting within the scope of the certified home care worker’s licensure or certification;
12.1.5 Excluding coverage for personal care services provided by a home health aide;
12.1.6 Requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service;
12.1.7 Requiring that the insured/claimant have an acute condition before home health care services are covered;
12.1.8 Limiting benefits to services provided by Medicare-certified agencies or providers; or
12.1.9 Excluding coverage for adult day care services.
12.2 A long-term care insurance policy or certificate, if it provides for home health or community care services, shall provide total home health or community care coverage that is a dollar amount equivalent to at least one-half of 1 year's coverage available for nursing home benefits under the policy or certificate. This requirement shall not apply to policies or certificates issued to residents of continuing care retirement communities.
12.3 Home health care coverage may be applied to non-home health care benefits provided in the policy or certificate when determining the maximum coverage under the terms of the policy or certificate.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-13.0 Requirement to Offer Inflation Protection
13.1 No insurer may offer a long-term care insurance policy unless the insurer also offers to the policyholder the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the costs of long-term services covered by the policy. Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than 1 of the following:
13.1.1 Increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than 5%. However, if the insured individual shall reject the inflation protection offer as provided for in Section 13.0 of this regulation, the insurer may offer other or alternate forms of inflation protection;
13.1.2 Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined. The amount of additional benefit shall be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least 5% for the period beginning with the purchase of the existing benefit and extended until the year in which the offer is made; or
13.1.3 Covers a specific percentage of actual or reasonable charges and does not include a maximum specified indemnity amount of limit.
13.2 Where the policy is issued to a group, the required offer in subsection 13.1 of this regulation shall be made to the group policyholder; except, if the policy is issued to a group defined in 18 Del.C. §7103(4), other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.
13.3 The offer in subsection 13.1 of this regulation shall not be required of life insurance policies or riders containing accelerated long-term care benefits.
13.4 Insurers shall include the following information in or with the outline of coverage:
13.4.1 A graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a 20-year period.
13.4.2 Any expected premium increases or additional premiums to pay for automatic or optional benefit increases. An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.
13.5 Inflation protection benefit increases under a policy which contains such benefits shall continue without regard to an insured's age, claim status or claim history, or the length of time the person has been insured under the policy.
13.6 An offer of inflation protection which provides for automatic benefit increases shall include an offer of a premium which the insurer expects to remain constant. Such offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.
13.7 Inflation protection as provided in subsection 13.1.1 of this regulation shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in subsection 13.7 of this regulation.
13.7.1 The rejection shall be considered part of the application and shall state:
I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans __________ and I reject inflation protection.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-14.0 Requirements for Replacement
14.1 Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any accident and sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and the agent, except where the coverage is sold without an agent, containing such questions may be used. With regard to a replacement policy issued to a group defined in 18 Del.C. §7103(4), the following questions may be modified only to the extent necessary to elicit information about health or long-term care insurance policies other than the group policy being replaced; provided, however, that the certificate holder has been notified of the replacement.
14.1.1 Do you have another long-term care insurance policy or certificate in force (including health care services contract, health maintenance organization contract)?
14.1.2 Did you have another long-term care insurance policy or certificate in force during the last 12 months?
14.1.2.1 If so, with which company?
14.1.2.2 If that policy lapsed, when did it lapse?
14.1.3 Are you covered by Medicaid?
14.1.4 Do you intend to replace any of your medical or health insurance with this policy {certificate}?
14.2 Agents shall list any other health insurance policies they have sold to the applicant.
14.2.1 List policies sold which are still in force.
14.2.2 List policies sold in the last 5 years which are no longer in force.
14.3 Solicitations Other than Direct Response. Upon determining that a sale will involve replacement, an insurer; other than an insurer using direct response solicitation methods, or its agent; shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of such notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the following manner:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF INDIVIDUAL
ACCIDENT AND SICKNESS OR LONG-TERM CARE INSURANCE
According to [your application] [information you have furnished], you intend to lapse or otherwise terminate existing accident and sickness or long-term care insurance and replace it with an individual long term care insurance policy to be issued by [company name] Insurance Company. Your new policy provides 30 days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.
You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care insurance is a wise decision.
STATEMENT TO APPLICANT BY AGENT
[BROKER OR OTHER REPRESENTATIVE]:
(Use additional sheets, as necessary).
I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations, which I call to your attention:
-
Health conditions which you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy.
-
State law provides that your replacement policy or certificate may not contain new pre-existing conditions or probationary periods.
-
If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its producer regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage.
-
If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information on an application may provide a basis for the company to deny and future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, reread it carefully to be certain that all information has been properly recorded.
(Date)
(Producer's Signature)
The above "Notice to the Applicant" was delivered to me on:
(Date)
(Applicant's Signature)
14.4 Direct Response Solicitations. Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in the following manner:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF INDIVIDUAL
ACCIDENT AND SICKNESS OR LONG-TERM CARE INSURANCE
According to [your application] [information you have furnished], you intend to lapse or otherwise terminate existing accident and sickness or long-term care insurance and replace it with the long-term care insurance policy delivered herewith issued by [company name] Insurance Company. Your new policy provides 30 days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.
You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision.
-
Health conditions which you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy.
-
State law provides that your replacement policy or certificate may not contain new pre-existing conditions or probationary periods.
-
If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage.
-
[To be included only if the application is attached to the policy.] If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to [company name and address] within 30 days if any information is not correct and complete, or if any past medical history has been left out of the application.
(Company Name)
14.5 Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the name of the insurer, name of the insured and policy number or address including zip code. Such notice shall be made within 5 working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.
14.6 Life Insurance policies that accelerate benefits for long-term care shall comply with Section 14.0 of this regulation if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of 18 DE Admin. Code 1204. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-15.0 Reporting Requirements
15.1 Every insurer shall maintain records for each Delaware-licensed producer of that producer’s amount of replacement sales as a percentage of the producer’s total annual sales and the amount of lapses of long-term care insurance policies sold by the producer as a percent of the producer’s total annual sales.
15.2 Each insurer shall report annually by June 30 the 10% of its Delaware-licensed producers with the greatest percentages of lapses and replacements as measured by subsection 15.1 of this regulation.
15.3 Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely producer activities regarding the sale of long-term care insurance.
15.4 Every entity providing long-term care insurance in this state shall file annually as an attachment to its annual statement an exhibit that discloses the total number of long-term care insurance policies, by form number, in force in this state and the total number of policies, by form number, that have lapsed over the previous 5 years. Companies must provide in-force policy and lapsed policy information in the following manner:
15.5 Every insurer shall report, annually by June 30 the number of replacement policies sold as a percentage of its total annual sales and as a percentage of its total number of policies in force as of the preceding calendar year.
15.6 For purposes of Section 15.0 of this regulation, "policy" shall mean only long-term care insurance and "report" shall mean on a statewide basis.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-16.0 Licensing
16.1 No producer is authorized to market, sell, solicit or otherwise contact any person for the purpose of marketing long-term care insurance unless the producer has demonstrated knowledge of long-term care insurance and the appropriateness of such insurance by passing a test required by this state and maintaining appropriate licenses.
16.2 Producers shall comply with the licensing provisions contained in 18 Del.C. Ch. 17 and 18 DE Admin. Code 504, as the same may be amended or supplemented relating to lines of authority and examinations, respectively.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-17.0 Discretionary Powers of Commissioner
17.1 The Commissioner may, upon written request and after an administrative hearing, issue an order to modify or suspend a specific provision or provisions of this regulation with respect to a specific long-term care insurance policy or certificate upon a written finding that:
17.1.1 The modification or suspension would be in the best interest of the insureds; and
17.1.2 The purposes to be achieved could not be effectively or efficiently achieved without the modification or suspension; and
17.2 The modification or suspension is necessary to the development of an innovative and reasonable approach for insuring long-term care; or
17.3 The policy or certificate is to be issued to residents of a life care or continuing care retirement community or some other residential community for the elderly and the modification or suspension is reasonable related to the special needs or nature of such a community; or
17.4 The modification or suspension is necessary to permit long-term care insurance to be sold as part of, or in conjunction with, another insurance product.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-18.0 Reserve Standards
18.1 When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for such benefits shall be determined in accordance with 18 Del.C. §1113. Claim reserves must also be established in the case when such policy or rider is in claim status. Reserves for policies and riders subject to subsection 18.1 of this regulation should be based on the multiple decrement model utilizing all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may consider the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event shall the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term benefit. In the development and calculation of reserves for policies and riders subject to subsection 18.1 of this regulation due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures and all other considerations which have an impact on projected claim costs, including, but not limited to, the following:
18.2 Any applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a member of the American Academy of Actuaries.
18.3 When long-term care benefits are provided other than as in subsection 18.1 of this regulation, reserves shall be determined in accordance with 18 Del.C. §1108.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-19.0 Loss Ratio
19.1 Section 19.0 of this regulation shall apply to all long-term care insurance policies or certificates except those covered under Sections 10.0 and 20.0 of this regulation.
19.2 Benefits under long-term care insurance policies shall be deemed reasonable in relation to premiums provided the expected loss ratio is at least 60% for individual policies and at least 65% for group policies, calculated in a manner which provides for adequate reserving of the long-term care insurance risk. In evaluating the expected loss ratio, due consideration shall be given to all relevant factors, including:
19.2.1 Statistical credibility of incurred claims experience and earned premiums;
19.2.2 The period for which rates are computed to provide coverage;
19.2.3 Experienced and projected trends;
19.2.4 Concentration of experience within early policy duration;
19.2.5 Expected claim fluctuation;
19.2.6 Experience refunds, adjustments or dividends;
19.2.7 Renewability features;
19.2.8 All appropriate expense factors;
19.2.9 Interest;
19.2.10 Experimental nature of the coverage;
19.2.11 Policy reserves;
19.2.12 Mix of business by risk classification; and
19.2.13 Product features such as long elimination periods, high deductibles and high maximum limits.
19.3 Subsection 19.2 of this regulation shall not apply to life insurance policies that accelerate benefits for long-term care. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid, if the policy complies with all of the following provisions:
19.3.1 The interest credited internally to determine cash value accumulations, including long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;
19.3.2 The portion of the policy that provides life insurance benefits meets the nonforfeiture requirements of 18 Del.C. §2929;
19.3.3 The policy meets the disclosure requirements of 18 Del.C. §7105;
19.3.4 Any policy illustration that meets the applicable requirements of 18 DE Admin. Code 1210; and
19.3.5 An actuarial memorandum is filed with the insurance department that includes:
19.3.5.1 A description of the basis on which the long-term care rates were determined;
19.3.5.2 A description of the basis for the reserves;
19.3.5.3 A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;
19.3.5.4 A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any;
19.3.5.5 A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
19.3.5.6 The estimated average annual premium per policy and the average issue age;
19.3.5.7 A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and
19.3.5.8 A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying life insurance policy, both for active lives and those in long-term care claim status.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-20.0 Premium Rate Schedule Increases
20.1 Section 20.0 of this regulation shall apply as follows:
20.1.1 Except as provided in subsection 20.1.2 of this regulation, Section 20.0 of this regulation applies to any long-term care policy or certificate issued in this state on or after September 1, 2005.
20.1.2 For certificates issued on or after May 1, 1999 under a group long-term care insurance policy as defined in 18 Del.C. §7103(4), which policy was in force at the time this amended regulation became effective, the provisions of Section 20.0 of this regulation shall apply on the policy anniversary following January 1, 2006.
20.2 An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the commissioner at least 30 days prior to the notice to the policyholders and shall include:
20.2.1 Information required by Section 8.0 of this regulation;
20.2.2 Certification by a qualified actuary that:
20.2.2.1 If the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated;
20.2.2.2 The premium rate filing is in compliance with the provisions of Section 20.0 of this regulation;
20.2.3 An actuarial memorandum justifying the rate schedule change request that includes:
20.2.3.1 Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale;
20.2.3.1.1 Annual values for the 5 years preceding and the 3 years following the valuation date shall be provided separately;
20.2.3.1.2 The projections shall include the development of the lifetime loss ratio, unless the rate increase is an exceptional increase;
20.2.3.1.3 The projections shall demonstrate compliance with subsection 20.3 of this regulation; and
20.2.3.1.4 For exceptional increases,
20.2.3.1.4.1 The projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase; and
20.2.3.1.4.2 In the event the commissioner determines as provided in subsection 4.1.4 of this regulation that offsets may exist, the insurer shall use appropriate net projected experience;
20.2.3.2 Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse;
20.2.3.3 Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the company have been relied on by the actuary;
20.2.3.4 A statement that policy design, underwriting and claims adjudication practices have been taken into consideration; and
20.2.3.5 In the event that it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer will need to file composite rates reflecting projections of new certificates;
20.2.4 A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the commissioner; and
20.2.5 Sufficient information for review of the premium rate schedule increase by the commissioner.
20.3 All premium rate schedule increases shall be determined in accordance with the following requirements:
20.3.1 Exceptional increases shall provide that 70% of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits;
20.3.2 Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:
20.3.2.1 The accumulated value of the initial earned premium times 58%;
20.3.2.2 Eighty-five percent of the accumulated value of prior premium rate schedule increases on an earned basis;
20.3.2.3 The present value of future projected initial earned premiums times 58%; and
20.3.2.4 Eighty-five percent of the present value of future projected premiums not in subsection 20.3.2.3 of this regulation on an earned basis;
20.3.3 In the event that a policy form has both exceptional and other increases, the values in subsections 20.3.2.2 and 20.3.2.4 of this regulation will also include 70% for exceptional rate increase amounts; and
20.3.4 All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified by applicable Delaware law or regulation. The actuary shall disclose as part of the actuarial memorandum the use of any appropriate averages.
20.4 For each rate increase that is implemented, the insurer shall file for review by the commissioner updated projections, as defined in subsection 20.2.3.1 of this regulation, annually for the next 3 years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than 3 years if actual results are not consistent with projected values from prior projections. For group insurance policies that meet the conditions in subsection 20.11 of this regulation, the projections required by subsection 20.4 of this regulation shall be provided to the policyholder in lieu of filing with the commissioner.
20.5 If any premium rate in the revised premium rate schedule is greater than 200% of the comparable rate in the initial premium schedule, lifetime projections, as defined in subsection 20.2.3.1 of this regulation, shall be filed for review [approval] by the commissioner every 5 years following the end of the required period in subsection 20.4 of this regulation. For group insurance policies that meet the conditions in subsection 20.11 of this regulation, the projections required by subsection 20.5 of this regulation shall be provided to the policyholder in lieu of filing with the commissioner.
20.6 Actual v. projected experience.
20.6.1 If the commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in subsection 20.3 of this regulation, the commissioner may require the insurer to implement any of the following:
20.6.1.1 Premium rate schedule adjustments; or
20.6.1.2 Other measures to reduce the difference between the projected and actual experience.
20.6.2 In determining whether the actual experience adequately matches the projected experience, consideration should be given to subsection 20.2.3.5 of this regulation, if applicable.
20.7 If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file:
20.7.1 A plan, subject to commissioner approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise the commissioner may impose the condition in subsection 20.8 of this regulation; and
20.7.2 The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to subsection 20.3 of this regulation had the greater of the original anticipated lifetime loss ratio or 58% been used in the calculations described in subsections 20.3.2.1 and 20.3.2.3 of this regulation.
20.8 Lapse rate review.
20.8.1 For a rate increase filing that meets the following criteria, the commissioner shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated:
20.8.1.1 The rate increase is not the first rate increase requested for the specific policy form or forms;
20.8.1.2 The rate increase is not an exceptional increase; and
20.8.1.3 The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.
20.8.2 In the event significant adverse lapsation has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the commissioner may determine that a rate spiral exists. Following the determination that a rate spiral exists, the commissioner may require the insurer to offer, without underwriting, to all in force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.
20.8.2.1 The offer shall:
20.8.2.1.1 Be subject to the approval of the Commissioner;
20.8.2.1.2 Be based on actuarially sound principles, but not be based on attained age; and
20.8.2.1.3 Provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.
20.8.2.2 The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. In the event of a request for a rate increase on the policy form, the rate increase shall be limited to the lesser of:
20.8.2.2.1 The maximum rate increase determined based on the combined experience; and
20.8.2.2.2 The maximum rate increase determined based only on the experience of the insureds originally issued the form plus 10%.
20.9 If the Commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care insurance, the Commissioner may, in addition to the provisions of subsection 20.8 of this regulation, prohibit the insurer from either of the following:
20.9.1 Filing and marketing comparable coverage for a period of up to 5 years; or
20.9.2 Offering all other similar coverages and limiting marketing of new applications to the products subject to recent premium rate schedule increases.
20.10 Subsections 20.1 through 20.9 of this regulation shall not apply to policies for which the long-term care benefits provided by the policy are incidental, as defined in subsection 4.2 of this regulation, if the policy complies with all of the following provisions:
20.10.1 The interest credited internally to determine cash value accumulations, including long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest rate for cash value accumulations without long-term care set forth in the policy;
20.10.2 The portion of the policy that provides insurance benefits other than long-term care coverage meets the nonforfeiture requirements as set forth by law or regulation including but not limited to the following:
20.10.2.1 18 Del.C. §2929; and
20.10.2.2 18 DE Admin. Code 1201;
20.10.3 The policy meets the disclosure requirements of 18 Del.C. §§ 7105 and 7106;
20.10.4 The portion of the policy that provides insurance benefits other than long-term care coverage meets the requirements as set forth by law or regulation including but not limited to the following:
20.10.4.1 Policy illustrations as required by 18 DE Admin. Code 1210; and
20.10.4.2 Disclosure requirements in 18 DE Admin. Code 1201.
20.10.5 An actuarial memorandum is filed with the insurance department that includes:
20.10.5.1 A description of the basis on which the long-term care rates were determined;
20.10.5.2 A description of the basis for the reserves;
20.10.5.3 A summary of the type of policy, benefits, renewability, general marketing method, and limits on ages of issuance;
20.10.5.4 A description and a table of each actuarial assumption used. For expenses, an insurer must include percent of premium dollars per policy and dollars per unit of benefits, if any;
20.10.5.5 A description and a table of the anticipated policy reserves and additional reserves to be held in each future year for active lives;
20.10.5.6 The estimated average annual premium per policy and the average issue age;
20.10.5.7 A statement as to whether underwriting is performed at the time of application. The statement shall indicate whether underwriting is used and, if used, the statement shall include a description of the type or types of underwriting used, such as medical underwriting or functional assessment underwriting. Concerning a group policy, the statement shall indicate whether the enrollee or any dependent will be underwritten and when underwriting occurs; and
20.10.5.8 A description of the effect of the long-term care policy provision on the required premiums, nonforfeiture values and reserves on the underlying insurance policy, both for active lives and those in long-term care claim status.
20.11 Subsections 20.6 and 20.8 of this regulation shall not apply to group insurance policies as defined in 18 Del.C. § 7103(4) where:
20.11.1 The policies insure 250 or more persons and the policyholder has 5,000 or more eligible employees of a single employer; or
20.11.2 The policyholder, and not the certificateholders, pays a material portion of the premium, which shall not be less than 20% of the total premium for the group in the calendar year prior to the year a rate increase is filed.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-21.0 Filing Requirement
Prior to an insurer or similar organization offering group long-term care insurance to a resident of this state pursuant to 18 Del.C. §7104 it shall file with the Commissioner evidence that the group policy or certificate thereunder has been approved by a state having statutory or regulatory long-term care insurance requirements substantially similar to those adopted in this state.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-22.0 Standard Format Outline of Coverage
22.1 Section 22.0 of this regulation implements, interprets and makes specific, the provisions of 18 Del.C. §7105, in prescribing a standard format and the content of an outline of coverage.
22.2 The outline of coverage shall be a free-standing document, using no smaller than 10 point type.
22.3 The outline of coverage shall contain no material of an advertising nature.
22.4 Text which is capitalized or underscored in the standard format outline of coverage may be emphasized by other means which provide prominence equivalent to such capitalization or underscoring.
22.5 Use of the text and sequence of text of the standard format outline of coverage is mandatory, unless otherwise specifically indicated.
22.6 Format for outline of coverage:
[COMPANY NAME]
[ADDRESS - CITY & STATE]
[TELEPHONE NUMBER]
LONG-TERM CARE INSURANCE
OUTLINE OF COVERAGE
[Policy Number or Group Master Policy and Certificate Number]
[Except for polices or certificates which are guaranteed issue, the following caution statement, or language substantially similar, must appear as follows in the outline of coverage.]
Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when your applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address].
-
This policy is [an individual policy of insurance] ([a group policy] which was issued in the [indicate jurisdiction in which group policy was issued]).
-
Purpose Of Outline Of Coverage. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY!
-
FEDERAL TAX CONSEQUENCES.
This [POLICY] [CERTIFICATE] is intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.
OR
Federal Tax Implications of this [POLICY] [CERTIFICATE]. This [POLICY] [CERTIFICATE] is not intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986 as amended. Benefits received under the [POLICY] [CERTIFICATE] may be taxable as income.
- Terms Under Which the Policy OR Certificate May Be Continued in Force or Discontinued.
(a) [For long-term care health insurance policies or certificates describe one of the following permissible policy renewability provisions:
(1) Policies and certificates that are guaranteed renewable shall contain the following statement:] RENEWABILITY: THIS POLICY [CERTIFICATE] IS GUARANTEED RENEWABLE. This means you have the right, subject to the terms of your policy, [certificate] to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own, except that, in the future, IT MAY INCREASE THE PREMIUM YOU PAY.
(2) [Policies and certificates that are noncancellable shall contain the following statement:] RENEWABILITY: THIS POLICY [CERTIFICATE] IS NONCANCELLABLE. This means that you have the right, subject to the terms of your policy, to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own and cannot change the premium you currently pay. However, if your policy contains an inflation protection feature where you choose to increase your benefits, [Company Name] may increase your premium at that time for those additional benefits.
(b) [For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy;]
(c) [Describe waiver of premium provisions or state that there are not such provisions.]
- TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.
[In bold type larger than the maximum type required to be used for the other provisions of the outline of coverage, state whether or not the company has a right to change the premium, and if a right exists, describe clearly and concisely each circumstance under which the premium may change.]
- TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
(a) [Provide a brief description of the right to return–“free look” provision of the policy.]
(b) [Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains such provisions, include a description of them.]
- THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer’s Guide available from the insurance company.
(a) [For agents] Neither [insert company name] nor its agents represent Medicare, the federal government or any state government.
(b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government.
-
LONG-TERM CARE COVERAGE. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community or in the home. This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to policy [limitations] [waiting periods] and [coinsurance] requirements. [Modify this paragraph if the policy is not an indemnity policy.]
-
BENEFITS PROVIDED BY THIS POLICY.
(a) [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.]
(b) [Institutional benefits, by skill level.]
(c) [Non-institutional benefits, by skill level.]
(d) Eligibility for Payment of Benefits
[Activities of daily living and cognitive impairment shall be used to measure an insured’s need for long-term care and must be defined and described as part of the outline of coverage.] [Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanation of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too must be specified.]
- LIMITATIONS AND EXCLUSIONS.
[Describe:
(a) Preexisting conditions;
(b) Non-eligible facilities and provider;
(c) Non-eligible levels of care (e.g., unlicensed providers, care or treatment provided by a family member, etc.);
(d) Exclusions and exceptions;
(e) Limitations.]
[This section should provide a brief specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in Number 6 above.]
THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG-TERM CARE NEEDS.
- RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of long-term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. [As applicable, indicate the following:
(a) That the benefit level will not increase over time;
(b) Any automatic benefit adjustment provisions;
(c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage;
(d) If there is such a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations;
(e) And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated.]
-
ALZHEIMER’S DISEASE AND OTHER ORGANIC BRAIN DISORDERS. [State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer’s disease or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision which provides preconditions to the availability of policy benefits for such an insured.]
-
PREMIUM.
[(a) State the total annual premium for the policy;
(b) If the premium varies with an applicant’s choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.]
- ADDITIONAL FEATURES.
[(a) Indicate if medical underwriting is used;
(b) Describe other important features.]
- CONTACT THE STATE SENIOR HEALTH INSURANCE ASSISTANCE PROGRAM IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR CERTIFICATE.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-23.0 Filing Requirements for Advertising
Prior to use, every insurer, health care service plan or other entity providing long-term care insurance in this State shall provide a copy of any long-term care insurance advertisement intended for use in this State whether through written, radio or television medium to the Insurance Commissioner of the State Delaware for review and approval by the Commissioner.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-24.0 Standards for Marketing
24.1 Every insurer, health care service plan or other entity marketing long-term care insurance coverage in this state, directly or through its producers, shall:
24.1.1 Establish marketing procedures to assure that any comparison of policies by its agents or other producers will be fair and accurate.
24.1.2 Establish marketing procedures to assure excessive insurance is not sold or issued.
24.1.3 Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy, the following: "Notice to Buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."
24.1.4 Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance.
24.1.5 Every insurer or entity marketing long-term care insurance shall establish auditable procedures for verifying compliance with Section 24.0 of this regulation.
24.1.6 If the state of Delaware is the state in which the policy or certificate is delivered or issued for delivery, the insurer shall, at solicitation, provide written notice to the prospective policyholder or certificate holder that the Delaware Medicare Assistance Bureau (DMAB), formerly known as the Elderinfo Program, a senior counseling program approved by the Commissioner, is available and the name, address and telephone number of the DMAB.
24.2 In addition to the practices prohibited in 18 Del.C. Ch. 23, Unfair Trade Practices, the following acts and practices are prohibited:
24.2.1 Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer.
24.2.2 High Pressure Tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.
24.2.3 Cold lead advertising. Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-25.0 Suitability
25.1 Section 25.0 of this regulation shall not apply to life insurance policies that accelerate benefits for long-term care.
25.2 Every insurer, health care service plan or other entity marketing long-term care insurance (“insurer”) shall:
25.2.1 Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;
25.2.2 Train its agents in the use of its suitability standards; and
25.2.3 Maintain a copy of its suitability standards and make them available for inspection upon request by the Commissioner.
25.3 Procedures required.
25.3.1 To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration:
25.3.1.1 The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;
25.3.1.2 The applicant’s goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs; and
25.3.1.3 The values, benefits and costs of the applicant’s existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.
25.3.2 The insurer, and where a producer is involved, the producer shall make reasonable efforts to obtain the information set out in subsection 25.3.1 of this regulation. The efforts shall include presentation to the applicant, at or prior to application, the “Long-Term Care Insurance Personal Worksheet.” The personal worksheet used by the issuer shall contain, at a minimum, the information in the format contained in Appendix B, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer’s personal worksheet shall be filed with the Commissioner.
25.3.3 A completed personal worksheet shall be returned to the insurer prior to the insurer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.
25.3.4 The sale or dissemination outside the company or agency by the issuer or producer of information obtained through the personal worksheet in Appendix B is prohibited.
25.4 The insurer shall use the suitability standards it has developed pursuant to Section 25.0 of this regulation in determining whether issuing long-term care insurance coverage to an applicant is appropriate.
25.5 Producers shall use the suitability standards developed by the insurer in marketing long-term care insurance.
25.6 At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled “Things You Should Know Before You Buy Long-Term Care Insurance” shall be provided. The form shall be in the format contained in Appendix C, in not less than 12 point type.
25.7 If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer shall send the applicant a letter similar to Appendix D. However, if the applicant has declined to provide financial information, the issuer may use some other method to verify the applicant’s intent. Either the applicant’s returned letter or a record of the alternative method of verification shall be made part of the applicant’s file.
25.8 The insurer shall report annually to the Commissioner the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who chose to confirm after receiving a suitability letter.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-26.0 Standards for Benefit Triggers
26.1 A long-term care insurance policy shall condition the payment of benefits on a determination of the insured’s ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than 3 of the activities of daily living or the presence of cognitive impairment.
26.2 Activities of Daily Living
26.2.1 Activities of daily living shall include at least the following as defined in Section 5.0 of this regulation and in the policy:
26.2.1.1 Bathing;
26.2.1.2 Continence;
26.2.1.3 Dressing;
26.2.1.4 Eating;
26.2.1.5 Toileting; and
26.2.1.6 Transferring;
26.2.2 Insurers may use activities of daily living to trigger covered benefits in addition to those contained in subsection 26.2.1 of this regulation as long as they are defined in the policy.
26.3 An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however, the provisions shall not restrict, and are not in lieu of, the requirements contained in subsections 26.1 and 26.2 of this regulation.
26.4 For purposes of Section 26.0 of this regulation, the determination of a deficiency shall not be more restrictive than:
26.4.1 Requiring the hands-on assistance of another person to perform the prescribed activities of daily living; or
26.4.2 If the deficiency is due to the presence of a cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured or others.
26.5 Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.
26.6 Long term care insurance policies shall include a clear description of the process for appealing and resolving benefit determinations.
26.7 The requirements set forth in Section 26.0 of this regulation shall be effective (12 months after adoption of this provision) and shall apply as follows:
26.7.1 Except as provided in subsection 26.7.2 of this regulation, the provisions of Section 26.0 of this regulation apply to a long-term care policy issued in this state on or after the effective date of the amended regulation.
26.7.2 For certificates issued on or after the effective date of this section, under a group long-term care insurance policy as defined in 18 Del.C. §7103(4)a, the provisions of Section 26.0 of this regulation shall not apply.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-27.0 Prohibition Against Pre-Existing Conditions and Probationary Periods in Replacement Policies or Certificates
If a long-term care insurance policy or certificate replaces another long-term care insurance policy or certificate, the replacing insurer shall waive any time periods applicable to pre-existing conditions and probationary periods in the new long-term care insurance policy or certificate to the extent that similar exclusions have been satisfied under the original policy.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-28.0 Requirement to Deliver Shopper's Guide
28.1 A long-term care insurance shopper's guide in the format developed by the National Association of Insurance Commissioners, or one developed or approved by the Commissioner, shall be provided to all prospective applicants of a long-term care insurance policy or certificate.
28.1.1 In the case of agent solicitations, an agent must deliver the shopper's guide prior to the presentation of an application or enrollment form.
28.1.2 In the case of direct response solicitations, the shopper's guide must be presented in conjunction with any application or enrollment form.
28.2 Life insurance policies or riders containing accelerated long-term care benefits are not required to furnish the guide referenced in subsection 28.1 of this regulation but shall furnish the policy summary required under 18 Del.C. §7105(j).
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-29.0 Requirement to Offer Nonforfeiture Benefit
29.1 No policy or certificate may be delivered or issued for delivery in this state unless the insurer also offers to the policyholder or certificateholder the option to purchase a policy that provides for nonforfeiture benefits to the defaulting or lapsing policyholder or certificateholder.
Section 29.0 of this regulation not apply to life insurance policies or riders containing accelerated long-term care benefits.
29.1.1 For purpose of Section 29.0 of this regulation, attained age rating is defined as a schedule of premiums starting from the issue date which increases with increasing age at least 1 percent per year to age 50, and at least 3% per year beyond age 50.
29.1.2 For purposes of Section 29.0 of this regulation, the nonforfeiture benefit shall be a shortened benefit period providing paid-up long-term care insurance coverage after lapse.The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) will be payable for a qualifying claim, but the lifetime maximum dollars or days of benefit shall be determined as specified in subsection 29.1.3 of this regulation.
29.1.3 The standard nonforfeiture credit will be equal to 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of subsection 29.2 of this regulation.
29.1.4 Effective Dates
29.1.4.1 The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first 3 years.
29.1.4.2 Subsection 29.1.4.1 of this regulation notwithstanding, no policy or certificate shall begin a nonforfeiture benefit later than the end of the third year following the policy or certificate issue date except that for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of:
29.1.4.2.1 The end of the tenth year following the policy or certificate issue date; or
29.1.4.2.2 The end of the second year following the date the policy or certificate is no longer subject to attained age rating.
29.1.5 Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
29.2 All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status will not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium paying status.
29.3 There shall be no difference in the minimum nonforfeiture benefit as required under Section 29.0 of this regulation for group and individual policies.
29.4 The requirements set forth in Section 29.0 of this regulation shall become effective on May 1, 1997, except for certificates issued on or after the effective date of Section 29.0 of this regulation under a group long-term care insurance policy as defined in 18 Del.C. §7103, which policy was in force at the time this amended regulation became effective.
29.5 Premiums charged for a policy or certificate containing nonforfeiture benefits shall be subject to the loss ratio requirements of Section 18.0 of this regulation treating the policy as a whole.
29.6 Rejection of nonforfeiture benefit.
29.6.1 A nonforfeiture benefit as provided in subsections 29.1.2 and 29.1.3 of this regulation shall be included in a long-term care insurance policy or certificate unless an insurer obtains a rejection of a nonforfeiture benefit signed by the policyholder or certificateholder as required in Section 29.0 of this regulation.
29.6.2 The rejection shall be considered part of the application and shall state: I have reviewed the outline of coverage and the nonforfeiture benefit as described therein. Specifically, I have reviewed Plan ___________ and I reject the nonforfeiture benefit.
29.7 Nonforfeiture benefits for qualified long-term care policies shall meet the following requirements:
29.7.1 The nonforfeiture provision shall be appropriately captioned:
29.7.2 The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium paying contracts approved by the Commissioner for the same contract form; and
29.7.3 The nonforfeiture provision shall provide at least 1 of the following:
29.7.3.1 Reduced paid-up insurance;
29.7.3.2 Extended term insurance;
29.7.3.3 Shortened benefit insurance; or
29.7.3.4 Other similar offerings approved by the Commissioner.
29.8 If the required offer of a nonforfeiture benefit is rejected, the insurer shall provide the contingent benefit upon lapse described below. In the event that a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
29.8.1 The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium set forth below based on the insured’s issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase.
Triggers for a Substantial Premium Increase
Percent Increase Over
Initial Premium
29.8.2 On or before the effective date of a substantial premium increase as defined in subsection 29.8.1 of this regulation, the insurer shall:
29.8.2.1 Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased;
29.8.2.2 Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the terms of subsection 29.5 of this regulation. This option may be elected at any time during the 120-day period referenced in subsection 29.8.1 of this regulation; and
29.8.2.3 Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period referenced in subsection 29.8.1 of this regulation shall be deemed to be the election of the offer to convert in subsection 29.8.2.2 of this regulation.
29.8.2.4 The contingent benefit upon lapse shall begin not later than the end of the third year following the policy or certificate issue date.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-30.0 Permitted Compensation Arrangements
30.1 An insurer or other entity may provide commission or other compensation to an agent or other representative for the sale of a long-term care insurance policy or certificate which shall not exceed 35% of the total premium paid for that policy year.
30.2 No entity shall provide compensation to its agents or other producers and no agent or producer shall receive compensation greater than 25% of the total premium paid for that policy year for the sale of a replacement long-term care insurance policy or certificate.
30.3 For purposes of Section 30.0 of this regulation, "compensation" includes pecuniary or non-pecuniary remuneration or any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards and finders fees.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-31.0 Penalties
In addition to any other penalties provided by the laws of this state, any insurer and any agent found to violate any requirement of this state relating to the regulation of long-term care insurance or the marketing of such insurance shall be subject to a fine of up to 3 times the amount of any commissions paid for each policy involved in the violation or up to $10,000, whichever is greater.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-32.0 Separability
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
18 Del. Admin. Code § 1404-33.0 Effective Date
This regulation became effective July 30, 1990, except Section 13.0 became effective July 1, 1993. Amendment #1 adopted nonforfeiture benefits (Section 26.0) on December 23, 1996, to become effective on May 1, 1997. Amendment #2 became effective on March 22, 1999 to become effective 120 days thereafter. Amendment #3 adding Sections 8.0, 10.0 and 20.0 shall become effective on January 1, 2005. Amendment #4 adding subsections 11.6 through 11.11 became effective on October 11, 2001. Amendment #5 adding new subsections 8.2.5.1.4 through 8.2.5.1.6 and new subsection 8.6 became effective January 11, 2022. Amendment #6 deleting subsections 8.2.5.1.4 through 8.2.5.1.6 and adding subsections 8.5.1 through 8.5.3 shall become effective 10 days after its adoption.
APPENDIX A
RESCISSION REPORTING FORM FOR
LONG-TERM CARE POLICIES
FOR THE STATE OF DELAWARE
FOR THE REPORTING YEAR 19[ ]
Company Name:___________________________________________
Address:______________________________________
Phone Number:__________________________________
Due: March 1 annually
Instructions:
The purpose of this form is to report all rescissions of long-term care insurance policies or certificates. Those rescissions voluntarily effectuated by an insured are not required to be included in this report. Please furnish one form per rescission.
Policy
Form #
Policy and
Certificate #
Name of
Insured
Date of
Policy
Issuance
Date/s
Claim/s
Submitted
Date of
Rescission
Detailed reason for rescission: ________________________________________________
Signature
Name and Title (please type)
Date
APPENDIX B
Long Term Care Insurance
Personal Worksheet
People buy long-term care insurance for a variety of reasons. Some don’t want to use thier own assets to pay for long-term care Some buy insurance to make sure they can choose the type of care they get. Others don’t want their family to have to pay for care or don’t want to go on Medicaid. But long term care insurance may be expensive, and may not be right for everyone.
By state law, the insurance company must fill out part of the information on this worksheet and ask you to fill out the rest to help you and the company decide if you should buy this policy.
Premium Information
Policy Form Numbers____________________
The premium for the coverage you are considering will be [$_________ per month, or $_______ per year,] [a one-time single premium of $____________.]
Type of Policy (non cancellable/guaranteed renewable):________________________________
The Company’s Right to Increase Premiums:
[The company cannot raise your rates on this policy.] [The company has a right to increase premiums on this policy in the future, provided it raises rates for all policies in the same class in this state.] [Insurers shall use appropriate bracketed statement. Rate guarantees shall not be shown on this form.]
Rate Increase History
The company has sold long-term care insurance since [year] and has sold this policy since [year]. [The company has never raised its rates for any long-term care policy it has sold in this state or any other state.] [The company has not raised its rates for this policy form or similar policy forms in this state or any other state in the last 10 years.] [The company has raised its premium rates on this policy form or similar policy forms in the last 10 years. Following is a summary of the rate increases.]
Questions Related to Your Income
How will you pay each year’s premium?
®From my Income ®From my Savings/Investments ®My Family will Pay
[® Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%?]
What is your annual income? (check one)
®Under $10,000 ®$[10-20,000] ®$[20-30,000]
®$[30-50,000] ®Over $50,000
How do you expect your income to change over the next 10 years? (check one)
®No change ®Increase ®Decrease
If you will be paying premiums with money received only from your own income, a rule of thumb is that you may not be able to afford this policy if the premiums will be more than 7% of your income.
Will you buy inflation protection?(check one) ®Yes ® No
If not, have you considered who you will pay for the difference between future costs and your daily benefit amount?
®From my Income ®From my Savings/Investments ®My Family will Pay
How are you planning to pay for your care during the elimination period? (check one)
®From my Income ®From my Savings/Investments ®My Family will Pay
Question Related to Your Savings and Investments
Not counting your home, about how much are all of your assets (savings and investments) worth? (check one)
®Under $20,000 ®$20,000-$30,000 ®$30,000-$50,000 ®Over $50,000
How do you expect your assets to change over the next ten years? (check one)
®Stay about the same ®Increase ®Decrease
If you are buying this policy to protect your assets and your assets are less than $30,000, you may wish to consider other options for financing your long-term care.
Disclosure Statement
®The information provided above accurately describes my financial situation.
®I choose not to complete this information.
Signed:
(Applicant) (Date)
[® I explained to the applicant the importance of completing this information.
Signed:
(Producer) (Date)
Producer’s Printed Name: ]
[Note: In order for us to process your application, please return this signed statement to [name of company], along with your application.]
[My producer has advised me that this policy does not appear to be suitable for me. However, I still want the company to consider my application.
Signed: ]
(Applicant) (Date)
Drafting Note: Choose the appropriate sentences depending on whether this is a direct mail or agent sale.
The company may contact you to verify your answers.
Drafting Note: When the Long-Term Care Insurance Personal Worksheet is furnished to employees and their spouses under employer group policies, the text from the heading “Disclosure Statement” to the end of the page may be removed.
APPENDIX C
Things You Should Know Before You Buy Long-Term Care Insurance
Long-Term
Care
Insurance
A long-term care insurance policy may pay most of the costs for your care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it.
[You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.]
Drafting Note: For single premium policies, delete this bullet; for noncancellable policies, delete the second sentence only.
The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs.
Medicare
Medicare does not pay for most long-term care.
Medicaid
Medicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid.
Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services.
When Medicaid pays your spouse’s nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets.
Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency.
Shopper’s
Guide
Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners’ “Shopper’s Guide to Long-Term Care Insurance.” Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy.
Counseling
Free counseling and additional information about long-term care insurance are available through your state’s insurance counseling program. Contact your state insurance department or department on aging for more information about the senior health insurance counseling program in your state.
APPENDIX D
Long-Term Care Insurance Suitability Letter
Dear [Applicant]:
Your recent application for long-term care insurance included a “personal worksheet,” which asked questions about your finances and your reasons for buying long-term care insurance. For your protection, state law requires us to consider this information when we review your application, to avoid selling a policy to those who may not need coverage.
[Your answers indicate that long-term care insurance may not meet your financial needs. We suggest that you review the information provided along with your application, including the booklet “Shopper’s Guide to Long-Term Care Insurance” and the page titled “Things You Should Know Before Buying Long-Term Care Insurance.” Your state insurance department also has information about long-term care insurance and may be able to refer you to a counselor free of charge who can help you decide whether to buy this policy.]
[You chose not to provide any financial information for us to review.]
Drafting Note: Choose the paragraph that applies.
We have suspended our final review of your application. If, after careful consideration, you still believe this policy is what you want, check the appropriate box below and return this letter to us within the next 60 days. We will then continue reviewing your application and issue a policy if you meet our medical standards.
If we do not hear from you within the next 60 days, we will close your file and not issue you a policy. You should understand that you will not have any coverage until we hear back from you, approve your application and issue you a policy.
Please check one box and return in the enclosed envelope.
® Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase,] I wish to purchase this coverage. Please resume review of my application.
Drafting Note: Delete the phrase in brackets if the applicant did not answer the questions about income.
® No. I have decided not to buy a policy at this time.
APPLICANT’S SIGNATURE DATE
Please return to [issuer] at [address] by [date].
APPENDIX E
Claims Denial Reporting Form
Long-Term Care Insurance
OMITTED
APPENDIX F
Instructions:
This form provides information to the applicant regarding premium rate schedules, rate schedule adjustments, potential rate revisions, and policyholder options in the event of a rate increase.
Insurers shall provide all of the following information to the applicant:
Long Term Care Insurance
Potential Rate Increase Disclosure Form
- [Premium Rate] [Premium Rate Schedules]: [Premium rate] [Premium rate schedules] that [is][are] applicable to you and that will be in effect until a request is made and [filed][approved] for an increase [is][are] [on the application][$_____])
Drafting Note: Use "approved" in states requiring prior approval of rates.
-
The [premium] [premium rate schedule] for this policy [will be shown on the schedule page of] [will be attached to] your policy.
-
Rate Schedule Adjustments:
The company will provide a description of when premium rate or rate schedule adjustments will be effective (e.g., next anniversary date, next billing date, etc.) (fill in the blank): __________________.
- Potential Rate Revisions:
This policy is Guaranteed Renewable. This means that the rates for this product may be increased in the future. Your rates can NOT be increased due to your increasing age or declining health, but your rates may go up based on the experience of all policyholders with a policy similar to yours.
If you receive a premium rate or premium rate schedule increase in the future, you will be notified of the new premium amount and you will be able to exercise at least one of the following options:
"Pay the increased premium and continue your policy in force as is.
"Reduce your policy benefits to a level such that your premiums will not increase. (Subject to state law minimum standards.)
"Exercise your nonforfeiture option if purchased. (This option is available for purchase for an additional premium.)
"Exercise your contingent nonforfeiture rights.* (This option may be available if you do not purchase a separate nonforfeiture option.)
- Contingent Nonforfeiture
If the premium rate for your policy goes up in the future and you didn't buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here's how to tell if you are eligible:
You will keep some long-term care insurance coverage, if:
"Your premium after the increase exceeds your original premium by the percentage shown (or more) in the following table; and
"You lapse (not pay more premiums) within 120 days of the increase.
The amount of coverage (i.e., new lifetime maximum benefit amount) you will keep will equal the total amount of premiums you've paid since your policy was first issued. If you have already received benefits under the policy, so that the remaining maximum benefit amount is less than the total amount of premiums you've paid, the amount of coverage will be that remaining amount.
Except for this reduced lifetime maximum benefit amount, all other policy benefits will remain at the levels attained at the time of the lapse and will not increase thereafter.
Should you choose this Contingent Nonforfeiture option, your policy, with this reduced maximum benefit amount, will be considered "paid-up" with no further premiums due.
Example:
"You bought the policy at age 65 and paid the $1,000 annual premium for 10 years, so you have paid a total of $10,000 in premium.
"In the eleventh year, you receive a rate increase of 50%, or $500 for a new annual premium of $1,500, and you decide to lapse the policy (not pay any more premiums).
"Your "paid-up" policy benefits are $10,000 (provided you have a least $10,000 of benefits remaining under your policy.)
Contingent Nonforfeiture
Cumulative Premium Increase over Initial Premium
That qualifies for Contingent Nonforfeiture
(Percentage increase is cumulative from date of original issue. It does NOT represent a one-time increase.)
Percent Increase Over Initial Premium
APPENDIX G
Long-Term Care Insurance
Replacement and Lapse Reporting Form
OMITTED
History
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 14 DE Reg. 316 (10/01/10)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 26 DE Reg. 767 (03/01/23)
- 2 DE Reg. 2113 (05/01/99)
- 14 DE Reg. 316 (10/01/10)
- 25 DE Reg. 714 (01/01/22)
- 26 DE Reg. 767 (03/01/23)
- 14 DE Reg. 316 (10/01/10)
- 8 DE Reg. 563 (10/01/04)
- 26 DE Reg. 767 (03/01/23)
1405 Requirements for Fully Insured Multiple Employer Welfare Arrangements and Association Health Plans
18 Del. Admin. Code § 1405-1.0 Purpose
1.1 The purpose of this regulation is to aid the Department of Insurance in enforcing provisions of the Delaware Insurance Code relating to the unauthorized transaction of insurance. As a result of the Final Rule issued by the U.S. Department of Labor expanding the definition of the term "employer" (see 83 FR 28,961 (to be codified at 29 CFR 2510.3-5(c)), the Department recognizes that multiple employer welfare arrangements, including association health plans, may begin marketing group policies in Delaware. These entities sell group health care coverage to employers. Employers operating small businesses may be particularly targeted. Because of rate increases imposed by licensed companies, or adverse experience in their group, many small employers have in the past been attracted by the purported low cost coverage offered by these entities.
1.2 Some of these entities incorrectly represent to their agents and applicants that they are exempt from state insurance regulation either because they are subject to the Federal Employee Retirement Income Security Act ("ERISA") or because they hold a policy issued outside the state. Exemption from Delaware Department of Insurance regulation is available under those circumstances if certain legal standards are met. This regulation also ensures that only those entities that meet the legal standards established by the Delaware Department of Insurance to issue policies in Delaware are permitted to operate in Delaware.
1.3 An additional purpose of this regulation is to set forth rules, forms, and procedures regarding fully insured MEWAs and association health plans. This regulation protects Delaware consumers and promotes the stability of Delaware's health insurance markets, to the extent permitted under federal law, by setting rules regarding licensure, solvency, reserve requirements, and rating requirements.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-2.0 Authority
This regulation is issued pursuant to the authority vested in the Commissioner under 18 Del.C. §311, 18 Del.C. §2101, 18 Del.C. §505, 29 Del.C. Ch. 101, and 29 USC §1144(b)(6)(A)(i) and in response to 29 CFR 2510.3-5.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-3.0 Definitions
The following words and terms, when used in this regulation, have the following meaning unless the context clearly indicates otherwise:
"Association" means any foreign or domestic association that complies with 18 Del.C. §3506(a)(1)-(6) and provides a health benefit plan that covers the employees of at least one employer that is either domiciled in Delaware or has its principal headquarters or principal administrative office in Delaware or covers a Delaware resident of a non-Delaware employer.
"Commissioner" means the Commissioner of the Delaware Department of Insurance.
"Department" means the Delaware Department of Insurance.
"Employee welfare benefit plan" or "welfare plan" means an employee welfare benefit plan or welfare plan as defined in 29 USC §1002(1).
"Employee Retirement Income Security Act" or "ERISA" means the federal statute 29 USC Ch. 18.
"Fully Insured" means any association or MEWA health benefit plan coverage provided by a foreign or domestic insurer licensed to do business in Delaware in compliance with 18 Del.C. §3506 and 29 USC §1144(b)(6)(D).
"Health Benefit Plan" means a policy, contract, certificate, or agreement offered or issued by a health insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health services, as defined in 18 Del.C. §903. The health benefit plan is issued to an association, to a trust, or to one or more trustees of a fund established, created, or maintained for the benefit of the members of one or more associations or a contract or plan issued by an association or trust or by a MEWA as defined in the Employee Retirement Income Security Act of 1974, 29 USC Ch. 18.
"Insurer" means any insurer, health service corporation, a health maintenance organization, or a managed care organization offering health insurance as defined in 18 Del.C. §903. An insurer shall not offer a health benefit plan to an association or MEWA with covered lives in Delaware unless it possesses a certificate of authority from the Commissioner or unless the nature of its business in Delaware is such that it is exempt from this requirement under the provisions of 18 Del.C. §506.
"Intermediary" shall mean an agent, broker, or other person who negotiates, solicits, or effectuates an agreement or contract to provide health care and/or medical coverage or benefits for any employer or employee in the state.
"Multiple employer welfare arrangement" or "MEWA" shall mean an arrangement which is established or maintained and offers to provide health care benefits or coverage to employees of two or more employers. Except, however, this regulation does not apply to multiple employer welfare arrangements which are exempt from state regulation under ERISA.
The following plans are excluded from the definition of MEWA:
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-4.0 Filing Requirements
4.1 Initial filing requirements
4.1.1 No association or MEWA or intermediary of an association or MEWA may offer either a fully insured employee welfare benefit plan or solicit any resident of this state to make application or effectuate coverage under an association plan or MEWA in Delaware unless:
4.1.1.1 The association or MEWA is duly licensed with the Department. An association or MEWA seeking to offer a fully-insured health benefit plan shall make application for a license to the Department and shall not offer such plans in this State until it is licensed;
4.1.1.2 The association's or MEWA's application for licensure is approved by the Department; and
4.1.1.3 The plan intermediary has ascertained that the MEWA represented has complied with this Section.
4.1.2 The application for licensure for a fully insured association or MEWA shall be on a form prescribed by the Department and shall include the following:
4.1.2.1 A certification of an officer, director, or trustee of the fully insured association or MEWA that states:
4.1.2.1.1 Name of the association or MEWA;
4.1.2.1.2 Names and business addresses of all principals, officers, directors, and trustees;
4.1.2.1.3 Names and addresses of the employer members;
4.1.2.1.4 Names and addresses of trustees or other persons responsible for the MEWA's or the association's operation;
4.1.2.1.5 Mailing address, email address, and telephone number at which communications are to be received;
4.1.2.1.6 Eligibility requirements for membership in the association or MEWA; and
4.1.2.1.7 The fees, if any, charged for membership in the association or MEWA;
4.1.2.2 A copy of any policy or contract describing benefits offered by the association or the MEWA;
4.1.2.3 A copy of the organizational documents of the association or MEWA, including the articles of incorporation, by-laws or trust instrument;
4.1.2.4 A statement that the benefits or coverage are fully insured;
4.1.2.5 A copy of the association's or MEWA's certificate of good standing from the state in which the association or MEWA is registered as a business;
4.1.2.6 The name of the insurer that insures the association or MEWA;
4.1.2.7 The name and contact information for the Delaware registered agent for service of process on the association or MEWA;
4.1.2.8 A certification of an officer, director, or trustee of the fully insured association or MEWA that states compliance with 18 Del.C. §3506;
4.1.2.9 A description of the membership requirements;
4.1.2.10 A copy of any document executed by an employer to become a member of the association, including application for membership in the association;
4.1.2.11 Biographical affidavits for all trustees, officers, directors, and other members of the association or MEWA's governing body responsible for the operation of the association or MEWA;
4.1.2.12 The names, addresses, and qualifications of persons who will solicit, negotiate, procure, or effect applications for coverage with the association or MEWA;
4.1.2.13 A copy of all current policies or contracts of insurance issued to the association or MEWA that provide coverage for health care benefits and services to be offered in Delaware;
4.1.2.14 A copy of all current contracts between the association or MEWA and insurers to provide coverage for health care benefits and services to be offered in Delaware;
4.1.2.15 A copy of all current advertising and marketing materials used by the association or MEWA;
4.1.2.16 The names and addresses of all administrators and organizations, including third party administrators or intermediaries, responsible for the operation of the association or MEWA that complies with the following:
4.1.2.16.1 The association or MEWA contact shall be the person responsible for filing all applicable forms and changes in information with the Department; and
4.1.2.16.2 The regulatory contact shall be the person responsible for receiving notice of laws regulations, bulletins, and the like that may affect the plan;
4.1.2.17 The most recent audited financial statement as defined in Section 12.0 of this regulation;
4.1.2.18 A copy of the most recent M-1 form as filed with United States Department of Labor; and
4.1.2.19 A $1000 filing fee.
4.2 Annual filing requirements
4.2.1 Following licensure, a fully insured association or MEWA that offers a plan in the State shall annually, on or before July 1, submit the following information:
4.2.1.1 A Proof of Coverage form that:
4.2.1.1.1 Affirms that all the covered benefits are fully insured on a direct basis by an insurer; and
4.2.1.1.2 Is completed and certified by an officer, director, or trustee of the association or MEWA;
4.2.1.2 Demographic Information, on a form prescribed by the Department, providing association, MEWA, third party administrator, intermediary, regulatory, and insurer contacts, that complies with the following:
4.2.1.2.1 The association or MEWA contact shall be the person responsible for filing all applicable forms and changes in information with the Department; and
4.2.1.2.2 The regulatory contact shall be the person responsible for receiving notice of laws, regulations, bulletins, and the like that may affect the plan;
4.2.1.3 Notice of any changes in information previously filed with the Commissioner, which shall include, but is not limited to, the following items:
4.2.1.4 The most recent audited financial statement as defined in Section 12.0 of this regulation; and
4.2.1.5 A $150.00 filing fee.
4.3 If, subsequent to a filing under subsections 4.1 or 4.2, changes occur so that the information contained in the filing is no longer accurate, the MEWA, association, or intermediary that made the filing shall, within fifteen days of the date the change is effective, file the changes with the Department.
4.4 The Commissioner shall conduct a completeness review of a filing submitted under this Section and shall notify the applicant in writing of any deficiencies found during the completeness review within 30 business days of receipt. An applicant shall address any deficiencies in its application within 15 business days of notice thereof. Upon written request from the applicant and for good cause shown, the Commissioner may extend this 15-business day timeframe to correct any deficiencies in the application or renewal for an additional 30 business days. The Department shall notify the applicant in writing of its response to any such request.
4.5 If the Commissioner rejects a complete initial licensure application, or a subsequent annual registration application filed pursuant to this Section, the Department shall advise the applicant in writing that the application is denied and shall specify the reason for denial. The applicant may make written demand upon the Commissioner within 15 business days for a hearing before the Commissioner to determine the reasonableness of the Commissioner's action. The hearing shall be held pursuant to 18 Del.C. §323.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-5.0 Applicability of federal preemption requirements
5.1 Notwithstanding any other provision of law, and except as provided in this regulation, any association or MEWA that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expense, whether such coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the Department unless the association or MEWA shows that while providing such services it is exempt from State jurisdiction as a result of federal preemption.
5.2 An association or MEWA may show that it is subject to federal jurisdiction by providing to the Commissioner the appropriate certificate of license issued by the federal agency which permits or qualifies it to provide those services for which it is licensed or certified. For the avoidance of doubt, an M-1 filing with the U.S. Department of Labor shall not, in and of itself, be sufficient to overcome the presumption of the Department's jurisdiction as set forth in this Section.
5.3 Except as otherwise set forth herein, any MEWA or association that is unable to show that it is subject to federal jurisdiction shall submit to an examination by the Commissioner to determine whether the organization and solvency of such association or MEWA is in compliance with the applicable provisions of Delaware law.
5.4 Any association or MEWA that is unable to show that it is subject to federal jurisdiction shall be subject to all appropriate provisions of this regulation regarding the conduct of its business.
5.5 Until such time as the Department issues regulations specific to self-insured MEWAs and associations, self-insured MEWAs and associations shall be subject to all provisions of Title 18 of the Delaware Code and all regulations promulgated thereunder to the extent not inconsistent with the provisions of ERISA, including but not limited to:
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-6.0 Surplus Requirements
6.1 When a fully-insured association or MEWA submits its initial application as required under subsection 4.1 with the Department, it shall have a minimum surplus that is not less than $500,000, regardless of whether the insurer directly bills certificate holders for premiums on behalf of the association or MEWA or if the association or MEWA bills its members for premiums and remits the premiums to the insurer.
6.2 A fully insured association or MEWA shall continue to maintain the required minimum surplus indicated in subsection 6.1 so long as it continues to provide a health benefit plan in Delaware.
6.3 One year after the application for licensure pursuant to subsection 4.1 is approved and on every July 1 thereafter, a fully insured association or MEWA shall produce documentation of its annual premium for the preceding policy year and an estimate of its annual premium for the following year.
6.4 Surplus funds required under this Section are not to be used to fund the fully insured association or MEWA's normal operations, including providing a health benefit plan to its members. This unimpaired free surplus shall be in the form of cash or marketable securities.
6.5 The Commissioner may require additional surplus funds, based on the coverages and exposures involved.
6.6 If the level of surplus falls below the amounts specified in subsection 6.1, the fully insured association or MEWA shall notify the Commissioner within five days and shall file with the Commissioner within 45 days a plan to return the surplus to the required level. This plan shall include a report of the causes of the association's or MEWA's insufficiency, the assessments necessary to replenish the minimum surplus and the steps taken to prevent a recurrence of such circumstances.
6.7 In addition to the minimum surplus required in subsection 6.1, the fully insured association or MEWA shall obtain a surety bond sufficient to cover 20% of its annual premium for Delaware members, and shall comply with the following:
6.7.1 For the first year of operation, the fully insured association or MEWA shall obtain a surety bond in the amount of $500,000.00 to ensure the association's or MEWA's contractual obligations to its health benefit plan members:
6.7.2 Every surety bond obtained by a fully insured association or MEWA shall be:
6.7.2.1 In a form to be approved by the Commissioner;
6.7.2.2 Issued by an insurer or surety licensed to transact such business in Delaware, or by a surplus lines insurer on Delaware's approved list; and
6.7.2.3 Provided, by certified copy, to the Commissioner at the time of initial application under subsection 4.1 and annually thereafter; and
6.7.3 A fully insured association or MEWA shall notify the Department within five days of any cancellation or termination of its surety bond.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-7.0 Rating Requirements
7.1 An insurer offering a health benefit plan to an association or MEWA shall obtain rate approval from the Commissioner through the rate review process provided in 18 Del.C. Ch. 25. An insurer may use its existing group rates, without making an association or MEWA-specific rate filing, so long as its group rates have been filed with and approved by the Commissioner and meet the requirements of this Section.
7.2 No insurer shall offer a health benefit plan to an association or MEWA unless such association or MEWA meets the eligibility requirements of 18 Del.C. §3506 in order to qualify for a group health insurance policy.
7.3 Any insurer contracting with an association or MEWA to provide a health benefit plan shall use a community rating methodology acceptable to the Commissioner in accordance with this Section and with the following:
7.3.1 The association or MEWA may be rated based on the collective group experience of its members, provided that each certificate holder and dependent is charged the same community rate; and
7.3.2 The following risk classification factors are prohibited in rating employees or members of such groups, and dependents of such employees or members:
7.3.2.1 Demographic rating, including age and gender rating;
7.3.2.2 Geographic area rating;
7.3.2.3 Health status rating, including pre-existing conditions;
7.3.2.4 Industry rating;
7.3.2.5 Medical underwriting and screening;
7.3.2.6 Experience rating;
7.3.2.7 Tier rating (except for tiers related to family structure); or
7.3.2.8 Durational rating.
7.4 The Commissioner may permit an insurer to establish rewards, premium discounts, split benefit designs, rebates, or otherwise waive or modify applicable co-payments, deductibles, or other cost-sharing amounts in return for adherence by a member or subscriber to programs of health promotion and disease prevention that are satisfactory to the Commissioner.
7.5 An insurer offering a health benefit plan to an association or a MEWA shall guarantee acceptance of all persons within the association or MEWA and their dependents.
7.6 An insurer offering a health benefit plan or plans to an association or a MEWA shall guarantee the rates on all such plans for a minimum of 12 months.
7.7 Medical Loss Ratio. A foreign or domestic insurer offering a health benefit plan to an association or MEWA with covered lives in Delaware shall comply, with respect to those covered lives, with the medical loss ratio and rebating requirements of 45 CFR 158.210-240, but shall in no case fall below eighty-five percent (85%) of the aggregate amount of premiums earned by the insurer from policies and certificates issued in this State.
7.8 Any fees associated with broker services shall not be incorporated into the medical loss ratio under subsection 7.7, but shall be incorporated in the administrative expense portion of an insurer's rate filing.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-8.0 Benefit Requirements
8.1 Each health benefit plan coverage offered to an association or MEWA in compliance with 18 Del.C. §3506 shall, at a minimum, provide:
8.1.1 Essential Health Benefits as defined in 42 USC §18022(b)(1) (see Pub. L. 111–148, Title I, §1302, Title X, §10104(b), Mar. 23, 2010, 124 Stat. 163, 896, incorporated herein by reference), except that pediatric dental and vision coverage as required in this subsection may be offered to the association in either a stand-alone dental or vision plan or as a benefit embedded in the health benefit plan;
8.1.2 Cost sharing requirements of 42 USC §18022(c)(1), (c)(3) (see Pub. L. 111–148, Title I, §1302, Title X, §10104(b), Mar. 23, 2010, 124 Stat. 163, 896, incorporated herein by reference);
8.1.3 Lifetime and annual limits as prescribed in 29 CFR 2590.715-2711 (see 80 FR 72261, Nov. 18, 2015, as amended at 81 FR 75325, Oct. 31, 2016, incorporated herein by reference);
8.1.4 A level of coverage designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan;
8.1.5 All other insurance requirements and benefit mandates for health insurers as provided in 18 Del.C. Chs. 35 and 72, as applicable and as may be amended, any regulations promulgated pursuant thereto, and as specified by regulation by the Commissioner; and
8.1.6 All other benefits required to comply with applicable federal laws and regulations.
8.2 Every health benefit plan offered by any insurer to an association or a MEWA shall include a process for subscribers to appeal adverse benefit determinations that complies with the requirements of 18 Del.C. §6418 and 18 DE Admin. Code 1301.
8.3 An insurer shall not deliver or issue for delivery an association or MEWA health benefit plan covering lives located in Delaware that contains an exclusion or limitation for pre-existing conditions or a waiting period on the coverage of pre-existing conditions.
8.4 Regardless of the collective size of the fully insured association or MEWA, health benefit plans issued to small employers shall comply with all insurance laws applicable to small employer groups as required by 18 DE Admin. Code 1308-3.3
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-9.0 Membership Requirements
9.1 Prior to issuing a health benefit plan to a fully insured association or MEWA, an insurer shall confirm that the fully insured association or MEWA:
9.1.1 Meets the bona fide association test outlined in 18 Del.C. §3506;
9.1.2 Meets the commonality-of-interest test. Pursuant to 83 FR 28,961 (to be codified at 29 CFR 2510.3-5(c)), employer members of an association or MEWA will be treated as having a commonality of interest if the standards of either subsection 9.1.2.1 or 9.1.2.2 are met, provided these standards are not implemented in a manner that is subterfuge for discrimination as is prohibited under 18 Del.C. Ch. 23 and 29 CFR 2510.3-5(d):
9.1.2.1 The employers are in the same trade, industry, line of business, or profession; or
9.1.2.2 Each employer has a principal place of business in the State of Delaware; and
9.1.3 Does not restrict membership to employers located within a particular geographic region of the State; and
9.1.4 Accepts employers with a principal place of business located in any part of the State.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-10.0 Notice Requirements
10.1 No policy of health insurance or certificate under a policy offering health insurance shall be delivered or issued for delivery in this State until a copy of the form and of the rules for the classification of risks has been filed with and approved by the Commissioner in accordance with Section 4.0 of this regulation.
10.2 The following notice shall be provided by the insurer within the policy documents to employers and employees who obtain coverage from an association or MEWA:
"NOTICE
THE {Insert the name of the FULLY INSURED ASSOCIATION OR MULTIPLE EMPLOYER WELFARE ARRANGEMENT in all capital letters} IS NOT AN INSURANCE COMPANY. FOR ADDITIONAL INFORMATION ABOUT THE {Insert the name of the ASSOCIATION OR MULTIPLE EMPLOYER WELFARE ARRANGEMENT in all capital letters} YOU SHOULD ASK QUESTIONS OF THE ADMINISTRATOR OF THE {Insert the name of the ASSOCIATION OR MULTIPLE EMPLOYER WELFARE ARRANGEMENT in all capital letters}, OR YOU MAY CONTACT THE DELAWARE DEPARTMENT OF INSURANCE AT__________."
10.3 Each fully insured association or MEWA-related notice shall include the Department's current consumer service telephone number and website in the blank provided in this notice.
10.4 The insurer of a fully insured plan shall include in its policy documents the following disclosures:
10.4.1 The Delaware resident has the option of purchasing insurance on the Delaware Health Insurance Marketplace;
10.4.2 Purchasing a fully insured association or MEWA health benefit plan may prevent the employer or individual from accessing premium subsidies and cost sharing reductions that may otherwise be available under the Patient Protection and Affordable Care Act; and
10.4.3 Purchasing a fully insured association or MEWA health benefit plan may be more expensive than purchasing a plan on the Delaware Health Exchange.
10.5 The insurer shall file its advertising and marketing materials with the Commissioner for prior approval.
10.6 The insurer shall file policies, certificates, statement of benefits, brochures, and any other endorsement, rider, or application used in conjunction with the health benefit plan with the Department for prior approval.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-11.0 Enrollment Periods
At a minimum, an insurer enrolling employers or individuals in a fully insured association or MEWA health benefit plan shall comply with all open enrollment and special enrollment periods as provided in 18 Del.C. §3571J.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-12.0 Financial Auditing
12.1 Each fully insured association or MEWA shall file annually with the Commissioner, and with the members of the fully insured association or MEWA, an audited financial statement for the most recently completed fiscal year that is certified by an independent certified public accountant. If the fully insured association or MEWA fails to file such audited financial statement, the Commissioner may perform the audit and the fully insured association or MEWA shall reimburse the Commissioner for the cost thereof.
12.2 At a minimum, the audited financial statement shall contain the following exhibits for the current and prior fiscal years:
12.2.1 Balance sheet;
12.2.2 Statement of gain or loss from operations;
12.2.3 Statement of changes in financial position;
12.2.4 Proof of minimum surplus, as set forth in Section 6.0 of this regulation;
12.2.5 Notes to financial statements; and
12.2.6 Management and internal control letters.
12.3 The financial statement shall be prepared in accordance with generally accepted accounting principles with the following exceptions:
12.3.1 Loss reserves shall not be discounted. However, the Commissioner may approve discounting of loss reserves if the fully insured association's or MEWA's actuary certifies that said discounting is in accordance with the customary practice of the traditional insurance industry, and that said discounting will not adversely affect the fiscal integrity of the fully insured association or MEWA; and
12.3.2 Any other exceptions to generally accepted accounting principles the Commissioner finds necessary to preserve the fiscal integrity of the fully insured association or MEWA.
12.4 Each fully insured association or MEWA shall include with the financial statement a statement of opinion as to the loss and loss expense reserves certified by an actuary.
12.5 Each fully insured association or MEWA shall file a copy of the fidelity bond, or evidence acceptable to the Commissioner, covering the administrator, the fully insured association or MEWA employees and service agents with the audited financial statement.
12.6 In addition to the annual audited financial statement, the Commissioner may require any fully insured association or MEWA to file additional financial information, including, but not limited to, interim financial reports, additional financial reports or exhibits, or statements considered necessary to secure complete information concerning the condition, solvency, experience, transactions, or affairs of the fully insured association or MEWA. The Commissioner shall establish reasonable deadlines for filing these additional reports, exhibits, or statements. The Commissioner may require verification of any additional required information.
12.7 Each fully insured association or MEWA shall file annually with the Commissioner the methodology for establishing the annual contributions of its members. Such contributions shall be based on reasonable assumptions and certified by an actuary.
12.8 An insurer offering a health benefit plan to a fully insured association or MEWA with covered lives in Delaware shall comply with all financial reporting requirements applicable to traditional insurance companies doing business in Delaware. Instructions for annual filings by traditional insurance companies doing business in Delaware are set forth on the Department's website.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-13.0 Advertising and Marketing
A fully insured association or MEWA, and insurance agents or brokers acting on behalf of a fully insured association or MEWA may only use marketing materials that have been submitted to and approved by the Commissioner pursuant to Section 4.0 of this regulation. A fully insured association or MEWA, and insurance agents or brokers acting on behalf of a fully insured association or MEWA are subject to 18 Del.C. Ch. 23 and all other applicable provisions of law regarding advertising practices.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-14.0 Record Retention
A fully insured association or MEWA doing business in Delaware shall maintain its books and records for a minimum period of seven years following termination of coverage under a fully-insured policy and a minimum of seven years for all fully insured association or MEWA-related documentation unrelated to insurance coverage.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-15.0 Enforcement Authority
15.1 A violation of this regulation shall be considered an unfair and deceptive trade practice under 18 Del.C. §2304. Failure to file the information required in this regulation shall be prima facie evidence of a deceptive practice which endangers the legitimate interest of customers and public. If the fully insured MEWA or association does not qualify for an exemption under ERISA, after hearing, the MEWA or association may be found in violation of 18 Del.C. §505 and 18 Del.C. Ch. 21.
15.2 To ensure compliance with the provisions of this regulation and protect Delaware health care consumers, the Commissioner may, in his or her discretion, examine the business and financial affairs of a fully insured association or MEWA doing business in this state utilizing the powers granted by 18 Del.C. §320, and other provisions of Title 18 as may be applicable.
15.3 The Commissioner may decline to issue or renew a license issued pursuant to this regulation if the Commissioner finds that a fully insured association or MEWA does not satisfy any standard or requirement of this regulation or any provision of other applicable state or federal law or regulation.
15.4 The Commissioner may suspend or revoke a license issued pursuant to this regulation for a violation of this regulation or any provision of applicable state and federal law.
15.5 Any person or entity that violates any provision of this regulation is subject to the penalties provided in Chapters 3, 17 and 23 of Title 18 and such other provisions of Title 18 as may be applicable.
15.6 When the Commissioner believes that a fully insured association, MEWA, or any other person is operating in this state without being duly registered or has violated the law, an administrative regulation of the Department, or an Order of the Commissioner, the Commissioner may issue an order to cease and desist such violation or take any other action set forth in 18 Del.C. §2307.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-16.0 Notification to the Department by Insurers of Contracts with Fully insured Associations or MEWAs
16.1 An insurer shall notify the Department by December 31st of each year of all health insurance contracts and administrative-services-only contracts it issued, renewed, or had in force at any time during the 12-month period of that calendar year, that covered a fully insured association or MEWA with members having employees or dependents in Delaware.
16.2 The health insurance contract between the insurer and the fully insured association or MEWA shall contain a provision whereby the insurer shall maintain, for the benefit of certificate holders, a deposit account covering 30 days of claims should the contract be cancelled or terminated. The insurer shall notify the Department within 5 days of any cancellation or termination of a contract that covered a fully insured association or MEWA with members having employees or dependents in Delaware.
16.3 Reporting Requirement for Fraudulent Fully Insured Association or MEWA Activity
16.3.1 An insurer having knowledge or a reasonable suspicion that a fully insured association, MEWA, or entity holding itself out to be a fully insured association or MEWA in this state is not in compliance with the requirements of this rule shall immediately report to the Commissioner, in writing, regarding the identity of the entity, any known contact information or other materials, and the nature of the entity's practices that triggered this reporting. This reporting obligation also requires an insurer report to the Commissioner any person, including a licensed or unlicensed agent, a broker, or other individual, soliciting, offering, or selling a health benefit plan on behalf of a fully insured association, MEWA, or entity holding itself out to be such a fully insured association or MEWA in this state without complying with the requirements of this regulation.
16.3.2 Confidentiality
16.3.2.1 The documents and evidence provided pursuant to this subsection or obtained by the Commissioner in an investigation of suspected or actual conduct in violation of this regulation shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in any private civil action pursuant to 29 Del.C. Ch. 100 or any confidentiality provision set forth in Delaware Title 18.
16.3.2.2 Subsection 16.3.2.1 of this subsection does not prohibit release by the Commissioner of documents and evidence obtained in an investigation of suspected or actual conduct in violation of this rule:
16.3.2.2.1 In administrative or judicial proceedings to enforce laws administered by the Commissioner;
16.3.2.2.2 To federal, state, or local law enforcement or regulatory agencies, or to the National Association of Insurance Commissioners; or
16.3.2.2.3 At the Commissioner's discretion.
16.3.3 Release of documents and evidence under subsection 16.3.2 of this subsection does not abrogate or modify the privilege granted in subsection 16.3.1 of this subsection.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-17.0 Insurance Agents and Brokers
17.1 Any person, including a licensed or unlicensed agent, a broker, or other individual, soliciting, offering, or selling a health benefit plan on behalf of a fully insured association or MEWA to a Delaware employer or a Delaware resident shall comply with the following requirements:
17.1.1 Notify the Commissioner in writing prior to engaging in any conduct in connection with such sale. This written notification shall include, at a minimum:
17.1.1.1 The soliciting person's name, address, telephone number, and email address;
17.1.1.2 The name of the fully insured association or MEWA; and
17.1.1.3 All materials in the soliciting person's possession used for the purposes of soliciting, offering, or selling the health benefit plan, including advertising and marketing materials;
17.1.2 Prior to completing a sale, disclose to the employer or resident that:
17.1.2.1 He/she is being compensated for the sale of the health benefit plan;
17.1.2.2 The employer or resident has the option of purchasing insurance on the Delaware Health Exchange;
17.1.2.3 Purchasing such a health benefit plan may prevent the employer or individual from accessing premium subsidies and cost sharing reductions; and
17.1.2.4 Purchasing such a health benefit plan may be more expensive than purchasing a plan on the Delaware Health Exchange.
17.1.3 Provide the employer or resident with a crosswalk of benefits comparing the fully insured association or MEWA health benefit plan with plans offered on the Delaware Health Insurance Marketplace; and
17.1.4 Prior to engaging in or assisting any person to engage in offering a fully insured association or MEWA health benefit plan, carry out and document appropriate due diligence to establish, at a minimum, the following:
17.1.4.1 That the insurer is licensed in the State;
17.1.4.2 That the association or MEWA is licensed in the State;
17.1.4.3 That the disclosures listed in subsection 17.1.2 are in the policy document; and
17.1.4.4 That the advertising and marketing materials he/she is using have been approved by the Department.
17.2 Any person, including a licensed or unlicensed agent, a broker, or other individual, soliciting, offering, or selling a health benefit plan on behalf of a fully insured association, MEWA, or entity holding itself out to be such a fully insured association or MEWA, having knowledge or a reasonable suspicion that a fully insured association, MEWA, or entity holding itself out to be a fully insured association or MEWA in this State is not in compliance with the requirements of this regulation shall immediately report to the Commissioner in writing regarding the identity of the entity, any known contact information or other materials, and the nature of the entity's practices triggering this reporting. This reporting obligation also requires such person to report to the Commissioner any person, including a licensed or unlicensed agent, a broker, or other individual, soliciting, offering, or selling a health benefit plan on behalf of a fully insured association, MEWA, or entity holding itself out to be such a fully insured association or MEWA in this State without complying with the requirements of this rule. The confidentiality provisions of subsection 16.3.2 shall apply to this subsection.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-18.0 Severability
If any provision of this regulation, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this regulation which can be given effect without the invalid provision or application, and to that end the provisions of this regulation are severable.
History
- 22 DE Reg. 509 (12/01/18)
18 Del. Admin. Code § 1405-19.0 Effective Date
The effective date of the Regulation shall be ten (10) days from the date the Order adopting this regulation is published in the Delaware Register of Regulations, pursuant to 29 Del.C. §10118(g).
History
- 22 DE Reg. 509 (12/01/18)
1406 Third Party Administrators
18 Del. Admin. Code § 1406-1.0 Scope and Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §102, 74 Del. Laws c. 157, and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-2.0 Definitions
The following words and terms, when used in the regulation, have the following meaning:
“Administrator” or “third party administrator” or “TPA” means a person who directly or indirectly underwrites, collects charges or premiums from, or denies, modifies, adjusts or settles claims on residents of this state in connection with health coverage offered or provided by an insurer, except any of the following:
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An employer, or a wholly owned direct or indirect subsidiary of an employer, on behalf of its employees or the employees of 1 or more subsidiaries or affiliated corporations of such employer;
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A union on behalf of its members;
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An insurer that is authorized to transact insurance in this state pursuant to Title 18;
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An insurance producer licensed to sell health coverage in this state, whose activities are limited exclusively to the sale of insurance;
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A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;
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A trust and its trustees, agents and employees acting pursuant to such trust established in conformity with 29 U.S.C. Section 186;
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A trust exempt from taxation under Section 501(a) of the Internal Revenue Code, its trustees and employees acting pursuant to such trust, or a custodian and the custodian’s agents or employees acting pursuant to a custodian account which meets the requirements of Section 401(f) of the Internal Revenue Code;
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A credit union or a financial institution that is subject to supervision or examination by federal or state banking authorities, or a mortgage lender, to the extent they collect and remit premiums to licensed insurance producers or to limited lines producers or authorized insurers in connection with loan payments;
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A credit card issuing company that advances for and collects insurance premiums or charges from its credit card holders who have authorized collection;
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A person who adjusts or settles claims in the normal course of that person’s practice or employment as an attorney at law and who does not collect charges or premiums in connection with health coverage;
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An adjuster licensed by this state whose activities are limited to adjustment of claims;
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A person licensed as a managing general agent in this state, whose activities are limited exclusively to the scope of activities conveyed under such license;
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An administrator who is affiliated with an insurer and who only performs the contractual duties (between the administrator and the insurer) of an administrator for the direct and assumed insurance business of the affiliated insurer. The insurer is responsible for the acts of the administrator and is responsible for providing all of the administrator’s books and records to the insurance Commissioner, upon a request from the insurance Commissioner. For purposes of this paragraph, “insurer” shall have the same meaning as set forth in subsection 2.8 of this regulation; or
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A person, firm or entity whose business is solely limited to the payment of money, claims or bills at the direction of an insurer and who does not adjust or settle claims on residents of this state in connection with health coverage offered or provided by an insurer.
“Affiliate” or “affiliated” means an entity or person who directly or indirectly through 1 or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person.
“Commissioner” means the Insurance Commissioner of Delaware.
“Control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by 18 Del.C. Ch. 50 that control does not exist in fact. The Commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.
“GAAP” means United States generally accepted accounting principles consistently applied.
“Home state” means the District of Columbia and any state or territory of the United States in which an administrator is incorporated, or maintains its principal place of business. If neither the state in which the administrator is incorporated, nor the state in which it maintains its principal place of business has adopted this Regulation, or a substantially similar law governing administrators, the administrator may declare another state, in which it conducts business, to be its “home state.”
“Insurance producer” means a person who sells, solicits or negotiates a contract of insurance as those terms are defined in this regulation.
“Insurer” means a person undertaking to provide health coverage or self‑funded coverage under a governmental plan or church plan in this state. For the purposes of this regulation, insurer includes an employer, a licensed insurance company, a prepaid hospital or medical care plan, a health maintenance organization, a managed care organization, a health service corporation,or a multiple employer welfare arrangements (MEWAs).
“Negotiate” means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.
“Nonresident administrator” means a person who is applying for licensure or is licensed in any state other than the administrator’s home state.
“Person” means an individual or a business entity.
“Sell” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.
“Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.
“Underwrites” or “underwriting” means, but is not limited to, the acceptance of employer or individual applications for coverage of individuals in accordance with the written rules of the insurer or self‑funded plan; the overall planning and coordinating of a benefits program.
“Uniform Application” means the current version of the NAIC Uniform Application for Third Party Administrators.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-3.0 Requirement for Written Agreement
3.1 No administrator shall act as such without a written agreement between the administrator and the insurer, and the written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and for 5 years thereafter. The agreement shall contain all provisions required by this regulation, except insofar as those requirements do not apply to the functions performed by the administrator.
3.2 The written agreement shall include a statement of duties that the administrator is expected to perform on behalf of the insurer and the lines, classes or types of insurance for which the administrator is to be authorized to administer. The agreement shall make provision with respect to underwriting or other standards pertaining to the business underwritten by the insurer.
3.3 The insurer or administrator may, with written notice, terminate the written agreement for cause as provided in the agreement. The insurer may suspend the underwriting authority of the administrator during the pendency of any dispute regarding the cause for termination of the written agreement. The insurer shall fulfill any lawful obligations with respect to policies affected by the written agreement, regardless of any dispute between the insurer and the administrator.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-4.0 Payment to Administrator
If an insurer utilizes the services of an administrator, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured party shall be deemed to have been received by the insurer, and the payment of return premiums or claim payments forwarded by the insurer to the administrator shall not be deemed to have been paid to the insured party or claimant until the payments are received by the insured party or claimant. Nothing in this section limits any right of the insurer against the administrator resulting from the failure of the administrator to make payments to the insurer, insured parties or claimants.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-5.0 Maintenance of Information
5.1 An administrator shall maintain and make available to the insurer complete books and records of all transactions performed on behalf of the insurer. The books and records shall be maintained in accordance with prudent standards of insurance record keeping and shall be maintained for a period of not less than 5 years from the date of their creation.
5.2 The Commissioner shall have access to books and records maintained by an administrator for the purposes of examination, audit and inspection. Any documents, materials or other information in the possession or control of the Commissioner that are furnished by an administrator, insurer, insurance producer or an employee or agent thereof acting on behalf of the administrator, insurer or insurance producer, or obtained by the Commissioner in an investigation shall be confidential by law, shall not be subject to the provisions of 29 Del.C. Ch. 100, shall not be not subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the Commissioner is authorized to use such documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioner’s official duties, in which case the rules of the court having jurisdiction over the case shall govern the production and admissibility of such documents.
5.3 Neither the Commissioner nor any person who received documents, materials or other information while acting under the authority of the Commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection 5.2 of this regulation.
5.4 In order to assist in the performance of his or her duties, the Commissioner:
5.4.1 May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection 5.2 of this regulation with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners, its affiliates or subsidiaries and with state, federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information; and
5.4.2 May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information.
5.5 No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subsection 5.4 of this regulation.
5.6 Nothing in this regulation shall prohibit the Commissioner from releasing final, adjudicated actions including for cause terminations that are open to public inspection pursuant to 29 Del.C. Ch. 100 to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries.
5.7 The insurer shall own the records generated by the administrator pertaining to the insurer; however, the administrator shall retain the right to continuing access to books and records to permit the administrator to fulfill all of its contractual obligations to insured parties, claimants, and the insurer.
5.8 In the event the insurer and the administrator cancel their agreement; notwithstanding the provisions of subsection 5.1 of this regulation, the administrator may, by written agreement with the insurer, transfer all records to a new administrator rather than retain them for 5 years. In such cases, the new administrator shall acknowledge, in writing, that it is responsible for retaining the records of the prior administrator as required in subsection 5.1 of this regulation.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-6.0 Approval of Advertising
An administrator may use only advertising pertaining to the business underwritten by an insurer that has been approved in writing by the insurer in advance of its use.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-7.0 Responsibilities of the Insurer
7.1 If an insurer utilizes the services of an administrator, the insurer shall be responsible for determining the benefits, premium rates, underwriting criteria and claims payment procedures applicable to the coverage and for securing reinsurance, if any. The rules pertaining to these matters shall be provided, in writing, by the insurer to the administrator. The responsibilities of the administrator as to any of these matters shall be set forth in the written agreement between the administrator and the insurer.
7.2 It is the sole responsibility of the insurer to provide for competent administration of its programs.
7.3 In cases where an administrator administers benefits for more than 100 certificate holders on behalf of an insurer, the insurer shall, at least semiannually, conduct a review of the operations of the administrator, which may be conducted on-site or by virtual means.
7.4 For purposes of this section, “insurer” means a licensed insurance company, prepaid hospital or medical care plan, a health maintenance organization or a multiple employer welfare arrangements (MEWAs).
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-8.0 Premium Collection and Payment of Claims
8.1 All insurance charges or premiums collected by an administrator on behalf of or for an insurer, and the return of premiums received from that insurer, shall be held by the administrator in a fiduciary capacity. The funds shall be immediately remitted to the person entitled to them or shall be deposited promptly in a fiduciary account established and maintained by the administrator in a federally or state insured financial institution. The written agreement between the administrator and the insurer shall provide for the administrator to periodically render an accounting to the insurer detailing all transactions performed by the administrator pertaining to the business underwritten by the insurer.
8.2 If charges or premiums deposited in a fiduciary account have been collected on behalf of or for 1 or more insurers, the administrator shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each insurer. The administrator shall keep copies of all the records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to the deposits and withdrawals.
8.3 The administrator shall not pay any claim by withdrawals from a fiduciary account in which premiums or charges are deposited. Withdrawals from the account shall be made as provided in the written agreement between the administrator and the insurer. The written agreement shall address at least the following:
8.3.1 Remittance to an insurer entitled to remittance;
8.3.2 Deposit in an account maintained in the name of the insurer;
8.3.3 Transfer to and deposit in a claims‑paying account, with claims to be paid as provided for in subsection 8.4 of this regulation;
8.3.4 Payment to a group policyholder for remittance to the insurer entitled to such remittance;
8.3.5 Payment to the administrator of its commissions, fees or charges; and
8.3.6 Remittance of return premium to the person or persons entitled to such return premium.
8.4 All claims paid by the administrator from funds collected on behalf of or for an insurer shall be paid only on drafts or checks of and as authorized by the insurer.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-9.0 Compensation to the Administrator
9.1 An administrator shall not enter into an agreement or understanding with an insurer in which the effect is to make the amount of the administrator’s commissions, fees, or charges contingent upon savings effected in the adjustment, settlement and payment of losses covered by the insurer’s obligations. This provision shall not prohibit an administrator from receiving performance‑based compensation for providing hospital or other auditing services.
9.2 This section shall not prevent the compensation of an administrator from being based on premiums or charges collected or the number of claims paid or processed.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-10.0 Notice to Covered Individuals; Disclosure of Charges and Fees
10.1 When the services of an administrator are utilized, the administrator shall provide a written notice approved by the insurer to covered individuals advising them of the identity of, and relationship among, the administrator, the policyholder and the insurer.
10.2 When an administrator collects funds, the reason for collection of each item shall be identified to the insured party and each item shall be shown separately from any premium. Additional charges may not be made for services to the extent the services have been paid for by the insurer.
10.3 The administrator shall disclose to the insurer all charges, fees and commissions received from all services in connection with the provision of administrative services for the insurer, including any fees or commissions paid by insurers providing reinsurance.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-11.0 Delivery of Materials to Covered Individuals
Any policies, certificates, booklets, termination notices or other written communications delivered by the insurer to the administrator for delivery to insured parties or covered individuals shall be delivered by the administrator promptly after receipt of instructions from the insurer to deliver them.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-12.0 Home State Certificate of Authority/License
12.1 A person shall apply to be an administrator in its home state, upon the Uniform Application and shall receive a certificate of authority or license from the Commissioner of its home state, prior to performing any function of an administrator in this state.
12.2 The Uniform Application shall include or be accompanied by the following information and documents:
12.2.1 All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement and other applicable documents and all amendments to such documents;
12.2.2 The bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;
12.2.3 NAIC Biographical Affidavit for the individuals who are responsible for the conduct of affairs of the applicant; including all members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholders or member holding directly or indirectly 10% or more of the voting stock, voting securities or voting interest of the applicant; and any other person who exercises control or influence over the affairs of the applicant;
12.2.4 Audited annual financial statements or reports for the 2 most recent fiscal years that prove that the applicant has a positive net worth. If the applicant has been in existence for less than 2 fiscal years, the Uniform Application shall include financial statements or reports, certified by an officer of the applicant and prepared in accordance with GAAP, for any completed fiscal years, and for any month during the current fiscal year for which such financial statements or reports have been completed. An audited financial/annual report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following: a) amounts shown on the consolidated audited financial report shall be shown on the worksheet; b) amounts for each entity shall be stated separately, and c) explanations of consolidating and eliminating entries shall be included. The applicant shall also include such other information as the Commissioner may require in order to review the current financial condition of the applicant;
12.2.5 A statement describing the business plan including information on staffing levels and activities proposed in this state and nationwide. The plan shall provide details setting forth the applicant’s capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, record keeping and underwriting; and
12.2.6 Such other pertinent information as may be required by the Commissioner.
12.3 An administrator licensed or applying for licensure under this section shall make available for inspection by the Commissioner copies of all contracts with insurers or other persons utilizing the services of the administrator.
12.4 An administrator licensed or applying for licensure under this section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as reasonably required by the Commissioner.
12.5 The Commissioner may refuse to issue a certificate of authority or license if the Commissioner determines that the administrator, or any individual responsible for the conduct of affairs of the administrator is not competent, trustworthy, financially responsible or of good personal and business reputation, or has had an insurance or an administrator certificate of authority or license denied or revoked for cause by any jurisdiction, or if the Commissioner determines that any of the grounds set forth in Section 15.0 of this regulation exists with respect to the administrator.
12.6 A certificate of authority or license issued under this section shall remain valid, unless surrendered, suspended or revoked by the Commissioner, for so long as the administrator continues in business in this state and remains in compliance with this regulation.
12.7 An administrator licensed or applying for licensure under this section shall immediately notify the Commissioner of any material change in its ownership, control, or other fact or circumstance affecting its qualification for a certificate of authority or license in this state. The Commissioner shall report any such changes to the national producer database or its successor.
12.8 An administrator licensed or applying for a home state certificate of authority/license that administers or will administer governmental or church self‑insured plans in its home state or any other state shall maintain a surety bond for the use and benefit of the home state Commissioner and the insurance regulatory authority of any additional state in which the administrator is authorized to conduct business and cover individuals and persons who have remitted premiums or insurance charges or other monies to the administrator in the course of the administrator’s business in the greater of the following amounts:
12.8.1 $100,000; or
12.8.2 10% of the aggregate total amount of self‑funded coverage under church plans or governmental plans handled in the administrator’s home state and all additional states in which the administrator is authorized to conduct business.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-13.0 Registration Requirement
A person who directly or indirectly underwrites, collects or charges premiums from, or adjusts or settles claims on residents of this state, in connection with health coverage provided by a self‑funded plan other than a governmental or church plan shall register with the Commissioner annually, verifying its status as herein described.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-14.0 Nonresident Administrator Certificate of Authority
14.1 Unless an administrator has obtained a home state certificate of authority or license in this state under Section 12.0 of this regulation, any administrator who performs administrator duties in this state shall obtain a nonresident administrator certificate of authority or license in accordance with this section by filing with the Commissioner the Uniform Application, accompanied by a letter of certification. In lieu of requiring an administrator to file a letter of certification with the Uniform Application, the Commissioner may verify the nonresident administrator’s home state certificate of authority or license status through an electronic database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries.
14.2 An administrator shall not be eligible for a Nonresident Administrator certificate of authority or license under this section if it does not hold a certificate of authority as a resident in a home state that has adopted this regulation or a substantially similar law governing administrators.
14.3 Except as provided in subsections 14.2 and 14.8 of this regulation, the Commissioner shall issue to the administrator a nonresident administrator certificate of authority or license promptly upon receipt of a complete application.
14.4 Unless notified by the Commissioner that the Commissioner is able to verify the nonresident administrator’s home state certificate of authority or license status through an electronic database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, each nonresident administrator shall annually file a statement that its home state administrator certificate of authority or license remains in force and has not been revoked or suspended by its home state during the preceding year.
14.5 At the time of filing the statement required under subsection 14.4 of this regulation or, if the Commissioner has notified the nonresident administrator that the Commissioner is able to verify the nonresident administrator’s home state certificate of authority or license status through an electronic database, on an annual date determined by the Commissioner, the nonresident administrator shall pay a filing fee as required by the Commissioner.
14.6 An administrator licensed or applying for licensure under this section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as reasonably required by the Commissioner.
14.7 A nonresident administrator is not required to hold a nonresident administrator certificate of authority or license in this state if the administrator’s duties in this state are limited to the administration of a group policy or plan of insurance and no more than a total of 100 lives for all plan residents in this state.
14.8 The Commissioner may refuse to issue a nonresident administrator certificate of authority or license, or delay the issuance of a nonresident administrator certificate of authority or license, if the Commissioner determines that, due to events or information obtained subsequent to the home state’s licensure of the administrator, the nonresident administrator cannot satisfy the requirements of this regulation, or that grounds exist for the home state’s revocation or suspension of the administrator’s home state certificate of authority or license. In such an event, the Commissioner shall give written notice of its determination to the Commissioner of the home state, and the Commissioner may delay the issuance of a nonresident administrator certificate of authority to the nonresident administrator until such time, if at all, that the Commissioner determines that the administrator can satisfy the requirements of this regulation and that no grounds exist for the home state’s revocation or suspension of the administrator’s home state certificate of authority or license.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-15.0 Annual Report, Fees and Expenses
15.1 Each administrator licensed under Section 12.0 of this regulation shall file an annual report for the preceding calendar year with the Commissioner on or before July 1 of each year, or within such extension of time as the Commissioner for good cause may grant. The annual report shall include an audited financial statement performed by an independent certified public accountant. The report shall be in the form and contain such matters as the Commissioner prescribes and shall be verified by at least 2 officers of the administrator. An audited financial/annual report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following:
15.1.1 Amounts shown on the consolidated audited financial report shall be shown on the worksheet;
15.1.2 Amounts for each entity shall be stated separately; and
15.1.3 Explanations of consolidating and eliminating entries shall be included.
15.2 The annual report shall include the complete names and addresses of all insurers with which the administrator had agreements during the preceding fiscal year.
15.3 At the time of filing its annual report, the administrator shall pay a filing fee as set by Section 17.0 of this regulation.
15.4 The Commissioner shall review the most recently filed annual report of each administrator on or before September 1 of each year. Upon completion of its review, the Commissioner shall either:
15.4.1 Issue a certification to the administrator that the annual report shows that the administrator has a positive net worth as evidenced by audited financial statements and is currently licensed and in good standing, or noting any deficiencies found in that annual report and financial statements; or
15.4.2 Update any electronic database maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries, indicating that the annual report shows that the administrator has a positive net worth as evidenced by audited financial statements and is in compliance with existing law, or noting any deficiencies found in the annual report.
15.5 An administrator shall be subject to assessment for all fees, costs, experts and related expenditures with respect to any examination, arbitration or enforcement action undertaken by the Commissioner pursuant to Title 18.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-16.0 Grounds for Denial, Suspension or Revocation of Certificate of Authority
16.1 The certificate of authority or license of an administrator shall be denied, suspended or revoked if the Commissioner finds that the administrator:
16.1.1 Is in an unsound financial condition;
16.1.2 Is using such methods or practices in the conduct of its business so as to render its further transaction of business in this state hazardous or injurious to insured persons or the public; or
16.1.3 Has failed to pay any judgment rendered against it in this state within 60 days after the judgment has become final.
16.2 The Commissioner may deny, suspend or revoke the certificate of authority or license of an administrator if the Commissioner finds that the administrator:
16.2.1 Has violated any lawful rule or order of the Commissioner or any applicable law of this state;
16.2.2 Has refused to be examined or to produce its accounts, records and files for examination, or if any individual responsible for the conduct of affairs of the administrator, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly 10% or more of the voting stock, voting securities or voting interest of the administrator; and any other person who exercises control or influence over the affairs of the administrator; has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination, when required by the Commissioner;
16.2.3 Has, without just cause, refused to pay clean claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the administrator to secure full payment or settlement of such claims;
16.2.4 At any time fails to meet any qualification for which issuance of the certificate could have been refused had the failure then existed and been known to the Commissioner;
16.2.5 Or any of the individuals responsible for the conduct of its affairs, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly 10% or more of its voting stock, voting securities or voting interest; and any other person who exercises control or influence over its affairs; has been convicted of, or has entered a plea of guilty or nolo contendere to, a felony without regard to whether adjudication was withheld;
16.2.6 Is under suspension or revocation in another state; or
16.2.7 Has failed to timely file its annual report pursuant to Section 15.0 of this regulation, if a resident administrator, or its statement and filing fee, as applicable, pursuant to subsections 14.4 and 14.5 of this regulation, if a nonresident administrator.
16.3 The Commissioner may, in his or her discretion and without advance notice or hearing, immediately suspend the certificate of authority or license of an administrator if the Commissioner finds that 1 or more of the following circumstances exist:
16.3.1 The administrator is insolvent or impaired;
16.3.2 A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the administrator has been commenced in any state; or
16.3.3 The financial condition or business practices of the administrator otherwise pose an imminent threat to the public health, safety or welfare of the residents of this state.
16.4 If the Commissioner finds that 1 or more grounds exist for the suspension or revocation of a certificate of authority issued under this part, the Commissioner may, in lieu of suspension or revocation, impose a fine upon the administrator.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-17.0 Fees
17.1 The following fees shall be applicable for filings and matters arising under this regulation:
17.2 For any other fee, cost or charge, the provisions of 18 Del.C. §701 are incorporated by reference and are applicable to matters arising under this regulation.
17.3 The provisions of 18 Del.C. Ch. 3 shall be applicable to examinations required by this regulation.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-18.0 Severability
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of this regulation or the applicability of the provision to other persons or circumstances shall not be affected.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
18 Del. Admin. Code § 1406-19.0 Effective Date
This regulation became effective on January 1, 2004. The amendments to this regulation shall become effective 10 days after being published as a final regulation.
History
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 27 DE Reg. 342 (11/01/23)
- 7 DE Reg. 668 (11/01/03)
- 27 DE Reg. 342 (11/01/23)
1407 Supplemental Health Insurance Coverage for Children of Insureds
18 Del. Admin. Code § 1407 Supplemental Health Insurance Coverage for Children of Insureds
1407 Supplemental Health Insurance Coverage for Children of Insureds
1.0 Authority
1.1 This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§310, 311, 3354, and 3570 and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101.
2.0 Scope
2.1 This regulation applies to all Carriers, as defined below, consistent with and to the extent the provisions of 18 Del.C. §§3354 and 3570 are adopted and implemented by the State of Delaware for its employees under the State Employees Benefit Plan.
3.0 Definitions
"Carrier" means any entity that provides health insurance in this State. For the purposes of this section, carrier includes an insurance company, health service corporation, managed care organization, health maintenance organization, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. "Carrier" also includes any third party administrator or other entity that adjusts, administers, or settles claims in connection with health benefit plans.
"Covered person" means a person who claims to be entitled to receive benefits from a carrier.
"Dependent" means a covered person's child by blood or by law who:
a. is less than 24 years of age;
b. is unmarried;
c. has no dependents of his or her own;
d. is a resident of Delaware or is enrolled as a full-time student at an accredited public or private institution of higher education; and
e. is not actually provided coverage as a named subscriber, insured, enrollee, or covered person under any other group or individual health benefits plan, group health plan, or church plan, or entitled to benefits under 42 U.S.C. §1395 et. seq.
4.0 Submission of Rate Plans
4.1 No later than 30 days following the effective date of this regulation, each Carrier shall submit the following to the Commissioner:
4.1.1 Certified notice that within 60 days following the effective date of this regulation, the carrier will be in compliance with all terms of 18 Del.C. §§3354 and 3570.
4.1.2 A rate filing containing proposed premiums for dependent coverage consistent with 18 Del.C. §§3354(g), 3354(h), 3570(g) and 3570(h).
4.2 Where possible, rate filings made consistent with this regulation shall be made in the format and on the forms required of the carriers' other filings made pursuant to Title 18, Chapter 25 of the Delaware Code.
4.3 Rate filings required by this regulation shall demonstrate that the premium charged pursuant to 18 Del.C. §§3354 and 3570 does not exceed 102% of the applicable portion of the premium previously paid for that dependent's coverage under the contract prior to the termination of coverage at the specific age provided in the contract.
4.4 Compliance with Section 4.3 of this Regulation shall be demonstrated by:
4.4.1 Establishing the portion of existing carrier costs directly attributable to inclusion of persons whose coverage would have been terminated due to age but for implementation of 18 Del.C. §§3354 and 3570.
4.4.2 Generating a rate schedule that assesses premiums no greater than 102% of the costs generated by Section 4.4.1.
4.4.3 Fixed costs which would be incurred by the carrier regardless of inclusion of persons whose coverage would have been terminated due to age but for implementation of 18 Del.C. §§3354 and 3570 shall not be included in the carrier costs established under Section 4.4.1, and the rate filings made pursuant to Sections 4.2 and 4.3 shall affirmatively state that such fixed costs have not been included.
4.4.4 Carriers may submit rate filings pursuant to Sections 4.2 and 4.3 that produce premiums substantially similar to those that would be generated by compliance with Sections 4.4.1 through 4.4.3.
4.4.5 The Department interprets 18 Del.C. §§3354 and 3570 to permit and require it to review rate filings made pursuant to this Regulation to ensure that they are not excessive. The effective filing date provisions of 18 Del.C. §2506 apply to a carrier's conditional right to charge premiums upon the filing of a rate request.
4.4.6 The carrier shall be required to submit the notices, or any amendments thereto, required by 18 Del.C. §§3354(j) and 3570(j) to the Department for form approval prior to their use.
5.0 Effective Date
5.1 This Regulation shall become effective June 1, 2007.
10 DE Reg. 1711 (05/01/07)
1408 Standards for Prompt, Fair and Equitable Settlement of Claims for Long-Term Care Insurance
18 Del. Admin. Code § 1408 Standards for Prompt, Fair and Equitable Settlement of Claims for Long-Term Care Insurance
1408 Standards for Prompt, Fair and Equitable Settlement of Claims for Long-Term Care Insurance
1.0 Authority
This regulation is adopted by the Commissioner pursuant to 18 Del.C. §§311, 2304(16), and 2312 and 7107. It is promulgated in accordance with 29 Del.C. Ch. 101.
2.0 Scope
This regulation shall apply to all carriers as defined herein.
3.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
“Carrier” means any entity that provides long-term care insurance in this State. "Carrier" also includes any 3rd-party administrator or other entity that adjusts, administers or settles claims in connection with long-term care plans.
“Days” means calendar days.
“Institutional Provider” means a hospital, nursing home, or any other medical or health-related service facility caring for the sick or injured or providing care or other coverage which may be provided in a long-term care policy. An entity must be a Provider under this Regulation in order to be an Institutional Provider.
“Policyholder,” “Insured,” or “Subscriber” means a person covered under a long-term care insurance policy or a representative (other than a provider) designated by such person and entitled to make claims on his behalf.
“Provider” means any entity or individual licensed, certified, or otherwise permitted by law pursuant to Titles 16 or 24 of the Delaware Code to provide long-term care services, irrespective of whether the entity or the individual is a participating provider pursuant to a written agreement with the carrier. When used alone, the term “provider” shall include individual providers and institutional providers.
4.0 Prompt Payment of Clean Claims
4.1 “Claim” means a request for payment of benefits under an in-force policy, regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met.
4.2 “Clean Claim” means a claim that has no defect or impropriety, including any lack of required substantiating documentation, such as satisfactory evidence of expenses incurred, or particular circumstances requiring special treatment that prevents timely payment from being made on the claim.
4.3 Within thirty (30) days after receipt of a claim for benefits under a long-term care insurance policy or certificate, an insurer shall pay such claim if it is a clean claim, or send written notice acknowledging the date of receipt of the claim and one of the following:
4.3.1 The insurer is declining to pay all or part of the claim and the specific reason(s) for denial; or
4.3.2 That additional information is necessary to determine if all or any part of the claim is payable and the specific additional information that is necessary.
4.4 Within thirty (30) days after the receipt of all the requested additional information, an insurer shall pay a claim for benefits under a long-term care insurance policy or certificate if it is a clean claim, or send a written notice that the insurer is declining to pay all or part of the claim, and the specific reason or reasons for denial.
4.5 If an insurer fails to comply with 4.3 or 4.4, such an insurer shall pay interest at the rate of 1% per month on the amount of the claim that should have been paid but that remains unpaid after forty-five (45) days after the receipt of the claim with respect to 4.3 or all requested additional information under 4.4. The interest payable pursuant to this sub-section shall be included in an late reimbursement without requiring the person who filed the original claim to make any additional claim for such interest.
4.6 These provisions shall not apply where the insurer has a reasonable basis supported by specific information that such claim was fraudulently submitted.
4.7 Any violation of this regulation by an insurer if committed flagrantly and in conscious disregard of the provisions of this regulation or with such frequency as to constitute a general business practice shall be considered a violation of 18 Del.C. §2304.
5.0 Waiver
The provisions of this regulation may not be waived, voided, or nullified by contract.
6.0 Causes of Action
This regulation shall not create a private cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a carrier or its representative based upon a violation of 18 Del.C. §2304.
7.0 Separability
If any provision of this regulation, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of such provisions, and the application of such provisions to any person or circumstance other than those as to which it is held invalid, shall not be affected.
8.0 Effective Date
This regulation becomes effective for all claims submitted for payment on or after July 1, 2010.
13 DE Reg. 1465 (05/01/10)
1409 Insurance Coverage for Telemedicine and Telehealth
18 Del. Admin. Code § 1409-1.0 Authority
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311, 3370 and 3571R and is promulgated in accordance with 29 Del.C. Chapter 101.
History
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 285 (09/01/21)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
- 19 DE Reg. 768 (02/01/16)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
18 Del. Admin. Code § 1409-2.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
“Distant site” means a site at which a health care provider legally allowed to practice in the state is located while providing health care services by means of telehealth.
“Originating site” means a site in Delaware at which a patient is located at the time health care services are provided to the patient by means of telemedicine or telehealth, unless the term is otherwise defined with respect to the provision in which it is used. Notwithstanding any other provision of law, insurers and providers may agree to alternative siting arrangements deemed appropriate by the parties.
“Store and forward transfer” means the synchronous or asynchronous transmission of a patient’s medical information either to or from an originating site or to or from the provider at the distant site, but does not require the patient being present nor must it be in real time, as set forth in 24 Del.C. §6001(4).
“Telehealth” means the use of information and communications technologies consisting of telephones, remote patient monitoring devices or other electronic means which support clinical health care, health-care provider consultation, patient and professional health-related education, public health, health administration, and other services as authorized in 24 Del.C. Ch. 60.
"Telemedicine" is a subset of telehealth which is the delivery of clinical health-care services and other services, as authorized in 24 Del.C. Ch. 60, by means of real time 2-way audio, visual, or other telecommunications or electronic communications, including the application of secure video conferencing or store and forward transfer technology to provide or support health-care delivery, which facilitate the assessment, diagnosis, consultation, treatment, education, care management and self-management of a patient's health care by a health-care provider legally allowed to practice in the state and practicing within the health-care provider’s scope of practice as would be practiced in-person with a patient, while such patient is at an originating site and the health-care provider is at a distant site.
History
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 285 (09/01/21)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
- 19 DE Reg. 768 (02/01/16)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
18 Del. Admin. Code § 1409-3.0 Compliance with Statutes Regarding Telemedicine and Telehealth
Each insurer proposing to issue individual or group accident and sickness insurance policies providing hospital, medical and surgical, or major medical coverage on an expense-incurred basis; each health service corporation providing individual or group accident and sickness subscription contracts; and each managed care organization and health maintenance organization providing a health care plan for health care services shall comply with the provisions of 18 Del.C. §§3370 and 3571R, and this regulation.
History
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 285 (09/01/21)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
- 19 DE Reg. 768 (02/01/16)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
18 Del. Admin. Code § 1409-4.0 Telehealth
4.1 Each insurer proposing to issue individual or group accident and sickness insurance policies providing hospital, medical and surgical, or major medical coverage on an expense-incurred basis; each health service corporation providing individual or group accident and sickness subscription contracts; and each managed care organization and health maintenance organization providing a health care plan for health care services shall provide coverage for the cost of such health care services provided through telehealth. Coverage for health care services provided through telehealth shall be provided so long as the underlying health care service is a covered service and the health care provider providing the service is licensed to furnish the service under State law and is practicing within the scope of State law, including but not limited to 24 Del.C. Ch. 60.
4.2 No insurer proposing to issue individual or group accident and sickness insurance policies providing hospital, medical and surgical, or major medical coverage on an expense-incurred basis; health service corporation providing individual or group accident and sickness subscription contracts; or managed care organization or health maintenance organization providing a health care plan for health care services shall impose any limitation on the ability of an insured to seek medical care through the use of telehealth service solely because the health care service is being provided through telehealth. Such prohibited limitations shall include, but not be limited to, preauthorization, medical necessity, homebound requirements, or requiring the use of technology permitting visual communication.
History
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 285 (09/01/21)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
- 19 DE Reg. 768 (02/01/16)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
18 Del. Admin. Code § 1409-5.0 Severability
If any provision of this regulation or the application of any such provision to any person or circumstance shall be held invalid, the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected.
History
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 285 (09/01/21)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
- 19 DE Reg. 768 (02/01/16)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
18 Del. Admin. Code § 1409-6.0 Effective Date
This regulation became effective on February 11, 2016, ten (10) days after being published as a final regulation. The amendments to the regulation, effective November 11, 2020 (the 2020 amendments) on July 1, 2021, unless extended by order of the Commissioner. The expiration date of the 2020 amendments was removed by operation of the Telehealth Access Preservation and Modernization Act of 2021, HB 160/HA1 (151st Gen. Assembly) and by order of the Commissioner dated July 19, 2021.
History
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 488 (11/01/20)
- 24 DE Reg. 285 (09/01/21)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
- 19 DE Reg. 768 (02/01/16)
- 24 DE Reg. 488 (11/01/20)
- 25 DE Reg. 285 (09/01/21)
1410 Reporting Medical Management Protocols for Insurance Coverage for Serious Mental Illness and Drug And Alcohol Dependency
18 Del. Admin. Code § 1410-1.0 Purpose
The purpose of this regulation is to set forth the format and submission requirements for the mental health parity report that is required to be submitted to the Delaware Health Information Network and the Department in accordance with 18 Del.C. §§3343 and 3571U.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-2.0 Applicability
This regulation applies to every carrier as defined in Section 4.0 of this regulation who issues a health benefit plan as defined in Section 4.0 of this regulation.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-3.0 Authority
The authority for this regulation is 18 Del.C. §§311, 3343 and 3571U and Del. S.B. 230/Del. S.A. 1, 149th Gen. Assem. §4 (2018), and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-4.0 Definitions
The following words and terms, when used in this regulation, have the following meaning unless the context clearly indicates otherwise:
"Carrier" means any entity that provides health insurance in this State. For the purposes of this section, "carrier" includes an insurance company, health service corporation, health maintenance organization, managed care organization, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. "Carrier" also includes any third-party administrator or other entity that adjusts, administers, or settles claims in connection with a health benefit plan. “Carrier” also includes any carrier who administers a health benefit plan under 31 Del.C. §505(3).
“Commissioner” means the Insurance Commissioner of the State of Delaware.
“Department” means the Delaware Department of Insurance.
“FR” means financial requirements, and includes but is not limited to deductibles, copayments, coinsurance, and out-of-pocket maximums.
“Health benefit plan" means any hospital or medical policy or certificate, major medical expense insurance, health service corporation subscriber contract, or health maintenance organization subscriber contract, as defined and qualified under 18 Del.C. §§3343 and 3578, and any assistance provided to an individual under 31 Del.C. §505(3).
“Mental health parity report” means the report that is to be submitted to the Department and to the Delaware Health Information Network pursuant to Section 5.0 of this regulation.
“MHPAEA” means the Mental Health Parity and Addiction Equity Act of 2008 (29 U.S.C. § 1185a) as amended and supplemented.
“MH/SUD benefits” means mental health and substance use disorder benefits.
“M/S benefits” means medical and surgical benefits.
“NQTL” means non-quantitative treatment limitation, and includes but is not limited to preauthorization requirements and first-fail requirements.
“QTL” means quantitative treatment limitation, and includes but is not limited to lifetime limits, episode limits, and day and visit limits.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-5.0 Reporting Content and Format
5.1 Each carrier shall complete a mental health parity report, using forms provided by the Department, in which the carrier shall report on the following:
5.1.1 Whether the health insurance coverage is or is not exempt from MHPAEA. If the carrier reports that the health insurance coverage is exempt from MHPAEA, the carrier shall indicate the reason for the exemption, which may include, by way of example only, retiree-only plan, excepted benefits (45 CFR § 146.145(b)), short term limited duration insurance, small employer exemption (45 CFR § 146.136(f)), or increased cost exemption (45 CFR § 146.136(g));
5.1.2 If the health insurance coverage is not exempt from MHPAEA pursuant to subsection 5.1.1 of this regulation:
5.1.2.1 How the health insurance coverage provides MH and/or SUD benefits in addition to providing M/S benefits; and
5.1.2.2 Using the data collection tool incorporated as Appendix A of this regulation, how the insurance coverage provides MH/SUD benefits in each of the following six coverage classifications in which M/S benefits are provided:
5.1.2.2.1 Inpatient, in-network;
5.1.2.2.2 Inpatient, out-of-network;
5.1.2.2.3 Outpatient, in-network;
5.1.2.2.4 Outpatient, out-of-network;
5.1.2.2.5 Emergency care; and
5.1.2.2.6 Prescription drugs.
5.1.3 If the plan includes multiple tiers in its prescription drug formulary, whether the tier classifications are based on reasonable factors (such as cost, efficacy, generic versus brand name, and mail order versus pharmacy pick-up) determined in accordance with the rules for NQTLs at 45 CFR 146.136(c)(4)(i), and without regard to whether the drug is generally prescribed for MH/SUD or M/S benefits. To comply with this reporting requirement, a carrier shall explain how the plan’s tiering factors for MH/SUD prescription drugs are comparable to and are applied no more stringently than the tiering factors for M/S prescription drugs.
5.1.4 If the plan includes multiple network tiers of in-network providers, whether the tiering is based on reasonable factors (such as quality, performance, and market standards) determined in accordance with the rules for NQTLs at 45 CFR 146.136(c)(4)(i), and without regard to whether a provider provides services with respect to MH/SUD benefits or M/S benefits. To comply with this reporting requirement a carrier shall explain how the plan’s tiering factors for MH/SUD network tiers are comparable to and are applied no more stringently than the tiering factors for M/S network tiers.
5.1.5 Whether the plan complies with the parity requirements for aggregate lifetime and annual dollar limits, including the prohibition on lifetime dollar limits or annual dollar limits for MH/SUD benefits that are lower than the lifetime or annual dollar limits imposed on M/S benefits. To comply with this reporting requirement, a carrier shall list the services subject to lifetime or annual limits, separated into MH/SUD and M/S benefits.
5.1.6 Whether the plan imposes any FR or QTLs on MH/SUD benefits in any classification that is more restrictive than the predominant FR or QTL of that type that applies to substantially all M/S benefits in the same classification. To comply with this reporting requirement a carrier shall demonstrate compliance with this standard by completing the data collection tool incorporated as Appendix A of this regulation by reference;
5.1.7 Whether the plan applies any cumulative financial requirements or cumulative QTL for MH/SUD benefits in a classification that accumulates separately from any cumulative financial requirement or QTL established for M/S benefits in the same classification. To demonstrate compliance with this standard, the carrier shall complete the data collection tool incorporated as Appendix A to this regulation;
5.1.8 Whether the plan imposes NQTLs on MH/SUD benefits in any classification. If so, the carrier shall demonstrate compliance with parity requirements by completing the data collection tool incorporated as Appendix A of this regulation. For purposes of this subsection 5.1.8, examples of NQTLs include but are not limited to:
5.1.9 Whether the carrier complies with MHPAEA disclosure requirements including:
5.1.9.1 Criteria for medical necessity determinations for MH/SUD benefits; and
5.1.9.2 The reasons for any denial of benefits of any kind.
5.2 Nothing in this Section shall supersede any federal or State law governing the privacy of health information.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-6.0 Report submission deadlines and deadline extension request requirements
6.1 Each carrier who is required to submit a mental health parity report pursuant to this regulation shall submit its initial report on or before July 1, 2019.
6.2 Each carrier who is required to submit a mental health parity report pursuant to this regulation shall submit an amended report 30 calendar days after the close of any year during which the carrier made significant changes to how it designs and applies its medical management protocols.
6.3 One copy of each report required to be prepared in accordance with this Regulation shall be submitted to each of the following addresses:
6.4 A carrier may request from the Commissioner an extension of the deadline for submission of the initial report to be submitted pursuant to subsection 6.1 of this regulation, and any subsequent reports to be submitted pursuant to subsection 6.2 of this regulation for due cause. To request an extension pursuant to this subparagraph, the carrier shall, no later than 30 days prior to the reporting deadline, petition the Commissioner for a reporting deadline extension, with a copy of the request to the Delaware Health Information Network, stating the reasons for the extension request.
6.4.1 No reporting deadline shall be extended for a period longer than 60 days.
6.4.2 If the Commissioner fails to affirmatively approve or disapprove an extension request within 30 days of receipt of the request, the request shall be deemed approved.
6.4.3 The Commissioner may extend the 30-day review period for not more than 30 additional days by providing the carrier with written notice of the extension before the expiration of the initial 30-day review period.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-7.0 Enforcement Authority
7.1 To ensure compliance with the provisions of this regulation and to protect Delaware health care consumers, the Commissioner may, in his or her discretion, examine the business and financial affairs of a carrier doing business in this state by utilizing the powers granted by 18 Del.C. §§320, 3343(g)(5), 3571U(a)(5), and other provisions of Title 18 as may be applicable.
7.2 Any person or entity who violates any provision of this regulation shall be subject to the penalties provided in 18 Del.C. Chapter 3, and such other provisions of Title 18 as may be applicable.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-8.0 Severability
If any provision of this regulation, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this regulation which can be given effect without the invalid provision or application, and to that end the provisions of this regulation are severable.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
18 Del. Admin. Code § 1410-9.0 Effective Date
This regulation shall be effective on June 11, 2019.
APPENDIX A
DATA COLLECTION TOOL FOR MENTAL HEALTH PARITY ANALYSIS
Most parity analysis examines benefits by comparing MH/SUD to M/S within a classification. 45 CFR 146.136(c)(2)(i). The exception is aggregate lifetime or annual dollar limits (to the extent the plan is not prohibited from imposing such limits under Federal or State law), which are examined for the plan as a whole. See 45 CFR 146.136(b). The following is intended to simplify data collection for parity analysis at the classification level.
A-1 GUIDANCE FOR PLACING BENEFITS INTO CLASSIFICATIONS:
MH/SUD and M/S benefits must be mapped to one of six classifications of benefits: (1) inpatient in-network, (2) inpatient out-of-network, (3) outpatient in-network, (4) outpatient out-of-network, (5) prescription drugs, and (6) emergency care (see subsection 5.1.3 of this regulation and 45 CFR 146.136(c)(2)(ii)):
A-2 FINANCIAL REQUIREMENTS AND QUANTITATIVE TREATMENT LIMITATIONS:
Types of FRs include deductibles, copayments, coinsurance, and out-of-pocket maximums. See 45 CFR 146.136(c)(1)(ii). Types of QTLs include annual, episode, and lifetime day and visit limits, for example number of treatments, visits, or days of coverage. See 45 CFR 146.136(c)(1)(ii). A two-part analysis applies to FRs and QTLs. In general, MHPAEA regulations require that any FR or QTL imposed on MH/SUD benefits not be more restrictive than the predominant level of financial requirement or treatment limitation of that type that applies to substantially all medical/surgical benefits in a classification.
If the plan applies a cumulative FR or QTL (a FR or QTL that determines whether or to what extent benefits are provided based on accumulated amounts), the FR or QTL must not accumulate separately from any established for M/S benefits in a classification.
A-3 NON-QUANTITATIVE TREATMENT LIMITATIONS:
NQTLs include but are not limited to medical management techniques such as step therapy and pre-authorization requirements. Coverage cannot impose a NQTL with respect to MH/SUD benefits in any classification unless, under the terms of the plan as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to MH/SUD benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the limitation with respect to M/S benefits in the classification. Note that not every NQTL needs an evidentiary standard. There is flexibility under MHPAEA for plans to use NQTLs. The focus is on finding out what processes and standards the plan actually uses.
All plan standards that are not FRs or QTLs and that limit the scope or duration of benefits for services are subject to the NQTL parity requirements. This includes restrictions such as geographic limits, facility-type limits, and network adequacy.
The following data collection chart is modeled after a tool used in federal MHPAEA examinations. Insurers who have completed “Table 5” for NQTLs may substitute those documents for completion of this chart.
History
- 23 DE Reg. 316 (10/01/19)
- 22 DE Reg. 1025 (06/01/19)
- 23 DE Reg. 316 (10/01/19)
1411 Registration of Pharmacy Benefits Managers
18 Del. Admin. Code § 1411-1.0 Scope and Authority
1.1 This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §311 and Chapter 33A and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
1.2 This regulation does not apply to plans of health insurance or health benefits designed for issuance to persons eligible for coverage under Titles XVIII, XIX, and XXI of the Social Security Act, 42 U.S.C. §§1395 et seq., 1396 et seq., and 1397aa et seq., known as Medicare, Medicaid, or any other similar coverage under a state or federal government plan.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-2.0 Definitions
The following words and terms, when used in this regulation, shall have the following meaning unless the context clearly indicates otherwise:
“Affiliate” means an entity or person who directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person.
“Commissioner” means the Insurance Commissioner of Delaware.
“Control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by 18 Del.C. Ch. 50 that control does not exist in fact. The Commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect.
"Department" means the Delaware Department of Insurance.
"Health benefit plan" means any hospital or medical policy or certificate, major medical expense insurance, health service corporation subscriber contract, or health maintenance organization subscriber contract. Health benefit plan does not include accident-only, credit, dental, vision, Medicaid plans, long-term care or disability income insurance, coverage issued as a supplement to liability insurance, worker's compensation or similar insurance, or automobile medical payment insurance.
“Insurer” means any entity that provides health insurance coverage in this State as defined in 18 Del.C. §903.
"Maximum allowable cost pricing" or "MACP" means drug pricing that meets the requirements of 18 Del.C. §3323A.
"Network provider" means a pharmacist or pharmacy who provides covered health-care services or supplies to an insured or a member pursuant to a contract with an insurer or pharmacy benefits manager.
“Person” means an individual or a business entity.
“Pharmacy benefits management services” means all of the following:
-
Mail service pharmacy;
-
Claims processing, retail network management, and payment of claims to pharmacies for prescription drugs dispensed to beneficiaries;
-
Clinical formulary development and management services;
-
Rebate contracting and administration;
-
Patient compliance, therapeutic intervention, and generic substitution programs; and
-
Disease management programs.
“Pharmacy benefits manager” or “PBM” means an entity that contracts with pharmacists or pharmacies on behalf of a person to do any of the following:
"Pharmacy benefits manager network" means a network of pharmacists or pharmacies that are offered by an agreement or contract to provide pharmacy goods and services.
“Pharmacy services administrative organization” or "PSAO" means a cooperative network of independent pharmacies.
“Purchaser” means an insurance company, health service corporation, health maintenance organization, managed care organization, and any other entity that does all of the following:
-
Provides prescription drug coverage or benefits in this State; and
-
Enters into agreement with a pharmacy benefits manager for the provision of pharmacy benefits management services.
"Rebate" means a discount or other price concession, or a payment, that is based on utilization of a prescription drug and that is paid by a manufacturer or third party, directly or indirectly, to a pharmacy benefits manager, pharmacy services administrative organization, or pharmacy after a claim has been processed and paid at a pharmacy. "Rebate" includes incentives, disbursements, and reasonable estimates of a volume-based or category-based discount.
"Rural service area" means a five-digit ZIP code in which the population density is less than 1,000 individuals per square mile.
"Suburban service area" means a five-digit ZIP code in which the population density is between 1,000 and 2,500 individuals per square mile.
"Third party" means a person, business, or entity other than a pharmacy benefits manager that is not an enrollee or insured in a health benefit plan.
"Urban service area" means a five-digit ZIP code in which the population density is greater than 2,500 individuals per square mile.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-3.0 Requirement for Registration; Insurer Responsibilities
3.1 No insurer may enter into a written agreement or contract with a pharmacy benefits manager unless the pharmacy benefits manager is registered with the Department in accordance with Section 4.0 of this regulation.
3.2 An insurer who uses one or more PBMs for administration of the pharmacy benefits provided under its health benefit plans remains responsible for:
3.2.1 Ensuring that its pharmacy benefits comply with coverage requirements mandated under Title 18 of the Delaware Code; and
3.2.2 The insurer's compliance with the requirements under 18 Del.C. Ch. 73.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-4.0 Pharmacy Benefits Manager Registration Requirements
4.1 A pharmacy benefits manager shall register with the Commissioner in accordance with this Section before providing pharmacy benefits management services in this State to a purchaser.
4.2 An applicant who wishes to apply to be a pharmacy benefits manager in Delaware shall submit a Pharmacy Benefits Manager Registration Application to the Department, on which the applicant includes all of the following:
4.2.1 Applicant Information:
4.2.1.1 Name, address, telephone number;
4.2.1.2 Name and address of applicant’s agent for service of process in this State;
4.2.1.3 Name and address of each person beneficially interested in the applicant’s business (e.g. ownership of 10% or more);
4.2.1.4 Name and address of each officer and director;
4.2.1.5 The non-renewable registration fee set forth in Section 8.0 of this regulation;
4.2.2 Organization and Background Information:
4.2.2.1 All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement and other applicable documents and all amendments to such documents;
4.2.2.2 The bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant;
4.2.2.3 A biographical affidavit of each individual who is responsible for the conduct of affairs of the applicant, including:
4.2.2.3.1 All members of the board of directors, board of trustees, executive committee or other governing board or committee;
4.2.2.3.2 The principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company;
4.2.2.3.3 Any shareholders or members holding directly or indirectly 10% or more of the voting stock, voting securities or voting interest of the applicant;
4.2.2.3.4 Any other person who exercises control or influence over the affairs of the applicant; and
4.2.2.4 For each individual who is required to submit a biographical affidavit pursuant to subsection 4.2.2.3 of this regulation, a background check that has been performed by an independent third-party within six months of the date of the signature on the relevant biographical affidavit, chosen by the affiant from the list of approved vendors located on the NAIC website under the Uniform Certificate of Authority Application which may be downloaded from naic.org.
4.2.3 A statement describing the applicant’s business plan, that includes the following information:
4.2.3.1 Staffing levels and activities proposed in Delaware and nationwide;
4.2.3.2 Details concerning the applicant’s capability for providing a sufficient number of experienced and qualified personnel in the areas of claims processing and record keeping;
4.2.3.3 A list of all insurers for whom applicant provides pharmacy benefits management services in this State; and
4.2.4 Information on the applicant's compliance with Chapter 33A requirements, including:
4.2.4.1 A copy of the PBM’s standard, generic contract template, provider manual or other appropriate items incorporated by reference that the PBM uses for contracts entered into by the PBM with pharmacists, pharmacies or pharmacy services administrative organizations in this State in administration of pharmacy benefits for insurers, for the purpose only of the Department’s review that such contracts comply with 18 Del.C. Ch. 33A;
4.2.4.2 A copy of the written policies and procedures which demonstrate that the applicant has compliant processes established to adhere to all of the following:
4.2.4.2.1 The appeals and dispute resolution process as required by 18 Del.C. §3324A;
4.2.4.2.2 The requirements for maximum allowable cost pricing set forth in 18 Del.C. §3323A;
4.2.4.2.3 The Audit Integrity Program set forth in 18 Del.C. §§3301A-3310A.
4.2.5 Such other pertinent information as may be required by the Commissioner to verify the information in the application.
4.3 A registration certificate issued under this section shall remain valid, unless surrendered, suspended or revoked by the Commissioner, until May 1 following the effective date of the initial registration and the May 1 following the date of the registration renewal, as provided in subsection 4.4 of this regulation.
4.4 No pharmacy benefits manager may continue to do business in Delaware unless it has registered annually with the Commissioner on or before May 1 following the effective date of the initial registration and on or before the May 1 following the date of any subsequent registration renewal. A pharmacy benefits manager may renew a certificate of registration for an additional one-year term by timely submitting:
4.4.1 All of the information required in subsection 4.2 of this regulation, updated as necessary to reflect the most current information concerning the pharmacy benefits manager’s operations; and
4.4.2 The non-refundable renewal application fee set forth in Section 8.0 of this regulation.
4.5 A pharmacy benefits manager who is registered or who is applying for registration under Section 4.0 of this regulation shall, within 15 days after the end of the calendar month in which any of the foregoing transactions occur, notify the Commissioner of any material change in its ownership, control, or other fact or circumstance affecting its qualification for a registration certificate in this state.
4.6 A pharmacy benefits manager who is applying for registration or who is registered under this Section shall make available for inspection by the Commissioner copies of each permit issued to each nonresident pharmacy under 24 Del.C. §2535 that the pharmacy benefits manager uses to ship, mail, or deliver prescription drugs or devices in this state.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-5.0 Standard of Review of Initial and Renewal Registration Applications
5.1 The Commissioner shall deny an initial application or renewal application made under this regulation if the pharmacy benefits manager:
5.1.1 Has been determined by the Commissioner to be in violation or non-compliance with the requirements of this regulation or 18 Del.C. Ch. 33A; or
5.1.2 Has failed to timely submit information to complete review of the application or has failed to submit a renewal application and information under Section 4.0 of this regulation.
5.2 In lieu of a denial for an initial registration or renewal application under subsection 5.1 of this regulation, the Commissioner may permit the pharmacy benefits manager to submit to the Commissioner a corrective action plan to cure or correct deficiencies identified under subsection 5.1 of this regulation.
5.3 The Commissioner may refuse to issue a certificate of registration if the Commissioner determines that the pharmacy benefits manager, or any individual responsible for the conduct of affairs of the pharmacy benefits manager:
5.3.1 Has had an insurance or a pharmacy benefits manager certificate or license denied or revoked for cause by any jurisdiction; or
5.3.2 If the Commissioner determines that any of the grounds set forth in Section 6.0 of this regulation exists.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-6.0 Grounds for Denial, Suspension or Revocation of Registration Certificate
6.1 The Commissioner may deny, refuse to renew, suspend, or revoke the certificate of registration of a pharmacy benefits manager if the Commissioner finds that the pharmacy benefits manager or an officer, director, or employee of the pharmacy benefits manager has engaged in any of the following:
6.1.1 Making a material misstatement, misrepresentation, or omission in a registration or registration renewal application, including but not limited to:
6.1.1.1 Failure to meet any qualification for which issuance of the certificate could have been refused had the failure then existed and been known to the Commissioner;
6.1.1.2 Failure to timely file an annual registration pursuant to Section 4.0 of this regulation and filing fee pursuant to Section 8.0 this regulation;
6.1.1.3 Failure to disclose that its license, registration or certification is under suspension or revocation in another state; or
6.1.1.4 Failure to disclose that individuals who are responsible for the conduct of the affairs of the pharmacy benefits manager have been convicted of, or have entered a plea of guilty or nolo contendere to a felony without regard to whether adjudication was withheld;
6.1.2 Fraudulently or deceptively obtaining or attempting to obtain a registration or renewal of a registration;
6.1.3 In connection with the administration of pharmacy benefits management services, committing fraud or engaging in illegal or dishonest activities, including but not limited to:
6.1.3.1 Using such methods or practices in the conduct of its business that render its further transaction of business in Delaware hazardous or injurious to insured persons or the public;
6.1.3.2 Violating any lawful rule or order of the Commissioner or any applicable law of this state;
6.1.3.3 Failing to pay any judgment rendered against it in this state within sixty days after the judgment has become final; or
6.1.3.4 Without just cause, refusing to make reimbursements in compliance with its contracts and as required by law; or
6.1.4 Violating any provision of 18 Del.C. Ch. 33A or this regulation, including but not limited to:
6.1.4.1 In connection with the affairs of the pharmacy benefits manager, refusing to be examined or to produce pharmacy benefits manager-related accounts, records and files for examination, of any individual responsible for the conduct of affairs of the pharmacy benefits manager, including:
6.1.4.1.1 Members of the board of directors, board of trustees, executive committee or other governing board or committee;
6.1.4.1.2 The principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company;
6.1.4.1.3 Any shareholder or member holding directly or indirectly 10% or more of the voting stock, voting securities or voting interest of the pharmacy benefits manager; and
6.1.4.1.4 Any other person who exercises control or influence over the affairs of the pharmacy benefits manager; or
6.1.4.2 Reimbursing a pharmacy or pharmacist in this State in an amount less than the amount that the PBM reimburses a PBM affiliate for providing the same pharmacy goods or services;
6.1.4.3 Refusing to give information with respect to its affairs or refusing to perform any other legal obligation as to an examination, when required by the Commissioner; or
6.1.4.4 Engaging in any of the prohibited practices identified in 18 Del.C. §3372A.
6.2 In addition to any other remedies set forth in this regulation, the Commissioner may issue a cease-and-desist order to a pharmacy benefits manager that is registered or is seeking renewal of a registration if the pharmacy benefits manager, or an officer, director, or employee of the pharmacy benefits manager commits any of the acts set forth in subsection 6.1 of this regulation.
6.3 If a pharmacy benefits manager that is registered or seeking renewal of a registration does not comply with a cease-and-desist order issued by the Commissioner under subsection 6.2 of this regulation, the Commissioner may deny, refuse to renew, suspend, or revoke its registration.
6.4 Hearings
6.4.1 If the action by the Commissioner is to deny or not renew a registration, the Commissioner shall notify the pharmacy benefits manager of the decision, in writing, including the reason for the denial or nonrenewal of the registration. The pharmacy benefits manager may, within 10 days after the Commissioner provides notice under this subsection, make written demand on the Commissioner for a hearing before the Commissioner to determine the reasonableness of the Commissioner’s action.
6.4.2 If the Commissioner determines that a pharmacy benefits manager has violated any provision of 18 Del.C. Ch. 33A or this regulation, the Commissioner may, after notice and a hearing, issue an order in accordance with 18 Del.C. §3373A.
6.4.3 All hearings under this regulation must be held under 18 Del.C. §§323 through 328 and this regulation.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-7.0 Maintenance of Information – Examination by Commissioner
7.1 A pharmacy benefits manager shall maintain adequate books and records about each purchaser for which the pharmacy benefits manager provides pharmacy benefits management services.
7.2 The pharmacy benefits manager shall maintain all books and records in accordance with prudent standards of record keeping and shall retain all records referred to in subsection 7.1 of this regulation:
7.2.1 For the duration of the agreement between the pharmacy benefits manager and the purchaser; and
7.2.2 For three years after the pharmacy benefits manager ceases to provide pharmacy benefits management services for the purchaser.
7.3 The Commissioner shall have access to books and records maintained by a pharmacy benefits manager for the purposes of examining the affairs of the pharmacy benefits manager.
7.4 The conduct of an examination of any pharmacy benefits manager shall be in accordance with 18 Del.C. §§320 and 321, including the confidentiality provisions contained therein.
7.5 Nothing in this regulation shall prohibit the Commissioner from releasing final, adjudicated actions that are open to public inspection pursuant to 29 Del.C. Ch. 100 to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners, its affiliates or subsidiaries.
7.6 In the event the insurer or purchaser, as applicable, and the pharmacy benefits manager cancel their agreement, notwithstanding the provisions of subsection 7.1 of this regulation, the pharmacy benefits manager may, by written agreement with the insurer or purchaser, as applicable, transfer all records to a new pharmacy benefits manager rather than retain them as is required under subsection 7.1 of this regulation. In such cases, the new pharmacy benefits manager shall acknowledge, in writing, that it is responsible for retaining the records of the prior pharmacy benefits manager as required in subsection 7.1 of this regulation.
7.7 A pharmacy benefits manager who is applying for registration or who is registered under this Section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as considered advisable by the Commissioner.
7.8 A pharmacy benefits manager shall be subject to assessment for all fees, costs, experts and related expenditures with respect to any examination or enforcement action undertaken by the Commissioner pursuant to 18 Del.C. Ch. 33A and this regulation.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-8.0 Fees
The following fees shall be applicable for filings and matters arising under this regulation:
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-9.0 Pharmacy Provider Appeals Related to Maximum Allowable Cost Pricing (MACP) Reimbursements
9.1 A PBM shall designate the name, address, phone number, and electronic mail address of the person within the PBM organization who shall be the point of contact for responding to appeals received by the Department from a pharmacy provider or PSAO under 18 Del.C. §3324A(h).
9.2 All filings submitted to the Department, including the notice of appeal and any subsequent responses by either party shall be made by electronic mail to the electronic mail address designated by the Department on the Department's website.
9.3 Notice and Manner of Service
9.3.1 Notice and manner of service, except service of the notice of appeal, is sufficient and complete if properly addressed, upon mailing the same with prepaid first-class U.S. Postage.
9.3.2 Service of the initial notice of appeal shall be made by the pharmacy or PSAO on the PBM by Certified U.S. Postage and return receipt requested or hand delivery to the respondent and is complete upon receipt by addressee or an employee in respondent's place of business.
9.3.3 The parties must provide a brief statement verifying the service of all filed papers with the manner, date and address of service.
9.4 When an Appeal May Be Commenced
9.4.1 An appeal may be commenced after the pharmacy provider or PSAO and a PBM have attempted to resolve the matter in accordance with the PBM's internal appeal process required by 18 Del.C. §3324A(a).
9.4.2 A PBM's failure to communicate and process an internal appeal, as required under 18 Del.C. §3324A, or its failure to abide by its MACP appeal processes as described to the Department in the PBM's submission under subsection 4.2.4.2.1 of this regulation, shall constitute a denial under the internal appeal process for purposes of allowing the pharmacy provider or PSAO on its behalf to file an appeal with the Department.
9.4.3 The Commissioner may dismiss the appeal without prejudice if the Commissioner finds that the parties have not exhausted the PBM's internal appeals process.
9.4.4 A PBM shall not be held responsible for failure to timely process an internal appeal in the event that a pharmacy provider or PSAO acting on its behalf has not submitted sufficient information for the PBM to process the appeal.
9.4.5 All pricing information and data collected by the Department for purposes of processing an appeal under Section 9.0 of this regulation is confidential and is not subject to subpoena or the Freedom of Information Act, 29 Del.C. Ch. 100.
9.5 Commencement of Appeal
9.5.1 A pharmacy provider or PSAO may commence an appeal by filing a notice of appeal on a form provided by the Department and as specified at subsection 9.2 of this regulation, with the supporting documents or other evidence attached thereto. The pharmacy provider or PSAO shall at the same time serve a copy of the same notice of appeal and supporting documents to the PBM or PBM's representative and a statement verifying service in accordance with subsection 9.3 of this regulation. The Department may return any non-conforming notice of appeal.
9.5.2 Within 5 business days of receipt of the notice of appeal, the responding PBM ("Respondent") shall file a response on a form provided by the Department and as specified at subsection 9.2 of this regulation, that shall include a copy of the contract between the PBM and the appealing pharmacy provider or PSAO, along with any other documentation necessary for the Department to review the PBM's compensation program to determine whether the reimbursement underlying the appeal complies with 18 Del.C. §§3323A-3324A and the terms of the contract. The PBM shall at the same time serve a copy of the same response to the pharmacy provider or PSAO and a statement verifying service in accordance with subsection 9.3 of this regulation. The Department may return any non-conforming response.
9.5.3 If the Respondent fails to file a response in a timely fashion, the Department, after verifying proper service and notice to the parties, may enter a summary disposition. The Department may determine the matter in the nature of a default judgment after establishing that the appeal is properly supported and was properly served on Respondent. The Department may allow the re-opening of the matter to prevent a manifest injustice. A request for re-opening must be made no later than 5 business days after notice of the default judgment.
9.6 Consideration of Appeal
9.6.1 The Department shall consider the matter based on the submissions of the parties and information otherwise requested from the parties by the Department. The Department shall not consider any matter not contained in the original or supplemental submissions of the parties which has not been provided to the opposing party with at least 5 business days' notice, except claims of a continuing nature which are set out in the filed papers.
9.6.2 The Department shall review the pharmacy benefits manager's compensation program to ensure that the reimbursement for pharmacy benefits management services paid to the pharmacist or a pharmacy complies with 18 Del.C. §§3323A-3324A and the terms of the contract between the PBM and the appealing pharmacy or PSAO and shall either:
9.6.2.1 Dismiss the appeal; or
9.6.2.2 Grant the appeal and order the pharmacy benefits manager to pay the claim in accordance with the Department's findings.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-10.0 Network Adequacy Annual Reporting Requirements
10.1 Annually, no later than May 1, a pharmacy benefits manager shall submit to the Department a pharmacy benefits manager network adequacy report describing the pharmacy benefits manager network and the pharmacy benefits manager network's accessibility in this State, subject to the following:
10.1.1 The report is to address network adequacy in terms of patient access to physical pharmacy locations. The report may include a notation that mail-order pharmacy services are available, if applicable, but the report should not include mail-order pharmacies in calculations used to demonstrate the PBM's network adequacy.
10.2 The PBM's network adequacy report shall include at a minimum:
10.2.1 A hotspot map that shows density of network pharmacies;
10.2.2 A list identifying the number of lives within 5 miles, 10 miles, and 15 miles of a network pharmacy;
10.2.3 The percentage of covered individuals residing in urban, suburban, and rural service areas and their proximity to network retail pharmacies as follows:
10.2.3.1 The percentage of covered individuals residing in an urban service area who live within 2 miles of a retail pharmacy participating in the PBM's retail pharmacy network;
10.2.3.2 The percentage of covered individuals residing in an urban service area who live within 5 miles of a retail pharmacy designated as a preferred participating pharmacy in the PBM's retail pharmacy network;
10.2.3.3 The percentage of covered individuals residing in a suburban service area who live within 5 miles of a retail pharmacy participating in the PBM's retail pharmacy network;
10.2.3.4 The percentage of covered individuals residing in a suburban service area who live within 7 miles of a retain pharmacy designated as a preferred participating pharmacy in the PBM's retail pharmacy network;
10.2.3.5 The percentage of covered individuals residing in a rural service area who live within 15 miles of a retail pharmacy participating in the PBM's retail pharmacy network; and
10.2.3.6 The percentage of covered individuals residing in a rural service area who live within 18 miles of a retail pharmacy designated as a preferred participating pharmacy in the PBM's retail pharmacy network;
10.2.4 A description of how network adequacy is monitored to ensure a reasonably adequate and accessible network;
10.2.5 The percentage change in the number of pharmacies in the pharmacy network from the previous year; and
10.2.6 Any other information that the PBM may wish to provide to demonstrate network adequacy.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-11.0 Quarterly Reporting by PBMs
11.1 By January 15, April 15, July 15, October 15 of each year, a PBM shall provide a report of its rebating practices for the calendar quarter immediately preceding the report on a form provided by the Department (the "Rebate Report"), and shall include the following information for each insurer with which it contracts:
11.1.1 The name and Delaware registration number of the PBM;
11.1.2 The name and contact information of the person responsible for completing and filing the report with the Department;
11.1.3 The itemized amount of pharmacy benefits manager revenue sources, including professional fees, administrative fees, processing fees, audits, direct and indirect renumeration fees, or any other fees;
11.1.4 The aggregate dollar amount of rebates distributed to the appropriate insurer;
11.1.5 The aggregate dollar amount of rebates passed on to insureds of each insurer at the point of sale that reduced the insureds' applicable deductible, copayment, coinsurance, or other cost-sharing amount;
11.1.6 The individual and aggregate amount the insurer paid to the pharmacy benefits manager for pharmacy goods or services, itemized by all of the following:
11.1.6.1 Pharmacy;
11.1.6.2 Product; and
11.1.6.3 Goods and services; and
11.1.7 The individual and aggregate amount a pharmacy benefits manager paid for pharmacy goods or services, itemized by each of the following:
11.1.7.1 Pharmacy;
11.1.7.2 Product; and
11.1.7.3 Goods and services.
11.2 Failure to timely file a report as required under Section 11.0 of this regulation may result in the nonrenewal, suspension or revocation of the PBM's registration as set forth in 18 Del.C. Ch. 33A.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-12.0 Review and Approval of Claim Adjudication Fees and Pharmacy Standards
12.1 Unless approved in advance by the Commissioner as provided in this Section 12.0, no PBM may do either of the following:
12.1.1 Charge a pharmacist or pharmacy a fee related to the adjudication of a claim, including a fee for any of the following:
12.1.1.1 The receipt and processing of a pharmacy claim;
12.1.1.2 The development or management of claims processing services in a pharmacy benefits manager network; or
12.1.1.3 Participation in a pharmacy benefits manager network; or
12.1.2 Require a pharmacy accreditation standard or certification requirement that is inconsistent with, more stringent than, or in addition to any requirements of the Board of Pharmacy.
12.2 To seek Commissioner approval of a fee as required under subsection 12.1.1 of this regulation, a PBM shall provide the following minimum information:
12.2.1 The name, registration number and contact information of the PBM;
12.2.2 The fee for which the PBM seeks approval;
12.2.3 A statement regarding how the fee is to be charged, the need for the fee, and whether the fee represents a new fee, or an increase or decrease in a previously-charged fee;
12.2.4 A statement as to whether the requested fee applies to all contracted pharmacies within its complete network or a subset of contracted pharmacies. If the fee applies only to a subset of contracted pharmacies and/or the amount of the fee varies among contracted pharmacies, the statement should include the reason for the differential treatment among contracted pharmacies;
12.2.5 The PBM's anticipated revenue from the fee; and
12.2.6 Any other information the PBM wants the Department to consider as justification for the proposed fee.
12.3 To seek Commissioner approval of a pharmacy accreditation standard or certification requirement as required under subsection 12.1.2 of this regulation, a PBM shall provide the following minimum information on a form provided by the Department for such purposes:
12.3.1 The name, registration number and contact information of the PBM;
12.3.2 The accreditation standard or certification requirement sought to be implemented;
12.3.3 A statement of how the accreditation standard or certification requirement deviates from the requirements of the Board of Pharmacy;
12.3.4 Detailed justification for the necessity of an accreditation standard or certification requirement that is inconsistent with, more stringent than, or in addition to the requirements of the Board of Pharmacy, including the risk it is intended to mitigate and why the Board of Pharmacy standards are not sufficient for those purposes;
12.3.5 A statement whether the accreditation standard or certification requirement applies to all contracted pharmacies or a subset of contracted pharmacies. If the standard or requirement applies only to a subset of contracted pharmacies, the statement should include the reason for the differential treatment among contracted pharmacies;
12.3.6 A statement describing how application of the accreditation standard or certification requirement may impact patient access to pharmacy services or the PBM's network;
12.4 Upon receipt by the Department of a submission pursuant to subsection 12.3 of this regulation, the Department shall forward a copy of the submission to the Executive Director of the Board of Pharmacy to be placed on the agenda for the Board of Pharmacy's next available public meeting.
12.4.1 The PBM shall supplement its filing under subsection 12.3 of this regulation with any additional information requested by either the Department or the Board of Pharmacy.
12.4.2 Following consideration of the submission by the Board of Pharmacy, the Department shall take under advisement any recommendation provided or position taken by the Board of Pharmacy regarding the additional accreditation standard or certification requirement when rendering a final decision on the PBM's sub-mission under subsection 12.3 of this regulation.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-13.0 Severability
If any section or portion of a section of this regulation or its applicability to any person or circumstance is held invalid by a court, the remainder of this regulation or the applicability of the provision to other persons or circumstances shall not be affected.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
18 Del. Admin. Code § 1411-14.0 Effective Date
This Regulation shall become effective August 11, 2020. The effective date of the revisions to Section 8.0 is January 11, 2022. The amendments implementing House Bill 219 (151st General Assembly) shall become effective 11 days after the publication of a final order adopting those subsections and sections.
History
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 26 DE Reg. 594 (01/01/23)
- 24 DE Reg. 167 (08/01/20)
- 25 DE Reg. 715 (01/01/22)
- 26 DE Reg. 594 (01/01/23)
1500 Medicare Supplement Policies
1501 Medicare Supplement Insurance Minimum Standards
18 Del. Admin. Code § 1501-1.0 Purpose
The purpose of this regulation is to provide for the reasonable standardization of coverage and simplification of terms and benefits of Medicare supplement policies; to facilitate public understanding and comparison of such policies; to eliminate provisions contained in such policies which may be misleading or confusing in connection with the purchase of such policies or with the settlement of claims; and to provide for full disclosures in the sale of accident and sickness insurance coverages to persons eligible for Medicare.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-2.0 Authority
This regulation is issued pursuant to the authority vested in the Commissioner under 18 Del.C. §§311 and 3403.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-3.0 Applicability and Scope
3.1 Except as otherwise specifically provided in Sections 7.0, 16.0, 17.0, 20.0, and 25.0, this regulation shall apply to:
3.1.1 All Medicare supplement policies delivered or issued for delivery in this State on or after the effective date of this regulation; and
3.1.2 All certificates issued under group Medicare supplement policies, which certificates have been delivered or issued for delivery in this state.
3.2 This regulation shall not apply to a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-4.0 Definitions
For purposes of this regulation:
“Applicant” means:
“Bankruptcy” means when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.
“Certificate” means any certificate delivered or issued for delivery in this state under a group Medicare supplement policy.
“Certificate form” means the form on which the certificate is delivered or issued for delivery by the issuer.
“Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than sixty-three (63) days.
“Creditable coverage” means, with respect to an individual, coverage of the individual provided under any of the following:
A group health plan;
“Creditable coverage” shall not include one or more, or any combination of, the following:
“Creditable coverage” shall not include the following benefits if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the plan:
“Creditable coverage” shall not include the following benefits if offered as independent, non-coordinated benefits:
“Creditable coverage” shall not include the following if it is offered as a separate policy, certificate or contract of insurance:
“Employee welfare benefit plan” means a plan, fund or program of employee benefits as defined in 29 U.S.C. Section 1002 (Employee Retirement Income Security Act).
“Insolvency” means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer’s state of domicile.
“Issuer” includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this state Medicare supplement policies or certificates.
“Medicare” means the “Health Insurance for the Aged Act,” Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended.
“Medicare Advantage plan” means a plan of coverage for health benefits under Medicare Part C as defined in 42 U.S.C. 1395w‑28(b)(1), and includes:
“Medicare supplement policy” means a group or individual policy of accident and sickness insurance or a subscriber contract of hospital and medical service associations or health maintenance organizations, other than a policy issued pursuant to a contract under Section 1876 of the federal Social Security Act (42 U.S.C. § 1395 et. seq.) or an issued policy under a demonstration project specified in 42 U.S.C. § 1395ss(g)(1), which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. “Medicare supplement policy” does not include Medicare Advantage plans established under Medicare Part C, Outpatient Prescription Drug plans established under Medicare Part D, or any Health Care Prepayment Plan (HCPP) that provides benefits pursuant to an agreement under the Social Security Act at 42 U.S.C. § 1833(a)(1)(A).
"Pre-Standardized Medicare supplement benefit plan," "Pre-Standardized benefit plan" or "Pre-Standardized plan" means a group or individual policy of Medicare supplement insurance issued prior to January 1, 1992.
"1990 Standardized Medicare supplement benefit plan," "1990 Standardized benefit plan" or "1990 plan" means a group or individual policy of Medicare supplement insurance issued on or after January 1, 1992 and prior to June 1, 2010 and includes Medicare supplement insurance policies and certificates renewed on or after that date which are not replaced by the issuer at the request of the insured.
“2010 Standardized Medicare supplement benefit plan," "2010 Standardized benefit plan" or "2010 plan" means a group or individual policy of Medicare supplement insurance issued with an effective date on or after June 1, 2010.
“Policy form” means the form on which the policy is delivered or issued for delivery by the issuer.
“Secretary” means the Secretary of the United States Department of Health and Human Services.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-5.0 Policy Definitions and Terms
5.1 No policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate unless the policy or certificate contains definitions or terms that conform to the requirements of this Section.
5.2 For purposes of Section 5.0, the following terms have the following meanings:
“Accident,” “accidental injury,” or “accidental means” shall be defined to employ “result” language and shall not include words that establish an accidental means test or use words such as “external, violent, visible wounds” or similar words of description or characterization.
“Benefit period” or “Medicare Benefit Period” shall not be defined more restrictively than as defined in the Medicare program.
“Convalescent nursing home,” “extended care facility,” or “skilled nursing facility” shall not be defined more restrictively than as defined in the Medicare program.
“Health care expenses” means, for purposes of Section 14.0, expenses of health maintenance organizations associated with the delivery of health care services, which expenses are analogous to incurred losses of insurers.
“Hospital” may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare program.
“Medicare” shall be defined in the policy and certificate. Medicare may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended,” or “Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof,” or words of similar import.
“Medicare eligible expenses” shall mean expenses of the kinds covered by Medicare Parts A and B, to the extent recognized as reasonable and medically necessary by Medicare.
“Medicare program” means the Federal program through which Medicare is administered.
“Physician” shall not be defined more restrictively than as defined in the Medicare program.
“Sickness” shall not be defined to be more restrictive than the following: “Sickness means illness or disease of an insured person which first manifests itself after the effective date of insurance and while the insurance is in force.” The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any workers’ compensation, occupational disease, employer’s liability or similar law.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-6.0 Policy Provisions
6.1 Except for permitted preexisting condition clauses as described in subsections 7.1.1, 8.1.1 and 9.1.1 of this regulation, no policy or certificate may be advertised, solicited or issued for delivery in this State as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.
6.2 No Medicare supplement policy or certificate may use waivers to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions.
6.3 No Medicare supplement policy or certificate in force in the State shall contain benefits that duplicate benefits provided by Medicare.
6.4 Issuance and Renewal
6.4.1 Subject to subsections 7.1.4, 7.1.5 and 7.1.7, and 8.1.4 and 8.1.5 of this regulation, a Medicare supplement policy with benefits for outpatient prescription drugs in existence prior to January 1, 2006 shall be renewed for current policyholders who do not enroll in Part D at the option of the policyholder.
6.4.2 A Medicare supplement policy with benefits for outpatient prescription drugs shall not be issued after December 31, 2005.
6.4.3 After December 31, 2005, a Medicare supplement policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless:
6.4.3.1 The policy is modified to eliminate outpatient prescription coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual’s coverage under a Part D plan and;
6.4.3.2 Premiums are adjusted to reflect the elimination of outpatient prescription drug coverage at the time of Medicare Part D enrollment, accounting for any claims paid, if applicable.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-7.0 Minimum Benefit Standards for Pre-Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery Prior to July 1, 2009.
7.1 No policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate unless it meets or exceeds the following minimum standards. These are minimum standards and do not preclude the inclusion of other provisions or benefits which are not inconsistent with these standards. The following general standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this regulation.
7.1.1 A Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six (6) months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months before the effective date of coverage.
7.1.2 A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.
7.1.3 A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, co-payment, or coinsurance amounts. Premiums may be modified to correspond with such changes.
7.1.4 A “non-cancellable,” “guaranteed renewable,” or “non-cancellable and guaranteed renewable” Medicare supplement policy shall not:
7.1.4.1 Provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium; or
7.1.4.2 Be cancelled or non-renewed by the issuer solely on the grounds of deterioration of health.
7.1.5 Policy Termination or Cancelation
7.1.5.1 Except as authorized by the Commissioner, an issuer shall neither cancel nor non-renew a Medicare supplement policy or certificate for any reason other than nonpayment of premium or material misrepresentation.
7.1.5.2 If a group Medicare supplement insurance policy is terminated by the group policyholder and not replaced as provided in subsection 7.1.5.4 of this regulation, the issuer shall offer certificate holders an individual Medicare supplement policy. The issuer shall offer the certificate holder at least the following choices:
7.1.5.2.1 An individual Medicare supplement policy currently offered the issuer having comparable benefits to those contained in the terminated group Medicare supplement policy; and
7.1.5.2.2 An individual Medicare supplement policy which provides only such benefits as are required to meet the minimum standards as defined in subsection 9.2 of this regulation.
7.1.5.3 If membership in a group is terminated, the issuer shall:
7.1.5.3.1 Offer the certificate holder the conversion opportunities described in subsection 7.1.5.2 of this regulation; or
7.1.5.3.2 At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.
7.1.5.4 If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.
7.1.6 Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or to payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.
7.1.7 If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this subsection.
7.2 Minimum Benefit Standards.
7.2.1 Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;
7.2.2 Coverage for either all or none of the Medicare Part A inpatient hospital deductible amount;
7.2.3 Coverage of Part A Medicare eligible expenses incurred as daily hospital charges during use of Medicare’s lifetime hospital inpatient reserve days;
7.2.4 Upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of ninety percent (90%) of all Medicare Part A eligible expenses for hospitalization not covered by Medicare subject to a lifetime maximum benefit of an additional 365 days;
7.2.5 Coverage under Medicare Part A for the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations or already paid for under Part B;
7.2.6 Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the co-payment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to a maximum calendar year out-of-pocket amount equal to the Medicare Part B deductible [$100];
7.2.7 Effective January 1, 1990, coverage under Medicare Part B for the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations), unless replaced in accordance with federal regulations or already paid for under Part A, subject to the Medicare deductible amount.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-8.0 Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued or Delivered on or After July 1, 2009 and with an effective date of coverage prior to June 1, 2010
8.1 The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state on or after July 1, 2009 and prior to June 1, 2010. No policy or certificate may be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit standards. The following general standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this regulation.
8.1.1 A Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six (6) months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months before the effective date of coverage.
8.1.2 A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.
8.1.3 A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, co-payment, or coinsurance amounts. Premiums may be modified to correspond with such changes.
8.1.4 No Medicare supplement policy or certificate shall provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.
8.1.5 Each Medicare supplement policy shall be guaranteed renewable.
8.1.5.1 The issuer shall not cancel or non-renew the policy solely on the ground of health status of the individual.
8.1.5.2 The issuer shall not cancel or non-renew the policy for any reason other than nonpayment of premium or material misrepresentation.
8.1.5.3 If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under subsection 8.1.5.5 of this regulation, the issuer shall offer certificate holders an individual Medicare supplement policy which (at the option of the certificate holder);
8.1.5.3.1 Provides for continuation of the benefits contained in the group policy, or
8.1.5.3.2 Provides for benefits that otherwise meet the requirements of this subsection.
8.1.5.4 If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:
8.1.5.4.1 Offer the certificate holder the conversion opportunity described in subsection 8.1.5.3 of this regulation, or
8.1.5.4.2 At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.
8.1.5.5 If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.
8.1.5.6 If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this subsection.
8.1.6 Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.
8.1.7 Policy or Certificate Suspension
8.1.7.1 A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period (not to exceed twenty-four (24) months) in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within ninety (90) days after the date the individual becomes entitled to assistance.
8.1.7.2 If suspension occurs and if the policyholder or certificate holder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the policyholder or certificate holder provides notice of loss of entitlement within ninety (90) days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.
8.1.7.3 Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder if the policyholder is entitled to benefits under Section 226 (b) of the Social Security Act and is covered under a group health plan (as defined in Section 1862 (b)(1)(A)(v) of the Social Security Act). If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy shall be automatically reinstituted (effective as of the date of loss of coverage) if the policyholder provides notice of loss of coverage within ninety (90) days after the date of the loss.
8.1.7.4 Reinstitution of coverages as described in subsections 8.1.7.2 and 8.1.7.3 of this regulation:
8.1.7.4.1 Shall not provide for any waiting period with respect to treatment of preexisting conditions;
8.1.7.4.2 Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension. If the suspended Medicare supplement policy provided coverage for outpatient prescription drugs, reinstitution of the policy for Medicare Part D enrollees shall be without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of suspension; and
8.1.7.4.3 Shall provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.
8.1.8 If an issuer makes a written offer to the Medicare Supplement policyholders or certificate holders of one or more of its plans, to exchange during a specified period from his or her 1990 Standardized plan (as described in Section 10.0 of this regulation) to a 2010 Standardized plan (as described in Section 11.0 of this regulation), the offer and subsequent exchange shall comply with the following requirements:
8.1.8.1 If an issuer need not provide justification to the Commissioner if the insured replaces a 1990 Standardized policy or certificate with an issue age rated 2010 Standardized policy or certificate at the insured’s original issue age and duration. If an insured’s policy or certificate to be replaced is priced on an issue age rate schedule at the time of such offer, the rate charged to the insured for the new exchanged policy shall recognize the policy reserve buildup, due to the pre-funding inherent in the use of an issue age rate basis, for the benefit of the insured. The method proposed to be used by an issuer must be filed with the Commissioner.
8.1.8.2 The rating class of the new policy or certificate shall be the class closest to the insured’s class of the replaced coverage.
8.1.8.3 An issuer may not apply new pre-existing condition limitations or a new incontestability period to the new policy for those benefits contained in the exchanged 1990 Standardized policy or certificate of the insured, but may apply pre-existing condition limitations of no more than six (6) months to any added benefits contained in the new 2010 Standardized policy or certificate not contained in the exchanged policy.
8.1.8.4 The new policy or certificate shall be offered to all policyholders or certificate holders within a given plan, except where the offer or issue would be in violation of state or federal law.
8.2 Standards for Basic (Core) Benefits Common to Benefit Plans A to J. Every issuer shall make available a policy or certificate including only the following basic “core” package of benefits to each prospective insured. An issuer may make available to prospective insureds any of the other Medicare Supplement Insurance Benefit Plans in addition to the basic core package, but not in lieu of it.
8.2.1 Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;
8.2.2 Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;
8.2.3 Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred percent (100%) of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance;
8.2.4 Coverage under Medicare Parts A and B for the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;
8.2.5 Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the co-payment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible;
8.3 Standards for Additional Benefits. The following additional benefits shall be included in Medicare Supplement Benefit Plans “B” through “J” only as provided by Section 11.0 of this regulation.
8.3.1 Medicare Part A Deductible: Coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period.
8.3.2 Skilled Nursing Facility Care: Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A.
8.3.3 Medicare Part B Deductible: Coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.
8.3.4 Eighty Percent (80%) of the Medicare Part B Excess Charges: Coverage for eighty percent (80%) of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.
8.3.5 One Hundred Percent (100%) of the Medicare Part B Excess Charges: coverage for all of the difference between the actual Medicare Part B charge as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.
8.3.6 Basic Outpatient Prescription Drug Benefit: Coverage for fifty percent (50%) of outpatient prescription drug charges, after a $250 calendar year deductible, to a maximum of $1,250 in benefits received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.
8.3.7 Extended Outpatient Prescription Drug Benefit: Coverage for fifty percent (50%) of outpatient prescription drug charges, after a $250 calendar year deductible to a maximum of $3,000 in benefits received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.
8.3.8 Medically Necessary Emergency Care in a Foreign Country: Coverage to the extent not covered by Medicare for eighty percent (80%) of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first sixty (60) consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, “emergency care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset.
8.3.9 Preventive Medical Care Benefit:
8.3.9.1 Coverage for the following preventive health services not covered by Medicare:
8.3.9.1.1 An annual clinical preventive medical history and physical examination that may include tests and services from subsection 8.3.9.1.2 of this regulation and patient education to address preventive health care measures;
8.3.9.1.2 Preventive screening tests or preventive services, the selection and frequency of which is determined to be medically appropriate by the attending physician.
8.3.9.2 Reimbursement shall be for the actual charges up to one hundred percent (100%) of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) codes, to a maximum of $120 annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare.
8.3.10 At-Home Recovery Benefit: Coverage for services to provide short term, at-home assistance with activities of daily living for those recovering from an illness, injury or surgery.
8.3.10.1 For purposes of this benefit, the following definitions shall apply:
8.3.10.1.1 “Activities of daily living” include, but are not limited to bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings.
8.3.10.1.2 “Care provider” means a duly qualified or licensed home health aide or homemaker, personal care aide or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry.
8.3.10.1.3 “At home” shall mean any place used by the insured as a place of residence, provided that the place would qualify as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility shall not be considered the insured’s place of residence.
8.3.10.1.4 “At-home recovery visit” means the period of a visit required to provide at home recovery care, without limit on the duration of the visit, except each consecutive four (4) hours in a twenty-four-hour period of services provided by a care provider is one visit.
8.3.10.2 Coverage Requirements and Limitations.
8.3.10.2.1 At-home recovery services provided must be primarily services which assist in activities of daily living.
8.3.10.2.2 The insured’s attending physician must certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare.
8.3.10.3 Coverage described in subsection 8.3.10.2 of this regulation is limited to:
8.3.10.3.1 No more than the number and type of at-home recovery visits certified as necessary by the insured’s attending physician. The total number of at-home recovery visits shall not exceed the number of Medicare approved home health care visits under a Medicare approved home care plan of treatment;
8.3.10.3.2 The actual charges for each visit up to a maximum reimbursement of $40 per visit;
8.3.10.3.3 $1,600 per calendar year;
8.3.10.3.4 Seven (7) visits in any one week;
8.3.10.3.5 Care furnished on a visiting basis in the insured’s home;
8.3.10.3.6 Services provided by a care provider as defined in this Section;
8.3.10.3.7 At-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded; and
8.3.10.3.8 At-home recovery visits received during the period the insured is receiving Medicare approved home care services or no more than eight (8) weeks after the service date of the last Medicare approved home health care visit.
8.3.10.4 Coverage described in subsection 8.3.10.2 of this regulation is excluded for:
8.3.10.4.1 Home care visits paid for by Medicare or other government programs; and
8.3.10.4.2 Care provided by family members, unpaid volunteers or providers who are not care providers.
8.4 Standards for Plans K and L.
8.4.1 Standardized Medicare supplement benefit plan “K” shall consist of the following:
8.4.1.1 Coverage of one hundred percent (100%) of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
8.4.1.2 Coverage of one hundred percent (100%) of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
8.4.1.3 Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred percent (100%) of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance;
8.4.1.4 Medicare Part A Deductible: Coverage for fifty percent (50%) of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subsection 8.4.1.10 of this regulation;
8.4.1.5 Skilled Nursing Facility Care: Coverage for fifty percent (50%) of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subsection 8.4.1.10 of this regulation;
8.4.1.6 Hospice Care: Coverage for fifty percent (50%) of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subsection 8.4.1.10 of this regulation;
8.4.1.7 Coverage for fifty percent (50%), under Medicare Part A or B, of the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subsection 8.4.1.10 of this regulation;
8.4.1.8 Except for coverage provided in subsection 8.4.1.10 of this regulation, coverage for fifty percent (50%) of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in subsection 8.4.1.10 of this regulation;
8.4.1.9 Coverage of one hundred percent (100%) of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and
8.4.1.10 Coverage of one hundred percent (100%) of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.
8.4.2 Standardized Medicare supplement benefit plan “L” shall consist of the following:
8.4.2.1 The benefits described in subsections 8.1.1, 8.1.2, 8.1.3 and 8.1.9 of this regulation;
8.4.2.2 The benefit described in subsections 8.1.4, 8.1.5, 8.1.6, 8.1.7 and 8.1.8 of this regulation, but substituting seventy-five percent (75%) for fifty percent (50%); and
8.4.2.3 The benefit described in subsection 8.1.10, but substituting $2000 for $4000.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-9.0 Benefit Standards for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery with an effective Date for Coverage on or After June 1, 2010
9.1 The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date for coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit standards. No issuer may offer any 1990 Standardized Medicare supplement benefit plan for sale on or after June 1, 2010. Benefit standards applicable to Medicare supplement policies and certificates issued before June 1, 2010 remain subject to the requirements of 18 Del.C. Chapter 34. The following general standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this regulation.
9.1.1 A Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six (6) months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months before the effective date of coverage.
9.1.2 A Medicare supplement policy or certificate shall not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.
9.1.3 A Medicare supplement policy or certificate shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, co-payment, or coinsurance amounts. Premiums may be modified to correspond with such changes.
9.1.4 No Medicare supplement policy or certificate shall provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium.
9.1.5 Each Medicare supplement policy shall be guaranteed renewable.
9.1.5.1 The issuer shall not cancel or non-renew the policy solely on the ground of health status of the individual.
9.1.5.2 The issuer shall not cancel or non-renew the policy for any reason other than nonpayment of premium or material misrepresentation.
9.1.5.3 If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided under subsection 9.1.5.5 of this regulation, the issuer shall offer certificate holders an individual Medicare supplement policy which (at the option of the certificate holder):
9.1.5.3.1 Provides for continuation of the benefits contained in the group policy; or
9.1.5.3.2 Provides for benefits that otherwise meet the requirements of this Subsection.
9.1.5.4 If an individual is a certificate holder in a group Medicare Supplement policy and the individual terminates membership in the group, the issuer shall:
9.1.5.4.1 Offer the certificate holder the conversion opportunity described in subsection 9.1.5.3 of this regulation; or
9.1.5.4.2 At the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.
9.1.5.5 If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.
9.1.6 Termination of a Medicare supplement policy or certificate shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.
9.1.7 A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period (not to exceed twenty-four (24) months) in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within ninety (90) days after the date the individual becomes entitled to assistance.
9.1.7.1 If suspension occurs and if the policyholder or certificate holder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the policyholder or certificate holder provides notice of loss of entitlement within ninety (90) days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.
9.1.7.2 Each Medicare supplement policy shall provide that benefits and premiums under the policy shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder if the policyholder is entitled to benefits under Section 226 (b) of the Social Security Act and is covered under a group health plan (as defined in Section 1862 (b)(1)(A)(v) of the Social Security Act). If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy shall be automatically reinstituted (effective as of the date of loss of coverage) if the policyholder provides notice of loss of coverage within ninety (90) days after the date of the loss.
9.1.7.3 Reinstitution of coverages as described in subsections 9.1.7.1 and 9.1.7.2 of this regulation:
9.1.7.3.1 Shall not provide for any waiting period with respect to treatment of preexisting conditions;
9.1.7.3.2 Shall provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension; and
9.1.7.3.3 Shall provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.
9.2 Standards for Basic (Core) Benefits Common to Medicare Supplement Insurance Benefit Plans A, B, C, D, F, F with High Deductible, G, M and N. Every issuer of Medicare supplement insurance benefit plans shall make available a policy or certificate including only the following basic “core” package of benefits to each prospective insured. An issuer may make available to prospective insureds any of the other Medicare Supplement Insurance Benefit Plans in addition to the basic core package, but not in lieu of it.
9.2.1 Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;
9.2.2 Coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used;
9.2.3 Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred percent (100%) of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance;
9.2.4 Coverage under Medicare Parts A and B for the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations;
9.2.5 Coverage for the coinsurance amount, or in the case of hospital outpatient department services paid under a prospective payment system, the co-payment amount, of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible;
9.2.6 Hospice Care: Coverage of cost sharing for all Part A Medicare eligible hospice care and respite care expenses.
9.3 Standards for Additional Benefits. The following additional benefits shall be included in Medicare supplement benefit Plans B, C, D, F, F with High Deductible, G, M, and N as provided by subsection 11.1 of this regulation.
9.3.1 Medicare Part A Deductible: Coverage for one hundred percent (100%) of the Medicare Part A inpatient hospital deductible amount per benefit period.
9.3.2 Medicare Part A Deductible: Coverage for fifty percent (50%) of the Medicare Part A inpatient hospital deductible amount per benefit period.
9.3.3 Skilled Nursing Facility Care: Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A.
9.3.4 Medicare Part B Deductible: Coverage for one hundred percent (100%) of The Medicare Part B deductible amount per calendar year regardless of hospital confinement.
9.3.5 One Hundred Percent (100%) of the Medicare Part B Excess Charges: Coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge.
9.3.6 Medically Necessary Emergency Care in a Foreign Country: Coverage to the extent not covered by Medicare for eighty percent (80%) of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first sixty (60) consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, “emergency care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-10.0 Standard Medicare Supplement Benefit Plans for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery on or After July 1, 2009 with an effective date of coverage prior to June 1, 2010
10.1 An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic core benefits, as defined in subsection 8.2 of this regulation.
10.2 No groups, packages or combinations of Medicare supplement benefits other than those listed in this Section shall be offered for sale in this state, except as may be permitted in subsection 13.7 and in Section 14.0 of this regulation.
10.3 Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans “A” through “L” listed in this subsection and conform to the definitions in Section 4.0 of this regulation. Each benefit shall be structured in accordance with the format provided in subsections 8.2 and 8.3,or 8.4 of this regulation and list the benefits in the order shown in this subsection. For purposes of this Section, “structure, language, and format” means style, arrangement and overall content of a benefit.
10.4 An issuer may use, in addition to the benefit plan designations required in subsection 10.3 of this regulation, other designations to the extent permitted by law.
10.5 Make-up of benefit plans:
10.5.1 Standardized Medicare supplement benefit plan “A” shall be limited to the basic (core) benefits common to all benefit plans, as defined in subsection 8.2 of this regulation.
10.5.2 Standardized Medicare supplement benefit plan “B” shall include only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible as defined in subsection 8.3.1 of this regulation.
10.5.3 Standardized Medicare supplement benefit plan “C” shall include only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible and medically necessary emergency care in a foreign country as defined in subsections 8.3.1, 8.3.2, 8.3.3 and 8.3.8 of this regulation respectively.
10.5.4 Standardized Medicare supplement benefit plan “D” shall include only the following: The core benefit (as defined in subsection 8.2 of this regulation), plus the Medicare Part A deductible, skilled nursing facility care, medically necessary emergency care in an foreign country and the at-home recovery benefit as defined in subsections 8.3.1, 8.3.2, 8.3.8 and 8.3.10 of this regulation, respectively.
10.5.5 Standardized Medicare supplement benefit plan “E” shall include only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, medically necessary emergency care in a foreign country and preventive medical care as defined in subsections 8.3.1, 8.3.2, 8.3.8 and 8.3.9 of this regulation, respectively.
10.5.6 Standardized Medicare supplement benefit plan “F” shall include only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, the skilled nursing facility care, the Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsections 8.3.1, 8.3.2, 8.3.3, 8.3.5 and 8.3.8 of this regulation, respectively.
10.5.7 Standardized Medicare supplement benefit high deductible plan “F” shall include only the following: 100% of covered expenses following the payment of the annual high deductible plan “F” deductible. The covered expenses include the core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, the Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsections 8.3.1, 8.3.2, 8.3.3, 8.3.5 and 8.3.8 of this regulation, respectively. The annual high deductible plan “F” deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan “F” policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan “F” deductible shall be $1500 for 1998 and 1999, and shall be based on the calendar year. It shall be adjusted annually thereafter by the Secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.
10.5.8 Standardized Medicare supplement benefit plan “G” shall include only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, eighty percent (80%) of the Medicare Part B excess charges, medically necessary emergency care in a foreign country, and the at-home recovery benefit as defined in subsections 8.3.1, 8.3.2, 8.3.4, 8.3.8 and 8.3.10 of this regulation, respectively.
10.5.9 Standardized Medicare supplement benefit plan “H” shall consist of only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, basic prescription drug benefit and medically necessary emergency care in a foreign country as defined in subsections 8.3.1, 8.3.2, 8.3.6 and 8.3.8 of this regulation, respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.
10.5.10 Standardized Medicare supplement benefit plan “I” shall consist of only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B excess charges, basic prescription drug benefit, medically necessary emergency care in a foreign country and at-home recovery benefit as Defined in subsections 8.3.1, 8.3.2, 8.3.5, 8.3.6, 8.3.8, and 8.3.10 respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.
10.5.11 Standardized Medicare supplement benefit plan “J” shall consist of only the following: The core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, extended prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care and at-home recovery benefit as defined in subsections 8.3.1, 8.3.2, 8.3.3, 8.3.5, 8.3.7, 8.3.8, 8.3.9, and 8.3.10 respectively. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.
10.5.12 Standardized Medicare supplement benefit high deductible plan “J” shall consist of only the following: 100% of covered expenses following the payment of the annual high deductible plan “J” deductible. The covered expenses include the core benefit as defined in subsection 8.2 of this regulation, plus the Medicare Part A deductible, skilled nursing facility care, Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, extended outpatient prescription drug benefit, medically necessary emergency care in a foreign country, preventive medical care benefit and at-home recovery benefit as defined in subsections 8.3.1, 8.3.2, 8.3.3, 8.3.5, 8.3.7, 8.3.8, 8.3.9, and 8.3.10 of this regulation, respectively. The annual high deductible plan “J” deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by the Medicare supplement plan “J” policy, and shall be in addition to any other specific benefit deductibles. The annual deductible shall be $1500 for 1998 and 1999, and shall be based on a calendar year. It shall be adjusted annually thereafter by the Secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.
10.6 Make-up of two Medicare supplement plans mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA);
10.6.1 Standardized Medicare supplement benefit plan “K” shall consist of only those benefits described in subsection 8.4.1 of this regulation.
10.6.2 Standardized Medicare supplement benefit plan “L” shall consist of only those benefits described in subsection 8.4.2 of this regulation.
10.7 New or Innovative Benefits: An issuer may, with the prior approval of the Commissioner, offer policies or certificates with new or innovative benefits in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to Medicare supplement insurance, new or innovative, not otherwise available, cost-effective, and offered in a manner that is consistent with the goal of simplification of Medicare supplement policies. After December 31, 2005, the innovative benefit shall not include an outpatient prescription drug benefit.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-11.0 Standard Medicare Supplement Benefit Plans for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery with an effective date on or After June 1, 2010
11.1 The following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state with an effective date of coverage on or after June 1, 2010. No policy or certificate may be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit plan standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued before June 1, 2010 remain subject to the requirements of 18 Del.C. §3403.
11.1.1 An issuer shall make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic (core) benefits, as defined in subsection 9.2 of this regulation.
11.1.2 If an issuer makes available any of the additional benefits described in subsection 9.3, or offers standardized benefit Plans K or L (as described in subsections 11.5.8 and 11.5.9 of this regulation), then the issuer shall make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic (core) benefits as described in subsection 11.1.1 of this regulation, a policy form or certificate form containing either standardized benefit Plan C (as described in subsection 11.5.3 of this regulation) or standardized benefit Plan F (as described in subsection 11.5.5 of this regulation).
11.2 No groups, packages or combinations of Medicare supplement benefits other than those listed in this Section shall be offered for sale in this state, except as may be permitted in subsection 11.7 and in Section 13.0 of this regulation.
11.3 Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plans listed in this subsection and conform to the definitions in Section 4.0 of this regulation. Each benefit shall be structured in accordance with the format provided in subsections 8.1.2 and 8.1.3 of this regulation; or, in the case of plans K or L, in subsections 11.5.8 or 11.5.9 of this regulation and list the benefits in the order shown. For purposes of this subsection, “structure, language, and format” means style, arrangement and overall content of a benefit.
11.4 In addition to the benefit plan designations required in subsection 11.3 of this regulation, an issuer may use other designations to the extent permitted by law.
11.5 Make-up of 2010 Standardized Benefit Plans:
11.5.1 Standardized Medicare supplement benefit Plan A shall include only the following: The basic (core) benefits as defined in subsection 9.2 of this regulation.
11.5.2 Standardized Medicare supplement benefit Plan B shall include only the following: The basic (core) benefit as defined in subsection 9.2 of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible as defined in subsection 9.3.1 of this regulation.
11.5.3 Standardized Medicare supplement benefit Plan C shall include only the following: The basic (core) benefit as defined in subsection 9.2 of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B deductible, and medically necessary emergency care in a foreign country as defined in subsections 9.3.1, 9.3.3, 9.3.4, 9.3.5 and 9.3.6 of this regulation, respectively.
11.5.4 Standardized Medicare supplement benefit Plan D shall include only the following: The basic (core) benefit (as defined in subsection 9.2 of this regulation), plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in an foreign country as defined in subsections 9.3.1, 9.3.3, and 9.3.6 of this regulation, respectively.
11.5.5 Standardized Medicare supplement [regular] Plan F shall include only the following: The basic (core) benefit as defined in subsection of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, the skilled nursing facility care, one hundred percent (100%) of the Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsections 9.3.1, 9.3.3, 9.3.4, 9.3.5, and 9.3.6 of this regulation, respectively.
11.5.6 Standardized Medicare supplement Plan F With High Deductible shall include only the following: one hundred percent (100%) of covered expenses following the payment of the annual deductible set forth in subsection 11.5.6.2 of this regulation.
11.5.6.1 The basic (core) benefit as defined in subsection 9.2 of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B deductible, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsections 9.3.1, 9.3.3, 9.3.4, 9.3.5, and 9.3.6 of this regulation, respectively.
11.5.6.2 The annual deductible in Plan F With High Deductible shall consist of out-of-pocket expenses, other than premiums, for services covered by [regular] Plan F, and shall be in addition to any other specific benefit deductibles. The basis for the deductible shall be $1,500 and shall be adjusted annually from 1999 by the Secretary of the U.S. Department of Health and Human Services to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of ten dollars ($10).
11.5.7 Standardized Medicare supplement benefit Plan G shall include only the following: The basic (core) benefit as defined in subsection 9.2 of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, one hundred percent (100%) of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsections 9.3.1, 9.3.3, 9.3.5, and 9.3.6 of this regulation, respectively. Effective January 1, 2020, the standardized benefit plans described in subsection 12.1.4 of this regulation (re-designated Plan G High Deductible) may be offered to any individual who was eligible for Medicare prior to January 1, 2020.
11.5.8 Standardized Medicare supplement Plan K is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:
11.5.8.1 Part A Hospital Coinsurance 61st through 90th days: Coverage of one hundred percent (100%) of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
11.5.8.2 Part A Hospital Coinsurance, 91st through 150th days: Coverage of one hundred percent (100%) of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
11.5.8.3 Part A Hospitalization After 150 Days: Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of one hundred percent (100%) of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer’s payment as payment in full and may not bill the insured for any balance;
11.5.8.4 Medicare Part A Deductible: Coverage for fifty percent (50%) of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subsection 11.5.8.10 of this regulation;
11.5.8.5 Skilled Nursing Facility Care: Coverage for fifty percent (50%) of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subsection 11.5.8.10 of this regulation;
11.5.8.6 Hospice Care: Coverage for fifty percent (50%) of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subsection 11.5.8.10 of this regulation;
11.5.8.7 Blood: Coverage for fifty percent (50%), under Medicare Part A or B, of the reasonable cost of the first three (3) pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subsection 11.5.8.10 of this regulation;
11.5.8.8 Part B Cost Sharing: Except for coverage provided in subsection 11.5.8.9 of this regulation, coverage for fifty percent (50%) of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in subsections 11.5.8.9 and 11.5.8.10 of this regulation;
11.5.8.9 Part B Preventive Services: Coverage of one hundred percent (100%) of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and
11.5.8.10 Cost Sharing After Out-of-Pocket Limits: Coverage of one hundred percent (100%) of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary of the U.S. Department of Health and Human Services.
11.5.9 Standardized Medicare supplement Plan L is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall include only the following:
11.5.9.1 The benefits described in subsections 11.5.8.1, 11.5.8.2, 11.5.8.3 and 11.5.8.9 of this regulation;
11.5.9.2 The benefit described in subsections 11.5.8.4, 11.5.8.5, and 11.5.8.8 of this regulation, respectively, but substituting seventy-five percent (75%) for fifty percent (50%); and
11.5.9.3 The benefit described in subsection 11.5.8.10 of this regulation, but substituting $2000 for $4000.
11.5.10 Standardized Medicare supplement Plan M shall include only the following: The basic (core) benefit as defined in subsection 9.2 of this regulation, plus fifty percent (50%) of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in subsections 9.3.2, 9.3.3 and 9.3.6 of this regulation, respectively.
11.5.11 Standardized Medicare supplement Plan N shall include only the following: The basic (core) benefit as defined in subsection 9.2 of this regulation, plus one hundred percent (100%) of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in subsections 9.3.1, 9.3.3 and 9.3.6 of this regulation, respectively, with co-payments in the following amounts:
11.5.11.1 The lesser of twenty dollars ($20) or the Medicare Part B coinsurance or co-payment for each covered health care provider office visit (including visits to medical specialists); and
11.5.11.2 The lesser of fifty dollars ($50) or the Medicare Part B coinsurance or co-payment for each covered emergency room visit, however, this co payment shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense.
11.6 New or Innovative Benefits: An issuer may, with the prior approval of the Commissioner, offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits shall include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost-effective. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits shall not include an outpatient prescription drug benefit. New or innovative benefits shall not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-12.0 Standard Medicare Supplement Benefit Plans for 2020 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued for Delivery to Individuals Newly Eligible for Medicare on or After January 1, 2020.
12.1 The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires the following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state to individuals newly eligible for Medicare on or after January 1, 2020. No policy or certificate that provides coverage of the Medicare Part B deductible may be advertised, solicited, delivered or issued for delivery in this state as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, 2020. All policies must comply with the following benefit standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued to individuals eligible for Medicare before January 1, 2020, remain subject to the requirements of 18 Del.C. § 3403.
12.2 Benefit Requirements. The standards and requirements of Section 11.0 of this regulation shall apply to all Medicare supplement policies or certificates delivered or issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020, with the following exceptions:
12.2.1 Standardized Medicare supplement benefit Plan C is re-designated as Plan D and shall provide the benefits contained in subsection 11.5.3 of this regulation but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible.
12.2.2 Standardized Medicare supplement benefit Plan F is re-designated as Plan G and shall provide the benefits contained in subsection 11.5.5 of this regulation but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible.
12.2.3 Standardized Medicare supplement benefit plans C, F, and F with High Deductible may not be offered to individuals newly eligible for Medicare on or after January 1, 2020.
12.2.4 Standardized Medicare supplement benefit Plan F With High Deductible is re-designated as Plan G With High Deductible and shall provide the benefits contained in subsection 11.5.6 of this regulation but shall not provide coverage for one hundred percent (100%) or any portion of the Medicare Part B deductible; provided further that, the Medicare Part B deductible paid by the beneficiary shall be considered an out-of-pocket expense in meeting the annual high deductible.
12.2.5 The reference to Plans C or F contained in subsection 11.1.2 of this regulation is deemed a reference to Plans D or G for purposes of this Section.
12.3 Applicability to Certain Individuals. This subsection applies only to individuals that are newly eligible for Medicare on or after January 1, 2020:
12.3.1 By reason of attaining age 65 on or after January 1, 2020; or
12.3.2 By reason of entitlement to benefits under subsection 12.2 of this regulation, pursuant to Section 226(b) or 226A of the Social Security Act, or who is deemed to be eligible for benefits under section 226(a) of the Social Security Act on or after January 1, 2020.
12.4 Guaranteed Issue for Eligible Persons. For purposes of subsection 15.5 of this regulation, in the case of any individual newly eligible for Medicare on or after January 1, 2020, any reference to a Medicare supplement policy C or F (including F With High Deductible) shall be deemed to be a reference to Medicare supplement policy D or G (including G With High Deductible) respectively that meet the requirements of subsection 12.2 of this regulation.
12.5 Applicability to Waivered States. In the case of a State described in Section 1882(p)(6) of the Social Security Act (“waivered” alternative simplification states) MACRA prohibits the coverage of the Medicare Part B deductible for any Medicare supplement policy sold or issued to an individual that is newly eligible for Medicare on or after January 1, 2020.
12.6 Offer of Re-designated Plans to Individuals Other Than Newly Eligible. On or after January 1, 2020, the standardized benefit plans described in subsection 12.2.4, of this regulation may be offered to any individual who was eligible for Medicare prior to January 1, 2020 in addition to the standardized plans described in subsection 11.5 of this regulation.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-13.0 Medicare Select Policies and Certificates
13.1 General requirements
13.1.1 This Section shall apply to Medicare Select policies and certificates, as defined in this Section.
13.1.2 No policy or certificate may be advertised as a Medicare Select policy or certificate unless it meets the requirements of this Section.
13.2 For the purposes of this Section:
“Complaint” means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers.
“Grievance” means dissatisfaction expressed in writing by an individual insured under a Medicare Select policy or certificate with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers.
“Medicare Select issuer” means an issuer offering, or seeking to offer, a Medicare Select policy or certificate.
“Medicare Select policy” or “Medicare Select certificate” mean respectively a Medicare supplement policy or certificate that contains restricted network provisions.
“Network provider” means a provider of health care, or a group of providers of health care, which has entered into a written agreement with the issuer to provide benefits insured under a Medicare Select policy.
“Restricted network provision” means any provision which conditions the payment of benefits, in whole or in part, on the use of network providers.
“Service area” means the geographic area approved by the Commissioner within which an issuer is authorized to offer a Medicare Select policy.
13.3 The Commissioner may authorize an issuer to offer a Medicare Select policy or certificate, pursuant to this Section and Section 4358 of the Omnibus Budget Reconciliation Act (OBRA) of 1990 if the Commissioner finds that the issuer has satisfied all of the requirements of this regulation.
13.4 A Medicare Select issuer shall not issue a Medicare Select policy or certificate in this state until its plan of operation has been approved by the Commissioner.
13.5 A Medicare Select issuer shall file a proposed plan of operation with the Commissioner in a format prescribed by the Commissioner. The plan of operation shall contain at least the following information:
13.5.1 Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration that:
13.5.1.1 Services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation and after-hour care. The hours of operation and availability of after-hour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual travel times within the community.
13.5.1.2 The number of network providers in the service area is sufficient, with respect to current and expected policyholders, either:
13.5.1.2.1 To deliver adequately all services that are subject to a restricted network provision; or
13.5.1.2.2 To make appropriate referrals.
13.5.1.3 There are written agreements with network providers describing specific responsibilities.
13.5.1.4 Emergency care is available twenty-four (24) hours per day and seven (7) days per week.
13.5.1.5 In the case of covered services that area subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare Select policy or certificate. This subsection shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select policy or certificate.
13.5.2 A statement or map providing a clear description of the service area.
13.5.3 A description of the grievance procedure to be utilized.
13.5.4 A description of the quality assurance program, including:
13.5.4.1 The formal organizational structure;
13.5.4.2 The written criteria for selection, retention and removal of network providers; and
13.5.4.3 The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted.
13.5.5 A list and description, by specialty, of the network providers.
13.5.6 Copies of the written information proposed to be used by the issuer to comply with subsection 13.9 of this regulation.
13.5.7 Any other information requested by the Commissioner.
13.6 Plan changes filed with Commissioner
13.6.1 A Medicare Select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the Commissioner prior to implementing the changes. Changes shall be considered approved by the Commissioner after thirty (30) days unless specifically disapproved.
13.6.2 An updated list of network providers shall be filed with the Commissioner at least quarterly.
13.7 A Medicare Select policy or certificate shall not restrict payment for covered services provided by non-network providers if:
13.7.1 The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition; and
13.7.2 It is not reasonable to obtain services through a network provider.
13.8 A Medicare Select policy or certificate shall provide payment for full coverage under the policy for covered services that are not available through network providers.
13.9 A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions and limitations of the Medicare Select policy or certificate to each applicant. This disclosure shall include at least the following:
13.9.1 An outline of coverage sufficient to permit the applicant to compare the coverage and premiums of the Medicare Select policy or certificate with:
13.9.1.1 Other Medicare supplement policies or certificates offered by the issuer; and
13.9.1.2 Other Medicare Select policies or certificates.
13.9.2 A description (including address, phone number and hours of operation) of the network providers, including primary care physicians, specialty physicians, hospitals and other providers.
13.9.3 A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. Except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in plans K and L.
13.9.4 A description of coverage for emergency and urgently needed care and other out-of-service area coverage.
13.9.5 A description of limitations on referrals to restricted network providers and to other providers.
13.9.6 A description of the policyholder’s rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer.
13.9.7 A description of the Medicare Select issuer’s quality assurance program and grievance procedure.
13.10 Prior to the sale of a Medicare Select policy or certificate, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to subsection 13.9 of this regulation and that the applicant understands the restrictions of the Medicare Select policy or certificate.
13.11 A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written grievances from the subscribers. The procedures shall be aimed at mutual agreement for settlement and may include arbitration procedures.
13.11.1 The grievance procedure shall be described in the policy and certificates and in the outline of coverage.
13.11.2 At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder describing how a grievance may be registered with the issuer.
13.11.3 Grievances shall be considered in a timely manner and shall be transmitted to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.
13.11.4 If a grievance is found to be valid, corrective action shall be taken promptly.
13.11.5 All concerned parties shall be notified about the results of a grievance.
13.11.6 The issuer shall report no later than each March 31st to the Commissioner regarding its grievance procedure. The report shall be in a format prescribed by the Commissioner and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.
13.12 At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer.
13.13 At the request of an individual insured under a Medicare Select policy or certificate, a Medicare Select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make the policies or certificates available without requiring evidence of insurability after the Medicare Select policy or certificate has been in force for six (6) months.
13.14 For the purposes of this subsection, a Medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this subsection, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.
13.15 Medicare Select policies and certificates shall provide for continuation of coverage in the event the Secretary of Health and Human Services determines that Medicare Select policies and certificates issued pursuant to this Section should be discontinued due to either the failure of the Medicare Select Program to be reauthorized under law or its substantial amendment.
13.15.1 Each Medicare Select issuer shall make available to each individual insured under a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make the policies and certificates available without requiring evidence of insurability.
13.15.2 For the purposes of this subsection, a Medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this subsection, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Part B excess charges.
13.16 A Medicare Select issuer shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select Program.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-14.0 Open Enrollment
14.1 An issuer shall not deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this state, nor discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant in the case of an application for a policy or certificate that is submitted prior to or during the six (6) month period beginning with the first day of the first month in which an individual is both 65 years of age or older and is enrolled for benefits under Medicare Part B. Each Medicare supplement policy and certificate currently available from an insurer shall be made available to all applicants who qualify under this subsection without regard to age.
14.2 Credible coverage and pre-existing conditions
14.2.1 If an applicant qualifies under subsection 14.1 of this regulation and submits an application during the time period referenced in subsection 14.1 of this regulation and, as of the date of application, has had a continuous period of creditable coverage of at least six (6) months, the issuer shall not exclude benefits based on a preexisting condition.
14.2.2 If the applicant qualifies under subsection 14.1 of this regulation and submits an application during the time period referenced in subsection 14.1 of this regulation and, as of the date of application, has had a continuous period of creditable coverage that is less than six (6) months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The Secretary shall specify the manner of the reduction under this subsection.
14.3 Except as provided in subsection 14.2 and Sections 15.0 and 26.0 of this regulation, subsection 14.1 of this regulation shall not be construed as preventing the exclusion of benefits under a policy, during the first six (6) months, based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six (6) months before the coverage became effective.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-15.0 Guaranteed Issue for Eligible Persons
15.1 Guaranteed Issue.
15.1.1 Eligible persons are those individuals described in subsection 15.2 of this regulation who seek to enroll under the policy during the period specified in subsection 15.3 of this regulation, and who submit evidence of the date of termination, disenrollment, or Medicare Part D enrollment with the application for a Medicare supplement policy.
15.1.2 With respect to eligible persons, an issuer shall not deny or condition the issuance or effectiveness of a Medicare supplement policy described in subsection 15.5 of this regulation that is offered and is available for issuance to new enrollees by the issuer, shall not discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition, and shall not impose an exclusion of benefits based on a preexisting condition under such a Medicare supplement policy.
15.2 Eligible Persons. An eligible person is an individual described in any of the following subsections:
15.2.1 The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare; and the plan terminates, or the plan ceases to provide all such supplemental health benefits to the individual;
15.2.2 The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under Section 1894 of the Social Security Act, and there are circumstances similar to those described below that would permit discontinuance of the individual’s enrollment with such provider if such individual were enrolled in a Medicare Advantage plan:
15.2.2.1 The certification of the organization or plan has been terminated;
15.2.2.2 The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;
15.2.2.3 The individual is no longer eligible to elect the plan because of a change in the individual’s place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual’s enrollment on the basis described in Section 1851(g)(3)(B) of the federal Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under Section 1856), or the plan is terminated for all individuals within a residence area;
15.2.2.4 The individual demonstrates, in accordance with guidelines established by the Secretary, that:
15.2.2.4.1 The organization offering the plan substantially violated a material provision of the organization’s contract under this part in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or
15.2.2.4.2 The organization, or agent or other entity acting on the organization’s behalf, materially misrepresented the plan’s provisions in marketing the plan to the individual; or
15.2.2.5 The individual meets such other exceptional conditions as the Secretary may provide.
15.2.3 Additional eligibility requirements
15.2.3.1 The individual is enrolled with:
15.2.3.1.1 An eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost);
15.2.3.1.2 A similar organization operating under demonstration project authority, effective for periods before April 1, 1999;
15.2.3.1.3 An organization under an agreement under Section 1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or
15.2.3.1.4 An organization under a Medicare Select policy; and
15.2.3.2 The enrollment ceases under the same circumstances that would permit discontinuance of an individual’s election of coverage under subsection 15.2.2 of this regulation.
15.2.4 The individual is enrolled under a Medicare supplement policy and the enrollment ceases because:
15.2.4.1 The insolvency of the issuer or bankruptcy of the non-issuer organization; or of other involuntary termination of coverage or enrollment under the policy;
15.2.4.2 The issuer of the policy substantially violated a material provision of the policy; or
15.2.4.3 The issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy’s provisions in marketing the policy to the individual;
15.2.5 The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, any eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under Section 1894 of the Social Security Act or a Medicare Select policy; and
15.2.5.1 The subsequent enrollment is terminated by the enrollee during any period within the first twelve (12) months of such subsequent enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under Section 1851(e) of the federal Social Security Act); or
15.2.5.2 The individual, upon first becoming eligible for benefits under part A of Medicare at age 65, enrolls in a Medicare Advantage plan under part C of Medicare, or with a PACE provider under Section 1894 of the Social Security Act, and disenrolls from the plan or program by not later than twelve (12) months after the effective date of enrollment.
15.2.6 The individual enrolls in a Medicare Part D plan during the initial enrollment period and, at the time of enrollment in Part D, was enrolled under Medicare supplement policy that covers outpatient prescription drugs and the individual terminates enrollment in the Medicare supplement policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in subsection 15.5.4 of this regulation.
15.3 Guaranteed Issue Time Periods.
15.3.1 In the case of an individual described in subsection 15.2.1 of this regulation, the guaranteed issue period begins on the later of:
15.3.1.1 The date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if a notice is not received, notice that a claim has been denied because of a termination or cessation); or
15.3.1.2 The date that the applicable coverage terminates or ceases; and ends sixty-three (63) days thereafter;
15.3.2 In the case of an individual described in subsections 15.2.2, 15.2.3, or 15.3.5 of this regulation whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends sixty-three (63) days after the date the applicable coverage is terminated;
15.3.3 In the case of an individual described in subsection 15.2.4.1, the guaranteed issue period begins on the earlier of:
15.3.3.1 The date that the individual receives a notice of termination, a notice of the issuer’s bankruptcy or insolvency, or other such similar notice if any, and
15.3.3.2 The date that the applicable coverage is terminated, and ends on the date that is sixty-three (63) days after the date the coverage is terminated;
15.3.4 In the case of an individual described in subsections 15.2.2, 15.2.4.2, 15.2.4.3, 15.2.5.1 or 15.2.5.2 of this regulation who disenrolls voluntarily, the guaranteed issue period begins on the date that is sixty (60) days before the effective date of the disenrollment and ends on the date that is sixty-three (63) days after the effective date;
15.3.5 In the case of an individual described in subsection 15.2.5 of this regulation, the guaranteed issue period begins on the date the individual receives notice pursuant to Section 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the sixty-day period immediately preceding the initial Part D enrollment period and ends on the date that is sixty-three (63) days after the effective date of the individual’s coverage under Medicare Part D; and
15.3.6 In the case of an individual described in subsection 15.2 of this regulation but not described in the preceding provisions of this subsection, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is sixty-three (63) days after the effective date.
15.4 Extended Medigap Access for Interrupted Trial Periods.
15.4.1 In the case of an individual described in subsection 15.2.5 (or deemed to be so described, pursuant to this subsection) whose enrollment with an organization or provider described in subsection 15.2.5 of this regulation is involuntarily terminated within the first twelve (12) months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in subsection 15.2.5 of this regulation;
15.4.2 In the case of an individual described in subsection 15.2.5.2 of this regulation (or deemed to be so described, pursuant to this subsection) whose enrollment with a plan or in a program described in subsection 15.2.5.2 of this regulation is involuntarily terminated within the first twelve (12) months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in subsection 15.2.5.2; and
15.4.3 For purposes of subsections 15.2.5 and 15.2.6 of this regulation, no enrollment of an individual with an organization or provider described in subsection 15.2.5.1 of this regulation, or with a plan or in a program described in subsection 15.2.5.2 of this regulation, may be deemed to be an initial enrollment under this subsection after the two-year period beginning on the date on which the individual first enrolled with such an organization, provider, plan or program.
15.5 Products to Which Eligible Persons are Entitled. The Medicare supplement policy to which eligible persons are entitled under:
15.5.1 Subsections 15.2.1, 15.2.2, 15.2.3 and 15.2.4 of this regulation are Medicare supplement policies that have a benefit package classified as Plan A, B, C, F (including F with a high deductible), K or L offered by any issuer.
15.5.2 Policy availability
15.5.2.1 Subject to subsection 15.5.3 of this regulation, subsection 15.2.5 of this regulation is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy described in subsection 15.5.1 of this regulation;
15.5.2.2 After December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy described in this subsection is:
15.5.2.2.1 The policy available from the same issuer but modified to remove outpatient prescription drug coverage; or
15.5.2.2.2 At the election of the policyholder, an A, B, C, F (including F with a high deductible), K or L policy that is offered by any issuer;
15.5.3 Subsection 15.2.5.2 of this regulation shall include any Medicare supplement policy offered by any issuer;
15.5.4 Subsection 15.2.7 of this regulation is a Medicare supplement policy that has a benefit package classified as Plan A, B, C, F (including F with a high deductible), K or L, and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual’s Medicare supplement policy with outpatient prescription drug coverage.
15.6 Notification provisions.
15.6.1 At the time of an event described in subsection 14.2 of this regulation because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of his or her rights under this Section, and of the obligations of issuers of Medicare supplement policies under subsection 14.1 of this regulation. Such notice shall be communicated contemporaneously with the notification of termination.
15.6.2 At the time of an event described in subsection 15.2 of this regulation because of which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of his or her rights under this section Section, and of the obligations of issuers of Medicare supplement policies under subsection 15.1 of this regulation. Such notice shall be communicated within ten working days of the issuer receiving notification of disenrollment.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-16.0 Standards for Claims Payment
16.1 An issuer shall comply with section 1882(c)(3) of the Social Security Act (as enacted by section 4081(b)(2)(C) of the Omnibus Budget Reconciliation Act of 1987 (OBRA) 1987, Pub. L. No. 100-203) by:
16.1.1 Accepting a notice from a Medicare carrier on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice;
16.1.2 Notifying the participating physician or supplier and the beneficiary of the payment determination;
16.1.3 Paying the participating physician or supplier directly;
16.1.4 Furnishing, at the time of enrollment, each enrollee with a card listing the policy name, number and a central mailing address to which notices from a Medicare carrier may be sent;
16.1.5 Paying user fees for claim notices that are transmitted electronically or otherwise; and
16.1.6 Providing to the Secretary of Health and Human Services, at least annually, a central mailing address to which all claims may be sent by Medicare carriers.
16.2 Compliance with the requirements set forth in subsection 17.1 of this regulation shall be certified on the Medicare supplement insurance experience reporting form.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-17.0 Loss Ratio Standards and Refund or Credit of Premium
17.1 Loss Ratio Standards.
17.1.1 A Medicare Supplement policy form or certificate form shall not be delivered or issued for delivery unless the policy form or certificate form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders and certificate holders in the form of aggregate benefits (not including anticipated refunds or credits) provided under the policy form or certificate form:
17.1.1.1 At least seventy-five percent (75%) of the aggregate amount of premiums earned in the case of group policies; or
17.1.1.2 At least sixty-five percent (65%) of the aggregate amount of premiums earned in the case of individual policies;
17.1.2 Calculated on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums for the period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by a health maintenance organization shall not include:
17.1.2.1 Home office and overhead costs;
17.1.2.2 Advertising costs;
17.1.2.3 Commissions and other acquisition costs;
17.1.2.4 Taxes;
17.1.2.5 Capital costs;
17.1.2.6 Administrative costs; and
17.1.2.7 Claims processing costs.
17.1.3 All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of this Section when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which appropriate loss ratio standards.
17.1.4 For purposes of applying subsections 17.1.1 and 17.1.2 of this regulation and subsection 20.3.3 of this regulation only, policies issued as a result of solicitations of individuals through the mails or by mass media advertising (including both print and broadcast advertising) shall be deemed to be individual policies.
17.1.5 For policies issued prior to January 1, 1992, expected claims in relation to premiums shall meet:
17.1.5.1 The originally filed anticipated loss ratio when combined with the actual experience since inception;
17.1.5.2 The appropriate loss ratio requirement from subsection 17.1.1 of this regulation when combined with actual experience beginning with July 1, 2009 to date; and
17.1.5.3 The appropriate loss ratio requirement from subsection 17.1.1 of this regulation over the entire future period for which the rates are computed to provide coverage.
17.2 Refund or Credit Calculation.
17.2.1 An issuer shall collect and file with the commissioner by May 31 of each year the data contained in the applicable reporting form contained in Appendix A for each type in a standard Medicare supplement benefit plan.
17.2.2 If on the basis of the experience as reported the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation shall be done on a statewide basis for each type in a standard Medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year shall be excluded.
17.2.3 For the purposes of this Section, policies or certificates issued prior to January 1, 1992, the issuer shall make the refund or credit calculation separately for all individual policies (including all group policies subject to an individual loss ratio standard when issued) combined and all other group policies combined for experience after July 1, 2009. The first report shall be due by May 31, 2011.
17.2.4 A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a de minimis level. The refund shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the Secretary of Health and Human Services, but in no event shall it be less than the average rate of interest for thirteen-week Treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based.
17.3 Annual filing of Premium Rates. An issuer of Medicare supplement policies and certificates issued before or after the effective date of July 1, 2009, shall file annually its rates, rating schedule and supporting documentation including ratios of incurred losses to earned premiums by policy duration for approval by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner. The supporting documentation shall also demonstrate in accordance with actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. The demonstration shall exclude active life reserves. An expected third-year loss ratio which is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than three (3) years. As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer of Medicare supplement policies or certificates in this state shall file with the Commissioner, in accordance with the applicable filing procedures of this state:
17.3.1 Loss ratios
17.3.1.1 Appropriate premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or certificates. The supporting documents necessary to justify the adjustment shall accompany the filing.
17.3.1.2 An issuer shall make premium adjustments necessary to produce an expected loss ratio under the policy or certificate to conform to minimum loss ratio standards for Medicare supplement policies and which are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for the Medicare supplement policies or certificates. No premium adjustment which would modify the loss ratio experience under the policy other than the adjustments described herein shall be made with respect to a policy at any time other than upon its renewal date or anniversary date.
17.3.1.3 If an issuer fails to make premium adjustments acceptable to the Commissioner, the commissioner may order premium adjustments, refunds or premium credits deemed necessary to achieve the loss ratio required by this Section.
17.3.2 Any appropriate riders, endorsements or policy forms needed to accomplish the Medicare supplement policy or certificate modifications necessary to eliminate benefit duplications with Medicare. The riders, endorsements or policy forms shall provide a clear description of the Medicare supplement benefits provided by the policy or certificate.
17.4 The Commissioner may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before or after the effective date of July 1, 2009 if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for the reporting period. Public notice of the hearing shall be furnished in a manner deemed appropriate by the Commissioner.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-18.0 Filing and Approval of Policies and Certificates and Premium Rates
18.1 An issuer shall not deliver or issue for delivery a policy or certificate to a resident of this state unless the policy form or certificate form has been filed with and approved by the Commissioner in accordance with filing requirements and procedures prescribed by the Commissioner.
18.2 An issuer shall file any riders or amendments to policy or certificate forms to delete outpatient prescription drug benefits as required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 only with the Commissioner in the state in which the policy or certificate was issued.
18.3 An issuer shall not use or change premium rates for a Medicare supplement policy or certificate unless the rates, rating schedule and supporting documentation have been filed with and approved by the Commissioner in accordance with the filing requirements and procedures prescribed by the Commissioner.
18.4 Form of Policy or Certificate
18.4.1 Except as provided in subsection 18.4.2 of this regulation, an issuer shall not file for approval more than one form of a policy or certificate of each type for each standard Medicare supplement benefit plan.
18.4.2 An issuer may offer, with the approval of the Commissioner, up to four (4) additional policy forms or certificate forms of the same type for the same standard Medicare supplement benefit plan, one for each of the following cases:
18.4.2.1 The inclusion of new or innovative benefits;
18.4.2.2 The addition of either direct response or agent marketing methods;
18.4.2.3 The addition of either guaranteed issue or underwritten coverage;
18.4.2.4 The offering of coverage to individuals eligible for Medicare by reason of disability.
18.4.3 For the purposes of Section 18.0 of this regulation, a “type” means an individual policy, a group policy, an individual Medicare Select policy, or a group Medicare Select policy.
18.5 Availability of policies for purchase
18.5.1 Except as provided in subsection 18.5.1.1 of this regulation, an issuer shall continue to make available for purchase any policy form or certificate form issued after the effective date of this regulation that has been approved by the Commissioner. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous twelve (12) months.
18.5.1.1 An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the Commissioner in writing its decision at least thirty (30) days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the Commissioner, the issuer shall no longer offer for sale the policy form or certificate form in this state.
18.5.1.2 An issuer that discontinues the availability of a policy form or certificate form pursuant to subsection 18.7 of this regulation shall not file for approval a new policy form or certificate form of the same type for the same standard Medicare supplement benefit plan as the discontinued form for a period of five (5) years after the issuer provides notice to the Commissioner of the discontinuance. The period of discontinuance may be reduced if the Commissioner determines that a shorter period is appropriate.
18.5.2 The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.
18.5.3 A change in the rating structure or methodology shall be considered a discontinuance under subsection 18.5.1 of this regulation unless the issuer complies with the following requirements:
18.5.3.1 The issuer provides an actuarial memorandum, in a form and manner prescribed by the Commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and existing rates.
18.5.3.2 The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The Commissioner may approve a change to the differential that is in the public interest.
18.6 Refund or credit calculation
18.6.1 Except as provided in subsection 18.6.2 of this regulation, the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in Section 17.0 of this regulation.
18.6.2 Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.
18.7 An issuer shall not present for filing or approval a rate structure for its Medicare supplement policies or certificates issued after the effective date of the amendment of this regulation based upon a structure or methodology with any groupings of attained ages greater than one year. The ratio between rates for successive ages shall increase smoothly as age increases.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-19.0 Permitted Compensation Arrangements
19.1 An issuer or other entity may provide commission or other compensation to an agent or other representative for the sale of a Medicare supplement policy or certificate only if the first year commission or other first year compensation is no more than 200 percent of the commission or other compensation paid for selling or servicing the policy or certificate in the second year or period.
19.2 The commission or other compensation provided in subsequent (renewal) years must be the same as that provided in the second year or period and must be provided for no fewer than five (5) renewal years.
19.3 No issuer or other entity shall provide compensation to its agents or other producers and no agent or producer shall receive compensation greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates if an existing policy or certificate is replaced.
19.4 For purposes of Section 19.0, “compensation” includes pecuniary or non-pecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards and finders fees.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-20.0 Required Disclosure Provisions
20.1 General Rules.
20.1.1 Medicare supplement policies and certificates shall include a renewal or continuation provision. The language or specifications of the provision shall be consistent with the type of contract issued. The provision shall be appropriately captioned and shall appear on the first page of the policy, and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder’s age.
20.1.2 Except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require a signed acceptance by the insured. After the date of policy or certificate issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies, or if the increased benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy.
20.1.3 Medicare supplement policies or certificates shall not provide for the payment of benefits based on standards described as “usual and customary,” “reasonable and customary” or words of similar import.
20.1.4 If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions, such limitations shall appear as a separate paragraph of the policy and be labeled as “Preexisting Condition Limitations.”
20.1.5 Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate or attached thereto stating in substance that the policyholder or certificate holder shall have the right to return the policy or certificate within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason.
20.1.6 Delivery of Guide
20.1.6.1 Issuers of accident and sickness policies or certificates which provide hospital or medical expense coverage on an expense incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and CMS and in a type size no smaller than 12 point type. Delivery of the Guide shall be made whether or not the policies or certificates are advertised, solicited or issued as Medicare supplement policies or certificates as defined in this regulation. Except in the case of direct response issuers, delivery of the Guide shall be made to the applicant at the time of application and acknowledgment of receipt of the Guide shall be obtained by the issuer. Direct response issuers shall deliver the Guide to the applicant upon request but not later than at the time the policy is delivered.
20.1.6.2 For the purposes of Section 20.0 of this regulation, “form” means the language, format, type size, type proportional spacing, bold character, and line spacing.
20.2 Notice Requirements.
20.2.1 As soon as practicable, but no later than thirty (30) days prior to the annual effective date of any Medicare benefit changes, an issuer shall notify its policyholders and certificate holders of modifications it has made to Medicare supplement insurance policies or certificates in a format acceptable to the commissioner. The notice shall:
20.2.1.1 Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate; and
20.2.1.2 Inform each policyholder or certificate holder as to when any premium adjustment is to be made due to changes in Medicare.
20.2.2 The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension.
20.2.3 The notices shall not contain or be accompanied by any solicitation.
20.3 MMA Notice Requirements. Issuers shall comply with any notice requirements of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
20.4 Outline of Coverage Requirements for Medicare Supplement Policies.
20.4.1 Issuers shall provide an outline of coverage to all applicants at the time application is presented to the prospective applicant and, except for direct response policies, shall obtain an acknowledgement of receipt of the outline from the applicant; and
20.4.2 If an outline of coverage is provided at the time of application and the Medicare supplement policy or certificate is issued on a basis which would require revision of the outline, a substitute outline of coverage properly describing the policy or certificate shall accompany the policy or certificate when it is delivered and contain the following statement, in no less than twelve (12) point type, immediately above the company name:
20.4.3 The outline of coverage provided to applicants pursuant to Section 20.0 of this regulation consists of four parts: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage shall be in the language and format prescribed below in no less than twelve (12) point type. All plans shall be shown on the cover page, and the plans that are offered by the issuer shall be prominently identified. Premium information for plans that are offered shall be shown on the cover page or immediately following the cover page and shall be prominently displayed. The premium and mode shall be stated for all plans that are offered to the prospective applicant. All possible premiums for the prospective applicant shall be illustrated.
20.4.4 The following items shall be included in the outline of coverage in the order prescribed below.
Benefit Chart of Medicare Supplement Plans Sold for Effective Dates on or After June 1, 2010.
This chart shows the benefits included in each of the standard Medicare supplement plans. Every company must make Plan “A” available. Some plans may not be available in Delaware.
Plans E, H, I, and J are no longer available for sale. [This sentence shall not appear after June 1, 2011.]
Basic Benefits:
Benefit Chart of Medicare Supplement Plans Sold on or after January 1, 2020
This chart shows the benefits included in each of the standard Medicare supplement plans. Some plans may not be available. Only applicants who are first eligible for Medicare before 2020 may purchase Plans C, F, and high deductible F.
Note: A √ means 100% of the benefit is paid.
1 Plans F and G also have a high deductible option which require first paying a plan deductible of [$2300] before the plan begins to pay. Once the plan deductible is met, the plan pays 100% of covered services for the rest of the calendar year. High deductible plan G does not cover the Medicare Part B deductible. However, high deductible plans F and G count your payment of the Medicare Part B deductible toward meeting the plan deductible.
2 Plans K and L pay 100% of covered services for the rest of the calendar year once you meet the out-of-pocket yearly limit.
3 Plan N pays 100% of the Part B coinsurance, except for a co-payment of up to $20 for some office visits and up to a $50 co-payment for emergency room visits that do not result in an inpatient admission.
PREMIUM INFORMATION [Boldface Type]
We [insert issuer’s name] can only raise your premium if we raise the premium for all policies like yours in this State. [If the premium is based on the increasing age of the insured, include information specifying when premiums will change.]
DISCLOSURES [Boldface Type]
Use this outline to compare benefits and premiums among policies.
This outline shows benefits and premiums of policies sold for effective dates on or after June 1, 2010. Policies sold for effective dates prior to June 1, 2010 have different benefits and premiums. Plans E, H, I, and J are no longer available for sale. [This paragraph shall not appear after June 1, 2011.]
READ YOUR POLICY VERY CAREFULLY [Boldface Type]
This is only an outline describing your policy’s most important features. The policy is your insurance contract. You must read the policy itself to understand all of the rights and duties of both you and your insurance company.
RIGHT TO RETURN POLICY [Boldface Type]
If you find that you are not satisfied with your policy, you may return it to [insert issuer’s address]. If you send the policy back to us within 30 days after you receive it, we will treat the policy as if it had never been issued and return all of your payments.
POLICY REPLACEMENT [Boldface Type]
If you are replacing another health insurance policy, do NOT cancel it until you have actually received your new policy and are sure you want to keep it.
NOTICE [Boldface Type]
This policy may not fully cover all of your medical costs.
[for agents:]
Neither [insert company’s name] nor its agents are connected with Medicare.
[for direct response:]
[insert company’s name] is not connected with Medicare.
This outline of coverage does not give all the details of Medicare coverage. Contact your local Social Security Office or consult Medicare and You for more details.
COMPLETE ANSWERS ARE VERY IMPORTANT [Boldface Type]
When you fill out the application for the new policy, be sure to answer truthfully and completely all questions about your medical and health history. The company may cancel your policy and refuse to pay any claims if you leave out or falsify important medical information. [If the policy or certificate is guaranteed issue, this paragraph need not appear.]
Review the application carefully before you sign it. Be certain that all information has been properly recorded.
[Include for each plan prominently identified in the cover page, a chart showing the services, Medicare payments, plan payments and insured payments for each plan, using the same language, in the same order, using uniform layout and format as shown in the charts below. No more than four plans may be shown on one chart. For purposes of illustration, charts for each plan are included in this regulation. An issuer may use additional benefit plan designations on these charts pursuant to subsection 11.4 of this regulation.]
[Include an explanation of any innovative benefits on the cover page and in the chart, in a manner approved by the commissioner.]
PLAN A
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$0
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$[1364](Part A deductible)
$0
$0
$0**
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility
Within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
$0
$0
$0
Up to $[170.50] a day
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness.
All but very limited co-payment/
coinsurance for out-patient drugs and inpatient respite care
Medicare
co-payment/
coinsurance
$0
** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN A
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as Physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment,
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
Generally 80%
$0
Generally 20%
$[185] (Part B deductible)
$0
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs
BLOOD
First 3 pints
Next $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
$0
80%
All costs
$0
20%
$0
$[185] (Part B deductible)
$0
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN A
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED SERVICES
Medically necessary skilled
care services and medical
supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$0
20%
$0
$[185] (Part B deductible)
$0
PLAN B
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1364](Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$0
$0
$0
$0**
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
$0
$0
$0
Up to $[170.50] a day
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness
All but very limited co-payment/
coinsurance for out-patient drugs and inpatient respite care
Medicare co-payment/
coinsurance
$0
** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN B
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
Generally 80%
$0
Generally 20%
$[185] (Part B deductible)
$0
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs
BLOOD
First 3 pints
Next $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
$0
80%
All costs
$0
20%
$0
$[185] (Part B deductible)
$0
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN B
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED SERVICES
Medically necessary skilled
care services and medical
supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$0
20%
$0
$[185] (Part B deductible)
$0
PLAN C
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1364](Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$0
$0
$0
$0**
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[170.50] a day
$0
$0
$0
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness.
All but very limited co-payment/
coinsurance for out-patient drugs and inpatient respite care
Medicare co-payment/
coinsurance
$0
** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN C
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment,
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
Generally 80%
$[185] (Part B deductible)
Generally 20%
$0
$0
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs
BLOOD
First 3 pints
Next $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
$0
80%
All costs
$[185] (Part B deductible)
20%
$0
$0
$0
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN C
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED
SERVICES
Medically necessary skilled care services and medical supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$[185](Part B deductible)
20%
$0
$0
$0
PLAN C
OTHER BENEFITS—NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL—
NOT COVERED BY MEDICARE
Medically necessary emergency care services beginning during the first 60 days of each trip outside the USA
First $250 each calendar year
Remainder of Charges
$0
$0
$0
80% to a lifetime maxi-mum benefit of $50,000
$250
20% and amounts over the $50,000 lifetime maximum
PLAN D
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1364] (Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$0
$0
$0
$0**
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[170.50] a day
$0
$0
$0
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness
All but very limited co-payment/
coinsurance for out-patient drugs and inpatient respite care
Medicare co-payment/
coinsurance
$0
** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN D
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment,
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
Generally 80%
$0
Generally 20%
$[185] (Part B deductible)
$0
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs
BLOOD
First 3 pints
Next $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
$0
80%
All costs
$0
20%
$0
$[185] (Part B deductible)
$0
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN D
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED
SERVICES
Medically necessary skilled care services and medical supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$0
20%
$0
$[185] (Part B deductible)
$0
OTHER BENEFITS—NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL—NOT COVERED BY MEDICARE
Medically necessary emergency care services beginning during the first 60 days of each trip outside the USA
First $250 each calendar year
Remainder of charges
$0
$0
$0
80% to a lifetime maxi-mum benefit of $50,000
$250
20% and amounts over the $50,000 lifetime maximum
PLAN F or HIGH DEDUCTIBLE PLAN F
MEDICARE (PART A) – HOSPITAL SERVICES – PER BENEFIT PERIOD
[**This high deductible plan pays the same benefits as Plan F after one has paid a calendar year [$2300] deductible. Benefits from the high deductible plan F will not begin until out-of-pocket expenses are [$2300]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductibles for Part A and Part B, but does not include the plan’s separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[AFTER YOU PAY
$2300 DEDUCTIBLE,**]
PLAN PAYS
[IN ADDITION
TO $2300 DEDUCTIBLE,**]
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 Lifetime reserve days
Once lifetime reserve days are used:
—Additional 365 days
Beyond the additional
365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1364] (Part A deductible)
$[341] a day
$[682] a day
100% of Medicare
eligible expenses
$0
$0
$0
$0
$0***
All costs
SKILLED NURSING
FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[170.50] a day
$0
$0
$0
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness.
All but very limited co-payment/
coinsurance for out-patient drugs and inpatient respite care
Medicare co-payment/coinsurance
$0
*** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN F or HIGH DEDUCTIBLE PLAN F
MEDICARE (PART B) - MEDICAL SERVICES - PER CALENDAR YEAR
*Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[**This high deductible plan pays the same benefits as Plan F after one has paid a calendar year [$2300] deductible. Benefits from the high deductible plan F will not begin until out-of-pocket expenses are [$2300]. Out-of-pocket expenses for this deductible are expenses that would ordinarily be paid by the policy. This includes the Medicare deductibles for Part A and Part B, but does not include the plan’s separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
[AFTER YOU PAY
$2300 DEDUCTIBLE,**]
PLAN PAYS
[IN ADDITION TO $2300 DEDUCTIBLE,**]
YOU PAY
MEDICAL EXPENSES -
IN OR OUT OF THE
HOSPITAL AND OUTPATIENT
HOSPITAL TREATMENT,
such as physician’s
Services, inpatient and
Outpatient medical and
Surgical services and
Supplies, physical and
Speech therapy,
Diagnostic tests,
Durable medical
Equipment,
First $[185] of Medicare Approved amounts*
Remainder of Medicare
Approved amounts
$0
Generally 80%
$[185] (Part B
deductible)
Generally 20%
$0
$0
Part B excess charges
(Above Medicare Approved Amounts)
$0
100%
$0
BLOOD
First 3 pints
Next $[185] of Medicare
Approved amounts*
Remainder of Medicare
Approved amounts
$0
$0
80%
All costs
$[185] (Part B
deductible)
20%
$0
$0
$0
CLINICAL LABORATORY
SERVICES—-TESTS
FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN F or HIGH DEDUCTIBLE PLAN F
PARTS A & B
SERVICES
MEDICARE PAYS
AFTER YOU PAY
$[2300] DEDUCTIBLE,**
PLAN PAYS
IN ADDITION TO $[2300] DEDUCTIBLE,**
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED
SERVICES
Medically necessary skilled care services and medical supplies
—Durable medical equipment
First $[185] of Medicare Approved Amounts*
Remainder of Medicare —
Approved Amounts
100%
$0
80%
$0
$[185] (Part B
deductible)
20%
$0
$0
$0
PLAN F or HIGH DEDUCTIBLE PLAN F
OTHER BENEFITS - NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
AFTER YOU PAY
[$2300] DEDUCTIBLE,**
PLAN PAYS
IN ADDITION TO $[2300] DEDUCTIBLE,**
YOU PAY
FOREIGN TRAVEL -
NOT COVERED BY MEDICARE
Medically necessary
Emergency care services
Beginning during the
first 60 days of each
trip outside the USA
First $250 each calendar year
Remainder of charges
$0
$0
$0
80% to a lifetime
maximum benefit
of $50,000
$250
20% and amounts
over the $50,000 lifetime maximum
PLAN G [or HIGH DEDUCTIBLE PLAN G]
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
[**This high deductible plan pays the same benefits as Plan G after you have paid a calendar year [$2300] deductible. Benefits from the high deductible Plan G will not begin until out-of-pocket expenses are [$2300]. Out-of-pocket expenses for this deductible include expenses for the Medicare Part B deductible, and expenses that would ordinarily be paid by the policy. This does not include the plan’s separate foreign travel emergency deductible.]
SERVICES
MEDICARE PAYS
AFTER YOU PAY $[2300] DEDUCTIBLE,**
PLAN PAYS
IN ADDITION TO $[2300] DEDUCTIBLE,**
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1364] (Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$0
$0
$0
$0***
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[170.50] a day
$0
$0
$0
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness
All but very limited co-payment/ coinsurance for out-patient drugs and inpatient respite care
Medicare co-payment/
coinsurance
$0
*** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN G or HIGH DEDUCTIBLE PLAN G
MEDICARE (PART B) - MEDICAL SERVICES - PER CALENDAR YEAR
*Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
[**This high deductible plan pays the same benefits as Plan G after you have paid a calendar year [$2300] deductible. Benefits from the high deductible plan G will not begin until out-of-pocket expenses are [$2300]. Out-of-pocket expenses for this deductible include expenses for the Medicare Part B deductible, and expenses that would ordinarily be paid by the policy. This does not include the plan’s separate foreign travel emergency deductible.]
PLAN G or HIGH DEDUCTIBLE PLAN G
PARTS A & B
PLAN G or HIGH DEDUCTIBLE PLAN G
OTHER BENEFITS - NOT COVERED BY MEDICARE
PLAN K
- You will pay half the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[5560] each calendar year. The amounts that count toward your annual limit are noted with diamonds (♦) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare co-payment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called “Excess Charges”) and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
** A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOSPITALIZATION**
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using
60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[682](50% of Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$[682] (50% of Part A deductible)♦
$0
$0
$0***
All costs
SKILLED NURSING FACILITY CARE**
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility
Within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts.
All but $[170.50] a day
$0
$0
Up to $[85.25] a day (50% of Part A coinsurance)
$0
$0
Up to $[85.25] a day (50% of Part A coinsurance) ♦
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
50%
$0
50%♦
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness.
All but very limited co-payment/
coinsurance for outpatient drugs and inpatient respite care
50% of co-payment/
coinsurance
50% of Medicare co-payment/coinsurance♦
*** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN K
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
**** Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as Physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment,
First $[185] of Medicare
Approved Amounts****
Preventive Benefits for
Medicare covered services
Remainder of Medicare
Approved Amounts
$0
Generally 75% or more of Medicare approved amounts
Generally 80%
$0
Remainder of Medicare approved amounts
Generally 10%
$[185] (Part B deductible)**** ♦
All costs above Medicare approved amounts
Generally 10% ♦
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs (and they do not count toward annual out-of-pocket limit of [$5560])*
BLOOD
First 3 pints
Next $[185] of Medicare Approved Amounts****
Remainder of Medicare Approved Amounts
$0
$0
Generally 80%
50%
$0
Generally 10%
50% ♦
$[185] (Part B deductible)**** ♦
Generally 10% ♦
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
- This plan limits your annual out-of-pocket payments for Medicare-approved amounts to $[5560] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called “Excess Charges”) and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN K
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOME HEALTH CARE
MEDICARE APPROVED SERVICES
Medically necessary skilled
care services and medical
supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*****
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$0
10%
$0
$[185] (Part B deductible) ♦
10%♦
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN L
- You will pay one-fourth of the cost-sharing of some covered services until you reach the annual out-of-pocket limit of $[2780] each calendar year. The amounts that count toward your annual limit are noted with diamonds (♦) in the chart below. Once you reach the annual limit, the plan pays 100% of your Medicare copayment and coinsurance for the rest of the calendar year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called “Excess Charges”) and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
** A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOSPITALIZATION**
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365
days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1023] (75% of Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$[341] (25% of Part A deductible)♦
$0
$0
$0***
All costs
SKILLED NURSING FACILITY CARE**
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility
Within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[127.88] a day [(75% of Part A Coinsurance)
$0
$0
Up to $[42.63] a day (25% of Part A Coinsurance)♦
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
75%
$0
25%♦
$0
HOSPICE CARE
You must meet Medicare's requirements, including a doctor's certification of terminal illness.
All but very limited co-payment/
coinsurance for outpatient drugs and inpatient respite care
75% of co-payment/
coinsurance
25% of co-payment/
coinsurance ♦
*** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN L
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as Physi-cian’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment,
First $[185] of Medicare Approved Amounts****
Preventive Benefits for Medicare covered services
Remainder of Medicare Approved Amounts
$0
Generally 80% or more of Medicare approved amounts
Generally 80%
$0
Remainder of Medicare approved amounts
Generally 15%
$[185] (Part B deductible)**** ♦
All costs above Medicare approved amounts
Generally 5% ♦
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs (and they do not count toward annual out-of-pocket limit of [$2780])*
BLOOD
First 3 pints
Next $[185] of Medicare Approved Amounts****
Remainder of Medicare Approved Amounts
$0
$0
Generally 80%
75%
$0
Generally 15%
25%♦
$[185] (Part B deductible) ♦
Generally 5% ♦
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
- This plan limits your annual out-of-pocket payments for Medicare-approved amounts to $[2780] per year. However, this limit does NOT include charges from your provider that exceed Medicare-approved amounts (these are called “Excess Charges”) and you will be responsible for paying this difference in the amount charged by your provider and the amount paid by Medicare for the item or service.
PLAN L
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY*
HOME HEALTH CARE
MEDICARE APPROVED SERVICES
Medically necessary skilled
care services and medical
supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*****
Remainder of Medicare Approved Amounts
100%
$0
80%
$0
$0
15%
$0
$[185] (Part B deductible) ♦
5% ♦
*****Medicare benefits are subject to change. Please consult the latest Guide to Health Insurance for People with Medicare.
PLAN M
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[682] (50% of Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$[682] (50% of Part A deductible)
$0
$0
$0**
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[170.50] a day
$0
$0
$0
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare’s requirements, including a doctor’s certification of terminal illness
All but very limited co-payment/
coinsurance for outpatient drugs and inpatient respite care
Medicare co-payment/
coinsurance
$0
** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN M
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment
—First $[185] of Medicare Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
Generally 80%
$0
Generally 20%
$[185] (Part B deductible)
$0
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs
BLOOD
First 3 pints
Next $[185] of Medicare Approved Amounts*
Remainder of Medicare Approved Amounts
$0
$0
80%
All costs
$0
20%
$0
$[185] (Part B deductible)
$0
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN M
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED
SERVICES
Medically necessary skilled
care services and medical
supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$0
20%
$0
$[185](PartB deductible)
$0
OTHER BENEFITS—NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL—
NOT COVERED BY MEDICARE
Medically necessary emergency care services beginning during the first 60 days of each trip outside the USA
First $250 each calendar year
Remainder of Charges
$0
$0
$0
80% to a lifetime maxi-mum benefit of $50,000
$250
20% and amounts over the $50,000 lifetime maximum
PLAN N
MEDICARE (PART A)—HOSPITAL SERVICES—PER BENEFIT PERIOD
- A benefit period begins on the first day you receive service as an inpatient in a hospital and ends after you have been out of the hospital and have not received skilled care in any other facility for 60 days in a row.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOSPITALIZATION*
Semiprivate room and board, general nursing and miscellaneous services and supplies
First 60 days
61st thru 90th day
91st day and after:
—While using 60 lifetime reserve days
—Once lifetime reserve days are used:
—Additional 365 days
—Beyond the additional 365 days
All but $[1364]
All but $[341] a day
All but $[682] a day
$0
$0
$[1364] (Part A deductible)
$[341] a day
$[682] a day
100% of Medicare eligible expenses
$0
$0
$0
$0
$0**
All costs
SKILLED NURSING FACILITY CARE*
You must meet Medicare’s requirements, including having been in a hospital for at least 3 days and entered a Medicare-approved facility within 30 days after leaving the hospital
First 20 days
21st thru 100th day
101st day and after
All approved amounts
All but $[170.50] a day
$0
$0
Up to $[170.50] a day
$0
$0
$0
All costs
BLOOD
First 3 pints
Additional amounts
$0
100%
3 pints
$0
$0
$0
HOSPICE CARE
You must meet Medicare’s requirements, including a doctor’s certification of terminal illness
All but very limited co-payment/
coinsurance for outpatient drugs and inpatient respite care
Medicare co-payment/
coinsurance
$0
** NOTICE: When your Medicare Part A hospital benefits are exhausted, the insurer stands in the place of Medicare and will pay whatever amount Medicare would have paid for up to an additional 365 days as provided in the policy’s “Core Benefits.” During this time the hospital is prohibited from billing you for the balance based on any difference between its billed charges and the amount Medicare would have paid.
PLAN N
MEDICARE (PART B)—MEDICAL SERVICES—PER CALENDAR YEAR
- Once you have been billed $[185] of Medicare-approved amounts for covered services (which are noted with an asterisk), your Part B deductible will have been met for the calendar year.
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
MEDICAL EXPENSES—
IN OR OUT OF THE HOSPITAL AND OUTPATIENT HOSPITAL TREATMENT, such as physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
$0
Generally 80%
$0
Balance, other than up to [$20] per office visit and up to [$50] per emergency room visit. The co-payment of up to [$50] is waived if the insured is admitted to any hospital and the emergency visit is covered as a Medicare Part A expense.
$[185] (Part B deductible)
Up to [$20] per office visit and up to [$50] per emergency room visit. The co-payment of up to [$50] is waived if the insured is admitted to any hospital and the emergency visit is covered as a Medicare Part A expense.
Part B Excess Charges
(Above Medicare Approved Amounts)
$0
$0
All costs
BLOOD
First 3 pints
Next $[185] of Medicare Approved Amounts*
Remainder of Medicare Approved Amounts
$0
$0
80%
All costs
$0
20%
$0
$[185] (Part B deductible)
$0
CLINICAL LABORATORY
SERVICES—TESTS FOR DIAGNOSTIC SERVICES
100%
$0
$0
PLAN N
PARTS A & B
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
HOME HEALTH CARE
MEDICARE APPROVED
SERVICES
Medically necessary skilled
care services and medical
supplies
—Durable medical equipment
First $[185] of Medicare
Approved Amounts*
Remainder of Medicare
Approved Amounts
100%
$0
80%
$0
$0
20%
$0
$[185] (Part B deductible)
$0
PLAN N
OTHER BENEFITS—NOT COVERED BY MEDICARE
SERVICES
MEDICARE PAYS
PLAN PAYS
YOU PAY
FOREIGN TRAVEL—
NOT COVERED BY MEDICARE
Medically necessary emergency care services beginning during the first 60 days of each trip outside the USA
First $250 each calendar year
Remainder of Charges
$0
$0
$0
80% to a lifetime maximum benefit of $50,000
$250
20% and amounts over the $50,000 lifetime maximum
E. Notice Regarding Policies or Certificates Which Are Not Medicare Supplement Policies.
(1) Any accident and sickness insurance policy or certificate, other than a Medicare supplement policy a policy issued pursuant to a contract under Section 1876 of the Federal Social Security Act (42 U.S.C. § 1395 et seq.), disability income policy; or other policy identified in subsection 3.2 of this regulation, issued for delivery in this state to persons eligible for Medicare shall notify insureds under the policy that the policy is not a Medicare supplement policy or certificate. The notice shall either be printed or attached to the first page of the outline of coverage delivered to insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy, or certificate delivered to insureds. The notice shall be in no less than twelve (12) point type and shall contain the following language:
(2) Applications provided to persons eligible for Medicare for the health insurance policies or certificates described in Subsection D(1) shall disclose, using the applicable statement in Appendix C, the extent to which the policy duplicates Medicare. The disclosure statement shall be provided as a part of, or together with, the application for the policy or certificate.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-21.0 Requirements for Application Forms and Replacement Coverage
21.1 Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant currently has Medicare supplement, Medicare Advantage, Medicaid coverage, or another health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent containing such questions and statements may be used.
[Statements]
(1) You do not need more than one Medicare supplement policy.
(2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy.
(4) If, after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing Medicaid eligibility. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.
(5) If you are eligible for, and have enrolled in a Medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement policy under these circumstances, and later lose your employer or union-based group health plan, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.
(6) Counseling services may be available in your state to provide advice concerning your purchase of Medicare supplement insurance and concerning medical assistance through the state Medicaid program, including benefits as a Qualified Medicare Beneficiary (QMB) and a Specified Low-Income Medicare Beneficiary (SLMB).
[Questions]
If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance policy, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in one or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS.
[Please mark Yes or No below with an “X”]
To the best of your knowledge,
(1) (a) Did you turn age 65 in the last 6 months?
Yes____ No____
(b) Did you enroll in Medicare Part B in the last 6 months?
Yes____ No____
(c) If yes, what is the effective date? _______________
(2) Are you covered for medical assistance through the state Medicaid program?
Yes____ No____
If yes,
(a) Will Medicaid pay your premiums for this Medicare supplement policy?
Yes____ No____
(b) Do you receive any benefits from Medicaid OTHER THAN payments toward your Medicare Part B premium?
Yes____ No____
(3) (a) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave “END” blank.
START //__ END //__
(b) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement policy?
Yes____ No____
(c) Was this your first time in this type of Medicare plan?
Yes____ No____
(d) Did you drop a Medicare supplement policy to enroll in the Medicare plan?
Yes____ No____
(4) (a) Do you have another Medicare supplement policy in force?
Yes____ No____
(b) If so, with what company, and what plan do you have [optional for Direct Mailers]?
(c) If so, do you intend to replace your current Medicare supplement policy with this policy?
Yes____ No____
(5) Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union, or individual plan)
Yes____ No____
(a) If so, with what company and what kind of policy?
(b) What are your dates of coverage under the other policy?
START //__ END //__
(If you are still covered under the other policy, leave “END” blank.)
21.2 Agents shall list any other health insurance policies they have sold to the applicant.
21.2.1 List policies sold which are still in force.
21.2.2 List policies sold in the past five (5) years that are no longer in force.
21.3 In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the insurer, shall be returned to the applicant by the insurer upon delivery of the policy.
21.4 Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of Medicare supplement coverage.
21.5 The notice required by subsection 21.4 of this regulation for an issuer shall be provided in substantially the following form in no less than twelve (12) point type:
NOTICE TO APPLICANT REGARDING REPLACMENT
OF MEDICARE SUPPLEMENT INSURANCE
OR MEDICARE ADVANTAGE
[Insurance company’s name and address]
SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
According to [your application] [information you have furnished], you intend to terminate existing Medicare supplement or Medicare Advantage insurance and replace it with a policy to be issued by [Company Name] Insurance Company. Your new policy will provide thirty (30) days within which you may decide without cost whether you desire to keep the policy.
You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. If, after due consideration, you find that purchase of this Medicare supplement coverage is a wise decision, you should terminate your present Medicare supplement or Medicare Advantage coverage. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.
STATEMENT TO APPLICANT BY ISSUER, AGENT [BROKER OR OTHER REPRESENTATIVE]:
I have reviewed your current medical or health insurance coverage. To the best of my knowledge, this Medicare supplement policy will not duplicate your existing Medicare supplement or, if applicable, Medicare Advantage coverage because you intend to terminate your existing Medicare supplement coverage or leave your Medicare Advantage plan. The replacement policy is being purchased for the following reason (check one):
Additional benefits.
No change in benefits, but lower premiums.
Fewer benefits and lower premiums.
My plan has outpatient prescription drug coverage and I am enrolling in Part D.
Disenrollment from a Medicare Advantage plan. Please explain reason for disenrollment. [optional only for Direct Mailers.]
Other. (please specify)
-
Note: If the issuer of the Medicare supplement policy being applied for does not, or is otherwise prohibited from imposing pre-existing condition limitations, please skip to statement 2 below. Health conditions that you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.
-
State law provides that your replacement policy or certificate may not contain new preexisting conditions, waiting periods, elimination periods or probationary periods. The insurer will waive any time periods applicable to preexisting conditions, waiting periods, elimination periods, or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy.
-
If, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical and health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, review it carefully to be certain that all information has been properly recorded. [If the policy or certificate is guaranteed issue, this paragraph need not appear.]
Do not cancel your present policy until you have received your new policy and are sure that you want to keep it.
(Signature of Agent, Broker or Other Representative)*
[Typed Name and Address of Issuer, Agent or Broker]
(Applicant’s Signature
(Date)
*Signature not required for direct response sales.
F. Paragraphs 1 and 2 of the replacement notice (applicable to preexisting conditions) may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-22.0 Filing Requirements for Advertising
An issuer shall provide a copy of any Medicare supplement advertisement intended for use in this state whether through written, radio or television medium to the Commissioner of Insurance of this state for review or approval by the commissioner to the extent it may be required under state law.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-23.0 Standards for Marketing
23.1 An issuer, directly or through its producers, shall:
23.1.1 Establish marketing procedures to assure that any comparison of policies by its agents or other producers will be fair and accurate.
23.1.2 Establish marketing procedures to assure excessive insurance is not sold or issued.
23.1.3 Display prominently by type, stamp or other appropriate means, on the first page of the policy the following:
23.1.4 Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance.
23.1.5 Establish auditable procedures for verifying compliance with subsection 23.1 of this regulation.
23.2 In addition to the practices prohibited in 18 Del.C. §2304, the following acts and practices are prohibited:
23.2.1 Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert an insurance policy or to take out a policy of insurance with another insurer.
23.2.2 High pressure tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.
23.2.3 Cold lead advertising. Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.
23.3 The terms “Medicare Supplement,” “Medigap,” “Medicare Wrap-Around” and words of similar import shall not be used unless the policy is issued in compliance with this regulation.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-24.0 Appropriateness of Recommended Purchase and Excessive Insurance
24.1 In recommending the purchase or replacement of any Medicare supplement policy or certificate an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.
24.2 Any sale of a Medicare supplement policy or certificate that will provide an individual more than one Medicare supplement policy or certificate is prohibited.
24.3 An issuer shall not issue a Medicare supplement policy or certificate to an individual enrolled in Medicare Part C unless the effective date of the coverage is after the termination date of the individual’s Part C coverage.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-25.0 Reporting of Multiple Policies
25.1 On or before March 1 of each year, an issuer shall report the following information for every individual resident of this state for which the issuer has in force more than one Medicare supplement policy or certificate:
25.1.1 Policy and certificate number; and
25.1.2 Date of issuance.
25.2 The items set forth above must be grouped by individual policyholder.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-26.0 Prohibition Against Preexisting Conditions, Waiting Periods, Elimination Periods and Probationary Periods in Replacement Policies or Certificates
26.1 If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new Medicare supplement policy or certificate for similar benefits to the extent such time was spent under the original policy.
26.2 If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate which has been in effect for at least six (6) months, the replacing policy shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods for benefits similar to those contained in the original policy or certificate.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-27.0 Prohibition Against Use of Genetic Information and Requests for Genetic Testing
27.1 This Section applies to all policies with policy years beginning on or after May 21, 2009.
27.2 An issuer of a Medicare supplement policy or certificate;
27.2.1 Shall not deny or condition the issuance or effectiveness of the policy or certificate (including the imposition of any exclusion of benefits under the policy based on a pre-existing condition) on the basis of the genetic information with respect to such individual; and
27.2.2 Shall not discriminate in the pricing of the policy or certificate (including the adjustment of premium rates) of an individual on the basis of the genetic information with respect to such individual.
27.3 Nothing in subsection 27.2 shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, from:
27.3.1 Denying or conditioning the issuance or effectiveness of the policy or certificate or increasing the premium for a group based on the manifestation of a disease or disorder of an insured or applicant; or
27.3.2 Increasing the premium for any policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy (in such case, the manifestation of a disease or disorder in one individual cannot also be used as genetic information about other group members and to further increase the premium for the group).
27.4 An issuer of a Medicare supplement policy or certificate shall not request or require an individual or a family member of such individual to undergo a genetic test.
27.5 Subsection 27.4 of this regulation shall not be construed to preclude an issuer of a Medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a determination regarding payment (as defined for the purposes of applying the regulations promulgated under part C of title XI and section 264 of the Health Insurance Portability and Accountability Act of 1996, as may be revised from time to time) and consistent with subsection 27.2 of this regulation.
27.6 For purposes of carrying out subsection 27.5 of this regulation, an issuer of a Medicare supplement policy or certificate may request only the minimum amount of information necessary to accomplish the intended purpose.
27.7 Notwithstanding subsection 27.4 of this regulation, an issuer of a Medicare supplement policy may request, but not require, that an individual or a family member of such individual undergo a genetic test if each of the following conditions is met:
27.7.1 The request is made pursuant to research that complies with part 46 of title 45, Code of Federal Regulations, or equivalent Federal regulations, and any applicable State or local law or regulations for the protection of human subjects in research.
27.7.2 The issuer clearly indicates to each individual, or in the case of a minor child, to the legal guardian of such child, to whom the request is made that:
27.7.2.1 Compliance with the request is voluntary; and
27.7.2.2 Non-compliance will have no effect on enrollment status or premium or contribution amounts.
27.7.3 No genetic information collected or acquired under this Subsection shall be used for underwriting, determination of eligibility to enroll or maintain enrollment status, premium rates, or the issuance, renewal, or replacement of a policy or certificate.
27.7.4 The issuer notifies the Secretary in writing that the issuer is conducting activities pursuant to the exception provided for under this Subsection, including a description of the activities conducted.
27.7.5 The issuer complies with such other conditions as the Secretary may by regulation require for activities conducted under this Subsection.
27.8 An issuer of a Medicare supplement policy or certificate shall not request, require, or purchase genetic information for underwriting purposes.
27.9 An issuer of a Medicare supplement policy or certificate shall not request, require, or purchase genetic information with respect to any individual prior to such individual’s enrollment under the policy in connection with such enrollment.
27.10 If an issuer of a Medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring, or purchasing of other information concerning any individual, such request, requirement, or purchase shall not be considered a violation of subsection 27.9 of this regulation if such request, requirement, or purchase is not in violation of subsection 27.8 of this regulation.
27.11 For the purposes of Section 27.0 of this regulation only:
“Family member” means, with respect to an individual, any other individual who is a first-degree, second-degree, third-degree, or fourth-degree relative of such individual.
“Genetic information” means, with respect to any individual, information about such individual’s genetic tests, the genetic tests of family members of such individual, and the manifestation of a disease or disorder in family members of such individual. Such term includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research which includes genetic services, by such individual or any family member of such individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman, includes genetic information of any fetus carried by such pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member. The term “genetic information” does not include information about the sex or age of any individual.
“Genetic services” means a genetic test, genetic counseling (including obtaining, interpreting, or assessing genetic information), or genetic education.
“Genetic test” means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detect genotypes, mutations, or chromosomal changes. The term “genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutations, or chromosomal changes; or an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.
“Issuer of a Medicare supplement policy or certificate” includes third-party administrator, or other person acting for or on behalf of such issuer.
“Underwriting purposes” means,
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-28.0 Separability
If any provision of this regulation or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
18 Del. Admin. Code § 1501-29.0 Effective Date
This regulation shall be effective on 11 days after execution of the Adoption Order by the Commissioner.
APPENDIX A
MEDICARE SUPPLEMENT REFUND CALCULATION FORM
FOR CALENDAR YEAR_________________
TYPE1 SMSBP2
For the State of Company Name
NAIC Group Code NAIC Company Code
Address Person Completing Exhibit
Title Telephone Number
Line
(a)Earned Premium3
(b)Incurred Claims4
Current Year’s Experience
a. Total (all policy years)
b. Current year’s issues5
c. Net (for reporting purposes = 1a–1b
Past Years’ Experience (all policy years)
Total Experience
(Net Current Year + Past Year)
Refunds Last Year (Excluding Interest)
Previous Since Inception (Excluding Interest)
Refunds Since Inception (Excluding Interest)
Benchmark Ratio Since Inception (see worksheet for Ratio 1)
Experienced Ratio Since Inception (Ratio 2)
Total Actual Incurred Claims (line 3, col. b)
Total Earned Prem. (line 3, col. a)–Refunds Since Inception (line 6)
Life Years Exposed Since Inception
If the Experienced Ratio is less than the Benchmark Ratio, and there are more than 500 life years exposure, then proceed to calculation of refund.
Tolerance Permitted (obtained from credibility table)
Medicare Supplement Credibility Table
Life Years Exposed
Since Inception
Tolerance
10,000 +
0.0%
5,000 -9,999
5.0%
2,500 -4,999
7.5%
1,000 -2,499
10.0%
500 - 999
15.0%
If less than 500, no credibility.
1 Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2 “SMSBP” = Standardized Medicare Supplement Benefit Plan - Use “P” for pre-standardized plans.
3 Includes Modal Loadings and Fees Charged
4 Excludes Active Life Reserves
5 This is to be used as “Issue Year Earned Premium” for Year 1 of next year’s “Worksheet for Calculation of Benchmark Ratios”
MEDICARE SUPPLEMENT REFUND CALCULATION FORM
FOR CALENDAR YEAR_________________
TYPE1 SMSBP2
For the State of Company Name
NAIC Group Code NAIC Company Code
Address Person Completing Exhibit
Title Telephone Number
Adjustment to Incurred Claims for Credibility
Ratio 3 = Ratio 2 + Tolerance
If Ratio 3 is more than Benchmark Ratio (Ratio 1), a refund or credit to premium is not required.
If Ratio 3 is less than the Benchmark Ratio, then proceed.
Adjusted Incurred Claims
[Total Earned Premiums (line 3, col. a)–Refunds Since Inception (line 6)] x Ratio 3 (line 11)
Refund =
Total Earned Premiums (line 3, col. a)–Refunds Since Inception (line 6)
–[Adjusted Incurred Claims (line 12)/Benchmark Ratio (Ratio 1)]
If the amount on line 13 is less than .005 times the annualized premium in force as of December 31 of the reporting year, then no refund is made. Otherwise, the amount on line 13 is to be refunded or credited, and a description of the refund or credit against premiums to be used must be attached to this form.
I certify that the above information and calculations are true and accurate to the best of my knowledge and belief.
Signature
Name - Please Type
Title - Please Type
Date
REPORTING FORM FOR THE CALCULATION OF BENCHMARK
RATIO SINCE INCEPTION FOR GROUP POLICIES
FOR CALENDAR YEAR____________________
TYPE SMSBP
For the State of Company Name
NAIC Group Code NAIC Company Code
Address Person Completing Exhibit
Title Telephone Number
(a)
(b)4
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(o)5
Earned
Cumulative
Cumulative
Policy Year
Year
Premium
Factor
(b)x(c)
Loss Ratio
(d)x(e)
Factor
(b)x(g)
Loss Ratio
(h)x(i)
Loss Ratio
1
2.770
0.507
0.000
0.000
0.46
2
4.175
0.567
0.000
0.000
0.63
3
4.175
0.567
1.194
0.759
0.75
4
4.175
0.567
2.245
0.771
0.77
5
4.175
0.567
3.170
0.782
0.80
6
4.175
0.567
3.998
0.792
0.82
7
4.175
0.567
4.754
0.802
0.84
8
4.175
0.567
5.445
0.811
0.87
9
4.175
0.567
6.075
0.818
0.88
10
4.175
0.567
6.650
0.824
0.88
11
4.175
0.567
7.176
0.828
0.88
12
4.175
0.567
7.655
0.831
0.88
13
4.175
0.567
8.093
0.834
0.89
14
4.175
0.567
8.493
0.837
0.89
15+6
4.175
0.567
8.684
0.838
0.89
Total:
(k):
(l):
(m):
(n):
Benchmark Ratio Since Inception: (l + n)/(k + m): __________
1 Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2 “SMSBP” = Standardized Medicare Supplement Benefit Plan - Use “P” for pre-standardized plans
3 Year 1 is the current calendar year - 1. Year 2 is the current calendar year - 2 (etc.) (Example: If the current year is 1991, then: Year 1 is 1990; Year 2 is 1989, etc.)
4 For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.
5 These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.
6 To include the earned premium for all years prior to as well as the 15th year prior to the current year.
REPORTING FORM FOR THE CALCULATION OF BENCHMARK
RATIO SINCE INCEPTION FOR INDIVIDUAL POLICIES
FOR CALENDAR YEAR____________________
TYPE SMSBP
For the State of Company Name
NAIC Group Code NAIC Company Code
Address Person Completing Exhibit
Title Telephone Number
(a)
(b)4
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(o)5
Earned
Cumulative
Cumulative
Policy Year
Year
Premium
Factor
(b)x(c)
Loss Ratio
(d)x(e)
Factor
(b)x(g)
Loss Ratio
(h)x(i)
Loss Ratio
1
2.770
0.442
0.000
0.000
0.40
2
4.175
0.493
0.000
0.000
0.55
3
4.175
0.493
1.194
0.659
0.65
4
4.175
0.493
2.245
0.669
0.67
5
4.175
0.493
3.170
0.678
0.69
6
4.175
0.493
3.998
0.686
0.71
7
4.175
0.493
4.754
0.695
0.73
8
4.175
0.493
5.445
0.702
0.75
9
4.175
0.493
6.075
0.708
0.76
10
4.175
0.493
6.650
0.713
0.76
11
4.175
0.493
7.176
0.717
0.76
12
4.175
0.493
7.655
0.720
0.77
13
4.175
0.493
8.093
0.723
0.77
14
4.175
0.493
8.493
0.725
0.77
15+6
4.175
0.493
8.684
0.725
0.77
Total:
(k):
(l):
(m):
(n):
Benchmark Ratio Since Inception: (l + n)/(k + m): __________
1 Individual, Group, Individual Medicare Select, or Group Medicare Select Only.
2 “SMSBP” = Standardized Medicare Supplement Benefit Plan - Use “P” for pre-standardized plans
3 Year 1 is the current calendar year - 1. Year 2 is the current calendar year - 2 (etc.) (Example: If the current year is 1991, then: Year 1 is 1990; Year 2 is 1989, etc.)
4 For the calendar year on the appropriate line in column (a), the premium earned during that year for policies issued in that year.
5 These loss ratios are not explicitly used in computing the benchmark loss ratios. They are the loss ratios, on a policy year basis, which result in the cumulative loss ratios displayed on this worksheet. They are shown here for informational purposes only.
6 To include the earned premium for all years prior to as well as the 15th year prior to the current year.
APPENDIX B
FORM FOR REPORTING
MEDICARE SUPPLEMENT POLICIES
Company Name: ______________________________
Address: ______________________________
Phone Number: ______________________________
Due March 1, annually
The purpose of this form is to report the following information on each resident of this state who has in force more than one Medicare supplement policy or certificate. The information is to be grouped by individual policyholder.
Policy and Date of
Certificate # Issuance
Signature
Name and Title (please type)
Date
APPENDIX C
DISCLOSURE STATEMENTS
Instructions for Use of the Disclosure Statements for Health Insurance Policies
Sold to Medicare Beneficiaries that Duplicate Medicare
-
Section 1882 (d) of the federal Social Security Act [42 U.S.C. 1395ss] prohibits the sale of a health insurance policy (the term policy includes certificate) to Medicare beneficiaries that duplicates Medicare benefits unless it will pay benefits without regard to a beneficiary’s other health coverage and it includes the prescribed disclosure statement on or together with the application for the policy.
-
. All types of health insurance policies that duplicate Medicare shall include one of the attached disclosure statements, according to the particular policy type involved, on the application or together with the application. The disclosure statement may not vary from the attached statements in terms of language or format (type size, type proportional spacing, bold character, line spacing, and usage of boxes around text).
-
State and federal law prohibits insurers from selling a Medicare supplement policy to a person that already has a Medicare supplement policy except as a replacement policy.
-
Property/casualty and life insurance policies are not considered health insurance. Disability income policies are not considered to provide benefits that duplicate Medicare. Long-term care insurance policies that coordinate with Medicare and other health insurance are not considered to provide benefits that duplicate Medicare.
-
The federal law does not preempt state laws that are more stringent than the federal requirements.
-
The federal law does not preempt existing state form filing requirements.
-
Section 1882 of the federal Social Security Act was amended in Subsection (d)(3)(A) to allow for alternative disclosure statements. The disclosure statements already in Appendix C remain. Carriers may use either disclosure statement with the requisite insurance product. However, carriers should use either the original disclosure statements or the alternative disclosure statements and not use both simultaneously.
[Original disclosure statement for policies that provide benefits for expenses incurred for an accidental injury only.]
This is not Medicare Supplement Insurance
This insurance provides limited benefits, if you meet the policy conditions, for hospital or medical expenses that result from accidental injury. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits when it pays:
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Original disclosure statement for policies that provide benefits for specified limited services.]
This is not Medicare Supplement Insurance
This insurance provides limited benefits, if you meet the policy conditions, for expenses relating to the specific services listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits when:
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Original disclosure statement for policies that reimburse expenses incurred for specified diseases or other specified impairments. This includes expense-incurred cancer, specified disease and other types of health insurance policies that limit reimbursement to named medical conditions.]
This is not Medicare Supplement Insurance
This insurance provides limited benefits, if you meet the policy conditions, for hospital or medical expenses only when you are treated for one of the specific diseases or health conditions listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits when it pays:
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Original disclosure statement for policies that pay fixed dollar amounts for specified diseases or other specified impairments. This includes cancer, specified disease, and other health insurance policies that pay a scheduled benefit or specific payment based on diagnosis of the conditions named in the policy.]
This is not Medicare Supplement Insurance
This insurance pays a fixed amount, regardless of your expenses, if you meet the policy conditions, for one of the specific diseases or health conditions named in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits because Medicare generally pays for most of the expenses for the diagnosis and treatment of the specific conditions or diagnoses named in the policy.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Original disclosure statement for indemnity policies and other policies that pay a fixed dollar amount per day, excluding long-term care policies.]
This is not Medicare Supplement Insurance
This insurance pays a fixed dollar amount, regardless of your expenses, for each day you meet the policy conditions. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits when:
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Original disclosure statement for policies that provide benefits upon both an expense-incurred and fixed indemnity basis.]
This is not Medicare Supplement Insurance
This insurance pays limited reimbursement for expenses if you meet the conditions listed in the policy. It also pays a fixed amount, regardless of your expenses, if you meet other policy conditions. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits when:
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Original disclosure statement for other health insurance policies not specifically identified in the preceding statements.]
This is not Medicare Supplement Insurance
This insurance provides limited benefits if you meet the conditions listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
This insurance duplicates Medicare benefits when it pays:
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for policies that provide benefits for expenses incurred for an accidental injury only.]
Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.
This insurance provides limited benefits, if you meet the policy conditions, for hospital or medical expenses that result from accidental injury. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for policies that provide benefits for specified limited services.]
Some health care services paid for by Medicare may also trigger the payment of benefits under this policy.
This insurance provides limited benefits, if you meet the policy conditions, for expenses relating to the specific services listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for policies that reimburse expenses incurred for specified diseases or other specified impairments. This includes expense-incurred cancer, specified disease and other types of health insurance policies that limit reimbursement to named medical conditions.]
Some health care services paid for by Medicare may also trigger the payment of benefits from this policy. Medicare generally pays for most or all of these expenses.
This insurance provides limited benefits, if you meet the policy conditions, for hospital or medical expenses only when you are treated for one of the specific diseases or health conditions listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for policies that pay fixed dollar amounts for specified diseases or other specified impairments. This includes cancer, specified disease, and other health insurance policies that pay a scheduled benefit or specific payment based on diagnosis of the conditions named in the policy.]
Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.
This insurance pays a fixed amount, regardless of your expenses, if you meet the policy conditions, for one of the specific diseases or health conditions named in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for indemnity policies and other policies that pay a fixed dollar amount per day, excluding long-term care policies.]
Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.
This insurance pays a fixed dollar amount, regardless of your expenses, for each day you meet the policy conditions. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for policies that provide benefits upon both an expense-incurred and fixed indemnity basis.]
Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.
This insurance pays limited reimbursement for expenses if you meet the conditions listed in the policy. It also pays a fixed amount, regardless of your expenses, if you meet other policy conditions. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or state [health] insurance [assistance] program [SHIP].
Drafting Note: Insurers insert reference to: outpatient prescription drugs and state health insurance assistance program (SHIP) above when new notices need to be printed after December 31, 2005.
[Alternative disclosure statement for other health insurance policies not specifically identified in the preceding statements.]
Some health care services paid for by Medicare may also trigger the payment of benefits from this policy.
This insurance provides limited benefits if you meet the conditions listed in the policy. It does not pay your Medicare deductibles or coinsurance and is not a substitute for Medicare Supplement insurance.
Medicare generally pays for most or all of these expenses.
Medicare pays extensive benefits for medically necessary services regardless of the reason you need them. These include:
This policy must pay benefits without regard to other health benefit coverage to which you may be entitled under Medicare or other insurance.
√ Check the coverage in all health insurance policies you already have.
√ For more information about Medicare and Medicare Supplement insurance, review the Guide to Health Insurance for People with Medicare, available from the insurance company.
√ For help in understanding your health insurance, contact your state insurance department or your state [health] insurance [assistance] program [SHIP].
History
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 22 DE Reg. 1026 (06/01/19)
- 7 DE Reg. 800 (12/01/02)
- 8 DE Reg. 465 (09/01/04)
- 8 DE Reg. 1026 (01/01/05)
- 2 DE Reg. 2055 (05/01/99)
- 13 DE Reg. 270 (08/01/09)
- 22 DE Reg. 1026 (06/01/19)
1502 Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions [Formerly Regulation 59]
18 Del. Admin. Code § 1502 Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions [Formerly Regulation 59]
1502 Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions [Formerly Regulation 59]
1.0 Purpose
1.1 The purpose of this regulation is to assure the orderly implementation and conversion of medicare supplement insurance benefits and premiums due to changes in the federal medicare program; to provide for the reasonable standardization of the coverage, terms and benefits of medicare supplement policies or contracts; to facilitate public understanding of such policies or contracts; to eliminate provisions contained in such policies or contracts which may be misleading or confusing in connection with the purchase of such policies or contracts; to eliminate policy or contract provisions which may duplicate medicare benefits; to provide full disclosure of policy or contract benefits and benefit changes; and to provide for refunds of premiums associated with benefits duplicating medicare program benefits.
2.0 Authority
2.1 This regulation is issued pursuant to the authority vested in the commissioner under 18 Del.C. Ch. 34 and in accordance with the procedures specified in 29 Del.C. Ch. 101.
3.0 Applicability and Scope
3.1 This regulation shall take precedence over other rules and requirements relating to medicare supplement policies or contracts only to the extent necessary to assure that benefits are not duplicated, that applicants receive adequate notice and disclosure of changes in medicare supplement policies and contracts, that appropriate premium adjustments are made in a timely manner, and that premiums are reasonable in relation to benefits.
3.2 Except as otherwise provided, this regulation shall apply to:
3.2.1 All medicare supplement policies and contracts delivered, or issued for delivery, or which are otherwise subject to the jurisdiction of this state on or after the effective date hereof, and
3.2.2 All certificates issued under group medicare supplement policies as provided in section 3.1.
4.0 Definitions
4.1 For purposes of this regulation:
4.1.1 "Applicant" means:
4.1.1.1 in the case of an individual medicare supplement policy or contract, the person who seeks to contract for insurance benefits, and
4.1.1.2 in the case of a group medicare policy or contract, the proposed certificateholder.
4.1.2 "Certificate" means any certificate issued under a group medicare supplement policy.
4.1.3 "Medicare Supplement Policy" means a group or individual policy as defined in 18 Del.C. §3401(c).
5.0 Benefit Conversion Requirements
5.1 Effective January 1, 1989, no medicare supplement insurance policy, contract or certificate in force in this state shall contain benefits provided by Medicare.
5.2 General Requirements
5.2.1 No later than thirty (30) days prior to the annual effective date of Medicare benefit changes mandated by the Medicare Catastrophic Coverage Act of 1988, every insurer, health care service plan or other entity providing medicare supplement insurance or benefits to a resident of this state shall notify its policyholders, contract holders and certificateholders of modifications it has made to medicare supplement insurance policies or contracts. Such notice shall be in a format prescribed by the Commissioner or in the format adopted by the NAIC in June of 1988 if no other format is prescribed by the Commissioner.
5.2.1.1 Such notice shall include a description of revisions to the medicare program and a description of each modification made to the coverage provided under the medicare supplement insurance policy or contract.
5.2.1.2 The notice shall inform each covered person as to when any premium adjustment due to changes in Medicare benefits will be made.
5.2.1.3 The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension. Such notice shall not contain or be accompanied by any solicitation.
5.2.2 No modifications to an existing medicare supplement contract or policy shall be made at the time of or in connection with the notice requirements of this regulation except to the extent necessary to eliminate duplication of medicare benefits and any modifications necessary under the policy or contract to provide indexed benefit adjustment.
5.2.3 As soon as practicable, but no longer than forty-five (45) days after the effective date of the Medicare benefit changes, every insurer, health care service plan or other entity providing medicare supplement insurance or contracts in this state shall file with the Department, in accordance with the applicable filing procedures of this state:
5.2.3.1 Appropriate premium adjustments necessary to produce loss ratios as originally anticipated for the applicable policies or contracts. Such supporting documents as necessary to justify the adjustment shall accompany the filing.
5.2.3.2 Along with a copy of the policy and the date it was filed by the Department, any appropriate riders, endorsements or policy forms needed to accomplish the medicare supplement insurance modifications necessary to eliminate benefit duplications with Medicare. Any such riders, endorsements or policy forms shall provide a clear description of the medicare supplement benefits provided by the policy or contract.
5.2.4 Upon satisfying the filing requirements of this state, every insurer, health care service plan or other entity providing medicare supplement insurance in this state shall provide each covered person with any rider, endorsement or policy form necessary to eliminate any benefit duplications under the policy or contract with benefits provided by Medicare.
5.2.5 No insurer, health care service plan or other entity shall require any person covered under a medicare supplement policy or contract which was in force prior to January 1, 1989 to purchase additional coverage under such policy or contract unless such additional coverage was provided for in the policy or contract.
5.2.6 Every insurer, health care service plan or benefit, or other entity providing medicare supplement insurance or benefits to a resident of this state shall make such premium adjustments as are necessary to produce an expected loss ratio under such policy or contract as will conform with minimum loss ratio standards for medicare supplement standards for medicare supplement policies and which is expected to result in a loss ratio at least as great as that originally anticipated by the insurer, health care service plan or other entity for such medicare supplement insurance policies or contracts. No premium adjustment which would modify the loss ratio experience under the policy other than the adjustments described herein should be made with respect to a policy at any time other than upon its renewal date. Premium adjustments shall be in the form of refunds or premium credits and shall be made no later than upon renewal if a credit is given, or within sixty (60) days of the renewal date if a refund is provided to the premium player.
6.0 Requirements for New Policies and Certificates
6.1 Effective January 1, 1989, no medicare supplement insurance policy, contract, or certificate shall be issued or issued for delivery in this state which provides benefits which duplicate benefits provided by Medicare. No such policy, contract or certificate shall provide less benefits than those required under existing Medicare Supplement Minimum Standards Act or Regulations except where duplication of Medicare benefits would result.
6.2 General Requirements
6.2.1 Within ninety (90) days of the effective date of this regulation, every insurer, health care service plan or other entity required to file its policies or contracts with this state shall file new medicare supplement insurance policies or contracts which eliminate any duplication of medicare supplement benefits with benefits provided by Medicare and which provides a clear description of the policy or contract benefit.
6.2.2 The filing required under section 6.2.1 shall provide for loss ratios which are in compliance with all minimum standards.
6.2.3 Every applicant for a medicare supplement insurance policy, contract or certificate shall be provided with an outline of coverage which simplifies and accurately describes benefits provided by Medicare and policy or contract benefits along with benefit limitations.
7.0 Filing Requirements for Advertising
7.1 Every insurer, health care service plan or other entity providing medicare supplement insurance or benefits in this state shall provide a copy of any advertisement intended for use in this state whether through written, radio or television medium to the Commissioner of Insurance of this State for review by the Commissioner. Such advertisement shall comply with all applicable laws of this state.
8.0 Buyer's Guide
8.1 No insurer, health care service plan or other entity shall make use of or otherwise disseminate any Buyer's Guide or informational brochure which does not accurately outline current Medicare benefits and which has not been adopted by the Commissioner.
9.0 Separability
9.1 If any provision of this regulation or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the regulation and the application of such provision to other persons or circumstances shall not be affected thereby.
10.0 Effective Date
10.1 This regulation shall be effective upon adoption, under the authority of 29 Del.C. §10118(b).
1600 Title Companies
1601 Limited Licenses for Title Insurance [Formerly Regulation 18]
18 Del. Admin. Code § 1601 Limited Licenses for Title Insurance [Formerly Regulation 18]
1601 Limited Licenses for Title Insurance [Formerly Regulation 18]
1.0 Purpose
1.1 The purpose of this Regulation is to establish a limited license for those who wish to transact (title) insurance. At the present time many lawyers in this State transact title insurance which is in apparent conflict with 18 Del.C. §1720(a)(3) which requires that any person must derive, on an annual basis, not less than 50% of his entire income from personal services in order to hold an insurance license in this State. The exception to this is those holding, among other things, a limited agent's license.
1.2 The Commissioner has taken note that many practicing lawyers in this State offer their clients title insurance as an additional service. The revenue from this service does not, of course, constitute 50% of their income. Such service seems to be useful and in the public interest.
2.0 Implementation of Rules
2.1 Pursuant to the authority granted the Commissioner in 18 Del.C. §1720(a) he may issue a limited representative a Certificate of Authority which he deems, by Regulation, essential for the transaction of insurance business in this State. The following procedure, as applicable, must be followed to obtain such a license:
2.1.1 Request a license on Department Form 2A.
2.1.2 Each insurer must request an appointment for the applicant as a limited representative on Form 1A, accompanied by a $5.00 fee.
2.1.3 Lawyer applicants requesting waiver of examination must attach to the above request for license, evidence of admission to the Delaware Bar.
2.1.4 All others must apply for examination on Form 08 furnished by this Department.
As for licenses currently issued to lawyers throughout the State, they must be returned to this Department along with the Certificate of Authority to be amended to reflect the status of limited agent. No fee will be charged for this amendment. Said licenses must be returned by March 1, 1976.
3.0 Enforcement
3.1 This Regulation will be enforced pursuant to the provisions of 18 Del.C. §§1732 and 1733.
4.0 Compliance Date
4.1 This Regulation shall become effective January 30, 1976.
1700 Credit Life & Credit Health Insurance
1701 Credit Life and Credit Health Insurance [Formerly Regulation 5]
18 Del. Admin. Code § 1701 Credit Life and Credit Health Insurance [Formerly Regulation 5]
1701 Credit Life and Credit Health Insurance [Formerly Regulation 5]
1.0 50% Loss Ratio Benchmark
1.1 18 Del.C. §3707(b) of the Delaware Insurance Laws authorizes the Insurance Commissioner to disapprove any credit life or credit health insurance form ". . . if the premium rates charged or to be charged are excessive in relation to benefits . . . . After review of such insurance transactions in the State of Delaware, and after careful analysis of the studies and recommendations of the National Association of Insurance Commissioners, it is hereby ruled that premium rates are not excessive in relation to benefits as provided for in 18 Del.C. §3707(b), if an anticipated loss ratio of 50% is developed. NAIC Reporting Forms required to be filed annually will be used to determine if this standard is being met.
2.0 Prima Facie Acceptable Credit Insurance Rates
2.1 It shall be presumed that premium rates charged or to be charged are not excessive in relation to the benefits if the premiums or premium rates as filed with the Commissioner do not exceed the following, or actuarially equivalent, rates:
2.1.1 Credit Life Insurance:
2.1.1.1 For decreasing term credit life insurance, a single premium of 650 per annum per $100 of initial insured indebtedness. A premium payable monthly at the rate of $1.00 per $1000 of outstanding unpaid insured indebtedness will be deemed the actuarial equivalent of the foregoing rate.
2.1.1.2 For level term credit life insurance a single premium of $1.22 per annum per $100 of initial indebtedness pursuant to 18 Del.C. §3704. Note exception in 18 Del.C. §3708.
2.1.1.3 The premium rates specified are presumed not excessive only in relation to a plan of death benefits, with or without requirements for evidence of insurability:
2.1.1.3.1 which contains no exclusions, exceptions or limitations on coverage other than for suicide within one year from the effective date of insurance;
2.1.1.3.2 which contains no age restrictions, or only age restrictions making ineligible for the coverage, debtors 65 or over at the time the indebtedness is incurred.
2.1.2 Credit Health Insurance:
2.1.2.1 For credit health insurance the following single premium rates per $100 initial insured indebtedness:
Benefits Not Retroactive Elimination Period
Retroactive Benefits Waiting Period
No. of Months in Which in the Indebtedness Is Repayable in Equal Installments
7 Days
14 Days
30 Days
7 Days
14 Days
30 Days
2
.70
1.30
3
1.00
.60
.30
1.80
1.30
$.90
6
1.50
1.00
.40
2.50
1.80
1.30
12
2.00
1.40
.80
3.00
2.20
1.70
18
2.50
1.80
1.20
3.50
2.60
2.10
24
3.00
2.20
1.60
4.00
3.00
2.50
30
3.50
2.60
2.00
4.50
3.40
2.90
36
4.00
3.00
2.40
5.00
3.80
3.30
42
4.40
3.30
2.70
5.40
4.10
3.60
48
4.70
3.50
2.90
5.70
4.30
3.80
54
5.00
3.70
3.10
6.00
4.50
4.00
60
5.30
3.90
3.30
6.30
4.70
4.20
2.1.2.2 Rates for policies of credit health insurance on which premiums are paid other than on a single premium basis or for benefits or durations on a basis other than illustrated above shall be actuarially consistent with the rates specified above.
2.1.2.3 The premium rates specified are for policies which contain no exclusion for pre-existing conditions except for those conditions which were manifested requiring medical diagnosis or treatment within the six months preceding the effective date of the insurance and which caused loss within the six months following the effective date of the insurance; provided, however, that disability commencing thereafter resulting from such conditions shall be covered.
2.1.2.4 Any contract to which the foregoing rates apply may contain provisions excluding or restricting coverage in the event of total disability resulting from pregnancy, intentionally self-inflicted injuries, foreign travel or residence, or flight in non-scheduled aircraft. It is not anticipated that military personnel will be sold accident and health insurance except in unusual cases and the company and/or agent shall stand ready to justify any such sale. The policy may contain the same age limitation for eligibility as set forth for credit life policies.
2.1.3 Restricted Coverages:
2.1.3.1 If a credit life or credit health insurance form provides for coverages which are more restrictive than provided for in section 2.1.1.3 or 2.1.2.3 above, the insurer shall demonstrate to the satisfaction of the Commissioner that the schedule of premium rates applicable to such forms will, or can reasonably be expected to, produce a loss ratio of 50% in accordance with the basic test set forth in section 1.0.
2.1.4 Deviation From Prima Facie Acceptable Credit Insurance Rates:
2.1.4.1 An insurer may file and receive approval of a different premium rate or a schedule of premium rates to be used in connection with a particular policy form providing insurance on the debtors of a creditor or a class or classes of debtors, if the insurer demonstrates to the satisfaction of the Commissioner that the prima facie acceptable rates, if used with such forms will or can reasonably be expected to produce a loss ratio of 60% or more. The insurer may use said deviated rates for a period two years. Prior to the expiration of the two-year period the insurer must submit evidence satisfactory to the Commissioner justifying the continued use of said rates for an additional two-year period, provided that a loss ratio of not less than 60% shall not be considered for purposes of an upward deviation.
2.1.5 Downward Rate Adjustments:
2.1.5.1 If the Commissioner has reason to believe that any premium rate or schedule of premium rates theretofore approved by him is producing a loss ratio of less than 50%, the Commissioner may require the insurer to show cause why the premium rate or schedule of premium rates should not be adjusted so as to produce a loss ratio of 50% in accordance with section 1.0.
2.1.6 Filing of Experience Information:
2.1.6.1 Insurers doing credit life and/or credit health insurance business in this State shall annually file with the Insurance Department a report of its credit life insurance experience and credit health insurance experience separately on forms prescribed by the Commissioner, and set forth in Appendix A of this regulation. (See Bulletin No. 75-13. Page 1206.)
3.0 Unfair Trade Practices
3.1 The use of compensating balances or special deposits as an inducement to a creditor to place a credit insurance program with the insurer, making or offering to create such compensating balance or special deposit is considered by the Insurance Commissioner to be a prohibited practice within the meaning of the Unfair Trade Practices Act (Sec. 2301-2316) and this section is intended to serve notice as to his determination in this regard.
4.0 Collection and Remittance of Premiums
4.1 A creditor may remit and an insurer may collect premiums on either a single premium basis or on a monthly outstanding balance basis, unless the creditor adds identifiable charges or premium for credit life insurance to the total amount of the indebtedness, and makes any direct or indirect finance, carrying, credit or service charge whatever to the debtor in connection with such insurance charge. Under such circumstances, the creditor has loaned the premium or insurance charge to the debtor and the premium or the insurance charge is deemed collected for the insurer as soon as it is added to the indebtedness, in which event the creditor must remit and an insurer must collect on a single premium basis only. A creditor may remit and an insurer may collect on the monthly outstanding balance basis if no direct or indirect finance, carrying, credit or service charge is made to the debtor in connection with the insurance charge of premium.
5.0 Refunds
5.1 In the event of termination of insurance prior to the scheduled maturity date of indebtedness by any circumstance including death, there shall be a refund or credit to the debtor of the proper portion of any amount paid by the debtor for the insurance.
5.1.1 The amount of the refund in the case of reducing term credit life insurance or of credit health insurance on which such charges to the debtor are payable to the insurance company by other than a single sum and of level term credit life insurance shall not be less than the pro rata gross unearned premium.
5.1.2 The amount of the refund in the case of reducing term credit life insurance or of credit health insurance on which the insurance charges to the debtor are payable to the insurance company in a single sum shall not be less than the amount computed by the "sum of digits" formula, commonly known as the "Rule of 78."
5.1.3 A premium refund or credit need not be made if the amount thereof is less than $1.00.
6.0 Reserves
6.1 In order to determine that sufficient reserves are available to guarantee performance of all policy obligations, the minimum reserve standards shall be as follows:
6.1.1 The aggregate reserves on credit life insurance shall not be less than the 1958 Commissioner's Extended Mortality Table.
6.1.2 The reserve for credit health insurance should not be less than the gross unearned premium calculated upon a pro rata basis or a proper morbidity table, whichever is applicable.
Section 6.1.1 was amended by an order effective January 1, 1986, by substituting the words "the 1958 Commissioner's Extended Mortality Table" for the words "a reserve computed in accordance with the Commissioner's 1941 Standard Ordinary Mortality Table."
7.0 Separability
7.1 If any provision of this regulation shall be held invalid, the remainder of the regulation shall not be affected thereby.
8.0 Effective Date
8.1 This regulation shall become effective February 15, 1971. All credit life and credit health insurance rates and forms, delivered or issued for delivery on or after February 15, 1971, except as hereinafter provided, shall conform to the provisions of this regulation as of that date. With regard to existing group credit life and health insurance policies, the rates and forms shall be filed with the Commissioner, or be terminated, not later than the anniversary date of the date of issuance of the contract next following the effective date of this regulation. Existing group credit life and health insurance contracts that are renewed, reissued or replaced other than on their normal anniversary date and all group life and health insurance contracts newly issued to replace or supplement a creditor's existing insurance program on or after October 6, 1970 shall conform to the requirements of the effective date of this regulation. No replacements or amendment of group policies to postpone the effect of this regulation will be recognized for the purpose of this section.
1800 Holding Companies
1801 Insurance Holding Company System Regulation With Reporting Forms and Instructions
18 Del. Admin. Code § 1801-1.0 Authority
These regulations are promulgated pursuant to the authority granted by 18 Del.C. §311 and Ch. 50; and 29 Del.C. Ch. 101.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-2.0 Purpose
The purpose of these regulations is to set forth rules and procedural requirements which the Commissioner deems necessary to carry out the provisions of the NAIC Insurance Holding Company System Regulatory Act, 18 Del.C. Ch. 50 of the Insurance Code hereinafter referred to as "the Act." The information called for by these regulations is hereby declared to be necessary and appropriate in the public interest and for the protection of the policyholders in this State.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-3.0 Severability Clause
If any provision of these regulations, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect other provisions or applications of these regulations which can be given effect without the invalid provision or application, and to that end the provisions of these regulations are severable.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-4.0 Forms - General Requirements
4.1 Forms A, B, C, D, E and F are intended to be guides in the preparation of the statements required by Sections 5003, 5003A, 5004, and 5005 of the Act. They are not intended to be blank forms which are to be filled in. The statements filed shall contain the numbers and captions of all items, but the text of the items may be omitted provided the answers thereto are prepared in such a manner as to indicate clearly the scope and coverage of the items. All instructions, whether appearing under the items of the form or elsewhere therein, are to be omitted. Unless expressly provided otherwise, if any item is inapplicable or the answer thereto is in the negative, an appropriate statement to that effect shall be made.
4.2 Two complete copies of each statement including exhibits and all other papers and documents filed as a part thereof, shall be filed with the Commissioner by personal delivery or mail addressed to: Insurance Commissioner of the State of Delaware, 1351 West North Street, Suite 101, Dover DE 19904. At least one of the copies shall be signed in the manner prescribed on the form. Unsigned copies shall be conformed. If the signature of any person is affixed pursuant to a power of attorney or other similar authority, a copy of the power of attorney or other authority shall also be filed with the statement.
4.3 If an applicant requests a hearing on a consolidated basis under Section 5003(d)(2) of the Act, in addition to filing the Form A with the Commissioner, the applicant shall file a copy of Form A with the National Association of Insurance Commissioners (NAIC) in electronic form.
4.4 Statements should be prepared electronically. Statements shall be easily readable and suitable for review and reproduction. Debits in credit categories and credits in debit categories shall be designated so as to be clearly distinguishable as such on photocopies. Statements shall be in the English language and monetary values shall be stated in United States currency. If any exhibit or other paper or document filed with the statement is in a foreign language, it shall be accompanied by a translation into the English language and any monetary value shown in a foreign currency normally shall be converted into United States currency.
4.5 No Form A statement shall be considered "filed" pursuant to the Act or this regulation until the Department determines that the statement is complete.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-5.0 Forms - Incorporation by Reference, Summaries and Omissions
5.1 Information required by any item of Form A, Form B, Form D, Form E or Form F may be incorporated by reference in answer or partial answer to any other item. Information contained in any financial statement, annual report, proxy statement, statement filed with a governmental authority, or any other document may be incorporated by reference in answer or partial answer to any item of Form A, Form B, Form D, Form E or Form F provided the document is filed as an exhibit to the statement. Excerpts of documents may be filed as exhibits if the documents are extensive. Documents currently on file with the Commissioner which were filed within three (3) years need not be attached as exhibits. References to information contained in exhibits or in documents already on file shall clearly identify the material and shall specifically indicate that such material is to be incorporated by reference in answer to the item. Matter shall not be incorporated by reference in any case where the incorporation would render the statement incomplete, unclear or confusing.
5.2 Where an item requires a summary or outline of the provisions of any document, only a brief statement shall be made as to the pertinent provisions of the document. In addition to the statement, the summary or outline may incorporate by reference particular parts of any exhibit or document currently on file with the Commissioner which was filed within three (3) years and may be qualified in its entirety by such reference. In any case where two (2) or more documents required to be filed as exhibits are substantially identical in all material respects except as to the parties thereto, the dates of execution, or other details, a copy of only one of the documents need be filed with a schedule identifying the omitted documents and setting forth the material details in which the documents differ from the documents, a copy of which is filed.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-6.0 Forms-Information Unknown or Unavailable and Extension of Time to Furnish
6.1 If it is impractical to furnish any required information, document or report at the time it is required to be filed, there shall be filed with the Commissioner a separate document:
6.1.1 Identifying the information, document or report in question;
6.1.2 Stating why the filing thereof at the time required is impractical; and
6.1.3 Requesting an extension of time for filing the information, document or report to a specified date. The request for extension shall be deemed granted unless the Commissioner within 30 days after receipt thereof enters an order denying the request.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-7.0 Forms - Additional Information and Exhibits
In addition to the information expressly required to be included in Form A, Form B, Form C, Form D, Form E and Form F, the Commissioner may request such further material information, if any, as may be necessary to make the information contained therein not misleading. The person filing may also file such exhibits as it may desire in addition to those expressly required by the statement. The exhibits shall be so marked as to indicate clearly the subject matters to which they refer. Changes to Forms A, B, C, D, E or F shall include on the top of the cover page the phrase: "Change No. [insert number] to" and shall indicate the date of the change and not the date of the original filing.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-8.0 Definitions
Unless the context otherwise requires, with the exception of the terms listed below, terms found in these regulations and in Section 5003 of the Act are used as defined in the Act. Other nomenclature or terminology is according to the Insurance Code, or industry usage if not defined by the Code.
"Executive officer" means chief executive officer, chief operating officer, chief financial officer, treasurer, secretary, controller, and any other individual performing functions corresponding to those performed by the foregoing officers under whatever title.
"Ultimate controlling person" means that person who is not controlled by any other person.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-9.0 Subsidiaries of Domestic Insurers
The authority to invest in subsidiaries under Section 5002 of the Act is in addition to any authority to invest in subsidiaries which may be contained in any other provision of the Insurance Code.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-10.0 Acquisition of Control - Statement Filing
A person required to file a statement pursuant to Section 5003 of the Act shall furnish the required information on Form A, hereby made a part of this regulation. Such person shall also furnish the required information on Form E, hereby made a part of this regulation and described in Section 13.0 of this regulation.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-11.0 Amendments to Form A
The applicant shall promptly advise the Commissioner of any changes in the information furnished on Form A arising subsequent to the date upon which the information was furnished but prior to the Commissioner's disposition of the application.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-12.0 Acquisition of Section 5003(a) Insurers
12.1 If the person being acquired is deemed to be a "domestic insurer" solely because of the provisions of Section 5003(a) of the Act, the name of the domestic insurer on the cover page should be indicated as follows:
"ABC Insurance Company, a subsidiary of XYZ Holding Company."
12.2 Where a Section 5003(a) insurer is being acquired, references to "the insurer" contained in Form A shall refer to both the domestic subsidiary insurer and the person being acquired.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-13.0 Pre-Acquisition Notification
13.1 If a domestic insurer, including any person controlling a domestic insurer, is proposing a merger or acquisition pursuant to Section 5003(a) of the Act, that person shall file a pre-acquisition notification form, Form E, which was developed pursuant to Section 5003A(c)(1) of the Act.
13.2 Additionally, if a non-domiciliary insurer licensed to do business in this state is proposing a merger or acquisition pursuant to Section 5003A of the Act, that person shall file a pre-acquisition notification form, Form E. No pre acquisition notification form need be filed if the acquisition is beyond the scope of Section 5003A as set forth in Section 5003A(b)(2).
13.3 In addition to the information required by Form E, the Commissioner may wish to require an expert opinion as to the competitive impact of the proposed acquisition.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-14.0 Annual Registration of Insurers - Statement Filing
An insurer required to file an annual registration statement pursuant to Section 5004 of the Act shall furnish the required information on Form B, hereby made a part of these regulations.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-15.0 Summary of Registration - Statement Filing
An insurer required to file an annual registration statement pursuant to Section 5004 of the Act is also required to furnish information required on Form C, hereby made a part of these regulations.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-16.0 Amendments to Form B
16.1 An amendment to Form B shall be filed within fifteen (15) days after the end of any month in which there is a material change to the information provided in the annual registration statement.
16.2 Amendments shall be filed in the Form B format with only those items which are being amended reported. Each amendment shall include at the top of the cover page "Amendment No. [insert number] to Form B for [insert year]" and shall indicate the date of the change and not the date of the original filings.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-17.0 Alternative and Consolidated Registrations
17.1 Any authorized insurer may file a registration statement on behalf of any affiliated insurer or insurers which are required to register under Section 5004 of the Act. A registration statement may include information not required by the Act regarding any insurer in the insurance holding company system even if the insurer is not authorized to do business in this State. In lieu of filing a registration statement on Form B, the authorized insurer may file a copy of the registration statement or similar report which it is required to file in its State of domicile, provided:
17.1.1 The statement or report contains substantially similar information required to be furnished on Form B; and
17.1.2 The filing insurer is the principal insurance company in the insurance holding company system.
17.2 The question of whether the filing insurer is the principal insurance company in the insurance holding company system is a question of fact and an insurer filing a registration statement or report in lieu of Form B on behalf of an affiliated insurer, shall set forth a brief statement of facts which will substantiate the filing insurer's claim that it, in fact, is the principal insurer in the insurance holding company system.
17.3 With the prior approval of the Commissioner, an unauthorized insurer may follow any of the procedures which could be done by an authorized insurer under subsection 17.1 above.
17.4 Any insurer may take advantage of the provisions of Section 5004(h) or Section 5004(i) of the Act without obtaining the prior approval of the Commissioner. The Commissioner, however, reserves the right to require individual filings if he or she deems such filings necessary in the interest of clarity, ease of administration or the public good.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-18.0 Disclaimers and Termination of Registration
18.1 A disclaimer of affiliation or a request for termination of registration claiming that a person does not, or will not upon the taking of some proposed action, control another person (hereinafter referred to as the "subject") shall contain the following information:
18.1.1 The number of authorized, issued and outstanding voting securities of the subject;
18.1.2 With respect to the person whose control is denied and all affiliates of such person, the number and percentage of shares of the subject's voting securities which are held of record or known to be beneficially owned, and the number of shares concerning which there is a right to acquire, directly or indirectly;
18.1.3 All material relationships and bases for affiliation between the subject and the person whose control is denied and all affiliates of such person;
18.1.4 A statement explaining why the person should not be considered to control the subject.
18.2 A request for termination of registration shall be deemed to have been granted unless the Commissioner, within thirty (30) days after receipt of the request, notifies the registrant otherwise.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-19.0 Transactions Subject to Prior Notice - Notice Filing
19.1 An insurer required to give notice of a proposed transaction pursuant to Section 5005 of the Act shall furnish the required information on Form D, hereby made a part of these regulations.
19.2 Agreements for cost sharing services and management services shall at a minimum and as applicable:
19.2.1 Identify the person providing services and the nature of such services;
19.2.2 Set forth the methods to allocate costs;
19.2.3 Require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the Accounting Practices and Procedures Manual;
19.2.4 Prohibit advancement of funds by the insurer to the affiliate except to pay for services defined in the agreement;
19.2.5 State that the insurer will maintain oversight for functions provided to the insurer by the affiliate and that the insurer will monitor services annually for quality assurance;
19.2.6 Define records and data of the insurer to include all records and data developed or maintained under or related to the agreement that are otherwise the property of the insurer, in whatever form maintained, including, but not limited to, claims and claim files, policyholder lists, application files, litigation files, premium records, rate books, underwriting manuals, personnel records, financial records or similar records within the possession, custody or control of the affiliate;
19.2.7 Specify that all records and data of the insurer are and remain the property of the insurer, and are:
19.2.7.1 Subject to control of the insurer;
19.2.7.2 Identifiable; and
19.2.7.3 Segregated from all other persons' records and data or are readily capable of segregation at no additional cost to the insurer;
19.2.8 State that all funds and invested assets of the insurer are the exclusive property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer;
19.2.9 Include standards for termination of the agreement with and without cause;
19.2.10 Include provisions for indemnification of the insurer in the event of gross negligence or willful misconduct on the part of the affiliate providing the services and for any actions by the affiliate that violate provisions of the agreement required in subsections 19.2.11, 19.2.12, 19.2.13, 19.2.14 and 19.2.15 of this regulation;
19.2.11 Specify that if the insurer is placed in supervision, seizure, conservatorship, or receivership pursuant to 18 Del.C. Ch. 59:
19.2.11.1 All of the rights of the insurer under the agreement extend to the receiver or Commissioner to the extent permitted by Delaware Law;
19.2.11.2 All records and data of the insurer shall be identifiable and segregated from all other persons' records and data or readily capable of segregation at no additional cost to the receiver or the Commissioner.
19.2.11.3 A complete set of records and data of the insurer will immediately be made available to the receiver or the Commissioner, shall be made available in a usable format, and shall be turned over to the receiver or Commissioner immediately upon the receiver or the Commissioner's request, and the cost to transfer data to the receiver or the Commissioner shall be fair and reasonable; and
19.2.11.4 The affiliated person or persons will make available all employees essential to the operations of the insurer and the services associated therewith for the immediate continued performance of the essential services ordered or directed by the receiver or Commissioner;
19.2.12 Specify that the affiliate has no automatic right to terminate the agreement if the insurer is placed into supervision, seizure, conservatorship, or receivership pursuant to 18 Del.C. Ch. 59;
19.2.13 Specify that the affiliate will provide the essential services for a minimum period of time [specified in the agreement] after termination of the agreement, if the insurer is placed into supervision, seizure, conservatorship or receivership pursuant to 18 Del.C. Ch. 59, as ordered or directed by the receiver or Commissioner. Performance of the essential services will continue to be provided without regard to pre-receivership unpaid fees, so long as the affiliate continues to receive timely payment for post-receivership services rendered, and unless released by the receiver, Commissioner or supervising court;
19.2.14 Specify that the affiliate will continue to maintain any systems, programs, or other infrastructure notwithstanding supervision, seizure, conservatorship or receivership pursuant to 18 Del.C. Ch. 59, and will make them available to the receiver or Commissioner as ordered or directed by the receiver or Commissioner, for so long as the affiliate continues to receive timely payment for post-receivership services rendered, and unless released by the receiver, Commissioner or supervising court; and
19.2.15 Specify that, in furtherance of the cooperation between the receiver and the affected guaranty association or associations and subject to the receiver's authority over the insurer, if the insurer is placed into supervision, seizure, conservatorship or receivership pursuant to 18 Del.C. Ch. 59, and portions of the insurer's policies or contracts are eligible for coverage by one or more guaranty associations, the affiliate's commitments under subsections 19.2.11, 19.2.12, 19.2.13 and 19.2.14 of this regulation will extend to such guaranty association or associations.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-20.0 Enterprise Risk Report
The ultimate controlling person of an insurer required to file an enterprise risk report pursuant to Section 5004(l)(1) of the Act shall furnish the required information on Form F, hereby made a part of these regulations.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-21.0 Group Capital Calculation
21.1 Where an insurance holding company system has previously filed the annual group capital calculation at least once, the lead state commissioner has the discretion to exempt the ultimate controlling person from filing the annual group capital calculation if the lead state commissioner makes a determination based upon that filing that the insurance holding company system meets all of the following criteria:
21.1.1 Has annual direct written and unaffiliated assumed premium (including international direct and assumed premium), but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1,000,000,000;
21.1.2 Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories;
21.1.3 Has no banking, depository or other financial entity that is subject to an identified regulatory capital framework within its holding company structure;
21.1.4 The holding company system attests that there are no material changes in the transactions between insurers and non-insurers in the group that have occurred since the last filing of the annual group capital; and
21.1.5 The non-insurers within the holding company system do not pose a material financial risk to the insurer's ability to honor policyholder obligations.
21.2 Where an insurance holding company system has previously filed the annual group capital calculation at least once, the lead state commissioner has the discretion to accept in lieu of the group capital calculation a limited group capital filing if:
21.2.1 The insurance holding company system has annual direct written and unaffiliated assumed premium (including international direct and assumed premium), but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of less than $1,000,000,000; and all of the following additional criteria are met:
21.2.1.1 Has no insurers within its holding company structure that are domiciled outside of the United States or one of its territories;
21.2.1.2 Does not include a banking, depository or other financial entity that is subject to an identified regulatory capital framework; and
21.2.1.3 The holding company system attests that there are no material changes in transactions between insurers and non-insurers in the group that have occurred since the last filing of the report to the lead state commissioner and the non-insurers within the holding company system do not pose a material financial risk to the insurers' ability to honor policyholder obligations.
21.3 For an insurance holding company that has previously met an exemption with respect to the group capital calculation pursuant subsection 21.1 or 21.2 of this regulation, the lead state commissioner may require at any time the ultimate controlling person to file an annual group capital calculation, completed in accordance with the NAIC Group Capital Calculation Instructions, if any of the following criteria are met:
21.3.1 Any insurer within the insurance holding company system is in a Risk-Based Capital action level event as set forth in 18 Del.C. Ch. 58 or a similar standard for a non-U.S. insurer; or
21.3.2 Any insurer within the insurance holding company system meets one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in 18 DE Admin. Code 304, subsection 3.1; or
21.3.3 Any insurer within the insurance holding company system otherwise exhibits qualities of a troubled insurer as determined by the lead state commissioner based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests.
21.4 A non-U.S. jurisdiction is considered to "recognize and accept" the group capital calculation if it satisfies the following criteria:
21.4.1 With respect to Section 5004(l)(2)d. of the Act:
21.4.1.1 The non-U.S. jurisdiction recognizes the U.S. state regulatory approach to group supervision and group capital, by providing confirmation by a competent regulatory authority, in such jurisdiction, that insurers and insurance groups whose lead state is accredited by the NAIC under the NAIC Accreditation Program shall be subject only to worldwide prudential insurance group supervision including worldwide group governance, solvency and capital, and reporting, as applicable, by the lead state and will not be subject to group supervision, including worldwide group governance, solvency and capital, and reporting, at the level of the worldwide parent undertaking of the insurance or reinsurance group by the non-U.S. jurisdiction; or
21.4.1.2 Where no U.S. insurance groups operate in the non-U.S. jurisdiction, that non-U.S. jurisdiction indicates formally in writing to the lead state with a copy to the International Association of Insurance Supervisors that the group capital calculation is an acceptable international capital standard. This will serve as the documentation otherwise required in subsection 21.4.1.1 of this regulation.
21.4.2 The non-U.S. jurisdiction provides confirmation by a competent regulatory authority in such jurisdiction that information regarding insurers and their parent, subsidiary, or affiliated entities, if applicable, shall be provided to the lead state commissioner in accordance with a memorandum of understanding or similar document between the commissioner and such jurisdiction, including but not limited to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding coordinated by the NAIC. The commissioner shall determine, in consultation with the NAIC Committee Process, if the requirements of the information sharing agreements are in force.
21.5 A list of non-U.S. jurisdictions that "recognize and accept" the group capital calculation will be published through the NAIC Committee Process:
21.5.1 A list of jurisdictions that "recognize and accept" the group capital calculation pursuant to Section 5004(l)(2)d. of the Act, is published through the NAIC Committee Process to assist the lead state commissioner in determining which insurers shall file an annual group capital calculation. The list will clarify those situations in which a jurisdiction is exempted from filing under Section 5004(l)(2)d. of the Act. To assist with a determination under Section 5004(l)(2)e. of the Act, the list will also identify whether a jurisdiction that is exempted under either Section 5004(l)(2)c. or Section 5004(l)(2)d. of the Act requires a group capital filing for any U.S. based insurance group's operations in that non-U.S. jurisdiction.
21.5.2 For a non-U.S. jurisdiction where no U.S. insurance groups operate, the confirmation provided to meet the requirement of subsection 21.4.1.2 of this regulation will serve as support for recommendation to be published as a jurisdiction that "recognizes and accepts" the group capital calculation through the NAIC Committee Process.
21.5.3 If the lead state commissioner makes a determination pursuant to Section 5004(l)(2)d. of the Act that differs from the NAIC List, the lead state commissioner shall provide thoroughly documented justification to the NAIC and other states.
21.5.4 Upon determination by the lead state commissioner that a non-U.S. jurisdiction no longer meets one or more of the requirements to "recognize and accept" the group capital calculation, the lead state commissioner may provide a recommendation to the NAIC that the non-U.S. jurisdiction be removed from the list of jurisdictions that "recognize and accepts" the group capital calculation.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-22.0 Extraordinary Dividends and Other Distributions
22.1 Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders shall include the following:
22.1.1 The amount of the proposed dividend;
22.1.2 The date established for payment of the dividend;
22.1.3 A statement as to whether the dividend is to be in cash or other property and, if in property, a description thereof, its cost, and its fair market value together with an explanation of the basis for valuation;
22.1.4 A copy of the calculations determining that the proposed dividend is extraordinary. The work paper shall include the following information:
22.1.4.1 The amounts, dates and form of payment of all dividends or distributions (including regular dividends but excluding distributions of the insurer's own securities) paid within the period of twelve (12) consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the last preceding year;
22.1.4.2 Surplus as regards policyholders (total capital and surplus) as of the 31st day of December next preceding;
22.1.4.3 If the insurer is a life insurer, the net gain from operations for the 12-month period ending the 31st day of December next preceding;
21.1.4.4 If the insurer is not a life insurer, the net income less realized capital gains for the 12-month period ending the 31st day of December next preceding and the two preceding 12-month periods; and
22.1.4.5 If the insurer is not a life insurer, the dividends paid to stockholders excluding distributions of the insurer's own securities in the preceding two (2) calendar years;
22.1.5 A balance sheet and statement of income for the period intervening from the last annual statement filed with the Commissioner and the end of the month preceding the month in which the request for dividend approval is submitted; and
22.1.6 A brief statement as to the effect of the proposed dividend upon the insurer's surplus and the reasonableness of surplus in relation to the insurer's outstanding liabilities and the adequacy of surplus relative to the insurer's financial needs.
22.2 Subject to Section 5005(b) of the Act, each registered insurer shall report to the Commissioner all dividends and other distributions to shareholders within fifteen (15) business days following the declaration thereof, including the same information required by subsection 22.1.4.4.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-23.0 Adequacy of Surplus
The factors set forth in Section 5005(c) of the Act are not intended to be an exhaustive list. In determining the adequacy and reasonableness of an insurer's surplus no single factor is necessarily controlling. The Commissioner instead will consider the net effect of all of these factors plus other factors bearing on the financial condition of the insurer. In comparing the surplus maintained by other insurers, the Commissioner will consider the extent to which each of these factors varies from company to company and in determining the quality and liquidity of investments in subsidiaries, the Commissioner will consider the individual subsidiary and may discount or disallow its valuation to the extent that the individual investments so warrant.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
18 Del. Admin. Code § 1801-24.0 Effective Date
This Regulation became effective on January 11, 2016 (ten days after publication - see 19 DE Reg. 642). Subsection 4.5 became effective on March 12, 2018. The amendments to Section 19.0 of this regulation and the addition of new Section 21.0 shall become effective the eleventh day after publication of a final order signed by the Commissioner adopting the amendments into this regulation.
FORM A
STATEMENT REGARDING THE
ACQUISITION OF CONTROL OF OR MERGER WITH A DOMESTIC INSURER
Name of Domestic Insurer
BY
Name of Acquiring Person (Applicant)
Filed with the Insurance Department of Delaware
Dated:____________________, 20_
Name, Title, address and telephone number of Individual to Whom Notices and Correspondence Concerning this Statement Should be Addressed:
ITEM 1. METHOD OF ACQUISITION
State the name and address of the domestic insurer to which this application relates and a brief description of how control is to be acquired.
ITEM 2. IDENTITY AND BACKGROUND OF THE APPLICANT
(a) State the name and address of the applicant seeking to acquire control over the insurer.
(b) If the applicant is not an individual, state the nature of its business operations for the past 5 years or for such lesser period as such person and any predecessors thereof shall have been in existence. Briefly describe the business intended to be done by the applicant and the applicant's subsidiaries.
(c) Furnish a chart or listing clearly presenting the identities of the interrelationships among the applicant and all affiliates of the applicant. Indicate in such chart or listing the percentage of voting securities of each such person which is owned or controlled by the applicant or by any other such person. If control of any person is maintained other than by the ownership or control of voting securities, indicate the basis of such control. As to each person specified in such chart or listing indicate the type of organization (e.g. corporation, trust, partnership) and the state or other jurisdiction of domicile. If court proceedings involving a reorganization or liquidation are pending with respect to any such person, indicate which person, and set forth the title of the court, nature of proceedings and the date when commenced.
ITEM 3. IDENTITY AND BACKGROUND OF INDIVIDUALS ASSOCIATED WITH THE APPLICANT
On the biographical affidavit, include a third party background check, and state the following with respect to (1) the applicant if (s)he is an individual or (2) all persons who are directors, executive officers or owners of 10% or more of the voting securities of the applicant if the applicant is not an individual.
(a) Name and business address.
(b) Present principal business activity, occupation or employment including position and office held and the name, principal business and address of any corporation or other organization in which such employment is carried on.
(c) Material occupations, positions, offices or employment during the last 5 years, giving the starting and ending dates of each and the name, principal business and address of any business corporation or other organization in which each such occupation, position, office or employment was carried on; if any such occupation, position, office or employment required licensing by or registration with any federal, state or municipal governmental agency, indicate such fact, the current status of such licensing or registration, and an explanation of any surrender, revocation, suspension or disciplinary proceedings in connection therewith.
(d) Whether or not such person has ever been convicted in a criminal proceeding (excluding minor traffic violations) during the last 10 years and, if so, give the date, nature of conviction, name and location of court, and penalty imposed or other disposition of the case.
ITEM 4. NATURE, SOURCE AND AMOUNT OF CONSIDERATION
(a) Describe the nature, source and amount of funds or other considerations used or to be used in effecting the merger or other acquisition of control. If any part of the same is represented or is to be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding or trading securities, furnish a description of the transaction, the names of the parties thereto, the relationship, if any, between the borrower and the lender, the amounts borrowed or to be borrowed, and copies of all agreements, promissory notes and security arrangements relating thereto.
(b) Explain the criteria used in determining the nature and amount of such consideration.
(c) If the source of the consideration is a loan made in the lender's ordinary course of business and if the applicant wishes the identity of the lender to remain confidential, he must specifically request that the identity be kept confidential.
ITEM 5. FUTURE PLANS OF INSURER
Describe any plans or proposals which the applicant may have to declare an extraordinary dividend, to liquidate the insurer, to sell its assets to or merge it with any person or persons or to make any other material change in its business operations or corporate structure or management.
ITEM 6. VOTING SECURITIES TO BE ACQUIRED
State the number of shares of the insurer's voting securities which the applicant, its affiliates and any person listed in Item 3 plan to acquire, and the terms of the offer, request, invitation, agreement or acquisition, and a statement as to the method by which the fairness of the proposal was arrived at.
ITEM 7. OWNERSHIP OF VOTING SECURITIES
State the amount of each class of any voting security of the insurer which is beneficially owned or concerning which there is a right to acquire beneficial ownership by the applicant, its affiliates or any person listed in Item 3.
ITEM 8. CONTRACTS, ARRANGEMENTS, OR UNDERSTANDINGS WITH RESPECT TO VOTING SECURITIES OF THE INSURER
Give a full description of any contracts, arrangements or understandings with respect to any voting security of the insurer in which the applicant, its affiliates or any person listed in Item 3 is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. Such description shall identify the persons with whom the contracts, arrangements or understandings have been entered into.
ITEM 9. RECENT PURCHASES OF VOTING SECURITIES
Describe any purchases of any voting securities of the insurer by the applicant, its affiliates or any person listed in Item 3 during the 12 calendar months preceding the filing of this statement. Include in the description the dates of purchase, the names of the purchasers, and the consideration paid or agreed to be paid therefor. State whether any shares so purchased are hypothecated.
ITEM 10. RECENT RECOMMENDATIONS TO PURCHASE
Describe any recommendations to purchase any voting security of the insurer made by the applicant, its affiliates or any person listed in Item 3, or by anyone based upon interviews or at the suggestion of the applicant, its affiliates or any person listed in Item 3 during the 12 calendar months preceding the filing of this statement.
ITEM 11. AGREEMENTS WITH BROKER-DEALERS
Describe the terms of any agreement, contract or understanding made with any broker-dealer as to solicitation of voting securities of the insurer for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto.
ITEM 12. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements, exhibits, and three-year financial projections of the insurer(s) shall be attached to this statement as an appendix, but list under this item the financial statements and exhibits so attached.
(b) The financial statements shall include the annual financial statements of the persons identified in Item 2(c) for the preceding 5 fiscal years (or for such lesser period as such applicant and its affiliates and any predecessors thereof shall have been in existence), and similar information covering the period from the end of such person's last fiscal year, if the information is available. The statements may be prepared on either an individual basis, or, unless the Commissioner otherwise requires, on a consolidated basis if consolidated statements are prepared in the usual course of business.
The annual financial statements of the applicant shall be accompanied by the certificate of an independent public accountant to the effect that such statements present fairly the financial position of the applicant and the results of its operations for the year then ended, in conformity with generally accepted accounting principles or with requirements of insurance or other accounting principles prescribed or permitted under law. If the applicant is an insurer which is actively engaged in the business of insurance, the financial statements need not be certified, provided they are based on the Annual Statement of the person filed with the insurance department of the person's domiciliary state and are in accordance with the requirements of insurance or other accounting principles prescribed or permitted under the law and regulations of the state.
(c) File as exhibits copies of all tender offers for, requests or invitations for, tenders of, exchange offers for, and agreements to acquire or exchange any voting securities of the insurer and (if distributed) of additional soliciting material relating thereto, any proposed employment, consultation, advisory or management contracts concerning the insurer, annual reports to the stockholders of the insurer and the applicant for the last two fiscal years, and any additional documents or papers required by Form A or regulation Sections 4.0 and 6.0.
ITEM 13. AGREEMENT REQUIREMENTS FOR ENTERPRISE RISK MANAGEMENT
Applicant agrees to provide, to the best of its knowledge and belief, the information required by Form F within fifteen (15) days after the end of the month in which the acquisition of control occurs.
ITEM 14. SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 5003 of the Act ________________ has caused this application to be duly signed on its behalf in the City of __________________ and State of on the _____________ day of ________, 20.
(SEAL)____________________________________
Name of Applicant
BY________________________________________
(Name) (Title)
Attest:
(Signature of Officer)
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached application dated _____________, 20, for and on behalf of ____________________(Name of Applicant); that (s)he is the ________________(Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with the instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature)_______________________________
(Type or print name beneath)_______________________________
FORM B
INSURANCE HOLDING COMPANY SYSTEM ANNUAL REGISTRATION STATEMENT
Filed with the Insurance Department of the State of Delaware
By
Name of Registrant
On Behalf of Following Insurance Companies
Name Address
Date:_______________, 20
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed:
ITEM 1. IDENTITY AND CONTROL OF REGISTRANT
Furnish the exact name of each insurer registering or being registered (hereinafter called "the Registrant"), the home office address and principal executive offices of each; the date on which each registrant became part of the insurance holding company system; and the method(s) by which control of each registrant was acquired and is maintained.
ITEM 2. ORGANIZATIONAL CHART
Furnish a chart or listing clearly presenting the identities of and interrelationships among all affiliated persons within the insurance holding company system. The chart or listing should show the percentage of each class of voting securities of each affiliate which is owned, directly or indirectly, by another affiliate. If control of any person within the system is maintained other than by the ownership or control of voting securities, indicate the basis of control. As to each person specified in the chart or listing indicate the type of organization (e.g., corporation, trust, partnership) and the state or other jurisdiction of domicile.
ITEM 3. THE ULTIMATE CONTROLLING PERSON
As to the ultimate controlling person in the insurance holding company system furnish the following information:
(a) Name;
(b) Home office address;
(c) Principal executive office address;
(d) The organizational structure of the person, i.e., corporation, partnership, individual, trust, etc.;
(e) The principal business of the person;
(f) The name and address of any person who holds or owns 10% or more of any class of voting security, the class of such security, the number of shares held of record or known to be beneficially owned, and the percentage of class so held or owned; and
(g) If court proceedings involving a reorganization or liquidation are pending, indicate the title and location of the court, the nature of proceedings and the date when commenced.
ITEM 4. BIOGRAPHICAL INFORMATION
If the ultimate controlling person is a corporation, an organization, a limited liability company, or other legal entity, furnish the following information for the directors and executive officers of the ultimate controlling person: the individual's name and address, his or her principal occupation and all offices and positions held during the past 5 years, and any conviction of crimes other than minor traffic violations. If the ultimate controlling person is an individual, furnish the individual's name and address, his or her principal occupation and all offices and positions held during the past 5 years, and any conviction of crimes other than minor traffic violations.
ITEM 5. TRANSACTIONS AND AGREEMENTS
Briefly describe the following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between the registrant and its affiliates:
(a) Loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the Registrant or of the Registrant by its affiliates;
(b) Purchases, sales or exchanges of assets;
(c) Transactions not in the ordinary course of business;
(d) Guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the Registrant's assets to liability, other than insurance contracts entered into in the ordinary course of the registrant's business;
(e) All management agreements, service contracts and all cost-sharing arrangements;
(f) Reinsurance agreements;
(g) Dividends and other distributions to shareholders;
(h) Consolidated tax allocation agreements; and
(i) Any pledge of the registrant's stock and/or of the stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system.
No information need be disclosed if such information is not material for purposes of Section 5004 of the Act.
Sales, purchases, exchanges, loans or extensions of credit, investments or guarantees involving one-half of 1% or less of the registrant's admitted assets as of the 31st day of December next preceding shall not be deemed material.
The description shall be in a manner as to permit the proper evaluation thereof by the Commissioner, and shall include at least the following: the nature and purpose of the transaction, the nature and amounts of any payments or transfers of assets between the parties, the identity of all parties to the transaction, and relationship of the affiliated parties to the registrant.
ITEM 6. LITIGATION OR ADMINISTRATIVE PROCEEDINGS
A brief description of any litigation or administrative proceedings of the following types, either then pending or concluded within the preceding fiscal year, to which the ultimate controlling person or any of its directors or executive officers was a party or of which the property of any such person is or was the subject; give the names of the parties and the court or agency in which the litigation or proceeding is or was pending:
(a) Criminal prosecutions or administrative proceedings by any government agency or authority which may be relevant to the trustworthiness of any party thereto; and
(b) Proceedings which may have a material effect upon the solvency or capital structure of the ultimate holding company including, but not necessarily limited to, bankruptcy, receivership or other corporate reorganizations.
ITEM 7. STATEMENT REGARDING PLAN OR SERIES OF TRANSACTIONS
The insurer shall furnish a statement that transactions entered into since the filing of the prior year's annual registration statement are not part of a plan or series of like transactions, the purpose of which is to avoid statutory threshold amounts and the review that might otherwise occur.
ITEM 8. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements and exhibits should be attached to this statement as an appendix, but list under this item the financial statements and exhibits so attached.
(b) If the ultimate controlling person is a corporation, an organization, a limited liability company, or other legal entity, the financial statements shall include the annual financial statements of the ultimate controlling person in the insurance holding company system as of the end of the person's latest fiscal year.
If at the time of the initial registration, the annual financial statements for the latest fiscal year are not available, annual statements for the previous fiscal year may be filed and similar financial information shall be filed for any subsequent period to the extent such information is available. Such financial statements may be prepared on either an individual basis; or, unless the Commissioner otherwise requires, on a consolidated basis if consolidated statements are prepared in the usual course of business.
Other than with respect to the foregoing, such financial statement shall be filed in a standard form and format adopted by the National Association of Insurance Commissioners, unless an alternative form is accepted by the Commissioner. Documentation and financial statements filed with the Securities and Exchange Commission or audited GAAP financial statements shall be deemed to be an appropriate form and format.
Unless the Commissioner otherwise permits, the annual financial statements shall be accompanied by the certificate of an independent public accountant to the effect that the statements present fairly the financial position of the ultimate controlling person and the results of its operations for the year then ended, in conformity with generally accepted accounting principles or with requirements of insurance or other accounting principles prescribed or permitted under law. If the ultimate controlling person is an insurer which is actively engaged in the business of insurance, the annual financial statements need not be certified, provided they are based on the Annual Statement of the insurer's domiciliary state and are in accordance with requirements of insurance or other accounting principles prescribed or permitted under the law and regulations of that state.
Any ultimate controlling person who is an individual may file personal financial statements that are reviewed rather than audited by an independent public accountant. The review shall be conducted in accordance with standards for review of personal financial statements published in the Personal Financial Statements Guide by the American Institute of Certified Public Accountants. Personal financial statements shall be accompanied by the independent public accountant's Standard Review Report stating that the accountant is not aware of any material modifications that should be made to the financial statements in order for the statements to be in conformity with generally accepted accounting principles.
(c) Exhibits shall include copies of the latest annual reports to shareholders of the ultimate controlling person and proxy material used by the ultimate controlling person; and any additional documents or papers required by Form B or regulation Sections 4.0 and 6.0.
ITEM 9. FORM C REQUIRED
A Form C, Summary of Changes to Registration Statement, must be prepared and filed with this Form B.
ITEM 10. SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 5004 of the Act, Registrant has caused this annual registration statement to be duly signed on its behalf of the City of _________________ and State of ______________ on the ____________ day of _____________, 20 _____.
(SEAL)______________________________
Name of Applicant
BY__________________________________
(Name) (Title)
Attest:
(Signature of Officer)
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached annual registration statement dated __________, 20, for and on behalf of ___________________(Name of Applicant); that (s)he is the ___________________(Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature)_______________________________
(Type or print name beneath)_______________________________
FORM C
SUMMARY OF CHANGES TO REGISTRATION STATEMENT
Filed with the Insurance Department of the State of Delaware
By
Name of Registrant
On Behalf of Following Insurance Companies
Name Address
Date:_________________________, 20_____
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed:
Furnish a brief description of all items in the current annual registration statement which represent changes from the prior year's annual registration statement. The description shall be in a manner as to permit the proper evaluation thereof by the Commissioner, and shall include specific references to Item numbers in the annual registration statement and to the terms contained therein.
Changes occurring under Item 2 of Form B insofar as changes in the percentage of each class of voting securities held by each affiliate is concerned, need only be included where such changes are ones which result in ownership or holdings of 10% or more of voting securities, loss or transfer of control, or acquisition or loss of partnership interest.
Changes occurring under Item 4 of Form B need only be included where an individual is, for the first time, made a director or executive officer of the ultimate controlling person; a director or executive officer terminates his or her responsibilities with the ultimate controlling person; or in the event an individual is named president of the ultimate controlling person.
If a transaction disclosed on the prior year's annual registration statement has been changed, the nature of such change shall be included. If a transaction disclosed on the prior year's annual registration statement has been effectuated, furnish the mode of completion and any flow of funds between affiliates resulting from the transaction.
The insurer shall furnish a statement that transactions entered into since the filing of the prior year's annual registration statement are not part of a plan or series of like transactions whose purpose it is to avoid statutory threshold amounts and the review that might otherwise occur.
SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
Pursuant to the requirements of Section 5004 of the Act, Registrant has caused this annual registration statement to be duly signed on its behalf of the City of _________________ and State of ______________ on the ____________ day of _____________, 20 _____.
(SEAL)______________________________
Name of Applicant
BY__________________________________
(Name) (Title)
Attest:
(Signature of Officer)
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached annual registration statement dated __________, 20, for and on behalf of _______________________(Name of Applicant); that (s)he is the ___________________(Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature)_______________________________
(Type or print name beneath)_______________________________
FORM D
PRIOR NOTICE OF A TRANSACTION
Filed with the Insurance Department of the State of Delaware
By
Name of Registrant
On Behalf of Following Insurance Companies
Name Address
Date:_____________________, 20
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed:
ITEM 1. IDENTITY OF PARTIES TO TRANSACTION
Furnish the following information for each of the parties to the transaction:
(a) Name;
(b) Home office address;
(c) Principal executive office address;
(d) The organizational structure, i.e. corporation, partnership, individual, trust, etc.;
(e) A description of the nature of the parties' business operations;
(f) Relationship, if any, of other parties to the transaction to the insurer filing the notice, including any ownership or debtor/creditor interest by any other parties to the transaction in the insurer seeking approval, or by the insurer filing the notice in the affiliated parties;
(g) Where the transaction is with a non-affiliate, the name(s) of the affiliate(s) which will receive, in whole or in substantial part, the proceeds of the transaction.
ITEM 2. DESCRIPTION OF THE TRANSACTION
Furnish the following information for each transaction for which notice is being given:
(a) A statement as to whether notice is being given under Section 5005(a)(2)(a), (b), (c), (d), or (e) of the Act;
(b) A statement of the nature of the transaction;
(c) A statement of how the transaction meets the 'fair and reasonable' standard of Section 5005(a)(1)(a) of the Act; and
(d) The proposed effective date of the transaction.
ITEM 3. SALES, PURCHASES, EXCHANGES, LOANS, EXTENSIONS OF CREDIT, GUARANTEES OR INVESTMENTS
Furnish a brief description of the amount and source of funds, securities, property or other consideration for the sale, purchase, exchange, loan, extension of credit, guarantee, or investment, whether any provision exists for purchase by the insurer filing notice, by any party to the transaction, or by any affiliate of the insurer filing notice, a description of the terms of any securities being received, if any, and a description of any other agreements relating to the transaction such as contracts or agreements for services, consulting agreements and the like. If the transaction involves other than cash, furnish a description of the consideration, its cost and its fair market value, together with an explanation of the basis for evaluation.
If the transaction involves a loan, extension of credit or a guarantee, furnish a description of the maximum amount which the insurer will be obligated to make available under such loan, extension of credit or guarantee, the date on which the credit or guarantee will terminate, and any provisions for the accrual of or deferral of interest.
If the transaction involves an investment, guarantee or other arrangement, state the time period during which the investment, guarantee or other arrangement will remain in effect, together with any provisions for extensions or renewals of such investments, guarantees or arrangements. Furnish a brief statement as to the effect of the transaction upon the insurer's surplus.
No notice need be given if the maximum amount which can at any time be outstanding or for which the insurer can be legally obligated under the loan, extension of credit or guarantee is less than (a) in the case of non-life insurers, the lesser of 3% of the insurer's admitted assets or 25% of surplus as regards policyholders, or (b) in the case of life insurers, 3% of the insurer's admitted assets, each as of the 31st day of December next preceding.
ITEM 4. LOANS OR EXTENSIONS OF CREDIT TO A NON-AFFILIATE
If the transaction involves a loan or extension of credit to any person who is not an affiliate, furnish a brief description of the agreement or understanding whereby the proceeds of the proposed transaction, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase the assets of, or to make investments in, any affiliate of the insurer making such loans or extensions of credit, and specify in what manner the proceeds are to be used to loan to, extend credit to, purchase assets of or make investments in any affiliate. Describe the amount and source of funds, securities, property or other consideration for the loan or extension of credit and, if the transaction is one involving consideration other than cash, a description of its cost and its fair market value together with an explanation of the basis for evaluation. Furnish a brief statement as to the effect of the transaction upon the insurer's surplus.
No notice need be given if the loan or extension of credit is one which equals less than, in the case of non-life insurers, the lesser of 3% of the insurer's admitted assets or 25% of surplus as regards policyholders or, with respect to life insurers, 3% of the insurer's admitted assets, each as of the 31st day of December next preceding.
ITEM 5. REINSURANCE
If the transaction is a reinsurance agreement or modification thereto, as described by Section 5005(a)(2)(c)(2) of the Act, or a reinsurance pooling agreement or modification thereto as described by Section 5005(a)(2)(c)(1) of the Act, furnish a description of the known and/or estimated amount of liability to be ceded and/or assumed in each calendar year, the period of time during which the agreement will be in effect, and a statement whether an agreement or understanding exists between the insurer and non-affiliate to the effect that any portion of the assets constituting the consideration for the agreement will be transferred to one or more of the insurer's affiliates. Furnish a brief description of the consideration involved in the transaction, and a brief statement as to the effect of the transaction upon the insurer's surplus.
No notice need be given for reinsurance agreements or modifications thereto if the reinsurance premium or a change in the insurer's liabilities, or the projected reinsurance premium or change in the insurer's liabilities in any of the next three years, in connection with the reinsurance agreement or modification thereto is less than 5% of the insurer's surplus as regards policyholders, as of the 31st day of December next preceding. Notice shall be given for all reinsurance pooling agreements including modifications thereto.
ITEM 6. MANAGEMENT AGREEMENTS, SERVICE AGREEMENTS AND COST-SHARING ARRANGEMENTS.
For management and service agreements, furnish:
(a) A brief description of the managerial responsibilities, or services to be performed;
(b) A brief description of the agreement, including a statement of its duration, together with brief descriptions of the basis for compensation and the terms under which payment or compensation is to be made.
For cost-sharing arrangements, furnish:
(a) A brief description of the purpose of the agreement;
(b) A description of the period of time during which the agreement is to be in effect;
(c) A brief description of each party's expenses or costs covered by the agreement;
(d) A brief description of the accounting basis to be used in calculating each party's costs under the agreement;
(e) A brief statement as to the effect of the transaction upon the insurer's policyholder surplus;
(f) A statement regarding the cost allocation methods that specifies whether proposed charges are based on "cost or market." If market based, rationale for using market instead of cost, including justification for the company's determination that amounts are fair and reasonable; and
(g) A statement regarding compliance with the NAIC Accounting Practices and Procedure Manual regarding expense allocation.
ITEM 7. SIGNATURE AND CERTIFICATION
Signature and certification required as follows:
SIGNATURE
Pursuant to the requirements of Section 5005 of the Act, _________ has caused this application to be duly signed on its behalf in the City of _____________ and State of ________________ on the ____________ day of __________, 20 ____.
(SEAL)______________________________
Name of Applicant
BY__________________________________
(Name) (Title)
Attest:
(Signature of Officer)
(Title)
CERTIFICATION
The undersigned deposes and says that (s)he has duly executed the attached application dated _________, 20, for and on behalf of _______________________(Name of Applicant); that (s)he is the _____________________(Title of Officer) of such company and that (s)he is authorized to execute and file such instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.
(Signature)_______________________________
(Type or print name beneath)_______________________________
FORM E
PRE-ACQUISITION NOTIFICATION FORM
REGARDING THE POTENTIAL COMPETITIVE IMPACT
OF A PROPOSED MERGER OR ACQUISITION BY A
NON-DOMICILIARY INSURER DOING BUSINESS IN THIS
STATE OR BY A DOMESTIC INSURER
Name of Applicant
Name of Other Person
Involved in Merger or
Acquisition
Filed with the Insurance Department of Delaware
Dated:__________________________, 20 _______________
Name, title, address and telephone number of person completing this statement:
ITEM 1. NAME AND ADDRESS
State the names and addresses of the persons who hereby provide notice of their involvement in a pending acquisition or change in corporate control.
ITEM 2. NAME AND ADDRESSES OF AFFILIATED COMPANIES
State the names and addresses of the persons affiliated with those listed in Item 1. Describe their affiliations.
ITEM 3. NATURE AND PURPOSE OF THE PROPOSED MERGER OR ACQUISITION
State the nature and purpose of the proposed merger or acquisition.
ITEM 4. NATURE OF BUSINESS
State the nature of the business performed by each of the persons identified in response to Item 1 and Item 2.
ITEM 5. MARKET AND MARKET SHARE
State specifically what market and market share in each relevant insurance market the persons identified in Item 1 and Item 2 currently enjoy in this state. Provide historical market and market share data for each person identified in Item 1 and Item 2 for the past five years and identify the source of such data. Provide a determination as to whether the proposed acquisition or merger, if consummated, would violate the competitive standards of the state as stated in Section 5003A(b)(2)(d) of the Act. If the proposed acquisition or merger would violate competitive standards, provide justification of why the acquisition or merger would not substantially lessen competition or create a monopoly in the state.
For purposes of this question, market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state.
FORM F
ENTERPRISE RISK REPORT
Filed with the Insurance Department of the State of Delaware
By
Name of Registrant/Applicant
On Behalf of/Related to Following Insurance Companies
Name Address
Date:_______________, 20
Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Statement Should Be Addressed:
ITEM 1. ENTERPRISE RISK
The Registrant/Applicant, to the best of its knowledge and belief, shall provide information regarding the following areas that could produce enterprise risk as defined in Section 5001(4) of the Act, provided such information is not disclosed in the Insurance Holding Company System Annual Registration Statement filed on behalf of itself or another insurer for which it is the ultimate controlling person:
The Registrant/Applicant may attach the appropriate form most recently filed with the U.S. Securities and Exchange Commission, provided the Registrant/Applicant includes specific references to those areas listed in Item 1 for which the form provides responsive information. If the Registrant/Applicant is not domiciled in the U.S., it may attach its most recent public audited financial statement filed in its country of domicile, provided the Registrant/Applicant includes specific references to those areas listed in Item 1 for which the financial statement provides responsive information.
ITEM 2: OBLIGATION TO REPORT.
If the Registrant/Applicant has not disclosed any information pursuant to Item 1, the Registrant/Applicant shall include a statement affirming that, to the best of its knowledge and belief, it has not identified enterprise risk subject to disclosure pursuant to Item 1.
History
- 21 DE Reg. 724 (03/01/18)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 25 DE Reg. 1142 (06/01/22)
- 21 DE Reg. 724 (03/01/18)
- 25 DE Reg. 1142 (06/01/22)
- 19 DE Reg. 642 (01/01/16)
- 21 DE Reg. 724 (03/01/18)
- 23 DE Reg. 317 (10/01/19)
- 25 DE Reg. 1142 (06/01/22)
1900 Rates and Rating Organization
1901 Consent-to-rate Filings (Excess Rates) [Formerly Regulation 33]
18 Del. Admin. Code § 1901 Consent-to-rate Filings (Excess Rates) [Formerly Regulation 33]
1901 Consent-to-rate Filings (Excess Rates) [Formerly Regulation 33]
1.0 Purpose
1.1 The purpose of this Regulation is to provide definitive instructions among licensed agents and brokers and insurers with regard to securing and providing insurance for applicants under consent-to-rate filings, in accordance with 18 Del.C. §2509, at rates in excess of those filed with and approved by the Insurance Commissioner. This Regulation will facilitate the applicant/insured's efforts to obtain a policy of insurance, ensuring that these transactions are in the best interest of the insured, and further that the rating procedures are not excessive or unfairly discriminatory.
2.0 Authority
2.1 This Regulation is adopted pursuant to 18 Del.C. §314, and promulgated in accordance with the procedures specified in the Administrative Procedures Act, 29 Del.C. Ch. 64. 18 Del.C. §2509 of the Insurance Code states that "upon the written application of the insured stating his reasons therefor, filed with and approved by the Commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk."
2.2 Agents and brokers have an obligation under 18 Del.C. §1717, "Duties of licensed insurance personnel," in the conduct of their business "to insure that each transaction undertaken will, to the extent of the licensee's capabilities, meet the needs of the insurance-buying public."
3.0 Requirements for Filing
3.1 Pursuant to 18 Del.C. Ch. 25, and 18 Del.C. §2509 in particular, licensed insurers are authorized to issue policies of insurance at rates higher than those on file with the Department, for those risks which would not be accepted at filed and approved rate levels.
3.2 When a licensed agent and/or broker is unable to cover a risk at regular rates, the risk may be submitted to a licensed, appointed agent for any insurance company licensed to do business in Delaware, or to a licensed broker, for quotation of a rate in excess of that otherwise applicable.
3.3 If submitted to another agent or broker for quotation, that agent or broker must be licensed for that kind or line of insurance within which the risk would be placed.
3.4 Once a quote is received, the producer of record shall explain to the insured the coverage, the rates, and the circumstances necessitating an excess rate on the risk. Upon informing the insured of this information, the consent-to-rate action shall be initiated by completing the form prescribed by section 4.0.
3.5 Consent-to-rate forms shall be filed with the Insurance Department no later than fifteen calendar days after the effective date of the coverage. The consent-to-rate filing shall be issued in triplicate, one for the applicant, one for the producer's records, and the original for the Commissioner's records. All copies must be signed by the applicant indicating acknowledgment and acceptance of the rate proposed for the coverage.
3.6 All such policies shall be written subject to approval by the Commissioner. In the event a consent-to-rate filing is disapproved, the termination shall be on a pro rata basis, effective ten calendar days after receipt of the Commissioner's disapproval action.
3.7 In the event that the Commissioner does not approve the filing, the disapproval will specify in what respects he finds the filing to be unacceptable. The notice of disapproval shall be provided to the producer, the insurer, and the insured.
4.0 Consent-To-Rate Application Form
4.1 The application for approval of a rate on a risk in excess of that provided in a filing otherwise applicable shall be submitted in the format attached hereto, and in accordance with section 3.5 above.
5.0 Applicability
5.1 This Regulation applies to those lines of insurance subject to regulatory jurisdiction under 18 Del.C. §2502(a). This Regulation does not apply to surplus lines insurance. The terms of Insurance Department Bulletin 79-1 do not apply to this Regulation.
6.0 Severability
6.1 If any provision of this Regulation or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Regulation which can be given effect without the invalid provision or application, and to that end the provisions of this Regulation are severable.
7.0 Effective Date
7.1 All consent-to-rate requests must be submitted, as described in this Regulation, effective on October 15, 1980.
8.0 Penalty
8.1 Agents and/or brokers who fail to comply with the terms of this Regulation shall be subject to the provisions of 18 Del.C. §1732 and the penalties therefor.
9.0 APPENDIX
CONSENT-TO-RATE FILINGS
Note: The following is a format to be used by agents and brokers requesting approval for "excess" rates. Forms will not be provided by the Delaware Insurance Department.
CONSENT-TO-RATE APPLICATION FORMAT
TO: INSURANCE COMMISSIONER
STATE OF DELAWARE
841 SILVER LAKE BOULEVARD
DOVER, DELAWARE 19904
ATTN.: RATING SECTION
Pursuant to 18 Del.C. §2509, and in accordance with Regulation 1901 (Formerly Regulation 33), the following information is submitted, seeking approval for the coverage at the rate indicated.
9.1 RISK IDENTIFICATION
9.1.1 Name of Insured/Risk_________________________________________
Address_____________________________________________________
9.1.2 The location of the risk_______________________________________ _____________________________________________________________
9.1.3 The type of insurance (description of coverage to be provided)
9.1.4 Limits of liability__________________________________________
9.1.5 Dates of coverage: From________________ To________________
9.1.6 Insurer providing coverage___________________________________
9.1.7 Rates:
-
Total manual rate for this risk $_________________
-
Total proposed rate for this risk ‘ $_________________
9.1.8 For personal lines:Was this risk submitted for consideration by the Delaware automobile Insurance Plan (Assigned Risk)/Delaware FAIR Plan?____________________________________
If not, state reason why not____________________________________
9.2 PRODUCER'S STATEMENT
9.2.1) Name of Producer____________________________________________
9.2.2 Business Address____________________________________________
9.2.3 Telephone Number___________________________________________
9.2.4 Description of circumstances which cause the risk to be regarded as an other than ordinary risk subject to regular rates as filed.
(Be specific in this statement. Remarks in the nature of "class of business" or "type of risk" will not be adequate to review the request for an excess rate)
PRODUCER'S CERTIFICATION
Pursuant to Regulation 1901 (Formerly Regulation 33), I certify that I have informed the applicant/risk to be insured of the circumstances regarding the risk, and, further, that I have informed the insured of the excess rate and of the premium to be applied, as reflected above, by________________________, for
(Name of Insurer)
covering the risk.
Date:_________________ ____________________________________
Signature
(Typed or Printed Name)
9.3 Insured’s Statement
I have been advised of and understand the contents of this application for a consent-to-rate in excess of the rate otherwise applicable. I request that the proposed rate and resulting premium be approved, pursuant to 18 Del.C. §2509.
Date:_________________ ____________________________________
Signature
(Typed or Printed Name)
Date:_________________ ____________________________________
Witness Signature
(Typed or Printed Name)
1902 Private Passenger Automobile Insurance Rating Information [Formerly Regulation 34]
18 Del. Admin. Code § 1902 Private Passenger Automobile Insurance Rating Information [Formerly Regulation 34]
1902 Private Passenger Automobile Insurance Rating Information [Formerly Regulation 34]
1.0 Authority
1.1 This rule is promulgated pursuant to 18 Del.C. §314, which authorizes the Insurance Commissioner to ". . . make reasonable rules and regulations necessary for or as an aid to the administration or effectuation of any provision of this title," and has been adopted in accordance with the procedures of the Administrative Procedures Act, 29 Del.C. §§6411—6418.
2.0 Purpose
2.1 The fundamental purpose of this Regulation is to require insurance companies which provide motor vehicle insurance on private passenger automobiles registered, or principally garaged, in the State of Delaware, to provide to their insureds policies and renewal certificates which reflect information pertaining to the insurance coverage provided, and to require the submission of an accompanying rating information form which details to the insured the basis for rating the insured's automobile.
3.0 Form Requirements
3.1 As of the effective date of this regulation section, every private passenger automobile insurance policy and/or renewal certificate shall contain at least the following information:
3.1.1 coverages provided;
3.1.2 the applicable limits of liability and deductibles thereto;
3.1.3 the classification of the automobile(s); and
3.1.4 the rating territory.
3.2 As of the effective date of this regulation section, each private passenger automobile insurance policy and/or renewal certificate shall be accompanied by a "rating information form" which shall provide a detailed explanation of the classification determination, e.g., use of automobile, age, sex, marital status, driver training, student discount, etc. In addition, if a "safe driver" plan, or any other driver plan is used in premium determination, the rating information form shall provide succinct, but complete, description of such plan, stating under what circumstances points will not be assigned if accidents or motor vehicle law violations occur.
4.0 Filing Requirements
4.1 Each licensed or authorized rating organization, and each casualty insurance company licensed to transact vehicle insurance which files its own private passenger automobile rates, shall file with the Insurance Department the "rating information form" format the organization or company proposes to utilize. The rating information form shall be accompanied by the rating organization's or company's manual pages which set forth the present private passenger automobile classification and the individual driver record plan.
4.2 Whenever subsequent changes to the private passenger automobile classification or to the driver record plan are filed and made effective, a revised rating information form shall also be filed to be used coincident with the effective date of the revision or change.
5.0 Failure to Comply
5.1 Failure to comply with the provisions of this Regulation shall be deemed to be a violation of a Commissioner's Order, and shall subject the persons in violation to the penalties prescribed in 18 Del.C. §§2307, 2308, and/or §§520, 106.
6.0 Effective Dates
6.1 The filing of the rating information form and manual pages with classification and driver record plans, pursuant to section 4.0 above, shall be made on or before June 1, 1980.
6.2 The operative requirements for providing policy and certificate information and for submitting the accompanying rating information form to insureds, pursuant to section 3.0 above, shall be effective as of September 1, 1980.
1903 Waiver of Filing Requirements [Formerly Regulation 43]
18 Del. Admin. Code § 1903 Waiver of Filing Requirements [Formerly Regulation 43]
1903 Waiver of Filing Requirements [Formerly Regulation 43]
1.0 Reference
1.1 18 Del.C. §2505 which permits the Commissioner to waive filing requirements.
1.2 18 Del.C. §1712 which requires insurers to file policy forms and related documents.
2.0 Background
2.1 The Insurance Commissioner has determined that competition between insurers will be enhanced and, therefore, the public will benefit if filing requirements are waived for certain large risks. Section 1.1 provides authority for such waiver.
3.0 Filing Requirements Suspended
3.1 Effective December 30, 1987, and thereafter, the existing requirements to file rates, rating plans, classification plans, supporting or related documents, are suspended for any policy issued in Delaware or on Delaware risks which produce an annual premium of $100,000 or more except:
3.1.1 workers' compensation policies; and
3.1.2 medical malpractice policies; and
3.1.3 any form of group policy where certificates of insurance are issued and which presently requires filing in accordance with 18 Del.C. Ch. 25.
3.2 The requirement to file policy forms as established by section 1.2 remains in effect.
3.3 Each insurer issuing a policy in accordance with this Regulation shall establish and maintain a complete record of the rates employed, rate manuals, classification plans and all related materials needed to determine the rate developed for the policy.
3.4 The records shall be readily available for inspection by the Commissioner, the policyholder, or any person interested.These records shall be maintained for a period of three years after policy cancellation.
4.0 Effective Date
4.1 This Regulation shall become effective October 30, 1983, and shall remain in effect until rescinded.
2000 Premium Finance Companies
2001 Insurance Premium Finance Companies [Formerly Regulation 21]
18 Del. Admin. Code § 2001-1.0 Application for License
1.1 Each application for an original license as an Insurance Premium Finance Company shall be made on Form No. PF‑1, entitled "Application for License as an Insurance Premium Finance Company," attached hereto as Exhibit A, and incorporated herein. It shall be accompanied by all required documents and the required annual license fee promulgated at 18 Del.C. §§701 and 4802, which shall not be pro‑rated.
1.2 Each application for a renewal as an Insurance Premium Finance Company shall be made prior to January 1 of each year on Form No. PF‑2, entitled "Application for Renewal License as an Insurance Premium Finance Company," attached hereto as Exhibit B, and incorporated herein. The renewal application shall be accompanied by the renewal fee promulgated at 18 Del.C. §§701 and 4802.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-2.0 Biographical Questionnaire
2.1 Each application for an original license as an Insurance Premium Finance Company shall be accompanied by Form No. PF‑3, entitled "Biographical Questionnaire," attached hereto as Exhibit C and incorporated herein. A separate form shall be completed and executed:
2.1.1 In the case of a sole proprietor, by the sole proprietor; or
2.1.2 In the case of a partnership, by each partner; or
2.1.3 In the case of a corporation, by each officer, director, and owner of more than 10% of the outstanding shares of stock.
2.2 Biographical Questionnaires need not be filed with an application for renewal of a license unless changes have taken place in the business organization involving individuals who have not previously filed such questionnaire.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-3.0 Display of License
The licensee shall conspicuously display the license issued by the State Insurance Commissioner in the place of business.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-4.0 Termination and Transfer of Licenses
4.1 Death of a proprietor shall terminate the license; provided, however, that if notice of such death is furnished to the Commissioner and the Commissioner is satisfied, by examination or otherwise, that the interests of insureds and insurers have been adequately protected, he may issue a temporary license:
4.1.1 To the executor or administrator of the estate of a deceased proprietor; or
4.1.2 To a surviving next of kin of such deceased proprietor if no administrator or executor has been appointed or qualified, but any such license issued shall be revoked upon issuance of a license to an administrator or executor under subsection 4.1.1 of this regulation.
4.2 Death or withdrawal of a partner shall suspend the license if the licensee is a partnership; provided, however, that if notice of such death or withdrawal is provided to the Commissioner within 30 days of the event and the Commissioner is satisfied by examination or otherwise, that the interests of insureds and insurers have been adequately protected, he may reinstate the suspended license.
4.3 Licenses are not transferable, except that the withdrawal of a partner from a licensed partnership or the admission of a new partner shall not require a new license for the new partnership provided that the new partnership complies with Section 4.0 of this regulation.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-5.0 Changes in Composition of Licensee
When a partner retires from a licensed partnership or a new partner is admitted, or when a person ceases to be an officer, director, or 10% stockholder of a licensed corporation or a person becomes an officer, director or 10% stockholder of a licensed corporation, the Commissioner shall, within ten (10) days after the event, be advised of the facts in detail by letter. The letter shall be accompanied by a duly completed Biographical Questionnaire (on Form No. PF‑3) of any new partner or any new officer, director or 10% stockholder. Each licensee shall supply such additional information as the Commissioner may request.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-6.0 Changes in Condition
6.1 If any licensee or any person who is a partner of a licensee or who is an officer, director, or 10% stockholder of a licensee shall be:
6.1.1 Arrested or indicted for or convicted of any crime (other than a misdemeanor resulting from the operation of a motor vehicle); or
6.1.2 Refused a license or suffers a revocation or suspension of a license as an insurance premium finance company or an insurance agent or agency in any other jurisdiction; or
6.1.3 Be declared bankrupt or otherwise seek the protection of the National Bankruptcy Act or make an assignment for the benefit of creditors;
6.1.4 The Commissioner shall, within ten (10) days after the event, be advised of the facts in detail by letter.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-7.0 Separation of Records
If the licensee engages in any other business, the records relating to the insurance premium finance business shall be kept separate from the records of any other business.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-8.0 Preservation of Records
Every insurance premium finance contract and all documents relating thereto, and copies or form numbers of all documents delivered to an insured, shall be retained so as to be readily available for inspection by the Commissioner at any time. Said records shall be preserved intact for at least three (3) years after making final entry in respect to any premium finance contract and may be maintained and preserved in photographic form.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-9.0 Notice to the Insurer
The licensee shall notify the insurer that a premium finance contract was signed and the premium paid to an agent, agency or broker within twenty (20) days of the date the premium finance contract is accepted by the licensee.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-10.0 Description of Insurance Contracts Where Policy Information is not Immediately Known
10.1 In case of an application to the Delaware Automobile Insurance Plan where the policy information is not immediately available, the premium finance contract shall show "Delaware Automobile Insurance Plan" and all descriptive information pertaining to the policy which is known.
10.2 In other instances where complete policy information is not immediately available, the premium finance contract shall show all descriptive information pertaining to the policy which is known.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-11.0 Filing of Premium Finance Contracts — Deviation for Specific Transactions
11.1 All forms(s) of the premium finance contract as set forth in 18 Del.C. §4806 shall be filed with the Commissioner.
11.2 Every such filing shall be made not less than 30 days in advance of any such delivery. At the expiration of such 30 days the form so filed shall be effective unless prior thereto it has been accepted for filing or disapproved by order of the Commissioner. Filing of any such form by the Commissioner shall constitute a waiver of any unexpired portion of such waiting period. The Commissioner may extend by not more than an additional 30 days the period within which he may so affirmatively acknowledge or disapprove any such form, by giving notice to the filing party of such extension before expiration of the initial 30‑day period. At the expiration of any such period as so extended, and in the absence of such prior acceptance for filing or disapproval, any such form may be placed in use. The Commissioner may at any time, after notice and for cause shown, withdraw any such filing or effectiveness.
11.3 An order of the Commissioner disapproving any such form or withdrawing a previous effectiveness shall state the grounds therefor and the particulars thereof in such detail as reasonable to inform the filing party thereof. Any such withdrawal of a previously effective form shall be operative at expiration of such period, not less than 30 days after the giving of notice of withdrawal, as the Commissioner shall in such notice prescribe.
11.4 Appeals from orders of the Commissioner disapproving any such form or withdrawing a previous effectiveness may be taken as provided in 18 Del.C. §§327 through 333.
11.5 Upon the written application of the licensee, stating his reasons therefor, and after having been approved and filed by the Commissioner, a contract or form deviating from that already on file with the Commissioner may be used for any specific transaction.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-12.0 Licensee as Fiduciary
All payments less any commissions and fees tendered to a licensee are to be considered fiduciary funds held in trust for the insured and not in trust for the insurance company insofar as unearned premiums, fees and charges are concerned if the same are not directly owed to the licensee.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-13.0 Excessive Rates
13.1 The borrower shall not be charged premiums in excess of those filed with the Commissioner.
13.2 If a policy is written for the full policy term, i.e., either 6 months or 1 year and a reduced premium results, the borrower must receive full benefit of such reduction in premium.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-14.0 Distribution Agreement
Each loan shall be supported by a Disclosure Statement in conformity with Federal and Delaware Statutes.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-15.0 Cancellation Notice Requirement
Pursuant to the requirements of notice of cancellation to the insured contained herein, all such notices shall be transmitted by certified mail as defined in 18 Del.C. §3903(a)(4).
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-16.0 Service Charge
The service charge of $9 per $100 per year is to be calculated as an add‑on charge.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-17.0 Prepayment of Debt
Notwithstanding any provisions of the contract to the contrary, any unpaid balance may be paid at any time, without penalty, and any unearned service charge shall be refunded based on the "Rule of 78's" with the exception that any initial charge will not be refunded and rebates of less than $1 need not be made.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-18.0 Producer's Commission
18.1 The payment of commissions on the sale of insurance policies and the return of unearned commissions upon the cancellation of insurance policies prior to expiration is a matter of agreement or contract between the producer (agent or broker) and the insurer. The insured or licensee is not a party to such agreement and is not obligated or responsible in any way for the payment of earned commissions or for the return of earned commissions. An insurer may not pay or delegate its responsibility for paying commissions to a licensee. If such an attempt is made by an insurer it must be immediately reported to the Commissioner by the licensee. A licensee, in the event of cancellation, shall not accept the return of net unearned premiums or promise to hold the insurer harmless for failure to pay the difference between that and the gross unearned premium.
18.2 After an insurance policy is cancelled, 18 Del.C. §4809 mandates that the insurer shall return the gross unearned premium. By remitting a net unearned premium to its producer who forwards same to the licensee, the insurer is in violation of said section. Thus, the insurer has illegally imposed the burden upon the licensee of attempting to collect the balance of the unearned premium from the producer who may not be responsible therefor.
18.3 A broker has earned his commission in full when the policy has been issued and the premium paid. Under these circumstances the broker is under no obligation to make any refund of a portion of his commission to the insurer unless the broker has made an express agreement to refund a portion of his commission in the event of cancellation or where the policy is an audit policy, or where the broker has induced cancellation.
18.4 The right of a duly appointed agent to retain commissions under like circumstances is dependent upon the terms of the agency contract between himself and the appointing insurer.
18.5 The following is the procedure to be employed by insurers for returning gross unearned premiums to a licensee subsequent to cancellation of insurance policies:
18.5.1 Whenever a financed insurance contract is cancelled, the insurer shall promptly return whatever unearned premiums are due under the insurance contract to the licensee, either directly or via the agent, agency, or broker placing the insurance, for the account of the insured or insureds; provided, however, that if the insurer elects to return such unearned premiums to the licensee for the account of the insured or insureds via the agent, agency or broker placing such insurance, the insurer shall be directly responsible to the licensee for all unearned premiums due to the licensee under the contract which are not properly returned to the licensee within 90 days of date of the policy cancellation.
18.6 All unearned premiums must be handled and transmitted in a reasonable and expeditious manner. Any unreasonable delay by the insurer or producer, even if payment to the licensee is achieved within 90 days of policy cancellation, will be subject to appropriate action by the Commissioner. Any unreasonable delay in transmitting funds due an insured by a licensee will be subject to the sanctions of 18 Del.C. §4804.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-19.0 Delinquencies and Cancellation Charges
A premium finance agreement may provide for the payment by the insured of a delinquency charge per installment of at least $1 but which may not exceed a maximum charge of 5% of the delinquent installment of $5, whichever is less, for each installment which is in default for a period of 10 days or more. If the default results in the cancellation of any insurance contract listed in the agreement, the agreement may provide for the payment by the insured of a cancellation charge equal to the difference between any delinquency charge imposed in respect to the installment in default as permitted hereinabove and the sum of $5. No other penalties may be imposed.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-20.0 Application of Unearned Premiums
20.1 Whenever a financed insurance contract is cancelled, the insurer, on written notice of such cancellation, shall promptly return whatever gross unearned premiums are due under the insurance contract to the licensee, either directly or via the agent, agency or broker placing the insurance, for the account of the insured or insureds.
20.2 In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the licensee may refund such excess to the insured via his insurance agent, agency or broker, provided that no such refund shall be required if it amounts to less than $1.
20.3 When a financed insurance contract is cancelled, the insurer shall promptly file with the licensee and producer a report setting forth an itemization of the gross unearned premiums under such policy, as of cancellation, and the licensee shall promptly file with the agent, agency or broker placing the insurance, a report setting forth an itemization of the unearned service charges under such financed contract. A licensee must accept only gross unearned premiums from the insurer.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-21.0 Extension or Deferral Charge
21.1 The lender may at the request of the borrower, extend or defer the scheduled due dates of all or any part of any installment or installments, and may restate the amount of the installments and the time schedule therefor. The amount that may be charged to the borrower for such extension or deferral, shall not exceed the equivalent of one percent (1%), per month, simple interest on the amount of the installment, or installments, or part thereof, extended or deferred, for the period of such extension or deferral.
21.2 Such period shall not exceed the period from the date when such extended or deferred installment or installments, or part thereof, would have been payable in the absence of such extension or deferral, to the date when such installment or installments, or part thereof, are made payable under the agreement of extension or deferment.
21.3 Notwithstanding any prior provisions, a minimum charge of $1 may be made.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
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- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-22.0 Collection Fee
Attorneys' fees for collection as allowed by law, and so included in the evidence of debt and other supporting papers, shall not be charged to the borrower unless the account is actually processed by an attorney not an employee of the lender.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-23.0 Accounting System Requirements
23.1 The lender shall maintain an adequate accounting system exhibiting all transactions and operations of his business. Further, the records of the assets and liabilities of the lender shall be maintained so as to be available for examination at any time.
23.2 The lender shall maintain records in a manner to facilitate auditing of all charges and all credits to individual borrowers.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-24.0 Minimum Requirements for Books and Records
24.1 Each licensee office shall open and maintain the following books and records. These are the minimum books and records required by the Department and shall be kept on a current basis. For establishing and maintaining these required records, there may be suitable variations to accommodate individual accounting systems, including automated systems, provided the required data is kept on a current basis and is readily available to the Department's Examiners.
24.1.1 Loan Register — This shall be a book (bound or loose leaf) of original entry and permanent records, and shall show the account number, date of loan, name of borrower, service charge and amount of loan. The loans shall be listed in the register in numerical order in each office and all numbers shall be accounted for.
24.1.2 Individual Accounts with Borrowers — A card or ledger sheet shall be kept for each borrower and shall show the name and address of the borrower, the loan number, face amount of loan, date of loan, service charge and the amounts of all other charges, terms of repayment and the actual date of receipt of payment of principal and charges, and shall be kept in such manner as to show at once the balance due on principal. If an error is made in an entry, a line shall be drawn through the improper entry and the correct entry made on the following line. No erasures of bookkeeping entries are to be made on the card or ledger sheet.
24.1.3 File of All Original Paper — All obligations and disclosure forms signed by the borrower and taken in connection with loans made shall bear the loan number and shall be maintained in one envelope or file for each borrower, and their location indicated for the purpose of inspection by the Department.
24.1.4 Cash Book or Equivalent Record — All transactions involving either the receipt or disbursement of any amount whatsoever shall be entered in this record. Details of disbursements to or for account of borrowers shall be itemized, either in the cash book or upon a separate statement kept and maintained in the file of original papers. Separate columns shall be provided for amounts received as payments on principal, and on charges and on any fees that shall be collected. Such fees shall be described and identifiable. The cash book or equivalent record shall be a permanent record of all details of receipts from borrowers, but other receipts and disbursements of the office, at the option of the licensee, may be kept in this cash book or in other acceptable accounting records.
24.1.5 Index of Borrowers, Endorsers, Co‑Makers, Etc. ‑ An index of all borrowers, spouses and insurance companies shall be maintained with respect to all persons obligated. Such index cards shall be filed alphabetically. The numbers of all loans to such individuals shall be entered thereon in order as to dates made, loan number, amount loaned, and date of final payment. A separate index file card shall be maintained for each borrower. Husband and wife may be entered on the same card.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-25.0 Examination Expense
25.1 The expense of an examination of a licensee or of any person connected therewith shall be borne by that company or person. "Person" shall include any management or control of a finance company under contract.
25.2 Such company or person examined shall promptly pay the examination expense upon presentation by the Commissioner or his Examiner of a reasonably detailed written account thereof.
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
18 Del. Admin. Code § 2001-26.0 Annual Report
Prior to March 1 of each year, each licensee shall furnish to the Commissioner a completed Form No. PF‑4 entitled "Annual Report of Insurance Premium Finance Companies," attached hereto as Exhibit D and incorporated herein.
STATE OF DELAWARE‑INSURANCE DEPARTMENT
Exhibit A
INSURANCE DEPARTMENT
STATE OF DELAWARE
1351 WEST NORTH ST., SUITE 101
DOVER, DE 19904
APPLICATION FOR LICENSE AS AN INSURANCE PREMIUM FINANCE COMPANY
TO THE INSURANCE COMMISSIONER OF THE STATE OF DELAWARE:
Application is hereby made for a license to operate an insurance premium finance company.
Company Name: _____________________________________
Address at which applicant will conduct business under license: ___________________
Address of principal place of business within State: _______________________
Address at which all books, records, accounts and documents relating to business in this State will be kept: ________________________________
If applicant is a foreign proprietorship, partnership, or corporation, address of principal place of business: _______________________________
Applicant is
( ) Individual Proprietor
( ) Partnership
( ) Corporation
( ) Other (Specify)
If applicant is a corporation (Attach Certificate of Incorporation)
State of Incorporation: _______________________
Date of Incorporation: _______________________
If a foreign corporation, name and address of Agent for Service of Process in Delaware: _____________________________________
If applicant has engaged previously in the same or a similar business, provide details, including name(s), address(es), and date(s) first commenced: ___________________________
State whether applicant is, directly or indirectly, under common ownership, control, or management or is otherwise affiliated or associated with any insurer, or any person, firm or corporation having or exercising control of an insurer.
_ YES _ NO
If "yes," supply complete details: _________________________________________________
If applicant is a partnership
State whether general partnership or limited partnership: __________________
Give names and addresses of all partners specifically identifying limited partners, if any: _____________________________________________________________________
If applicant is a corporation, trust or other entity, other than a partnership, of which ownership is manifested by shares. identify each type of shares and state:
Number of shares authorized: ___________________
Number of shares outstanding ___________________
Par Value: _____________________
Give name, residence address, title and number and per cent of shares directly or beneficially owned by every officer and director and every person, firm or corporation owning or controlling 10% or more of the shares of each type: _______________________________
NAME AND RESIDENCE ADDRESS TITLE NUMBER OF SHARES (%)
Attach current, certified financial statement, which is as of the following dates:
In addition to an insurance premium finance company, the following additional business will a conducted at the address of the applicant: ___________________________________
If applicant, or any subsidiary, affiliated, or associated insurance premium finance company, has more than one place of business, give the name and address of each:
If the appropriate answer is "Yes" to any of the following questions concerning the applicant, manager, any officer, director, owner or beneficial owner of 10% or more of the shares, complete details must a given including name, address, disposition of charges, etc.
Have any of the above:
Applied previously in this State for a license to engage in the business of insurance premium financing?
_ YES _ NO
Received a rejection, revocation or suspension of license under laws of this State governing insurance premium or other consumer financing?
_ YES _ NO
Received a rejection, revocation or suspension under an insurance premium financing law or regulation, or si milar law or regulation in any other State?
_ YES _ NO
Received a revocation or suspension of any license, been convicted or entered a plea of guilty, or nolo contendere, with respect to any law or regulation relating to the business of insurance?
_ YES _ NO
Been arrested, indicted, convicted, entered a plea of guilty or nolo contendere with respect to a State or Federal offense in this or any other State?
_ YES _ NO
Been placed in voluntary or involuntary bankruptcy, receivership, trusteeship, or conservator ship?
_ YES _ NO
Do any of the above now hold a license to engage in the business of insurance premium financing or a similar or related business in any State, District or Territory of the United States?
_ YES _ NO
Form PF‑I Delaware
REGULATION NO. 21‑INSURANCE PREMIUM FINANCE COMPANIES
Exhibit B
INSURANCE DEPARTMENT
STATE OF DELAWARE
1351 WEST NORTH ST., SUITE 101
DOVER, DE 19904
APPLICATION FOR RENEWAL LICENSE AS AN INSURANCE PREMIUM FINANCE COMPANY
TO THE INSURANCE COMMISSIONER OF THE STATE OF DELAWARE:
Licensee's Name: ______________________________________________________
Address: _____________________________________________________________
NOTE: The name and address of the licensee as it appears above shall be the same as it presently appears on your license. If any of this information is incorrect, fill in the correct information in the space provided below:
Name: ________________________________________________________
Address: ______________________________________________________
This is a renewal of license number _________, for the year __________
If this is a corporation, give name and address:______________________________
Give names of officers:
President ________________________
Secretary ________________________
Treasurer ________________________
If this is a partnership or proprietorship, give names of partners or proprietor:
Attached is check in the amount of $300 for annual license fee. (Check should be made payable to "Insurance Commissioner, State of Delaware.")
Affidavit
County ______________________
State ________________________
I, _________________________________________ the undersigned, being the ______________________________________________________________________ of the
(Title, if a corporation)
Name of the insurance premium finance company) swear, (or affirm), that to the best of my knowledge and belief, the statements contained in this application, including the accompanying statements (if any), are true and complete.
By ____________________________________
Title ___________________________________
Subscribed and sworn to before me this day of________, 19_________
Notary Public
Form PF‑2
Delaware
Exhibit C
INSURANCE DEPARTMENT
STATE OF DELAWARE
1351 WEST NORTH ST., SUITE 101
DOVER, DE 19904
BIOGRAPHICAL QUESTIONNAIRE FOR PREMIUM FINANCE COMPANIES
Company Name: _________________________________________
Office Held: _________________________________________
Individual's Name: _________________________________________
Date of Birth: ______________________ Place of Birth: _____________________
Current Residential Address: _________________________________________
Current Business Address: _________________________________________
Residential Address for Past Five Years: ________________________________
Education (Beyond High School):
Employment History. (Beginning with current employer, trace back complete history. Show dates of employment, name and address of company, position held, and duties.)
List any other companies which you now serve, or within the past five years have served, as either an officer or director. (List company, position and dates.)
Have you ever been charged with a criminal violation (other than a traffic offense) at any time? If "yes," provide complete details.
Have you ever held any other license (except a driver’s license)
_ YES _ NO
If "yes," provide details as to any such license which was ever suspended, revoked, or renewal refused.
Have you ever been charged by any regulatory agency, whether City, County, State or Federal, with having violated any laws, rules or regulations or has any company been so charged, allegedly as a result of any action or conduct on you part?
_ YES _ NO
If "yes," as to either, submit full details including disposition of charge.
Date: _____________________ Signature ______________________________
State of_______________)
ss
County_______________)
On the ____________day of ________ , 20 __, before me, a Notary Public in and for the State and County aforesaid, personally appeared ________________________to me known to be the individual described in and who executed the foregoing and did make oath in due form of law that the matters and facts contained in the foregoing resume are true and correct.
Notary Public
PF‑3
Delaware
EXHIBIT D
INSURANCE DEPARTMENT
STATE OF DELAWARE
1351 WEST NORTH ST., SUITE 101
DOVER, DE 19904
ANNUAL REPORT OF INSURANCE PREMIUM FINANCE COMPANIES FOR THE YEAR ENDED DECEMBER 31, 20__
DUE ON OR BEFORE MARCH 1st
NOTE: Where insufficient space is provided to set forth the facts adequately, annex a schedule giving the details.
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READ THE INSTRUCTIONS CAREFULLY BEFORE MAKING UP THIS REPORT
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Schedule A
General
Name of Licensee: __________________ License # ________________________
Address, Street and City: _______________________________________________
State Whether Corporation, Partnership, Association or Individual: ______________
Date Licensee Began Business in Delaware: _________________________________
Business Other Than Insurance Premium Finance Business Conducted in Same Offices:
Name of Principal Officers at Close of Year Covered by this Report:
President ___________________________
Secretary __________________________
Treasurer ________________________
Owner ____________________________
Partners ___________________________
SCHEDULE B
Balance Sheets ‑ As Per Books
As at December 31, 20__ and December 31, 20__
Assets
End of Present Year
End of Previous Year
(7)Loans Receivable
(8)Cash in Office and in Banks
(9)Accounts Receivable:
(A)Parent and/or Affiliated Companies
(B)Other
(10)Notes Receivable ‑ Other
(11) Deferred Charges and Prepaid Expenses
(12)Fixed Assets (Less Reserve for Depreciation and Amortization
(13)Other Assets:
(A)Parent and/or Affiliated Companies
(B)Other
(C)All Other Assets
(14) Total Assets
LIABILITIES AND CAPITAL
End of
Present Year
End of Previous Year
(15) Accounts and Notes Payable:
(A)Banks
(B)Due to parent Company and/or Affiliated Companies
(C)Other
(16)Bonds
(17)Other Liabilities:
(A)Accrued Expenses
(B)All Other Liabilities
(18) Expenses Reserves:
(19) Deferred Income:
(A)Unearned Interest and Fees ‑ Loans Receivable
(B)All Other Deferred Income
(20)Branch Office Capital
(21)Net Worth (If Proprietorship or Partnership)
(22)Capital Stock (if Corporation)
(23)Paid in Surplus
(24)Earned Surplus
(25)Total Liabilities and Capital
SCHEDULE C
Statement of Income and Expense
For Period From January 1, 20__ and December 31, 20__
GROSS INCOME DERIVED FROM INSURANCE PREMIUM FINANCE BUSINESS End of Present Year End of Previous Year
(26)Earned Interest Less Refunds
(27)Earned Fees Less Refunds
(28)Collection on Loans Previously Charged Off
(29)All Other Income From Insurance Premium
Finance Business (Attach Schedule)
(30)Total Gross Income Derived from Insurance
Premium Finance Business (Items 26 to 29)
EXPENSES OF CONDUCTING INSURANCE PREMIUM FINANCE BUSINESS
End of
Present Year
End of Previous Year
(31)Advertising
(32)Automobile Expense
(33)Bad Debts, or Reserve for Bad Debts
(34)Credit and Collection Expense
(35)Depreciation and Amortization of Fixed Assets
(36)Donations, Dues and Subscriptions
(37)Expense, Sundry
(38)Heat, Light and Water
(39)Insurance
(40)Postage and Express
(41)Legal and Auditing Expense
(42)Printing, Stationery and Supplies
(43)Recording Fees ‑ Net
EXPENSES OF CONDUCTING INSURANCE PREMIUM FINANCE BUSINESS
End of Present Year
End of Previous Year
(44) Rent
(45) Salaries
(46) Supervision and Administration
(When not Allocated to Other Items)
(47) Taxes
(A) License Taxes
(48) Telephone and Telegraph
(49) Travel
(50) Other Expenses of Conducting Business
Premium Finance Business (Explain):
(A)
(B)
(51) Total Expenses of conducting Business
Premium Finance Business (Items 31 to 50)
(52) Total Net Earnings Derived From Insurance Premium Finance Business for the Period (Before Deducting Interest on Borrowed Funds and Federal and State Taxes on Income) (Item 30 Less Item 51)
SCHEDULE D
Reconciliation of Surplus or Net Earnings
For Period From ______, 20 and ___________, 20 ___________
SURPLUS, ADDITIONS AND DEDUCTIONS
End of Present Year
End of
Previous Year
(53) Surplus Balance at End of Previous Period,
for Books (Item 24)
ADDITIONS:
(54) Total Net Earnings Derived From Insurance Premium Finance Business For The Period (Item 52)
(55) Other Credits to Surplus for the Period
(Attach Explanation)
(56) Total Additions for the Period
(Item 54 to 55)
DEDUCTIONS:
(57) Federal and State Taxes on Income
(58) Interest Paid
(59) Amortization of Financing Cost
(60) Dividends Paid During the Period
(61) Other Charges to Surplus for the Period:
(A) Transfer of Earnings to net Worth or
Home Office Control
(B) All Other Charges
(62) Total Deductions for the Period
(Item 57 to 61)
(63) Net Additions to Previous Periods Surplus
Balance (Item 56 minus Item 62)
(64) Surplus Balance at End of Present Period ‑ As Per Books (Item 53 Plus Item 63) (This amount should be the same as Item 24)
AFFIDAVIT
County _____________________
State _______________________
I, _______________________ the undersigned, being the __________________________
(Title, if a corporation)
of the ___________________________________________
(Name of the insurance premium finance company) swear, (or affirm), that to the best of my knowledge and belief, the statements contained in this report, including the accompanying schedules and statements (if any), are true and that the same is a true and complete statement.
By ______________________________________
Title ____________________________________
Subscribed and sworn to before me this _____ day of _______, 20
Notary Public
Form PF‑4
Delaware
History
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
- 23 DE Reg. 129 (08/01/19)
2100 Miscellaneous Provisions
2101 Marine and Transportation Insurance, Amplified Definition
18 Del. Admin. Code § 2101 Marine and Transportation Insurance, Amplified Definition
2101 Marine and Transportation Insurance, Amplified Definition [Formerly Regulation 32]
1.0 Authority
1.1 This Regulation is adopted and promulgated pursuant to 18 Del.C. §§313, 314, and 29 Del.C. §§6411 through 6418.
2.0 Purpose
2.1 This Regulation is designed to enumerate the various risks and coverages which may properly be classified or identified under 18 Del.C. §907, ..."Marine and transportation,' 'wet marine,' insurance defined." This Regulation is to be read in conjunction with 18 Del.C. §907, and the definition included herein should not be construed as meaning that the listed risks and coverages are solely marine transportation in all instances. Certain insurance coverages may come within definitions of two or more kinds of insurance (as set forth in 18 Del.C. Ch. 9) and the inclusion of such coverage within one definition does not exclude it as to any other kind of insurance within which such coverage is reasonably includable. 18 Del.C. §901.
2.2 The definition utilized is essentially the 1976 Revised Nation-Wide Marine Definition as adopted by the National Association of Insurance Commissioners.
2.3 The use of the definition provides more specificity to insurance companies as to those risks and coverages subject to rate filing under 18 Del.C. §2502(a)(3).
3.0 Marine and Transportation, Amplified Definition
3.1 Marine and/or transportation policies may cover under the following conditions:
3.1.1 Imports
3.1.1.1 Imports may be covered wherever the property may be and without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.
3.1.1.2 An import, as a proper subject, of marine or transportation insurance, shall be deemed to maintain its character as such, so long as the property remains segregated in such a way that it can be identified and has not become incorporated and mixed with the general mass of property in the United States, and shall be deemed to have been completed when such property has been:
3.1.1.2.1 sold and delivered by the importer, factor or consignee; or
3.1.1.2.2 removed from place of storage and placed on sale as part of importer's stock in trade at a point of sale-distribution; or
3.1.1.2.3 delivered for manufacture, processing or change in form to premises of the importer or of another used for any such purposes.
3.1.2 Exports
3.1.2.1 Exports may be covered wherever the property may be without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.
3.1.2.2 An export, as a proper subject of marine or transportation insurance, shall be deemed to acquire its character as such when designated or while being prepared for export and retain that character unless diverted for domestic trade, and when so diverted, the provisions of this Ruling respecting domestic shipments shall apply, provided, however, that this provision shall not apply to long established methods of insuring certain commodities, e.g., cotton.
3.1.3 Domestic Shipments
3.1.3.1 Domestic shipments on consignment, [provided the coverage of the issuing companies includes hazards of transportation] for sale or distribution, exhibit, or trial, or approval or auction, while in transit, while in the custody of others and while being returned, provided that in no event shall the policy cover on premises owned, leased or operated by the consignor.
3.1.3.2 Domestic shipments not on consignment, provided the coverage of the issuing companies includes hazards of transportation, beginning and ending within the United States, provided that such shipments shall not be covered at manufacturing premises nor after arrival at premises owned, leased or operated by Assured or purchaser.
3.1.4 Bridges, Tunnels and Other Instrumentalities of Transportation and Communication (excluding buildings, their improvements and betterments, furniture and furnishings, fixed contents and supplies held in storage)
3.1.4.1 The foregoing includes:
3.1.4.1.1 Bridges, tunnels, other similar instrumentalities, including auxiliary facilities and equipment attendant thereto, unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion are the only hazards to be covered.
3.1.4.1.2 Piers, wharves, docks, slips, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion.
3.1.4.1.3 Other aids to navigation and transportation, including dry docks and marine railways.
3.1.4.1.4 Pipelines, including on-line propulsion, regulating and other equipment appurtenant to such pipelines, but excluding an property at manufacturing, producing, refining, converting, treating or conditioning plants.
3.1.4.1.5 Power transmission and Telephone and Telegraph lines, excluding all property at generating, converting or transforming stations, substations and exchanges.
3.1.4.1.6 Radio and Television Communication-Equipment in use as such including towers and antennae with auxiliary equipment, and appurtenant electrical operating and control apparatus.
3.1.4.1.7 Outdoor cranes, loading bridges and similar equipment used to load, unload and transport.
3.1.5 Personal Property Floater Risks covering individuals and/or generally
3.1.5.1 Personal Effects Floater Policies.
3.1.5.2 The Personal Property Floater.
3.1.5.3 Government Service Floaters.
3.1.5.4 Personal Fur Floaters.
3.1.5.5 Personal Jewelry Floaters.
3.1.5.6 Wedding Present Floaters for not exceeding 90 (ninety) days after the day of the wedding.
3.1.5.7 Silverware Floaters.
3.1.5.8 Fine Arts Floaters covering paintings, etchings, pictures, tapestries, art glass windows, and other bonafide works of art of rarity, historical value or artistic merit.
3.1.5.9 Stamp and Coin Floaters.
3.1.5.10 Musical Instrument Floaters, Radios, televisions, record players and combinations thereof are not deemed musical instruments.
3.1.5.11 Mobile Articles, Machinery and Equipment Floaters (excluding motor vehicles designed for highway use and auto homes, trailers and semi-trailers except when hauled by tractors not designed for highway use) covering identified property of a mobile or floating nature pertaining to or usual to a household. Such policies shall not cover furniture and fixtures not customarily used away from premises where such property is usually kept.
3.1.5.12 Installment Sales and Leased Property Policies covering property pertaining to a household and sold under conditional contract of sale, partial payment contract or installment sales contract or leased, but excluding motor vehicles designed for highway use. Such policies must cover in transit but shall not extend beyond the termination of the seller's or lessor's interest.
3.1.5.13 Live Animal Floaters.
3.1.6 Commercial Property Floater Risks covering property pertaining to a business, profession or occupation
3.1.6.1 Radium Floaters.
3.1.6.2 Physicians' and Surgeons' Instrument Floaters. Such policies may include coverage of such furniture, fixtures and tenant Assured's interest in such improvements and betterments of buildings as are located in that portion of the premises occupied by the assured in the practice of his profession.
3.1.6.3 Pattern and Die Floaters.
3.1.6.4 Theatrical Floaters, excluding buildings and their improvements and betterments, and furniture and fixtures that do not travel about with theatrical troupes.
3.1.6.5 Film Floaters, including builders' risk during the production and coverage on completed negatives and positives and sound records.
3.1.6.6 Salesmen's Samples Floaters.
3.1.6.7 Exhibition Policies on property while on exhibition and in transit to or from such exhibitions.
3.1.6.8 Live Animal Floaters.
3.1.6.9 Builders' Risks and/or Installation Risks covering interest of owner, seller or contractor, against loss or damage to machinery, equipment, building materials or supplies, being used with and during the course of installation, testing, building, renovating or repairing. Such policies may cover at points or places where work is being performed, while in transit and during temporary storage or deposit, of property designated for and awaiting specific installation, building, renovating or repairing.
3.1.6.9.1 Such coverage shall be limited to Builders' Risks or Installation Risks where Perils in addition to Fire and Extended Coverage are to be insured.
3.1.6.9.2 If written for account of owner, the coverage shall cease upon completion and acceptance thereof; or if written for account of a seller or contractor the coverage shall terminate when the interest of the seller or contractor ceases.
3.1.6.10 Mobile Articles, Machinery and Equipment Floaters (excluding motor vehicles designed for highway use and auto homes, trailers and semitrailers except when hauled by tractors not designed for highway use and snow plows constructed exclusively for highway use), covering identified property of a mobile or floating nature, not on sale or consignment, or in course of manufacture, which has come into custody or control of parties who intend to use such property for the purpose for which it was manufactured or created. Such policies shall not cover furniture and fixtures not customarily used away from premises where such property is usually kept.
3.1.6.11 Property in transit to or from and in the custody of bailees (not own controlled or operated by the bailor). Such policies shall not cover bailee's property at his premises.
3.1.6.12 Installment Sales and Leased Property. Policies covering property sold under conditional contract of sale, partial payment contract, installment sales contract, or leased but excluding motor vehicles designed for highway use. Such policies must cover in transit but shall not extend beyond the termination of the seller's or lessor's interest. This section is not intended to include machinery and equipment under certain "lease-back" contracts.
3.1.6.13 Garment Contractors Floaters.
3.1.6.14 Furriers or Fur Storer's Customer's Policies (i.e., policies under which certificates or receipts are issued by furriers or fur storers) covering specified articles the property of customers.
3.1.6.15 Accounts Receivable Policies, Valued Papers and Records Policies.
3.1.6.16 Floor Plan Policies, covering property for sale while in possession of dealers under a Floor Plan or any similar plan under which the dealer borrows money from a bank or lending institution with which to pay the manufacturer, provided:
3.1.6.16.1 Such merchandise is specifically identifiable as encumbered to the bank or lending institution.
3.1.6.16.2 The dealer's right to sell or otherwise dispose of such merchandise is conditioned upon its being released from encumbrance by the bank or lending institution.
3.1.6.16.3 That such policies cover in transit and do not extend beyond the termination of the dealer's interest.
3.1.6.16.3.1 Provided that such policies shall not cover automobiles or motor vehicles; merchandise for which the dealer's collateral is the stock or inventory as distinguished from merchandise specifically identifiable as encumbered to the lending institution.
3.1.6.17 Sign and Street Clock Policies, including neon signs, automatic or mechanical signs, street clocks, while in use as such.
3.1.6.18 Fine Arts Policies covering paintings, etchings, pictures, tapestries, art glass windows, and other bonafide works of art of rarity, historical value or artistic merit, for account of museums, galleries, universities, businesses, municipalities and other similar interests.
3.1.6.19 Policies covering personal property which, when sold to the ultimate purchaser, may be covered specifically, by the owner, under Inland Marine Policies including:
3.1.6.19.1 Musical Instrument Dealers Policies, covering property consisting principally of musical instruments and their accessories. Radios, televisions, record players and combinations thereof are not deemed musical instruments.
3.1.6.19.2 Camera Dealers Policies, covering property consisting principally of cameras and their accessories.
3.1.6.19.3 Furrier's Dealers Policies, covering property consisting principally of furs and fur garments.
3.1.6.19.4 Equipment Dealers Policies, covering mobile equipment consisting of binders, reapers, tractors, harvesters, harrows, tedders and other similar agricultural equipment and accessories therefor; construction equipment consisting of bulldozers, road scrapers, tractors, compressors, pneumatic tools and similar equipment and accessories therefor; but excluding motor vehicles designed for highway use.
3.1.6.19.5 Stamp and Coin Dealers covering property of philatelic and numismatic nature.
3.1.6.19.6 Jewelers' Block Policies.
3.1.6.19.7 Fine Arts Dealers.
3.1.6.19.7.1 Such policies may include coverage of money in locked safes or vaults on the Assured's premises. Such policies also may include coverage of furniture, fixtures, tools, machinery, patterns, molds, dies and tenant insureds interest in improvements of buildings.
3.1.6.20 Wool Growers Floaters.
3.1.6.21 Domestic Bulk Liquids Policies, covering tanks and domestic bulk liquids stored therein.
3.1.6.22 Difference in Conditions Coverage excluding fire and extended coverage perils.
3.1.6.23 Electronic Data Processing.
3.1.7 Unless otherwise permitted, nothing in the foregoing shall be construed to permit Marine or Transportation Policies to Cover:
3.1.7.1 Storage of Assured's merchandise, except as provided by statute.
3.1.7.2 Merchandise in course of manufacture, the property of and on the premises of the manufacturer.
3.1.7.3 Furniture and fixtures and improvements and betterments to buildings.
3.1.7.4 Monies and/or securities in safes, vaults, safety deposit vaults, bank or Assured's premises, except while in the course of transportation.
2102 Termination of Coverage for Policies of Commercial Governmental and Professional Liability Insurance (Repealed)
18 Del. Admin. Code § 2102 Termination of Coverage for Policies of Commercial Governmental and Professional Liability Insurance (Repealed)
This regulation was repealed, effective August 11, 2023.
History
- 27 DE Reg. 114 (08/01/23)
2103 Delaware Insurance Authority, Joint Insurance Fund and Excess Insurance Fund
18 Del. Admin. Code § 2103 Delaware Insurance Authority, Joint Insurance Fund and Excess Insurance Fund
2103 Delaware Insurance Authority, Joint Insurance Fund and Excess Insurance Fund [Formerly Regulation 73]
1.0 Purpose
1.1 The purpose of this Regulation is to implement 18 Del.C. Ch. 4 by adopting regulations required by that Chapter to be adopted.
2.0 Authority
2.1 This Regulation is issued pursuant to the authority vested in the Commissioner and the Insurance Department under 18 Del.C. Ch. 4 and 29 Del.C. Ch. 101. Enactment of 18 Del.C. Ch. 4 followed a legislative finding that liability and other insurance had become prohibitively expensive or impossible to obtain at any price for Delaware counties, municipalities, private occupational groups and types of enterprise. 18 Del.C. Ch. 4Section 401(a) finds that when other insurance, including worker's compensation insurance, becomes prohibitively expensive or when premium rates bear an uneconomic price, public bodies and private persons are exposed to catastrophic loss to the extent that the ability of governmental units to render services and the ability of private persons to function is severely impaired, to the grave detriment of the safety, economic stability and utility of public bodies and private persons. The Commissioner hereby finds that current worker's compensation insurance rates are "prohibitively expensive" or bear an "uneconomic price" within the meaning of 18 Del.C. §401(a).
3.0 Applicability and scope
3.1 This Regulation shall apply to all Joint Insurance Funds and Excess Funds under 18 Del.C. Ch. 4.
4.0 Effective Date
4.1 This Regulation shall be effective thirty (30) days after signature by the Commissioner in his individual capacity and on behalf of the Department.
5.0 Public Entity Joint Insurance Fund
5.1 The Commissioner has prepared the Bylaws of the Public Entity Joint Insurance Fund dated November 6, 1992 ("Public Bylaws"). Each participating Public Entity has, by resolution, adopted the Public Bylaws. The Public Bylaws are hereby adopted, and the Directors of the Public Entity Joint Insurance Fund are hereby granted the powers and authority conferred on them by the Public Bylaws. This Regulation by the Insurance Department exercises the powers conferred by 18 Del.C. §404(e)(1).
5.2 The Insurance Department hereby grants the Directors the power to invest the funds, including worker's compensation funds, utilizing prudent casualty and surety insurance company investment practices.
5.3 The Insurance Commissioner hereby approves the Bylaws and Plan of Risk Management concurrently filed by the Directors of the Public Entity Joint Insurance Fund pursuant to 18 Del.C. §404(h)(1).
5.4 The Directors of the Public Entity Joint Insurance Fund are subject to and shall operate in compliance with the provisions of the present and future regulations of the Delaware Insurance Department.
6.0 Private Entity Joint Insurance Funds
6.1 The Commissioner has prepared the Bylaws of the Private Entity Joint Insurance Fund for the General Business Affinity Group dated November 6, 1992 ("Private Bylaws"). Each participating Private Entity has, by resolution, adopted the Private Bylaws. The Private Bylaws are hereby adopted, and the Directors of the Private Entity Joint Insurance Fund are hereby granted the powers and authority conferred on them by the Private Bylaws. The Private Bylaws are hereby declared to be the model Bylaws for all affinity groups. This Regulation by the Insurance Department exercises the powers conferred by 18 Del.C. §405(c)(1).
6.2 The Insurance Department hereby grants the Directors the power to invest the funds, including worker's compensation funds, utilizing prudent casualty and surety insurance company investment practices.
6.3 The Insurance Commissioner hereby approves the Bylaws and Plan of Risk Management concurrently filed by the Directors of the Excess Insurance Fund pursuant to 18 Del.C. §405(f)(1).
6.4 "Natural affinity", within the meaning of 18 Del.C. §405(a) means a similarity among employers of loss ratios or duties performed by employees, or occupational exposure of employees, or any combination of the foregoing.
6.5 The Directors of the Private Entity Joint Insurance Fund are subject to and shall operate in compliance with the provisions of the present and future regulations of the Delaware Insurance Department.
6.6 18 Del.C. §405(a) governs creation of a Private Entity Joint Insurance Fund from private entities having a facility within local units of government which have joined the Public Entity Joint Insurance Fund. Subsequent withdrawal by the local unit of government does not affect the private entity's membership in the Private Entity Joint Insurance Fund, but new private entities within the jurisdiction of a local unit of government which has withdrawn from the Public Entity Joint Insurance Fund may not become members of the Private Entity Joint Insurance Fund.
7.0 Excess Insurance Pools
7.1 The Commissioner has prepared the Bylaws of the Excess Insurance Fund dated November 6, 1992 ("Excess Bylaws"). Each participating Joint Insurance Fund has, by resolution, adopted the Excess Bylaws. The Excess Bylaws are hereby adopted, and the Directors of the Excess Insurance Fund are hereby granted the powers and authority conferred on them by the Excess Bylaws. This Regulation by the Insurance Department exercises the powers conferred by 18 Del.C. §406(c)(1).
7.2 The Insurance Department hereby grants the Directors the power to invest the funds, including worker's compensation funds, utilizing prudent casualty and surety insurance company investment practices.
7.3 The Insurance Commissioner hereby approves the Bylaws and Plan of Risk Management concurrently filed by the Directors of the Excess Insurance Fund pursuant to 18 Del.C. §406(f)(1).
7.4 The Directors of the Excess Insurance Fund are subject to and shall operate in compliance with the provisions of the present and future regulations of the Delaware Insurance Department.
8.0 Inconsistent Regulations Repealed
8.1 In the event of conflict between this regulation and any prior regulation regulating the Delaware Insurance Authority, this regulation shall prevail and the inconsistent regulation is hereby repealed.
9.0 Purchase of Commercial Direct Insurance
9.1 For all Funds, the procedure for the purchase of commercial direct insurance or excess insurance is the procedure established by the Authority.
2104 Written Notice by Insurers of Payment of Third Party Claims
18 Del. Admin. Code § 2104 Written Notice by Insurers of Payment of Third Party Claims
2104 Written Notice by Insurers of Payment of Third Party Claims [Formerly Regulation 75]
1.0 Authority
1.1 This regulation is adopted by the Insurance Commissioner pursuant to 18 Del.C. §311 and 18 Del.C. Ch. 24. It is promulgated in accordance with 29 Del.C. Ch. 101.
2.0 Purpose
2.1 The purpose of this regulation is to protect the third party claimant from misuse or mishandling of funds payable under a liability or casualty insurance contract, when those funds are disbursed to the third party claimant’s attorney, accountant, agent or other representative.
3.0 Scope
3.1 This regulation will apply to all insurers who make payment in excess of $5,000.00 to third party claimants under casualty or liability insurance contracts.
4.0 Requirement of Notice
4.1 Upon payment in excess of $5,000.00 in settlement of or upon judgment on any third party liability or casualty claim and where the claimant is a natural person, the insurer or its representative shall mail to the third party claimant written notice of payment at the same time such payment is made to the third party’s attorney, accountant, agent or other representative.
1 DE Reg. 1408 (3/1/98)
5.0 Contents of Notice
5.1 The written notice referred to in section 4.0 above shall be mailed to the claimant by regular mail at the claimant’s last known address, and shall include at least the following information:
5.1.1 The amount of the payment;
5.1.2 The party or parties to whom the instrument is made payable;
5.1.3 The party to whom the instrument was forwarded; and
5.1.4 The address of the party to whom the instrument was forwarded.
5.1.5 A copy of the transmittal letter forwarded by the insurer to the party receiving the payment may be used as the form of notice to the third party claimant so long as the transmittal letter includes all of the information specified in section 5.1, 5.2, 5.3, and 5.4.
1 DE Reg. 1408 (3/1/98)
6.0 Causes of Action and Defenses
6.1 Nothing in section 4.0 and 5.0 above shall create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against an insurer or its representative based upon a failure to serve such notice, or defective service of such notice. Nothing in section 4.0 and 5.0 shall establish a defense for any party to any cause of action based upon a failure by the insurer or its representative to serve such notice, or by the defective service of such notice.
7.0 Effective Date
7.1 This regulation shall become effective March 15, 1998.
2200 Medical Malpractice Relief Initiative Pilot Program
2201 Implementation of Medical Malpractice Relief Initiative Pilot Program
18 Del. Admin. Code § 2201-1.0 Purpose
The purpose of this section is to provide regulations governing the Medical Malpractice Relief Initiative Pilot Program established by the Fiscal Year 2007 Appropriations Act.
History
- 11 DE Reg. 806 (12/01/07)
18 Del. Admin. Code § 2201-2.0 Authorization
These regulations are adopted in accordance with 18 Del.C. §311 and the Fiscal Year 2007 Appropriations Act.
History
- 11 DE Reg. 806 (12/01/07)
18 Del. Admin. Code § 2201-3.0 Scope
These regulations shall govern the application of entities seeking state funding pursuant to the Medical Malpractice Relief Initiative Pilot Program for the purpose of establishing a Delaware-domiciled risk retention and/or captive entity.
History
- 11 DE Reg. 806 (12/01/07)
18 Del. Admin. Code § 2201-4.0 Approval
4.1 No entity shall receive funding pursuant to the Medical Malpractice Relief Initiative Pilot Program unless such entity receives the recommendation of the Delaware Insurance Commissioner and the approval of the Controller General, the Co-Chairs of the Joint Finance Committee, and Director of the Office of Management and Budget.
4.2 An entity seeking low or no interest loans pursuant to the Medical Malpractice Relief Initiative Pilot Program for the purpose of fostering the establishment of risk reduction group(s) and/or captive insurance entities shall make application to the Delaware Department of Insurance on forms provided by the Department.
4.3 The Delaware Insurance Commissioner shall review any applications submitted pursuant to these provisions and shall determine whether to recommend such applicant for receipt of Medical Malpractice Relief Initiative Pilot Program funding. The Insurance Commissioner may require any documents reasonably necessary to verify the information contained in an application.
4.4 If the Insurance Commissioner decides to recommend an applicant for funding, the Commissioner shall make a funding recommendation for such applicant to the Controller General, the Co-Chairs of the Joint Finance Committee, and the Director of the Office of Management and Budget for their final review and approval.
4.5 If the Commissioner recommends funding for the application, the Commissioner's recommendation shall include the amount and type of funding, when said funds must be repaid to the State, and any conditions to be placed on the funding award.
History
- 11 DE Reg. 806 (12/01/07)
18 Del. Admin. Code § 2201-5.0 Requirements and Considerations for Funding Awards
5.1 No applicant for funding under the Medical Malpractice Relief Initiative Pilot Program shall be recommended for funding unless the Insurance Commissioner finds that the applicant:
5.1.1 Is organized for the purpose of increasing the availability of medical malpractice insurance and reducing the costs of medical malpractice insurance through enhanced risk management and lower administrative costs; and
5.1.2 Is a Delaware-domiciled captive insurance company licensed pursuant to 18 Del.C. §6903 or a Delaware-domiciled risk retention group chartered pursuant to 18 Del.C. §8003.
5.2 In reviewing such applications and determining whether to recommend an applicant for funding, the Insurance Commissioner shall consider all factors the Commissioner considers relevant to the success of the applicant and the protection of Delaware consumers, including but not limited to the following criteria:
5.2.1 The likelihood that receiving the funding will assist the applicant in increasing the availability of and reducing the cost of medical malpractice insurance and of increasing the predictability of such costs;
5.2.2 The need of the medical professionals who are members of the applicant for an alternative to the traditional medical malpractice insurance market;
5.2.3 The applicant's structure and business plan;
5.2.4 The number of medical professionals who are members of the applicant; and
5.2.5 The applicant's provisions for and emphasis on risk management.
History
- 11 DE Reg. 806 (12/01/07)
18 Del. Admin. Code § 2201-6.0 Funding
Funding pursuant to this program shall be limited to low or non-interest loans, via a surplus note, letter of credit, or otherwise. Funding awards must be conditioned upon binding agreements requiring that such funds be repaid to the State.
History
- 11 DE Reg. 806 (12/01/07)
18 Del. Admin. Code § 2201-7.0 Length of Pilot Program
The pilot portion of any program funded under this provision must be completed within 12 months of approval of these regulations.
History
- 11 DE Reg. 806 (12/01/07)
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