CHAPTER 111

FORMERLY

SENATE BILL NO. 126

AS AMENDED BY SENATE AMENDMENT NOS. 1, 2 AND 3

AN ACT TO AMEND CHAPTERS 1 AND 4, TITLE 18 OF THE DELAWARE CODE RELATING TO THE DELAWARE INSURANCE AUTHORITY.

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

Section 1. Amend Title 18, Delaware Code, Chapter 4, Section 401, by striking Section 401 in its entirety and inserting in lieu thereof the following:

"(a) The Insurance Commissioner shall ascertain whether:

(1) Delaware counties, municipalities, school districts, parking authorities, and other instrumentalities and political subdivisions of the State of Delaware are finding liability and other insurance prohibitively expensive or impossible to obtain at any price.

(1) Certain private occupational groups and types of enterprise are suffering from the same prohibitive cost or unavailability of liability and other insurance.

(1) The uneconomic price or unavailability of insurance coverage for public or private risks exposes public bodies or private persons to catastrophic loss to the extent that the ability of governmental units to render services or the ability of private persons to function is severely impaired, to the grave detriment of the safety, economic stability and utility of public bodies and private persons.

(1) The problems arising from the conditions found above may be alleviated by the adoption of self-insurance joint insurance funds and an excess insurance pool.

(b) If the Commissioner finds in the affirmative pursuant to subsection (a) of this section, the Commissioner shall be authorized to activate the Authority provided under Section 403 of this Chapter, subject to the appropriation of adequate funds by the General Assembly.

(c) The Delaware Insurance Authority, by resolution duly adopted by a majority of the members of the Board, shall ascertain and certify to the Insurance Commissioner and the General Assembly on or before March 1 of each year whether the conditions justifying the affirmative findings under subsection (a) pertain. If no such certification is made, or if the certification is rejected by the General Assembly, the General Assembly shall direct the Insurance Commissioner to exercise the authority, as is appropriate, under Section 404(k), 405(i), or 406(i) of this Title. If the Insurance Commissioner rejects the certification by the Delaware Insurance Authority Board, the General Assembly may direct the Insurance Commissioner to exercise such authority, as is appropriated under Section 404(k), 405(i), 406(i) of this title.

(d) Any certification by the Delaware Insurance Authority Board pursuant to subsection (c) above shall be supported by the following:

(1) An independent market and actuarial analysis to determine the existence of the conditions listed in subsection (a) of this section. The analysis procedure shall be developed by the Board of the Delaware Insurance Authority and subject to the approval of the Insurance Commissioner; and

(2) Affidavits of five or more employers

(i) qualifying under section 404 of this Title, or

(ii) qualifying under section 405 of this Title. Such affidavits shall affirm the intent of the employer to purchase insurance from either the Public Entity fund or the Private Entity Fund.

(3) The Commissioner shall promulgate regulations governing the form and content of the affidavit."

Section 2. Amend Title 18, Delaware Code, Chapter 1, Section 104(a) by striking paragraphs (4), (5), and (6) and by striking Section 104(b).

Section 3. Amend Title 18, Delaware Code, chapter 4, Section 403 by adding the following at the end of said section:

"(o) Notwithstanding any other law, the provisions of Title 18, Chapter 5 and the requirements imposed through Section 507 of that chapter shall govern the formation and operation of entities authorized by Title 18, Chapter 4.

(p) To the extent those entities authorized by Title 18, chapter 4, Sections 404, 405, and 406 provide self-insurance, those entities shall be subject to the requirements imposed on group self-insurance by the group self-insurance model statute promulgated by the National Association of Insurance Commissioners.

(q) The Insurance Commissioner is hereby authorized to promulgate regulations embodying requirements necessary for conforming the operation of those entities authorized by Section 404, 405, and 406 to the requirements imposed by Title 18, Chapter 5, by Section 507 of that chapter."

Section 4. Amend Title 18, Delaware Code, Chapter 4 by adding thereto a new Section 420:

"The Delaware Insurance Authority and those entities authorized by Title 18, Chapter 4, Sections 404, 405, and 406 shall be governed by this chapter and the following chapters of this title:

Chapters 1, 3, 5, 9, 11, 13, 23, 25, 27, 39, 41, 47 and 59.

Section 5. Amend Title 18, Delaware Code, chapter 4, Section 404(k) by adding thereto a new paragraph 5:

"(5) A determination by the Commissioner that the conditions under which an affirmative finding was made under Section 401 of this Chapter no longer exist."

Section 6. Amend Title 18, Delaware Code, Chapter 4, Section 405(f) by adding thereto a new paragraph 5:

"(5) A determination by the Commissioner that the conditions under which an affirmative finding was made under Section 401 of this Chapter no longer exist."

Section 7. Amend Title 18, Delaware Code, Chapter 4, Section 406(i) by adding thereto a new paragraph 4:

"(4) A determination by the Commissioner that the conditions under which an affirmative finding was made under Section 401 of this Chapter no longer exist."

Section 8. Amend Title 18, Delaware Code, Chapter 4 by striking Section 404(c) in its entirety and inserting in lieu thereof the following:

"(c) The governing body of any public entity may, by resolution or ordinance as appropriate, for the purpose of insuring liability and worker's compensation as provided in this act, agree to join together with any other public entity or entities, subject to the restrictions of Subsection (a) of this section, to establish a joint insurance fund for the purpose of insuring said liability and worker's compensation and shall appropriate such monies as are required therefore."

Section 9. Amend Section 403 Title 18, of the Delaware Code by striking subsection (b) in its entirety and inserting the following:

"The Authority shall consist of a Chairman which shall be appointed by the Insurance Commissioner, and shall be someone other than the Insurance Commissioner, and 6 other members. The Chairman shall hold office for a term of 4 years from the date of appointment unless sooner terminated for cause. The Chairman may succeed himself/herself."

Section 10. Amend Section 403, Title 18, of the Delaware Code, subsection (d) by deleting the first sentence and by deleting the words an employee of the Insurance Department to serve as ", as they appear in the third sentence thereof so that the sentence shall read as follows: The Chairman shall appoint a nonvoting Secretary—Treasurer of the Authority, who shall serve at the pleasure of the Chairman."

Section 11. Amend Section 403, Title 18, of the Delaware Code, subsection (e) by striking it in its entirety and inserting the following:

"Notwithstanding any other law, no officer or employee of the State shall be deemed to have forfeited or shall forfeit his office or employment or any benefits or emoluments thereof by reason of his service as an officer of the Authority."

Section 12. Amend Section 404, Title 18, of the Delaware Code, subsection (d) by striking it in its entirety and inserting the following:

"Upon the establishment of a public entity joint insurance fund, a board of directors consisting of 5 members shall be appointed for a term of 4 years. The board of directors shall be appointed as follows:

(a) Three members to be appointed by the Insurance Commissioner."

Section 13. Amend Section 404, Title 18, of the Delaware Code, subsection (f) by striking the words "The Insurance Commissioner," and insert in lieu thereof "The Chairman of the Authority."

Section 14. Amend Section 405, Title 18, of the Delaware Code, subsection (b) by striking it in its entirety and inserting the following:

"Upon the establishment of a joint insurance fund, a board of directors consisting of 5 members shall be appointed for a term of 4 years. The board of directors shall be appointed as follows:

(a) Three members to be appointed by the Governor.

(b) Two members to be appointed by the Insurance Commissioner."

Section 15. Amend Section 405, subsection (d) by striking the words The Insurance Commissioner," and insert in lieu thereof The Chairman of the Authority."

Section 16. Amend Section 406, Title 18, of the Delaware Code, subsection (b) by striking it in its entirety and inserting the following:

"Upon the establishment of an excess insurance fund, a board of directors consisting of 5 members shall be appointed for a term of 4 years. The board of directors shall be appointed as follows:

(a) Three members to appointed by the Governor.

(b) Two members to be appointed by the Insurance Commissioner."

Approved July 8, 1993.