CHAPTER 390

FORMERLY

HOUSE BILL NO. 161

AS AMENDED BY

HOUSE AMENDMENT NOS. 1 & 2

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO INSURANCE CONTRACTS.

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

Section 1. Amend Chapter 29, Title 18, of the Delaware Code by inserting a new Section 2941 as shown by underlining as follows:

§ 2941. Notification and reasons for cancellation. A notice of cancellation of life insurance coverage by an insurer due to nonpayment of premiums shall be in writing, shall be delivered to the named policyholder or mailed to the named policyholder at the last known address of the named policyholder, shall state the effective date of the cancellation and shall be accompanied by a written explanation of the specific reasons for the cancellation. Proof of mailing of such cancellation notice shall be retained by the insurer for a period of not less than 1 year.

Section 2. Amend Chapter 31, Title 18, of the Delaware Code by inserting a new Section 3128 as shown by underlining as follows:

§ 3128. Notification and reasons for cancellation. A notice of cancellation of group life insurance coverage by an insurer due to nonpayment of premiums shall be in writing, shall be delivered to the policyholder or mailed to the policyholder at the last known address of the policyholder, shall state the effective date of the cancellation and shall be accompanied by a written explanation of the specific reasons for the cancellation. Proof of mailing of such cancellation notice shall be retained by the insurer for a period of not less than 1 year.

Section 3. Amend Chapter 33, Title 18, of the Delaware Code by inserting a new Section 3369 as shown by underlining as follows:

§ 3369. Notification and reasons for cancellation or nonrenewal. A notice of cancellation or nonrenewal of health insurance coverage by an insurer due to nonpayment of premiums shall be in writing, shall be delivered to the named policyholder or mailed to the named policyholder at the last known address of the named policyholder, shall state the effective date of the cancellation or nonrenewal and shall be accompanied by a written explanation of the specific reasons for the cancellation or nonrenewal. Proof of mailing of such cancellation or nonrenewal notice shall be retained by the insurer for a period of not less than 1 year. This Section shall not apply to any policy issued under the Delaware Healthy Children Program or any long-term care policy where notice provisions regarding cancellations or nonrenewals are specifically addressed elsewhere in this title or in regulations promulgated thereunder.

Section 4. Amend Chapter 35, Title 18, of the Delaware Code by inserting a new Section 3571Q as shown by underlining as follows:

§ 3571Q. Notification and reasons for cancellation or nonrenewal. A notice of cancellation or nonrenewal of group health insurance coverage by an insurer due to nonpayment of premiums shall be in writing, shall be delivered to the policyholder or mailed to the policyholder at the last known address of the policyholder, shall state the effective date of the cancellation or nonrenewal and shall be accompanied by a written explanation of the specific reasons for the cancellation or nonrenewal. Proof of mailing of such cancellation or nonrenewal notice shall be retained by the insurer for a period of not less than 1 year. This section shall not apply to any long-term care policy where notice provisions regarding cancellations or nonrenewals are specifically addressed elsewhere in title 18 or in regulations promulgated thereunder.

Section 5. Amend Section 3905(c), Title 18, of the Delaware Code by making insertions as shown by underlining as follows:

§ 3905. Cancellation or nonrenewal of automobile policy – Notice of cancellation or intention not to renew; notice of reasons.

(c) The mailing of the notice of cancellation, or of intention not to renew, to the named insured at his/her last address of record with the insurer, shall be by certified mail or by USPS Intelligent Mail Barcode (IMb). Proof of mailing of such notice shall be retained by the insurer for a period of not less than 1 year. This subsection shall not apply in case of nonpayment of premium.

Section 6. Amend Section 4122(b), Title 18, of the Delaware Code by making insertions as shown by underlining as follows:

§ 4122. Notification and reasons for declination or termination.

(b) A notice of cancellation of property insurance coverage by an insurer shall be in writing, shall be delivered to the named insured or mailed to the named insured at the last known address of the named insured, shall state the effective date of the cancellation and shall be accompanied by a written explanation of the specific reasons for the cancellation. Proof of mailing of such cancellation notice shall be retained by the insurer for a period of not less than 1 year.

Section 7. Amend Section 4130(a), Title 18, of the Delaware Code by making insertions as shown by underlining as follows:

§ 4130. Nonrenewal.

(a) (1) An insurer may not refuse to renew a policy of homeowners insurance solely on the basis of:

a. Claims caused by weather, unless 3 or more such claims have been made against the policy during the 36 months immediately preceding the expiration of the current policy period; or

b. Claims not caused by weather, unless 2 or more claims have been made against the policy; or

c. A combination of claims caused by weather and claims not caused by weather, unless such combination of three or more claims has been made against the policy during the 36 48 months immediately preceding the expiration of the current policy period; or

d. Claims closed without payment, notwithstanding any other provision of this section.

(2) However, an insurer may nonrenew a homeowner’s policy if:

a. The claim or claims asserted against the policy demonstrate that there has been a reasonably substantial change or increase in the hazard or in the risk assumed by the carrier subsequent to the date the policy was issued, and such nonrenewal is applied to other homeowners policies similarly situated; or

b. The policyholder has refused or failed to make objectively reasonably necessary changes or repairs after being notified by the insurer that failure to make such changes or repairs will constitute a breach of contractual duties, conditions or warranties that will change or increase the hazard or risk assumed by the insurer subsequent to the date the policy was issued.

Section 8. Effective Date. This law shall apply to all insurance contracts issued or renewed on or after January 1, 2015.

Approved August 06, 2014