SENATE BILL NO. 128
AN ACT TO AMEND TITLE 18, DELAWARE CODE REGARDING FINANCIAL EXAMINATIONS OF INSURANCE COMPANIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Section 322, Chapter 3, Title 18 Delaware Code by adding a new subsection to read as follows:
"(e) In lieu of an examination under this Section of any foreign or alien insurer licensed in this State, the Commissioner may accept an examination report on such company as prepared by the Insurance Department for the company's state of domicile or port-or-entry state until January 1, 1994. Thereafter, such reports may only be accepted if (1) the Insurance Department was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program or (2) the examination is performed under the supervision of an accredited Insurance Department or with the participation of one or more examiners who are employed by such an accredited State Insurance Department and who after a review of the examination work papers and report state under oath that the examination was performed in a manner consistent with the standards and procedures required by their Insurance Department."
Section 2. Amend Section 324(a), Chapter 3, Title 18 Delaware Code by inserting after the period (.) at the end of the subsection (a) the following:
Upon determining that an examination should be conducted, the Commissioner or his designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners. The Commissioner may also employ such other guidelines or procedures as the Commissioner may deem appropriate."
Section 3. Amend Section 325, Chapter 3, Title 18 Delaware Code by adding a subsection (f) to read as follows:
"(f) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the Commissioner or any other person in the course of an examination made under this Chapter shall be given confidential treatment and are not subject to subpoena and may not be made public by the Commissioner or any other person except to other state insurance departments. Access may also be granted to the National Association of Insurance Commissioners. Such parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the company to which it pertains has been obtained".
Section 4. Amend Chapter 3, Title 18 Delaware Code by adding a new section to read as follows:
"325A. Immunity from Liability
(a) No cause of action shall arise nor shall any liability be imposed against the Commissioner, the Commissioner's authorized representatives or any examiner appointed by the Commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this Chapter.
(b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Commissioner or the Commissioner's authorized representative or examiner pursuant to an examination made under this Chapter, if such act of communication
or delivery was performed in good faith and without fraudulent intent or the intent to deceive.
(c) This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a) of this Section.
(d) A person identified in subsection (a) shall be entitled to an award of attorney's fees and costs if they are the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of their activities in carrying out the provisions of this Act and the party bringing the action was not substantially justified in doing so. For purposes of this section a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that It was initiated."
Approved June 20, 1991.