SB 175 — AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO REPORTING AND VALUATION REQUIREMENTS FOR INSURERS.

(12) Political subdivision liability insurance reported separately as to municipalities, counties, school districts and other authorities;

(13) Errors and omissions liability insurance;

(14) Officers’ and directors’ liability insurance reported separately as to nonprofit and for-profit entities;

(15) Day care facility liability insurance;

(16) Entertainment, recreational and sporting facility liability insurance, by specialty;

(17) Workers’ compensation insurance;

(18) Liquor liability insurance.

(c) Such supplemental report shall include the following data, both specific to this State and also to the United States, by the type of insurance for the previous year ending on December 31:

(1) Direct premiums written;

(2) Direct premiums earned;

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06/08/2021 09:45 AM (3) Investment income derived from unearned premium and loss reserves reflecting the overage rate of return on invested assets.

Forms to be used in transmitting this data and the formula for the calculations shall be promulgated by the Insurance Commissioner;

(4) Incurred claims, developed as the sum of the following (the report shall include data for each of the following categories used to develop the sum of incurred claims):

a.

Dollar amount of claims closed with payment;

plus b.

Reserves for reported claims at the end of the current year;

minus c.

Reserves for reported claims at the end of the previous year;

plus d.

Reserves for incurred but not reported claims at the end of the current year;

minus e.

Reserves for incurred but not reported claims at the end of the previous year;

plus f.

Loss adjustment expenses for claims closed;

plus g.

Reserves for loss adjustment expense at the end of the current year;

minus h.

Reserves for loss adjustment expense at the end of the previous year;

(5) Actual incurred expenses allocated separately to loss adjustment;

commissions, other acquisition costs, advertising, general office expenses, taxes, licenses and fees, and all other expenses.

This consolidated insurance expense exhibit must be filed in Delaware on or before April 1 of each year;

(6) Net underwriting gain or loss;

(7) Net operation gain or loss, including net investment income;

(8) The number and dollar amount of claims closed with payment, by year incurred and the amount reserved for these claims;

(9) The number of claims closed without payment and the dollar amount reserved for these claims;

and (10) The number of claims pending at the end of each year and the amount reserved for these claims.

(d) This report shall be due by May 1 of each year.

(e) For the first year only in which the insurer is required to file this supplemental report, the data required by subsection (c) of this section shall include the previous calendar year and each of the preceding calendar years.

(f) It shall be the duty of the Commissioner to annually compile and review all such supplemental reports submitted by insurers pursuant to this section to determine the appropriateness of premium rates for property or casualty insurance in this State.

The Commissioner’s findings and the filings shall be published and made available to any interested insured or citizen.

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06/08/2021 09:45 AM 82 (g) The Commissioner may refuse to continue or may suspend or revoke the certificate of authority of any property or casualty insurer failing to file its supplemental report when due.

(h) The Commissioner may waive, modify or defer the requirements of this section if he or she determines the information required under this section to be reported is not needed.

(i) The Commissioner shall impose a fine of $1,000 for each day a report required by this section is late.

Such fine may not be suspended by the Commissioner.

Section 3.

Amend Chapter 11, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underlining as follows:

§ 1127.

Valuation of bonds.

(b) Notwithstanding any other provision of this section, no bond or other evidence of debt shall be valued in excess of the value established by the National Association of Insurance Commissioners’ Security Valuation Capital Markets and Investment Analysis Office.

Section 4.

Amend Chapter 11, Title 18 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underlining as follows:

§ 1128.

Valuation of other securities.

(c) Notwithstanding any other provision of this section, securities shall be valued at prices established by the Securities Valuation Office of the National Association of Insurance Commissioners Commissioners’ Capital Markets and Investment Analysis Office and in accordance with procedures established by the National Association of Insurance Commissioners.

SYNOPSIS Section 1 of this bill adds additional financial reporting requirements for authorized insurers, which codifies current practices in accordance with the NAIC’s accounting practices and procedures manual and which was recommended by the NAIC as part of its most recent and ongoing accreditation review of the Department.

Section 2 of this bill repeals Section 526A because the Department has determined that the circumstances that originally resulted in the enactment of Section 526A are no longer present in today’s market and, therefore, the additional reporting requirement is not necessary.

Sections 3 and 4 of this bill make technical corrections recommended by the NAIC.

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