HOUSE OF REPRESENTATIVES

152nd GENERAL ASSEMBLY

HOUSE BILL NO. 47

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO AUTHORIZATION OF INSURERS AND GENERAL REQUIREMENTS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend § 511, Title 18, of the Delaware Code by making deletions as shown by strike through and insertions as shown by underlining as follows:

§ 511 Capital funds required.

(a) To transact any 1 kind of insurance (as defined in Chapter 9 of this title), or combinations of kinds of insurance as shown below, an insurer shall possess and thereafter maintain in cash or cash equivalents unimpaired paid-in capital stock (if a stock insurer) or a capital account (if an insurance department or division of a corporation established under Chapter 7 or regulated under Chapter 9 of Title 5) or unimpaired basic surplus (if a foreign mutual or a reciprocal insurer), and when first so authorized shall possess and maintain free surplus, all in amounts not less than as follows:

Kind or kinds of insurance

Stock insurers       Mutual Insurers       Reciprocal insurers

Capital stock | Free surplus Basic surplus | Free surplus   Basic surplus | Free surplus

Life

$300,000   $150,000   $300,000     $150,000   …..     …..  

$650,000 $350,000   $650,000   $350,000

Health

300,000   150,000     300,000     150,000     300,000     150,000

$650,000 $350,000   $650,000   $350,000   $650,000   $350,000

Life & health

350,000     200,000   350,000     200,000     …..     …..

$650,000 $350,000   $650,000   $350,000

Property

300,000 150,000   300,000   150,000   300,000   150,000

$650,000 $350,000   $650,000   $350,000   $650,000   $350,000

Casualty

400,000 200,000   400,000     200,000   400,000   200,000

$650,000 $350,000   $650,000   $350,000   $650,000   $350,000

Marine & transportation

350,000   175,000     350,000     175,000     350,000     175,000

$650,000 $350,000   $650,000   $350,000   $650,000   $350,000

Surety

300,000   150,000     300,000     150,000     300,000     150,000

$650,000 $350,000   $650,000   $350,000   $650,000   $350,000

Multiple line

500,000 250,000   500,000     250,000     500,000     250,000

$650,000 $350,000   $650,000   $350,000   $650,000   $350,000

Title

$250,000 $125,000   …..     …..     …..     …..

$650,000 $350,000  

Except:

(1) A domestic insurer holding a valid certificate of authority to transact insurance in this State immediately prior to November 1, 1968 January 1, 2024 , may, if otherwise qualified therefor, for a period of 5 years after such date continue to be so authorized while possessing paid-in capital stock (if a stock insurer) or surplus (if a mutual insurer) as required for such authority immediately prior to such date. The Commissioner shall not authorize such an insurer to transact any other kinds of insurance unless it then complies with the requirements as to capital and surplus, as applied to all kinds of insurance it then proposes to transact, as provided by this title as to foreign insurers applying for original certificates of authority under this title.

(2) An insurer which otherwise possesses funds as required under this subsection (a) above, shall at all times maintain policyholders’ surplus (combined paid-in capital stock, if any, and surplus) reasonable in amount, as determined by the Commissioner, in relation to the kinds and amount of insurance it has in force, or being written and retained by it, net of applicable reinsurance. In making any such determination the Commissioner shall give due consideration to any applicable standards approved or adopted by the National Association of Insurance Commissioners and to the desirability of substantial uniformity as to such requirements among the respective states. In no event shall an insurer’s surplus be less than the amount set forth under subsection (a) of this section.

SYNOPSIS

Delaware’s capital and surplus requirements for insurers have been in place for over fifty years and are currently among the lowest in the country. This bill increases the minimum amount of capital stock and free surplus an insurer must possess and maintain in order to transact business in the State of Delaware, making them more in line with other jurisdictions.