HOUSE BILL NO. 395
AS AMENDED BY HOUSE AMENDMENT NO. 2
AN ACT TO AMEND CHAPTER 23, PART II, TITLE 19 OF THE DELAWARE CODE RELATING TO THE USE OF DEDUCTIBILITY CLAUSES IN THE STATE WORKMENS' COMPENSATION ACT.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §2301, Chapter 23, Part II, Title 19 of the Delaware Code by re-designating subsection (7) as new subsection (8), and by re-designating each succeeding subsection accordingly.
Section 2. Amend §2301, Chapter 23, Part II, Title 19 of the Delaware Code by adding thereto a new subsection, designated as subsection (7), which new subsection shall read as follows:
"(7) 'Deductible Clause' shall mean a clause in an agreement between an employer and an insurer that the employer shall be liable for a specified initial amount, per occurrence or per employee, of each claim, loss or liability; but that the insurer shall be liable for any excess liability up to and including the maximum amount permitted by law."
Section 3. Amend §2344, Chapter 23, Part II, Title 19 of the Delaware Code by adding at the end of said section, the following sentence:
"The provisions of this section shall not apply to deductible clauses."
Section 4. Amend §2372, Chapter 23, Part II, Title 19 of the Delaware Code by adding thereto a new subsection, designated as subsection (c), which new subsection shall read as follows:
"(c) Every insurer licensed to issue Workers' Compensation and Employers' Liability Insurance by the Insurance Department pursuant to Title 18, Delaware Code, shall 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. Any applicable deductible shall be subject to the following provisions:
(1) The deductible shall apply separately to each occurrence during the policy term regardless of the number of employees injured in the occurrence.
(2) The deductible shall be subject to a minimum of $500 and a maximum of $5,000, with intermediate deductible incruments of $500.
(3) The premium charged for a deductible form of policy shall be subject to an actuarily sound credit related to the amount of the deductible.
(4) In the event of a claim under a deductible form of policy, the insurer shall administer the claim as though no deductible applied and shall then be entitled to reimbursement from the employer for the amount of said deductible.
Section 8. The provisions of this Act shall apply to any Workers' Compensation and Employers' Liability policies that are issued or renewed six months following the effective date of this Act.
Approved June 1, 1982.