SENATE SUBSTITUTE NO. 1
SENATE BILL NO. 220
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO THE DELAWARE INSURANCE GUARANTY ACT.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 3. Amend §4205(6)a of Title 18 of the Delaware Code by deleting the phrase "The property from which the claim arises is permanently located" and replacing it with the following: "The claim is a first-party claim for damage to property with a permanent location".
Amend §4205(6)b of Title 18 of the Delaware Code by deleting the second paragraph in subsection b, which begins "'Covered claim' shall in no event include" in its entirety and replacing it with the following:
"'Covered Claim' shall in no event include:
a. any amount awarded as punitive, bad faith or exemplary damages regardless of the language of the insurance policy invoked;
b. any amount sought as a return of premium under any retrospective rating plan;
c. any amount due any re-insurer, insurer, insurance pool, or underwriting association as subrogation moneys or otherwise. No such claim for any amount due any reinsurer, insurer, insurance pool or underwriting association may be asserted against a person insured under a policy issued by an insolvent insurer other than to the extent such claim exceeds the association obligation limits set forth in Section 4208 of this title.
d. any first-party claim by an insured whose net worth exceeds $10 million on December 31 of the year next preceding the date the insurer becomes an insolvent insurer; provided that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis; or
e. any first-party claim by an insured which is an affiliate of the insolvent insurer;"
Section 4. Amend §4205(9) of Title 18 of the Delaware Code by deleting the section reference "4208(a)(1)" after the word "under" and replacing it with "§4203".
Section 5. Amend §4205(10) of Title 18 of the Delaware Code by adding a comma after "association" and adding "governmental entity" following the word "association" and before the word "or".
Section 6. Amend §4208(a)(1) of Title 18 of the Delaware Code by deleting the phrase "determination of the insolvency" and "determination" wherever it appears in this subsection and replacing it with the phrase "order of liquidation".
Section 7. Amend §4208(a)(1) of Title 18 of the Delaware Code by adding after the phrase "after the" and before the phrase "the final date", the following phrase:
"later of: (i) 24 months after the date of the order of liquidation or (ii)".
Section 8. Amend §4208(a)(1) of Title 18 of the Delaware Code by deleting the last sentence of this subsection in its entirety.
Section 9. Amend §4208(a)(1) of Title 18 of the Delaware Code by adding the following at the end of said section:
"Notwithstanding any other provisions of this chapter, except in the case of a claim for benefits under workers' compensation coverage, any obligation of the association to any and all persons shall cease when $10 million shall have been paid in the aggregate by the association and any one or more associations similar to the Association of any other state or states or any property/casualty security fund which obtains contributions from insurers on a pre-insolvency basis, to or on behalf of any insured and its affiliates on covered claims or allowed claims arising under the policy or policies of any one insolvent insurer. For purposes of this section, the term 'affiliate' shall mean a person who directly, or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with another person. If the association determines that there may be more than one claimant having a covered claim or allowed claim against the Association or any association similar to the Association or any property/casualty insurance security fund in other states, under the policy or policies of any one insolvent insurer, the Association may establish a plan to allocate amounts payable by the Association in such manner as the Association in its discretion deems equitable."
Section 10. Amend §4208(a)(2) of Title 18 of the Delaware code by inserting the word "only" after the word "insurer" and before the word "to", and, after the comma following the word "extent" and before the word "shall", add the following: "subject to the limitations provided in this chapter,".
Section 11. Amend §4208(b)(3) of Title 18 of the Delaware Code by adding after the word "sued", and before the period, the phrase:
"and such power to sue includes the power and right to intervene as a party before any court in this State that has jurisdiction over an insolvent insurer as defined by this chapter. All actions against the Association must be brought in this state. This state shall have exclusive jurisdiction over all actions against the Association."
Section 12. Amend §4211(a)(2)a of Title 18 of the Delaware Code by deleting the phrase "average annual", and further by deleting the phrase "for the 3-year period ending".
Section 13. Amend §4211(a)(2)a of Title 18 of the Delaware Code by deleting the word "next" following the word "year" and substituting in lieu thereof the word "immediately".
Section 14. Amend §4211(a)(2)a of Title 18 of the Delaware Code by deleting the numerals "50,000,000" and replacing said numerals with the numerals "25,000,000".
Section 15. The provisions of this Act shall apply to all claims after the date of enactment.
Approved July 17, 1998