IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

DELSURE HEALTH INSURANCE, INC.,

Appellant,

v.
THE DELAWARE DEPARTMENT OF INSURANCE,

Appellee. )

) ) ) ) ) ) ) ) ) C.A. No.: N 19 A

- 11

- 00 9 VLM

(Consolidated)

MEMORANDUM OPINION
Submitted: April 12 , 202 2 Decided: July 7 , 2022
Upon Consideration of Appellant’s Appeal from Decision o

f Delaware Department of Insurance , AFFIRMED
.
Bernard G. Conaway , Esquire, Conaway

- Legal LLC , Wilmington, D elaware. Attorney for Appellant

. Kathleen P. Makowski , Deputy Attorney General, Wilmington, Delaware. Attorney for Appellee

.

MEDINILLA, J.2 I. INTRODUCTION Appellant Delsure Health Insurance, Inc. (“Delsure”), appeals a decision of the Delaware Insurance Commissioner (the “Commissioner”) who found that Appellee Delaware Department of Insurance ( the “Department”) properly exercised its statutory authority under 18 Del. C. § 51 9(a)(3) when it revoked Delsure’s
C ertificate of A uthority (the “Certificate”) to “transact the business of . . . [h]ealth
insurance with in the State of Delaware

. ” 1 For the reasons set forth below, upon consideration of the arguments, submissions of the parties, and the record in this case, the Commissioner’s decision is AFFIRMED

.

II. FACTUAL AND PROCEDURAL BACKGROUND
Delsure was formed for the purpose of providing health insurance to residents
of the state of Delaware. 2 On October 15, 2018, the Department issued the
Certificate to Delsure , authorizing Delsure to conduct business under 18 Del. C. §
903 3 as a “ s tock insurer

. ” 4 The following day, Delsure was informed that it was
authorized “to transact insurance business” in Delaware but that it was not permitted
to “ conduct Delaware transactions until the policies, rate forms, and related

1 See Record, Exhibit 10:14, Certificate of Authority dated October 15, 2018 [hereinafter Certificate]. 2 Record, Exhibit 1 1, Transcript of December 4, 2019 Hearing , at 16:9

- 14 [hereinafter Hearing Transcript]. 3 See 18 Del. C. § 903 ( defining health insurance coverage). 4 See Certificate.3

documents ha [d] been filed . . . and the producers ha [d] been properly licensed.” 5
Delsure has never been allowed to sell health insurance in Delaware. 6
To transact in health insurance, an insurer is required to maintain a minimum capital and surplus totaling $450,000

. 7 On October 19, 2018, Delsure possessed a combined capital and surplus total of $546,856. 8 Because th e excess surplus had a
limited amount of $96,856, t he Department required Delsure to “file statutory monthly financial statements” with the Department to ensure Delsure maintained sufficient levels of capital and surplus. 9 Delsure’s December 2018 financial statement reported a deficient balance. 10 In February 2019, t he Department a pproved Delsure’s request to make an additional capital contribution of $172,000 , 11 allowing Delsure to remain compliant on its
2018 Annual Statement. 12 The Department notified Delsure on May 6, 2019, that
Delsure’s finances were again deficient. 13 The Department specifically found that

5 Record, Exhibit 10:106 , Cover Letter dated Oct ober 16, 2018

. 6 See Hearing Transcript, at 42:7

- 8. 7 See 18 Del. C. § 511(a ). 8 Record, Exhibit 10:15 , Letter from Department dated October 19, 2018

. The letter also reiterates Delsure has been granted authority “to write health insurance.” 9 Id. 10 Record, Exhibit 10:17 , December 2018 Unaudited Financial Statement (showing total capital and surplus amount of $413,630). 11 Record, Exhibit 10:24 , Letter from Department dated February 22, 2019

. 12 See id. ; Record, Exhibit 10:25 , Annual Statement for the Year Ended December 31, 2018

. 13 See Record, Exhibit 10:28 , Letter from Department dated May 6, 2019.4

Delsure’s monthly financial statements for February 2019 14 and March 2019 15 showed “the company’s capital and surplus amounts [were] below the minimum capital surplus amount for a health insurer.” 16 The Department also required a plan from Delsure to ensure future compliance with capital and surplus requirements. 17
An additional letter delivered on May 22, 2019, remind ed Delsure of the deficiency and provid ed a 30

- day deadline to comply with the requirements

. 18 Delsure responded on June 24, 2019, reporting that additional funds of $129,000 had been arranged through a purchase agreement, with $115,000 of th e funds already r eceived. 19 Delsure reported that the remainder was expected to be received the following day. 20 Unfortunately, Delsure failed to provide r eceipt of
the se additional funds . Accordingly, the Department revoked Delsure’s Certificate on June 26, 2019. 21 Upon revocation, Delsure requested a hearing

. 22 On De cember 4, 2019 , a hearing was conducted before The Honorable Joshua W. Martin, III (the “Hearing

14 Capital and s urplus of $413,487. 15 Capital and s urplus of $388,794. 16 Record, Exhibit 10:28 , Letter from Department dated May 6, 2019

. 17 Id. 18 Record, Exhibit 10:29 , Letter from Department dated May 22, 2019

. 19 Record, Exhibit 10 :30, Email from Delsure dated June 24, 2019, at 1. 20 Id. 21 See Record, Exhibit 1 0:127 , Order Revoking COA and Cover Letter dated June 26, 2019

. 22 Appellant’s Opening Brief, D.I. 54, at 5 [hereinafter Appellant’s Opening Brief].5

Officer”)

. 23 Both the Department and Delsure were represented by counsel and presented evidence as well as pre

- hearing and post hearing briefs. 24 On February 19, 2020 , the Hearing Officer issued a Proposed Order Pursuant to 29 Del. C. §
10126 and recommended 25 th at the Department and the Commissioner issue an
order that the Department possessed the statutory authority to revoke Delsure’s
Certificate. 26 I n a Final Decision and Order (“Final Order”) dated June 22, 2020,

t his recommendation was accepted by the Commissioner. 27 On September 1 9 , 202 1 , Delsure filed this appeal. 28 The Department filed its

r esponse on November 19 , 2021. The matter was assigned to this Court on December 15, 2021. Oral arguments were heard on March 30, 2022. A letter from Delsure was submitted as “Clarification Regarding Oral Argument” on April 11,
2022. 29 The Department objected to its submission on April 12 as inappropriate, procedurally defective, and substanti vely wrong. 30 The matter is ripe for decision.

23 The Honorable Joshua W. Martin, III was appointed by Deputy Commissioner Tanisha Merced as the hearing officer for this matter by Order dated September 25, 2019. 24 Record, Exhibit 17, Final Decision and Order by the Honorable Trinidad Navarro dated June 22, 2020 , at 1 [hereinafter Final Order]. 25 John Tinsley, Commissioner’s Special Deputy for Examinations also recommended revocation of the Certificate. See Record, Exhibit 16, Proposed Order by The Honorable Joshua W. Martin, III dated February 19, 2020, at 4 [hereinafter Hearing Officer Proposed Order]. 26 See id. at 11. 27 See Final Order. 28 This appeal has been consolidated with a previous appeal which has been stayed pending resolution of the present matter

. 29 See Letter from Delsure, D.I. 62. 30 See generally Letter from Department , D.I. 63.6 III. STANDARD OF REVIEW On an appeal from an agency , the Superior Court does not “. . . weigh the evidence, determine questions of credibility, and make its own factual findings and
conclusions.” 31 T his Cour t’s review is limited to correcting errors of law and a
determination of whether substantial eviden ce 32 in the record supports the agency’s
decision. 33 Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” 34 Questions of law are reviewed
de novo

. 35 Absent an abuse of discretion or an error of law , the agency’s decision
must be affirmed

. 36

IV. PARTY CONTENTIONS
Delsure contends the Commissioner erred when it issued its Final Order and
concluded that the Department possessed the legal authority to revoke its Certificate
under 18 Del. C. § § 511(a) and 519(a)(3)

. It argues statutory interpretation support s

31 Christiana Care Health Servs. v. Davis , 127 A.3d 391, 394 (Del. 2015); Johnson v. Chrysler Corp ., 213 A.2d 64, 66 (Del. 1965). 32 Olney v. Cooch , 425 A.2d 610, 614 (Del. 1981) (Substantial evidence constitutes relevant evidence that a reasonable person “might accept as adequate to support a con clusion.”). 33 Maracle v. Int'l Game Tech , 2010 WL 541199, at *2 (Del. Super. Feb. 1, 2010); Histed v. E.I. Du Pont de Nemours & Co ., 621 A.2d 340, 342 (Del. 1993); Johnson , 213 A.2d at 66; Lecompte v. Christiana Care Health Sys ., 2002 WL 31186551, at *2 (Del. Super. Oct. 2, 2002) (citing 29 Del. C. § 10142(d)) (The Superior Court determines whether the record “is legally adequate to support the Board's findings.”). 34 Olney , 425 A.2d at 614

. 35 See Johnson Controls, Inc. v. Fields , 758 A.2d 506, 509 (Del. 2000) (citing E.I. Du Pont De Nemours & Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del. Super. 1985) )

. 36 See Public Water Supply Co. v. DiPasquale , 735 A.2d 378, 381 (Del. 1999).7

a finding that it was not authorized to sell insurance and was only required to maintain a minimum capital of $300,000

. 37 Therefore, the Department was not
authorized to r equire Delsure to maintain a n additional free s urplus whe re its deficiency never fell below th e required minimum capital stock of $300,000

. 38 It
further assert s that the Department’s deficiency notices were statutorily defective
under 18 Del. C. § 4927 because the notices did not identify the amount of the deficiency. 39
The Department maintains it possessed the requisite statutory authority to
revoke Delsure’s Certificate

. 40 It also claims Delsure wa s authorized to and did
transact insurance business in Delaware

. 41 Finally, the Department claims that Delsure’s argument with respect to notices under 18 Del. C. § 4927 is not properly
before the Court. 42
V. DISCUSSION
A. Statutory Interpretation Proper
What led to the ultimate revocation of Delsure’s Certificate was that it failed

to meet minimum capital and surplus statutory requirements

. Under 18 Del. C. §

37 Appellant’s Opening Brief, at 10. 38 Id. at 4

. 39 Id. at 22. 40 Responsive Brief of Appellee, The Delaware Department of Insurance, D.I. 56, at 13

. 41 Id. 42 Id.8

519(a)(3) , t he Commissioner is required to suspend or revoke a certificate of authority “[i]f a domestic insurer . . . has failed to cure an impairment of capital or surplus within the time allowed therefor by the Commissioner . . . or is otherwise no longer qualified . . . .” 43 Such suspension or revocation is mandatory.
Delsure obtained a hearing that challenged the Department’s authority to
revoke. Delaware law provides that when a hearing is conducted by an agency “[t]he burden of proof shall always be upon the applicant or proponent.” 44 Delsure failed
to meet its burden that the revocation was improper , in part, based upon the
Commissi oner ’s determin ation that “Delsure, as a stock insurer [was] subject to the requirements of $300,000 of capital stock and $150,000 of free surplus pursuant to § 511(a).” 45 Delsure challenges the commissioner’s interpretation of the relevant statutory provisions. 46 Rules of statutory interpretation are well

- established under Delaware law. 47 A statute is ambiguous “if it is ‘reasonably susceptible of two interpretations or if a
li teral reading of the statute would lead to an unreasonable or absurd result not

43 18 Del. C. § 519(a)(3). 44 29 Del. C. § 10125(c). 45 Hearing Officer Proposed Order, at 6 (emphasis added). 46 The Commissioner adopted and incorporated the Hearing Officer’s recommendation, findings of fact, and conclusions of law into the Final Order. Accordingly, this Court will refer to such findings and conclusions of the Hearing Officer as if they were that of the Commissioner. 47 See, e.g., Delaware Bd. of Nursing v. Gillepsie , 41 A.3d 424, 427 (Del. 2012); Dewey Beach Enters., Inc. v. Bd. of Adjustment of Dewey Beach , 1 A.3d 305, 307 (Del. 2010).9

contemplated by the legislature.”’ 48 If the statute is not ambiguous, the Court should apply the plain meaning of the statutory term which is determined “by considering the term in a common or ordinary way.” 49 When considering an agency’s interpretation on appeal, “ [a] reviewing court may accord due weight, but not defer, to an agency interpretation of a statute administered by it.” 50 Greater weight should be accorded when reviewing a technical definition of an agency bearing technical expertise or “an agency interpretation [that] is l ongstanding and widely enforced.” 51
So h ere t he claim of error is based upon the statutory interpretation of a specific comma under § 511(a) and the definitional language of “authorized” and to
“transact insurance” under 18 Del. C. §§ 102(a)(2) and 103, respectively. First, Delsure’s argument rests on two separate clauses under 18 Del. C. § 511(a): To transact any 1 kind of insurance . . . an insurer shall possess and thereafter maintain in cash or cash equivalents unimpaired paid

- in capital stock . . . or a capital account . . . or unimpaired basic surplus . .

. , and when first so authorized shall possess free surplus, all in amounts not less than as follows

. 52

48 De laware Tech. and Cmty

. College v. State of Delaware Human Relations Comm’n , 2017 WL 2180544, at *2 (Del. Super. May 17, 2017) (quoting Taylor v. Diamond State Port Corp. , 14 A.3d 536, 538 (Del. 2011)). 49 See id. 50 DiPasquale , 735 A.2d at 382. 51 Id. at 382 n.8. 52 18 Del. C. § 511(a) (emphasis added).10

In essence, Delsure argues that reversal is warranted because of a comma. Specifically, that “the last phrase of § 511(a) uses a serial comma and coordinating conjunction

– ‘and’

– to tie together the two different account types.” 53 Accordingly, Delsure claims that this comma serves as “recognition that the capital and surplus

accounts are treated differently,” 54 and the language that follows this comma “relates solely to the surplus account.” 55 Delsure argues the factual record lends further support for its position

. It does not dispute that t he Department issued the Certificate authorizing it to conduct
business under 18 Del. C. § 903 56 as a “stock insurer” on October 15, 2018. 57 But the next day, although it was authorized “to transact insurance business , ” the Department further advised Dels ure that it was not permitted to “conduct Delaware transactions until the policies, rate forms, and related documents ha[d] been filed

. .

. and the producers ha[d] been properly licensed

. ” 58 Due to these directives, Delsure suggests that a reading of the law confirms that because it was not “first so
authorized” to sell insurance , it was not required to maintain a free surplus minimum under § 511 (a)

.

53 Appellant’s Opening Brief, at 12. 54 Id. at 13. 55 Id. 56 See 18 Del. C. § 903 (defining health insurance coverage). 57 See Certificate. 58 Record, Exhibit 10:106 , Cover Letter dated October 16, 2018

.11

For support, Delsure also c ites to Levinson v. First Delaware Insurance Company

. 59 In Levinson , our Supreme Court found that a Commissioner could not exercise discretion when he denied a certificate of authority to a new insurer who exceeded the capital and free surplus requirements under § 511. 60 The Levinson Court distinguished between the mandatory i nitial minimum capital requirements for issuance of a certificate of authority under § 511(a) and the Commissioner’s discretionary authority under § 511(a)(2) to adjust maintenance amounts after
licensure. 61 The Commissioner properly determined that the proposed interpretation of § 511 was incorrect and violative of the objective of the statute; the financial stability
of insurers. 62 He properly interpreted § 511 to read that both capital and surplus minimums are required prior to being allowed to transact insurance and preservation of both funds is required to maintain a certificate of authority. 63 The Commissioner further considered and rejected Delsure’s reliance on Levinson

. 64 Delsure’s

59 549 A.2d 296 (Del. 1988). 60 Id. at 299

. 61 See id. 62 Hearing Officer Proposed Order, at 7. 63 Id. 64 See id. Notably, this Court finds Levinson distinguishable. Here, Delsure had already been issued the Certificate. The issue here addressed the validity of the Department’s authority to revoke, not the Commissioner’s discretionary authority to adjust maintenance amounts under § 511(a)(2). This case involves revocation, not is suance. Therefore, any interpretation under Levinson dealt with separate and distinct issues not currently before this Court.12

interpretation “would allow an insurer to only meet the required minimums and not maintain them” which “is in direct contravention of the objectives of the statute.” 65 Required minimums are just that

— required.
Delsure argu es further that it was not required to maintain a free surplus
because it was not authorized to transact insurance. This argument is unavailing.
Under 18 Del. C. § 102(a)(2) “[a]n “authorized” insurer is one duly authorized to
transact insurance in this Sta te by a subsisting certificate of authority issued by the
Commissioner.” 66 A plain reading of § 102(a)(2) suggests that once Delsure
received the Certificate it was authorized to transact insurance within Delaware. Yet, Delsure maintains that under 18 De l. C. § 103, it did not meet the definition to
“transact insurance” provided under the law’s four statutory factors

. 67
The Commissioner properly determined that Delsure’s reading of § 103 was
too narrow , and that Delsure was transacting insurance

. It found that Delsure failed
to consider that a business can transact insurance through “solicitation or
inducement” under § 103 and such a finding was not limited to activities of issuing

65 Id. 66 18 Del. C. § 102(2) (emphasis added). 67 See 18 Del. C. § 103 (“In addition to other aspects of insurance operations to which provisions of this title by their terms apply, “transact” with respect to a business of insurance includes any of the following: (1) Solicitation or inducement; (2) Negotiations; (3) Eff ectuation of a contract of insurance; (4) Transaction of matters subsequent to effectuation and arising out of such a contract.”).13

policies. 68 He set forth examples of Delsure’s activities that f ell within the definition
of “ t ransacting insurance” defined under § 103 . This includ ed submitting various
forms on the System for Electronic Rates and Forms Filing (“ SERFF , ”) which could only be performed by a licensed insurer, maintaining a website “which offers a product line of insurance products,” and soliciting visitors to its website to contact
Delsure about those products. 69 The Commissioner also noted that Delsure’s
activities satisfied § 103’s lan guage of transacting insurance under its catch

- all provision

. 70 In considering the Commissioner’s interpretation on appeal, this Court accords due weight and finds no error of law or abuse of discretion. On de novo review, t h is Court finds th e Commissioner ’s statutory interpretation of 18 Del. C. § § 511(a) and 103 proper. The serial comma does not change the statutory requirements
under § 511(a)

. Delsure engaged in “solicitation or inducement” defined under § 103 and was transacting insurance in Delaware. As such, Delsure was required to
maintain both a capital stock minimum of $300,000 and a free surplus minimum of $150,000

. Therefore, the Department p ossessed the legal authority to revoke its
Certificate under 18 Del. C. § 519(a)(3)

.

68 Hearing Officer Proposed Order, at 8. 69 See id. 70 See 18 Del. C. § 103 (providing the four statutory factors are “[i]n addition to other aspects of insurance operations to which provisions of this title by their terms apply . . . .”).14

B. The Commission er ’s Decision is Supported by Substantial Evidence
Delsure ’s final argument is that it timely cured any deficiency. In finding against Delsure, the Commissioner properly determined that “Delsure did not provide documentation that the impairment of capital and surplus was cured within
the time allowed.” 71 Substantial evidence was presented in support.
On May 22, 2019, the Department notified Delsure by letter that the company was deficient for both the months of February and March 2019. 72 Receipt of this letter is not disputed. Delsure was given “thirty (30) days from the date of this letter” to add funds necessary to be “above the minimum capital a nd surplus level.” 73 As stated by the Commissioner, Delsure remained deficient on June 24, 2019, when it wrote to the Department of its plans to become compliant. Delsure explicitly stated in this letter that “[p]roof of receipt will be sent after the fi nal amount is received.” 74 Delsure did not provide proof of compliance within the 30

- day deadline as required by the Department’s May 22, 2019, letter. As of June 26, 2019, when the Certificate was revoked, such proof still had not been provided. 75
Las tly, the Commissioner rejected Delsure’s argument that it was not obligated to provide evidence of compliance to the Department

. The Commissioner

71 Final Order, at 2. 72 See id. ; Hearing Officer Proposed Order, at 8

– 9

. 73 Record, Exhibit 10:29 , Letter from Department dated May 22, 2019

. 74 Record, Exhibit 10:30, Email from Delsure dated June 24, 2019, at 1. 75 Hearing Transcript, 302:16

- 23.15

found th at the mere addition of funds without providing proof to the Department was insufficient and untimely

. 76 Where the Department notified Delsure that proof of compliance was required by the deadline , 77 the Commissioner determined also that any other interpretation by Delsure “would have been unreasonable.” 78 This Court
agrees. For the reasons stated, s ubstantial evidence exists on the record that Delsure was notified of the deficiency and provided a timeframe to cure the deficiency. It failed to provide proof of cure to the Department within the allotted time and did no t cure as required

. Its revocation is valid under 18 Del. C. § 519(a)(3).
C. Appellant’s Argument Related to Deficiency Notices is not Properly before this Court
It is well

- established under Delaware law that a Court cannot consider an issue on appeal where that same issue was not raised in the lower tribunal. 79 Delsure raises the argument of statutorily defective deficiency notices as to the amount of the deficiency for the first time in its Opening Brief. 80 No such argument exists in the

76 Hearing Officer Proposed Order, at 8

– 9. 77 Id. ; see also Record, Exhibit 10: 29 , Letter from Department dated May 22, 2019 (“The Delaware Insurance Department is requiring additional funds be added to the company. . . within thirty (30) days from the date o f this letter.”). 78 Hearing Officer Proposed Order, at 9. 79 See, e.g. , Equitable Trust Co. v. Gallagher , 77 A.2d 548, 550 (Del. 1950); Pfeiffer v. State Farm Mut. Auto. Ins. Co. , 2011 WL 7062498, at *8 (Del. Super. Dec. 20, 2011). 80 See Appellant’s Opening Brief, at 22.16

record below. 81 Delsure ’s nuanced a rgument relating to the amount of a deficiency
under 18 Del. C. § 4927 is distinct from its argument below relating to cure notice
under the same statute . Because Delsure failed to raise this argument below , the argument is waived and will not be considered by this Court.
CONCLUSION
The r ules of statutory interpretation support the Commission er ’s Final Order
that Delsure failed to cure its deficiency and the Department possessed t he statutory authority to revoke Delsure’s Certificate under 1 8 Del. C. § § 511(a) and 519(a)(3)

. The Commissioner’s Final Order is supported by substantial evidence in the record.
The Commission er did not abuse his discretion and there is no error of law. T he
Commission er ’s decision is AFFIRMED

. IT IS SO ORDERED

.

/s/ Vivian L. Medinilla Vivian L. Medinilla Judge

81 See Record, Exhibit 6, Delsure Letter Brief on Scope and Discovery Issues dated November 7, 2019 ; Record, Exhibit 9, Pre

- Hearing Position Paper by Delsure Dated November 27, 2019; Hearing Transcript ; Record, Exhibit 13, Delsure’s Post

- Hearing Opening Brief.