Source: http://delcode.delaware.gov/title18/c042/
Timestamp: 2018-02-24 02:21:49
Document Index: 389684634

Matched Legal Cases: ['§ 4201', '§ 4202', '§ 4203', '§ 4204', '§ 4205', '§ 4206', '§ 4207', '§ 4208', '§ 4209', '§ 4210', '§ 4211', '§ 4212', '§ 4213', '§ 4214', '§ 4215', '§ 4216', '§ 4217', '§ 4218', '§ 4219', '§ 4220', '§ 4221', '§ 4223', '§ 4201', '§ 4201', '§ 4202', '§ 4202', '§ 4203', '§ 1', '§ 1', '§ 4204', '§ 4202', '§ 4204', '§ 4208', '§ 4205', '§ 1', '§ 1', '§ 26', '§ 2', '§ 3', '§ 4206', '§ 4205', '§ 4209', '§ 4207', '§ 4206', '§ 4207', '§ 4207', '§ 4208', '§ 2', '§ 1', '§ 27', '§ 3', '§ 6', '§ 4209', '§ 4208', '§ 4207', '§ 4208', '§ 4209', '§ 4210', '§ 4210', '§ 1', '§ 4211', '§ 4211', '§ 6', '§ 1', '§ 12', '§ 3', '§ 4212', '§ 1', '§ 7', '§ 1', '§ 4213', '§ 9', '§ 1', '§ 4214', '§ 4214', '§ 10', '§ 4215', '§ 4215', '§ 4216', '§ 4216', '§ 4217', '§ 4217', '§ 11', '§ 1', '§ 4218', '§ 12', '§ 4219', '§ 4216', '§ 3', '§ 1', '§ 4220', '§ 3', '§ 4221', '§ 13', '§ 4223', '§ 4201', '§ 14']

TITLE 18 - CHAPTER 42. DELAWARE INSURANCE GUARANTY ASSOCIATION ACT
§ 4201 § 4202 § 4203 § 4204 § 4205 § 4206 § 4207 § 4208 § 4209 § 4210 § 4211 § 4212 § 4213 § 4214 § 4215 § 4216 § 4217 § 4218 § 4219 § 4220 § 4221 § 4223
CHAPTER 42. DELAWARE INSURANCE GUARANTY ASSOCIATION ACT
§ 4201 Title.
This chapter shall be known and may be cited as the "Delaware Insurance Guaranty Association Act."
18 Del. C. 1953, § 4201; 57 Del. Laws, c. 437.;
§ 4202 Purpose.
This chapter shall provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies and to provide an association to assess the cost of such protection among insurers.
18 Del. C. 1953, § 4202; 57 Del. Laws, c. 437.;
(5) Insurance of warranties or service contracts;
18 Del. C. 1953, § 4203; 57 Del. Laws, c. 437; 63 Del. Laws, c. 395, § 1; 68 Del. Laws, c. 112, § 1.;
§ 4204 Construction.
This chapter shall be liberally construed to effect the purpose specified in § 4202 of this title, which shall constitute an aid and guide to interpretation.
18 Del. C. 1953, § 4204; 57 Del. Laws, c. 437.;
3. 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 § 4208 of this title;
4. Any first-party claim by an insured whose net worth exceeds $10,000,000 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
(10) "Person" means any individual, corporation, partnership, association, governmental entity or voluntary organization.
18 Del. C. 1953, § 4205; 57 Del. Laws, c. 437; 60 Del. Laws, c. 189, § 1; 64 Del. Laws, c. 346, § 1; 67 Del. Laws, c. 223, § 26; 68 Del. Laws, c. 112, § 2; 71 Del. Laws, c. 463, §§ 3-5.;
§ 4206 Creation of the Association.
There is created a nonprofit unincorporated legal entity to be known as the Delaware Insurance Guaranty Association. All insurers, defined as member insurers in § 4205 of this title, shall be and remain members of the Association as a condition of their authority to transact insurance in this State. The Association shall perform its functions under a plan of operation established and approved under § 4209 of this title and shall exercise its powers through a board of directors established under § 4207 of this title.
18 Del. C. 1953, § 4206; 57 Del. Laws, c. 437.;
§ 4207 Board of Directors.
(a) The Board of Directors of the Association shall consist of not less than 5 nor more than 9 persons serving terms as established in the plan of operation. The members of the Board shall be selected by member insurers subject to the approval of the Commissioner. Vacancies of the Board shall be filled for the remaining period of the term in the same manner as initial appointments. If no members are selected within 60 days after July 1, 1970, the Commissioner may appoint the initial members of the Board of Directors.
(b) In approving selections to the Board, the Commissioner shall consider among other things whether all member insurers are fairly represented.
(c) Members of the Board may be reimbursed from the assets of the Association for expenses incurred by them as members of the Board of Directors.
18 Del. C. 1953, § 4207; 57 Del. Laws, c. 437.;
(1) Be obligated to pay valid covered claims existing prior to the order of liquidation of the insolvency and arising within 30 days after the order of liquidation or before the policy expiration date if less than 30 days after the order of liquidation, or before the insured replaces the policy or causes its cancellation, if it is done within 30 days of that order of liquidation. Such obligation shall be satisfied by paying to the claimant an amount as follows: (i) the full amount of a covered claim for benefits under a workers' compensation insurance policy; (ii) an amount not exceeding $10,000 per policy for a covered claim for the return of an unearned premium; (iii) an amount not exceeding $300,000 per claimant for all other covered claims. In no event shall the Association be obligated to pay a claimant an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. Notwithstanding any other provisions of this chapter, a covered claim shall not include any claim filed with the Association after the later of: (i) 24 months after the date of the order of liquidation or (ii) final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer; provided, however, that a "covered claim" shall include any covered claim of which notice was given to the Association on or prior to June 30, 1991. 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 $10,000,000 shall have been paid in the aggregate by the association and any 1 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.
(3) For the purpose of providing the funds necessary to carry out the powers and duties of the Association, the Board of Directors shall assess the member insurers, separately for each class, at such times and in such amounts as the Board finds necessary. Assessments shall be due not less than 30 days after written notice to the member insurers.
(6) Refund to the member insurers in proportion to the contribution of each member insurer to the Association that amount by which the assets of the Association exceed the liabilities if at the end of any calendar year the Board of Directors finds that the assets of the Association exceed the liabilities for the coming year of the Association as estimated by the Board of Directors.
18 Del. C. 1953, § 4208; 57 Del. Laws, c. 437; 63 Del. Laws, c. 395, § 2; 65 Del. Laws, c. 5, § 1; 67 Del. Laws, c. 223, § 27; 68 Del. Laws, c. 112, §§ 3-5; 71 Del. Laws, c. 463, §§ 6-11.;
§ 4209 Plan of operation.
(2) If the Association fails to submit a suitable plan of operation by September 29, 1970, or if at any time thereafter the Association fails to submit suitable amendments to the plan, the Commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this chapter. Such rules shall continue in force until modified by the Commissioner or superseded by a plan submitted by the Association and approved by the Commissioner.
(c) The plan of operation shall:
(1) Establish the procedures whereby all the powers and duties of the Association under § 4208 of this title will be performed.
(2) Establish procedures for handling assets of the Association.
(3) Establish the amount and method of reimbursing members of the Board of Directors under § 4207 of this title.
(4) Establish procedures by which claims may be filed with the Association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the Association or its agent and a list of such claims shall be periodically submitted to the Association or similar organization in another state by the receiver or liquidator.
(5) Establish regular places and times for meetings of the Board of Directors.
(6) Establish procedures for records to be kept of all financial transactions of the Association, its agents, and the Board of Directors.
(7) Provide that any member insurer aggrieved by any final action or decision of the Association may appeal to the Commissioner within 30 days after the action or decision.
(8) Establish the procedures whereby selections for the Board of Directors will be submitted to the Commissioner.
(9) Contain additional provisions necessary or proper for the execution of the powers and duties of the Association.
(d) The plan of operation may provide that any or all powers and duties of the Association, except those under § 4208(a)(3) and (b)(2) of this title, are delegated to a corporation, association or other organization which performs or will perform functions similar to those of this Association, or its equivalent, in 2 or more states. Such a corporation, association or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the Association. A delegation under this subsection shall take effect only with the approval of both the Board of Directors and the Commissioner and may be made only to a corporation, association or organization which extends protection not substantially less favorable and effective than that provided by this chapter.
18 Del. C. 1953, § 4209; 57 Del. Laws, c. 438.;
§ 4210 Duties and powers of the Commissioner.
(a) The Commissioner shall:
(1) Notify the Association of the existence of an insolvent insurer not later than 3 days after he or she receives notice of the determination of the insolvency;
(2) Upon request of the Board of Directors, provide the Association with a statement of the net direct written premiums of each member insurer.
(b) The Commissioner may:
(1) Require that the Association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this chapter. Such notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient.
(2) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this State of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the Commissioner may levy a fine on any member insurer which fails to pay an assessment when due. Such fine shall not exceed 5% of the unpaid assessment per month, except that no fine shall be less than $100 per month.
(3) Revoke the designation of any servicing facility if he or she finds claims are being handled unsatisfactorily.
(c) Any final action or order of the Commissioner under this chapter shall be subject to judicial review in a court of competent jurisdiction.
18 Del. C. 1953, § 4210; 57 Del. Laws, c. 437; 70 Del. Laws, c. 186, § 1.;
§ 4211 Effect of paid claims.
(a)(1) Any person recovering under this chapter shall be deemed to have assigned the rights under the policy to the Association to the extent of the person's recovery from the Association. Every insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as such person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out, except such causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer and except as provided in paragraph (a)(2) of this section. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the Association shall not operate to reduce the liability of the insureds to the receiver, liquidator or statutory successor for unpaid assessments.
(2) The Association shall have the right to recover from the following persons the amount of any covered claim paid on behalf of such person pursuant to this chapter:
a. Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds $25,000,000 and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and
b. Any person who is an affiliate of the insolvent insurer and whose liability obligations to any other person are satisfied in whole or in part by payment under this chapter. This paragraph (a)(2) shall not apply retroactively and/or retrospectively and shall apply only as to insurer insolvencies which occur on or after June 30, 1991.
(b) The receiver, liquidator or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that to which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer.
(c) The Association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the Association, and estimates of anticipated claims on the Association which shall preserve the rights of the Association against the assets of the insolvent insurer.
18 Del. C. 1953, § 4211; 57 Del. Laws, c. 437; 68 Del. Laws, c. 112, § 6; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 463, §§ 12-14; 72 Del. Laws, c. 400, § 3.;
18 Del. C. 1953, § 4212; 57 Del. Laws, c. 437; 62 Del. Laws, c. 394, § 1; 68 Del. Laws, c. 112, §§ 7, 8; 70 Del. Laws, c. 186, § 1.;
(1) The Board of Directors may, upon majority vote:
18 Del. C. 1953, § 4213; 57 Del. Laws, c. 437; 68 Del. Laws, c. 112, § 9; 70 Del. Laws, c. 186, § 1.;
§ 4214 Examination of the Association.
The Association shall be subject to examination and regulation by the Commissioner. The Board of Directors shall submit, not later than June 30 of each year, a financial report for the preceding calendar year in a form approved by the Commissioner.
18 Del. C. 1953, § 4214; 57 Del. Laws, c. 437; 68 Del. Laws, c. 112, § 10.;
§ 4215 Tax exemption.
The Association shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions, except taxes levied on real or personal property.
18 Del. C. 1953, § 4215; 57 Del. Laws, c. 437.;
§ 4216 Recognition of assessments in rates.
The rates and premiums charged for insurance policies to which this chapter applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the Association by the member insurer less any amounts returned to the member insurer by the Association, and such rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer.
18 Del. C. 1953, § 4216; 57 Del. Laws, c. 437.;
§ 4217 Immunity.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the Association or its agents or employees, the Board of Directors or the Commissioner or the Commissioner's representatives for any action or any failure to act taken by them in the performance of their powers and duties under this chapter. Neither shall the Association, its officers, agents and employees be subject to any claim for damages for bad faith.
18 Del. C. 1953, § 4217; 57 Del. Laws, c. 437; 68 Del. Laws, c. 112, § 11; 70 Del. Laws, c. 186, § 1.;
All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this State shall be stayed for 120 days from the date the insolvency is determined, and for such time thereafter as may be determined by the court, to permit a proper defense by the Association of all pending causes of actions. As to any covered claims arising from a judgment under any decision, verdict or finding based on the default of the insolvent insurer or its failure to defend an insured, the Association, either on its own behalf or on behalf of such insured, may apply to have such judgment, order, decision, verdict or finding set aside by the same court or administrator that made such judgment, order, decision, verdict or finding and shall be permitted to defend against such claim on the merits.
18 Del. C. 1953, § 4218; 57 Del. Laws, c. 437; 68 Del. Laws, c. 112, § 12.;
§ 4219 Recoupment of assessment.
(a) Unless a longer period has been allowed by the Commissioner, a member insurer shall at its option have the right to show a certificate of contribution as an asset in the form approved by the Commissioner at percentages of the original face amount approved by the Commissioner, for calendar years as follows:
(1) One hundred percent for the calendar year of issuance;
(2) Eighty percent for the first calendar year after the year of issuance;
(3) Sixty percent for the second calendar year after the year of issuance;
(4) Forty percent for the third calendar year after the year of issuance;
(5) Twenty percent for the fourth calendar year after the year of issuance.
(b) The insurer may offset the amount written off by it in a calendar year under subsection (a) of this section above, against its premium tax liability to this State accrued with respect to business transacted in such year.
(c) Any sums acquired by refund from the Association which have theretofore been written off by contributing insurers and offset against premium taxes as provided above, and are not then needed for purposes of this chapter, shall be paid by the Association to the Commissioner and deposited by the Commissioner with the State Treasury for credit to the General Fund of this State.
(d) To the extent amounts have been written off under subsection (c) of this section above, § 4216 of this title shall not apply.
63 Del. Laws, c. 395, § 3; 70 Del. Laws, c. 186, § 1.;
§ 4220 Preferred creditor status.
Repealed by 64 Del. Laws, c. 193, § 3, effective July 19, 1983.;
§ 4221 Access to assets of insolvent insurer; application for court approval of plan to disburse assets.
Repealed by 68 Del. Laws, c. 112, § 13, effective July 5, 1991.;
§ 4223 Applicability.
Unless otherwise provided by this chapter, 68 Del. Laws, c. 112 shall apply retroactively and/or retrospectively to all incomplete matters having arisen or arising under the Delaware Insurance Guaranty Association Act (18 Del. C. § 4201 et seq.).
68 Del. Laws, c. 112, § 14.;