SENATE BILL NO. 316
AN ACT TO AMEND SUBCHAPTER V, CHAPTER 23, PART II, TITLE 19, DELAWARE CODE RELATING TO TAXES AND CHARGES UPON INSURANCE CARRIERS AND SELF INSURERS: SECOND INJURY AND CONTINGENCY FUND.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §2391 of Chapter 23, Title 19, Delaware Code, by striking said section in its entirety and substituting a new §2391 to read as follows:
"§2391. Taxes on premiums of insurance carriers and payrolls of self-insurers
(a) For the privilege of carrying on the business of workmen's compensation insurance in this State, every insurance carrier and every employer carrying his own risk and thereby insuring himself under the provisions of this chapter shall pay the taxes imposed by this section.
(b) Every insurance carrier, insuring employers who are or may be liable under this chapter to pay for compensation for personal injuries to or death of their employees, shall pay a tax upon all workmen's compensation or employer's liability premiums received, whether in cash or notes, in this State or on account of business done in this State or on account of premiums for compensation payable under this Chapter for such insurance in this State at the rate of 2% of the amount of such premiums, which tax shall be in lieu of all other taxes on such premiums. The tax shall be assessed and collected as provided in subsection (c) of this section. The insurance carrier shall be credited with all cancelled or returned premiums actually refunded during the year on such insurance and premiums on reinsurance received from other insurance carriers, except that mutual insurance companies shall be taxed upon the gross premium charged and collected and shall not be credited with unabsorbed premiums or dividends.
(c)(1) Every insurance carrier subject to the provisions of this section shall on or before the first day of March of each year make a return verified by the affidavit of its president and secretary or other chief officers or agents to the Secretary of Finance stating the amount of all premiums and credits for. the preceding calendar year. Each insurance carrier required to make such return shall
pay to the Secretary of Finance a tax of Two Dollars ($2.00) per hundred on such premiums ascertained as provided in subsection (b) of this section, less return premiums on cancelled policies actually refunded during the year and rein-
surance premiums received from other insurance carriers.
(2) If any insurance carrier subject to the. provisions of this section shall fail to make the return required by this subsection, the Secretary of Finance shall assess the tax against such insurance carrier at the rate provided in paragraph (1) of this subsection on such amounts of premiums he believes just, and the proceedings thereon shall be the same as if the return had been made.
(3) If any insurance carrier subject to the provisions of this section withdraws from business in this State before the tax falls due, as herein provided, or fails or neglects to pay such tax, the Secretary of Finance shall at once proceed to collect the same. The action may be brought by the Secretary of Finance in his official capacity in any court having jurisdiction, and reasonable attorney's fees may be taxed by the court as costs in such action.
(d) Every employer carrying his own risk, and thereby insuring himself under the provisions of this Chapter, shall annually on or before the 30th day of January report under oath to the Board the total amount of his payroll for the preceding calendar year, classified in accordance with
classifications approved by the Board for the purpose of fixing compensation rates. The Board may verify such classifications and such statement of payroll by inspection and audit at the expense of the employer, and such verification shall be made by the rating bureau or association provided for in §2382 of this Title. The charges to self-insurers
shall be the same charges which other insurance carriers are required to pay under the provisions of this chapter. The Board shall assess against such payroll a tax computed by taking 4% of the amount of premium payable upon the payroll so ascertained in accordance with the classifications
and premium rates approved by the Board for insurance against liability under this Chapter. No employer shall become or continue a self-insurer under the provisons of this Chapter, except upon the payment of the tax for the previous calendar year. The monies so assessed against and paid by insurers
who carry their own risks shall be paid to the Secretary of Finance."
Section 2. Amend §2392 of Chapter 23, Title 19, Delaware Code, by striking said section in its entirety and substituting a new §2392 to read as follows:
§2392. Assessments for administrative expenses on insurance carriers
(a) For the purpose of securing to the State of Delaware the monies necessary for paying the salaries and necessary expenses of the State in administering and carrying out the provisions of Part II of this Title relating to Workmen's Compensation, insurance carriers shall pay the assessments imposed by this section.
(b) Annually, on or before the first day of March, every insurance carrier insuring employees who are or may be liable under this Chapter to pay for compensation for personal injuries to or death of their employees, shall report, under oath, or, in the case of a corporation, verified by the affidavit of its president and secretary or other chief officers or agents, to the Secretary of Finance, the amount of all compensation payments and awards actually paid by said carrier during the preceding calendar year, excluding payments made under §2395 of this chapter, and reimbursements received under §2396 of this Chapter,
(c) The State Auditor annually as soon as practicable after January first shall ascertain and report to the Secretary of Finance and the Board the total amount of the following expenses:
(i) 100% of the expenses of the Industrial Accident Board;
(i) 66.6% of all expenses of the Inspection function of the Division of Industrial Affairs;
(i) 66.6% of all expenses of the Safety function of the Division of Industrial Affairs;
(i) a portion of the Division of Industrial Affairs' Administration costs which shall be computed by first adding (i), (ii), (iii) of this subsection set forth immediately above; this sum shall then be divided by the amount of all expenses of the Division of Industrial Affairs; the quotient yielded shall be set forth as a percentage rate which shall then be multiplied by the total expenses of the Administrative function of the Division of Industrial Affairs, and the product shall be the portion of the Division's Administration costs.
In determining these expenses, the State Auditor shall include in addition to the direct cost of personal service, the coat of maintenance and operation, the cost of retirement contributions made and workmen's compensation premiums paid by the State for and on account of personnel, rentals for space occupied in State owned or State leased buildings, and all other direct and indirect costs incurred during the preceding calendar year. An itemized satement of the ex-
penses so ascertained shall be open to public inspection in the office of the Board for thirty days after notice to all insurance carriers directly affected thereby before the
Board shall make an assessment upon such carriers as hereinafter provided. The Board shall appoint a referee who shall hold a hearing to approve the amount of such expenses within fifteen days of giving notice thereof to all insurance carriers at which time any insurance carrier may challenge said amount of expenses. The Board shall keep an accurate record of all hearings held and may, in its discretion, assess against each insurance carrier twenty-five dollars for each adjourned hearing held at the request of any party. Where the decision of the referee is affirmed by the Board upon review, the Board shall assess against each such insurance carrier seeking such review the sum of twenty-five dollars and may assess against any other party the sum of five dollars. The fund so created from these assessments shall be applied towards the total amount of the expenses ascertained as above.
(d) The Board shall then determine for each insurer the proportion/percentage of the expense determined in subsection (c) above that the toal compensation or payments made by each insurer bore to the toal of such expenses. Using these proportions/percentages, the Board shall then assess each insurer its proportion/percentage of such expenses. The amounts so secured shall be paid to the Secretary of Finance to reimburse the State for appropriations theretofore made by the State for the payment in the first instance of the expenses of administering this chapter.
Approved July 14, 1977.