CHAPTER 547
FORMERLY
HOUSE BILL NO. 584
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 18 RELATING TO THE DELAWARE LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION.
BE IT ENACTED I3Y 'HIE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Section 4405 (a), Chapter 44. Title 18 of the Delaware Insurance Code by striking the phrase any of the three.- and by substituting in lieu thereof the phrase. "either of the two'.
Section 2. Amend Section 4406 (a). Chapter 44. Title 18 of the Delaware Insurance Code by striking said subsection (a) in its entirety. and by substituting in lieu thereof the following
"(a) There is created a non-profit legal entity to he known as the Delaware Life and Health Insurance Guaranty Association. All member insurers shall be and remain members of the Association as a condition of their authority to transact insurance in this state. The Association shall perform its functions under the plan of operation established and approved under §4410 of this Title, and shall exercise its powers through a 13oard of Directors established under §44O7 of this Title. For purposes of administration and assessment, the Association shall maintain two (2) accounts:
(1) The life insurance and annuity account, which includes the Billowing subaccounts:
(a) the if insurance account.
(b) the annuity account. which shall include contracts issued under a governmental retirement plan established under Section 401, 403 (b). or 457 of the United States Internal Revenue Code, and
(c)I the unallocated annuity account.
(2) The health insurance account."
Section 3. Amend Section 4409(c)(3). Chapter 44. Title 18 of the Delaware Insurance Code by striking said paragraph (3) in its entirety. and substituting in hen thereof the following:
(3) Class C assessments against member insurers for each account and subaccount shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account for the three (3) most recent calendar years for which information is available preceding the y ear in which the insurer became impaired or insolvent. as the case may Ile. hears 111 such premiums received M this state for such calendar )ears by all assessed member kismet,
Section 4. Amend Section 4409(e). Chapter 44. Title 18 of the Delaware Insurance Code by striking said subsection (e) in its entirety. and by substituting in lieu thereof the following:
"(c)(1) The total of all assessments upon a member insurer for the life and annuity account and for each subaccount thereunder shall not in any one calendar year exceed two percent (2%); and for the health account shall not in any one calendar year exceed two percent (2%) of the insurers' average premiums received in this state on the policies and contracts covered by the account during three (3) calendar years preceding the year in which the insurer became an impaired or insolvent insurer. If the maximum assessment, together with the other assets of the Association in any account, does not provide in any one year in either account an amount sufficient to carry out the responsibilities of the association. the necessary additional funds shall he assessed as soon thereafter as permitted by this chapter.
(2) the Board may provide in the plan of operation a method of allocating funds among claims. whether relating to one or to more impaired or insolvent insurers, when the maximum assessment will he insufficient to cover anticipated claims.
(3) If a one percent ( I%) assessment for any subaccount of the life and annuity account in any one year does not provide an amount sufficient to carry out the responsibilities of the Association. then pursuant to paragraph (c )(3) of this section. the Board shall assess all subaccounts of the life and annuity account for the necessary additional amount. subject to the maximum stated in paragraph (elf]) above."
Section 5. Amend Section 4411(3). Chapter 44, Title 18 of the Delaware Insurance Code. by adding the following new sentences at the end of the first sentence of said subsection (3) to read as follows: "If a member is appealing an assessment, the amount assessed shall be paid to the Association and shall he available to meet Association obligations during the pendency of an appeal. If the appeal on the assessment is upheld. the amount paid in error or in excess shall he returned to the member company.
Section 6. If any provision of this Act, or the application thereof, to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the Act. which can he given effect without the invalid provision or application, and to that end the provisions of this Act shall he declared to be severable.
Approved July 18, 1996