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2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5709. Modifications.

§ 5709. Modifications.
Modifications of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No such modification shall be effective retroactively nor as to any insurance contract issued prior thereto.
18 Del. C. 1953, §  5709;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5710. Attorney's bond.

§ 5710. Attorney's bond.
(a) Concurrently with the filing of the declaration provided for in § 5706 of this title, the attorney of a domestic reciprocal insurer shall file with the Commissioner a bond in favor of this State for the benefit of all persons damaged as a result of breach by the attorney of the conditions of the attorney's bond as set forth in subsection (b) hereof. The bond shall be executed by the attorney and by an authorized corporate surety and shall be subject to the Commissioner's approval.
(b) The bond shall be in the penal sum of $25,000, aggregate in form, conditioned that the attorney will faithfully account for all moneys and other property of the insurer coming into the attorney's hands and that such attorney will not withdraw or appropriate to his or her own use from the funds of the insurer any moneys or property to which he or she is not entitled under the power of attorney.
(c) The bond shall provide that it is not subject to cancellation unless 30 days' advance notice in writing of cancellation is given both the attorney and the Commissioner.
18 Del. C. 1953, §  5710;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5711. Deposit in lieu of bond.

§ 5711. Deposit in lieu of bond.
In lieu of the bond required under § 5710 of this title, the attorney may maintain on deposit, through the office of the Commissioner, a like amount in cash or in value of securities qualified under this title as insurers' investments and subject to the same conditions as the bond.
18 Del. C. 1953, §  5711;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5712. Action on bond.

§ 5712. Action on bond.
Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by 1 or more subscribers suffering loss through a violation of its conditions or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of such bond.
18 Del. C. 1953, §  5712;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5713. Service of process; judgment.

§ 5713. Service of process; judgment.
(a) Legal process shall be served upon a domestic reciprocal insurer by serving the insurer's attorney at the attorney's principal offices or by serving the Commissioner as the insurer's process agent under §§ 524 and 525 of this title.
(b) Any judgment based upon legal process so served shall be binding upon each of the insurer's subscribers as their respective interests may appear but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had upon each such subscriber.
18 Del. C. 1953, §  5713;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5714. Contributions to insurer.

§ 5714. Contributions to insurer.
The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms such funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer and, except upon liquidation of the insurer, shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. No such withdrawal or repayment shall be made without the advance approval of the Commissioner. This section does not apply to bank loans or to other loans made upon security.
18 Del. C. 1953, §  5714;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5715. Financial condition; method of determining.

§ 5715. Financial condition; method of determining.
In determining the financial condition of a reciprocal insurer, the Commissioner shall apply the following rules:
(1) The Commissioner shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis.
(2) The surplus deposits of subscribers shall be allowed as assets, except that any premium deposits delinquent for 90 days shall first be charged against such surplus deposit.
(3) The surplus deposits of subscribers shall not be charged as a liability.
(4) All premium deposits delinquent less than 90 days shall be allowed as assets.
(5) An assessment levied upon subscribers and not collected shall not be allowed as an asset.
(6) The contingent liability of subscribers shall not be allowed as an asset.
(7) The computation of reserves shall be based upon premium deposits other than membership fees and without any deduction for expenses and the compensation of the attorney.
18 Del. C. 1953, §  5715;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5716. Subscribers.

§ 5716. Subscribers.
Individuals, partnerships and corporations of this State may make application, enter into agreement for and hold policies or contracts in or with and be a subscriber of any domestic, foreign or alien reciprocal insurer. Any corporation now or hereafter organized under the laws of this State shall, in addition to the rights, powers, and franchises specified in its articles of incorporation, have full power and authority as a subscriber to exchange insurance contracts through such reciprocal insurer. The right to exchange such contracts is hereby declared to be incidental to the purposes for which such corporations are organized and to be as fully granted as the rights and powers expressly conferred upon such corporations. Government or governmental agencies, state or political subdivisions thereof, boards, associations, estates, trustees or fiduciaries are authorized to exchange nonassessable reciprocal interinsurance contracts with each other and with individuals, partnerships and corporations to the same extent that individuals, partnerships and corporations are herein authorized to exchange reciprocal interinsurance contracts. Any officer, representative, trustee, receiver or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of such contract but shall not be personally liable upon such contract by reason of acting in such representative capacity.
18 Del. C. 1953, §  5716;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5717. Subscribers' advisory committee.

§ 5717. Subscribers' advisory committee.
(a) The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.
(b) Not less than 2/3 of such committee shall be subscribers other than the attorney or any person employed by, representing or having a financial interest in the attorney.
(c) The committee shall:
(1) Supervise the finances of the insurer;
(2) Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney;
(3) Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer; and
(4) Have such additional powers and functions as may be conferred by the subscribers' agreement.
18 Del. C. 1953, §  5717;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5718. Subscribers' liability generally.

§ 5718. Subscribers' liability generally.
(a) The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several and proportionate liability, and not joint.
(b) Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while the subscriber's policy was in force. Such contingent liability may be at the rate of not less than 1 nor more than 10 times the premium or premium deposit stated in the policy, and the maximum aggregate thereof shall be computed in the manner set forth in § 5722 of this title.
(c) Each assessable policy issued by the insurer shall contain a statement of the contingent liability set in type of the same prominence as the insuring clause.
18 Del. C. 1953, §  5718;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5719. Subscribers' liability on judgment.

§ 5719. Subscribers' liability on judgment.
(a) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for 30 days.
(b) Any such judgment shall be binding upon each subscriber only in such proportion as the subscriber's interests may appear and in amount not exceeding the subscriber's contingent liability, if any.
18 Del. C. 1953, §  5719;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5720. Assessments.

§ 5720. Assessments.
(a) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval in advance by the subscribers' advisory committee and the Commissioner or by the Commissioner in liquidation of the insurer.
(b) Each subscriber's share of a deficiency for which an assessment is made which shall not exceed in any event the subscriber's aggregate contingent liability as computed in accordance with § 5722 of this title, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment.
(c) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.
(d) No subscriber shall have an offset against any assessment for which such subscriber is liable on account of any claim for unearned premium or losses payable.
18 Del. C. 1953, §  5720;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5721. Time limit for assessments.

§ 5721. Time limit for assessments.
Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for and shall pay his or her share of any assessment, as computed and limited in accordance with this chapter, if:
(1) While his or her policy is in force or within 1 year after its termination, he or she is notified by either the attorney or the Commissioner of his or her intentions to levy such assessment, or
(2) An order to show cause why a receiver, conservator, rehabilitator or liquidator of the insurer should not be appointed is issued while his or her policy is in force or within 1 year after its termination.
18 Del. C. 1953, §  5721;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5722. Aggregate or contingent liability.

§ 5722. Aggregate or contingent liability.
No 1 policy or subscriber as to such policy shall be assessed or charged with an aggregate or contingent liability as to obligations incurred by a domestic reciprocal insurer in any 1 calendar year in excess of the amount provided for in the power of attorney or in the subscribers' agreement, computed solely upon premium earned on such policy during that year.
18 Del. C. 1953, §  5722;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5723. Nonassessable policies.

§ 5723. Nonassessable policies.
(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock and surplus required to be maintained by a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the Commissioner shall issue his or her certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this State and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this State for so long as all such surplus remains unimpaired.
(b) Upon impairment of such surplus, the Commissioner shall forthwith revoke the certificate. Such revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid, but, after such revocation, no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber.
(c) The Commissioner shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued unless it qualified to and does extinguish such liability of all its subscribers and in all such policies for all kinds of insurance transacted by it. Except, that if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in such state and need not extinguish the contingent liability applicable to policies theretofore in force in such state.
18 Del. C. 1953, §  5723;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5724. Subscribers' share in assets.

§ 5724. Subscribers' share in assets.
Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus and the return of any unused premium, savings or credits then standing on subscribers' accounts shall be distributed to its subscribers who were such within the 12 months prior to the last termination of its certificate of authority, according to such reasonable formula as the Commissioner may approve.
18 Del. C. 1953, §  5724;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5725. Merger or conversion.

§ 5725. Merger or conversion.
(a) A domestic reciprocal insurer upon affirmative vote of not less than 2/3 of its subscribers who vote on such merger, pursuant to due notice and the approval of the Commissioner of the terms therefor, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.
(b) Such a stock or mutual insurer shall be subject to the same capital or surplus requirements and shall have the same rights as a like domestic insurer transacting like kinds of insurance.
(c) The Commissioner shall not approve any plan for such merger or conversion which is inequitable to subscribers, or which, if for conversion to a stock insurer, does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to each subscriber's interest in the reciprocal insurer as determined in accordance with § 5724 of this title and a reasonable length of time within which to exercise such right.
18 Del. C. 1953, §  5725;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 57. RECIPROCAL INSURERS › § 5726. Impaired reciprocals.

§ 5726. Impaired reciprocals.
(a) If the assets of a domestic reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall forthwith make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency but subject to the limitation set forth in the power of attorney or policy.
(b) If the attorney fails to make up such deficiency or to make the assessment within 30 days after the Commissioner orders such attorney to do so or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title.
(c) If liquidation of such an insurer is ordered, an assessment shall be levied upon the subscribers for such an amount, subject to limits as provided by this chapter, as the Commissioner determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons but including the reasonable cost of the liquidation.
18 Del. C. 1953, §  5726;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5801. Definitions.

§ 5801. Definitions.
As used in this chapter, these terms shall have the following meanings:
(1) “Adjusted RBC Report” means an RBC report which has been adjusted by the Commissioner in accordance with § 5802(e) of this title.
(2) “Corrective order” means an order issued by the Commissioner specifying corrective actions which the Commissioner has determined are required.
(3) “Domestic insurer” means any insurance company domiciled in this State, except insurers not doing business with citizens or residents of the United States or organized or located within the United States.
(4) “Foreign insurer” means any insurance company which is licensed to do business in this State under § 516 of this title, but is not domiciled in this State.
(5) “Life and/or health insurer” means any insurance company licensed under § 516 of this title, or a licensed property and casualty insurer writing only accident and health insurance.
(6) “NAIC” means the National Association of Insurance Commissioners.
(7) “Negative trend” means, with respect to a life and/or health insurer, negative trend over a period of time, as determined in accordance with the Trend Test Calculation included in the RBC Instructions.
(8) “Property and casualty insurer” means any insurance company licensed under § 516 of this title, but shall not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers.
(9) “RBC instructions” means the RBC report including risk-based capital instructions adopted by the NAIC; as such, RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC.
(10) “RBC level” means an insurer's Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where:
a. “Company Action Level RBC” means, with respect to any insurer, the product of 2.0 and its Authorized Control Level RBC;
b. “Regulatory Action Level RBC” means the product of 1.5 and its Authorized Control Level RBC;
c. “Authorized Control Level RBC” means the number determined under the risk-based capital formula in accordance with the RBC Instructions;
d. “Mandatory Control Level RBC” means the product of .70 and the Authorized Control Level RBC.
(11) “RBC plan” means a comprehensive financial plan containing the elements specified in § 5803(b) of this title. If the Commissioner rejects the RBC Plan, and it is revised by the insurer, with or without the Commissioner's recommendation, the plan shall be called the revised RBC plan.
(12) “RBC report” means the report required in § 5802 of this title.
(13) “Total adjusted capital” means the sum of:
a. An insurer's statutory capital and surplus; and
b. Such other items, if any, as the RBC instructions may provide.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5802. RBC reports.

§ 5802. RBC reports.
(a) Every domestic insurer shall, on or prior to each March 1 (the “filing date”), prepare and submit to the Commissioner a report of its RBC levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, every domestic insurer shall file its RBC report:
(1) With the NAIC in accordance with the RBC instructions; and
(2) With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC report not later than the later of:
a. Fifteen days from the receipt of notice to file its RBC report with that state; or
b. The filing date.
(b) A life and health insurer's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between:
(1) The risk with respect to the insurer's assets;
(2) The risk of adverse insurance experience with respect to the insurer's liabilities and obligations;
(3) The interest rate risk with respect to the insurer's business; and
(4) All other business risks and such other relevant risks as are set forth in the RBC instructions;
determined in each case by applying the factors in the manner set forth in the RBC instructions.
(c) A property and casualty insurer's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account and may adjust for the covariance between:
(1) Asset risk;
(2) Credit risk;
(3) Underwriting risk; and
(4) All other business risks and such other relevant risks as are set forth in the RBC instructions;
determined in each case by applying the factors in the manner set forth in the RBC instructions.
(d) An excess of capital over the amount produced by the risk-based capital requirements contained in this chapter and the formulas, schedules and instructions referenced in this chapter is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the RBC levels required by this chapter. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this chapter.
(e) If a domestic insurer files an RBC report which in the judgment of the Commissioner is inaccurate, then the Commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is referred to as an “adjusted RBC report.”
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5805. Authorized Control Level Event.

§ 5805. Authorized Control Level Event.
(a) “Authorized Control Level Event” means any of the following events:
(1) The filing of an RBC report by the insurer which indicates that the insurer's total adjusted capital is greater than or equal to its Mandatory Control Level RBC but less than its Authorized Control Level RBC;
(2) The notification by the Commissioner to the insurer of an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, provided the insurer does not challenge the adjusted RBC report under § 5807 of this title;
(3) If, pursuant to § 5807 of this title, the insurer challenges an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge;
(4) The failure of the insurer to respond, in a manner satisfactory to the Commissioner, to a corrective order (provided the insurer has not challenged the corrective order under § 5807 of this title); or
(5) If the insurer has challenged a corrective order under § 5807 of this title, and the Commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner.
(b) In the event of an Authorized Control Level Event with respect to an insurer, the Commissioner shall:
(1) Take such actions as are required under § 5804 of this title, regarding an insurer with respect to which a Regulatory Action Level Event has occurred; or
(2) If the Commissioner deems it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions as are necessary to cause the insurer to be placed under regulatory control under Chapter 59 of this title. In the event the Commissioner takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 59 of this title, and the Commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Chapter 59 of this title. In the event the Commissioner takes actions under this paragraph pursuant to an adjusted RBC report, the insurer shall be entitled to such protections as are afforded to insurers under the provisions of Chapter 59 of this title pertaining to summary proceedings.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5806. Mandatory Control Level Event.

§ 5806. Mandatory Control Level Event.
(a) “Mandatory Control Level Event” means any of the following events:
(1) The filing of an RBC report which indicates that the insurer's total adjusted capital is less than its Mandatory Control Level RBC;
(2) Notification by the Commissioner to the insurer of an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, provided the insurer does not challenge the adjusted RBC report under § 5807 of this title; or
(3) If, pursuant to § 5807 of this title, the insurer challenges an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurer's challenge.
(b) In the event of a Mandatory Control Level Event:
(1) With respect to a life insurer, the Commissioner shall take such actions as are necessary to place the insurer under regulatory control under Chapter 59 of this title. In the event the Mandatory Control Level Event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 59 of this title, the Commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Chapter 59 of this title. If the Commissioner takes actions pursuant to an adjusted RBC report, the insurer shall be entitled to the protections of Chapter 59 to this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forgo action for up to 90 days after the Mandatory Control Level Event if the Commissioner finds there is a reasonable expectation that the Mandatory control Level Event may be eliminated within the 90-day period.
(2) With respect to a property and casualty insurer, the Commissioner shall take such actions as are necessary to place the insurer under regulatory control under Chapter 59 of this title, or, in the case of an insurer which is writing no business and which is running-off its existing business, may allow the insurer to continue its run-off under the supervision of the Commissioner. In either event, the Mandatory Control Level Event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 59 of this title and the Commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in Chapter 59 of this title. If the Commissioner takes actions pursuant to an adjusted RBC report, the insurer shall be entitled to the protections of Chapter 59 of this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forgo action for up to 90 days after the Mandatory Control Level Event if the Commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the 90-day period.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5807. Hearings.

§ 5807. Hearings.
Upon:
(1) Notification to an insurer by the Commissioner of an adjusted RBC report; or
(2) Notification to an insurer by the Commissioner that:
a. The insurer's RBC plan or revised RBC plan is unsatisfactory; and
b. Such notification constitutes a Regulatory Action Level Event with respect to such insurer; or
(3) Notification to any insurer by the Commissioner that the insurer has failed to adhere to its RBC plan or revised RBC plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC plan or revised RBC plan; or
(4) Notification to an insurer by the Commissioner of a corrective order with respect to the insurer,
the insurer shall have the right to a departmental hearing, on the record, at which the insurer may challenge any determination or action by the Commissioner. The insurer shall notify the Commissioner of its request for a hearing within 5 days after the notification by the Commissioner under paragraph (1), (2), (3) or (4) of this section. Upon receipt of the insurer's request for a hearing, the Commissioner shall set a date for the hearing, which date shall be no less than l0 nor more than 30 days after the date of the insurer's request.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5809. Supplemental provisions, rules, exemption.

§ 5809. Supplemental provisions, rules, exemption.
(a) The provisions of this chapter are supplemental to any other provisions of the laws of this State, and shall not preclude or limit any other powers or duties of the Commissioner under such laws, including, but not limited to, Chapter 59 of this title.
(b) The Commissioner may adopt reasonable rules necessary for the implementation of this chapter.
(c) The Commissioner may exempt from the application of this chapter any domestic property and casualty insurer which:
(1) Writes direct business only in this State;
(2) Writes direct annual premiums of $2,000,000 or less; and
(3) Assumes no reinsurance in excess of 5 percent of direct premium written.
(d) The provisions of this chapter shall not apply to any domestic insurer transacting insurance in foreign countries only, as defined in § 103 of this title; and negotiation and issuance of insurance on objects of insurance resident, located or to be performed in such foreign jurisdictions, and changes in, communications concerning, and collection of premiums and payment of proceeds on insurance so issued, shall not be deemed to constitute the transaction of insurance in any such state.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5810. Foreign insurers.

§ 5810. Foreign insurers.
(a) Any foreign insurer shall, upon the written request of the Commissioner, submit to the Commissioner an RBC report as of the end of the calendar year just ended the later of:
(1) The date an RBC report would be required to be filed by a domestic insurer under this chapter; or
(2) Fifteen days after the request is received by the foreign insurer.
(b) Any foreign insurer shall, at the written request of the Commissioner, promptly submit to the Commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state.
(c) In the event of a Company Action Level Event, Regulatory Action Level Event or Authorized Control Level Event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer (or, if no RBC statute is in force in that state, under the provisions of this chapter), if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC plan in the manner specified under that state's RBC statute (or, if no RBC statute is in force in that state, under § 5803 of this title), the Commissioner may require the foreign insurer to file an RBC plan with the Commissioner. In such event, the failure of the foreign insurer to file an RBC plan with the Commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in this State.
(d) In the event of a Mandatory Control Level Event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the Commissioner may make application to the Court of Chancery permitted under Chapter 59 of this title with respect to the liquidation of property of foreign insurers found in this State, and the occurrence of the Mandatory Control level Event shall be considered adequate grounds for the application.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5811. Immunity.

§ 5811. Immunity.
There shall be no liability on the part of, and no cause of action shall arise against, the Commissioner or the Insurance Department or its employees or agents for any action taken by them in the performance of their powers and duties under this chapter.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5812. Notices.

§ 5812. Notices.
All notices by the Commissioner to an insurer which may result in regulatory action hereunder shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the insurer's receipt of such notice.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter I. Risk-Based Capital (RBC) for Insurers › § 5813. Phase-in provision.

§ 5813. Phase-in provision.
For RBC reports required to be filed insurers with respect to 1994, the following requirements shall apply in lieu of the provisions of §§ 5803, 5804, 5805 and 5806 of this title:
(1) In the event of a Company Action Level Event with respect to a domestic insurer, the Commissioner shall take no regulatory action hereunder.
(2) In the event of a Regulatory Action Level Event under § 5804(a)(1), (2) or (3) of this title the Commissioner shall take the actions required under § 5803 of this title.
(3) In the event of a Regulatory Action Level Event under § 5804(a)(4), (5), (6), (7), (8) or (9) of this title or an Authorized Control Level Event, the Commissioner shall take the actions required under § 5804 of this title with respect to the insurer.
(4) In the event of a Mandatory Control Level Event with respect to an insurer, the Commissioner shall take the actions required under § 5805 of this title with respect to the insurer.
70 Del. Laws, c. 234, §  1;  79 Del. Laws, c. 425, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter II. Risk-Based Capital (RBC) for Health Organizations › § 5821. RBC reports.

§ 5821. RBC reports.
(a) A domestic health organization shall, on or prior to each March 1 or the required annual statement filing date if later (the “filing date”), prepare and submit to the Commissioner a report of its RBC levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, a domestic health organization shall file its RBC report:
(1) With the NAIC in accordance with the RBC instructions; and
(2) With the insurance commissioner in any state in which the health organization is authorized to do business, if the insurance commissioner has notified the health organization of its request in writing, in which case the health organization shall file its RBC report not later than the later of:
a. Fifteen days from the receipt of notice to file its RBC report with that state; or
b. The filing date.
(b) A health organization's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take the following into account (and may adjust for the covariance between) determined in each case by applying the factors in the manner set forth in the RBC instructions.
(1) Asset risk;
(2) Credit risk;
(3) Underwriting risk; and
(4) All other business risks and such other relevant risks as are set forth in the RBC instructions.
(c) An excess of capital (i.e. net worth) over the amount produced by the risk-based capital requirements contained in this subchapter II and the formulas, schedules and instructions referenced in this subchapter II is desirable in the business of health insurance. Accordingly, health organizations should seek to maintain capital above the RBC levels required by this subchapter II. Additional capital is used and useful in the insurance business and helps to secure a health organization against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this subchapter II.
(d) If a domestic health organization files an RBC report that in the judgment of the Commissioner is inaccurate, then the Commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the health organization of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is referred to as an “adjusted RBC report.”
79 Del. Laws, c. 425, §  3;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter II. Risk-Based Capital (RBC) for Health Organizations › § 5824. Authorized control level event.

§ 5824. Authorized control level event.
(a) “Authorized control level event” means any of the following events:
(1) The filing of an RBC report by the health organization that indicates that the health organization's total adjusted capital is greater than or equal to its mandatory control level RBC but less than its authorized control level RBC;
(2) The notification by the Commissioner to the health organization of an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, provided the health organization does not challenge the adjusted RBC report under § 5826 of this title;
(3) If, pursuant to § 5826 of this title, the health organization challenges an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the health organization's challenge;
(4) The failure of the health organization to respond, in a manner satisfactory to the Commissioner, to a corrective order (provided the health organization has not challenged the corrective order under § 5826 of this title); or
(5) If the health organization has challenged a corrective order under § 5826 of this title and the Commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health organization to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner.
(b) In the event of an authorized control level event with respect to a health organization, the Commissioner shall:
(1) Take such actions as are required under § 5823 of this title regarding a health organization with respect to which a regulatory action level event has occurred; or
(2) If the Commissioner deems it to be in the best interests of the policyholders and creditors of the health organization and of the public, take such actions as are necessary to cause the health organization to be placed under regulatory control under Chapter 59 of this title. In the event the Commissioner takes such actions, the authorized control level event shall be deemed sufficient grounds for the Commissioner to take action under Chapter 59 of this title, and the Commissioner shall have the rights, powers and duties with respect to the health organization as are set forth Chapter 59 of this title. In the event the Commissioner takes actions under this paragraph pursuant to an adjusted RBC report, the health organization shall be entitled to such protections as are afforded to health organizations under the provisions of Chapter 59 of this title pertaining to summary proceedings.
79 Del. Laws, c. 425, §  3;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter II. Risk-Based Capital (RBC) for Health Organizations › § 5825. Mandatory control level event.

§ 5825. Mandatory control level event.
(a) “Mandatory control level event” means any of the following events:
(1) The filing of an RBC report which indicates that the health organization's total adjusted capital is less than its mandatory control level RBC;
(2) Notification by the Commissioner to the health organization of an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, provided the health organization does not challenge the adjusted RBC report under § 5826 of this title; or
(3) If, pursuant to § 5826 of this title, the health organization challenges an adjusted RBC report that indicates the event in paragraph (a)(1) of this section, notification by the Commissioner to the health organization that the Commissioner has, after a hearing, rejected the health organization's challenge.
(b) In the event of a mandatory control level event, the Commissioner shall take such actions as are necessary to place the health organization under regulatory control under Chapter 59 of this title. In that event, the mandatory control level event shall be deemed sufficient grounds for the Commissioner to take action Chapter 59 of this title, and the Commissioner shall have the rights, powers and duties with respect to the health organization as are set forth in Chapter 59 of this title. If the Commissioner takes actions pursuant to an adjusted RBC report, the health organization shall be entitled to the protections of Chapter 59 of this title pertaining to summary proceedings. Notwithstanding any of the foregoing, the Commissioner may forego action for up to 90 days after the mandatory control level event if the Commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period.
79 Del. Laws, c. 425, §  3;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter II. Risk-Based Capital (RBC) for Health Organizations › § 5826. Hearings.

§ 5826. Hearings.
Upon the occurrence of any of the following events, the health organization shall have the right to a confidential departmental hearing, on a record, at which the health organization may challenge any determination or action by the Commissioner. The health organization shall notify the Commissioner of its request for a hearing within 5 days after the notification by the Commissioner under paragraph (1), (2), (3) or (4) of this section. Upon receipt of the health organization's request for a hearing, the Commissioner shall set a date for the hearing, which shall be no less than 10 nor more than 30 days after the date of the health organization's request. The events include:
(1) Notification to a health organization by the Commissioner of an adjusted RBC report;
(2) Notification to a health organization by the Commissioner that:
a. The health organization's RBC plan or revised RBC plan is unsatisfactory; and
b. Notification constitutes a regulatory action level event with respect to the health organization;
(3) Notification to a health organization by the Commissioner that the health organization has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the health organization to eliminate the company action level event with respect to the health organization in accordance with its RBC plan or revised RBC plan; or
(4) Notification to a health organization by the Commissioner of a corrective order with respect to the health organization.
79 Del. Laws, c. 425, §  3;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 58. RISK-BASED CAPITAL (RBC) › Subchapter II. Risk-Based Capital (RBC) for Health Organizations › § 5828. Supplemental provisions; rules; exemption.

§ 5828. Supplemental provisions; rules; exemption.
(a) The provisions of this subchapter II are supplemental to any other provisions of the laws of this State, and shall not preclude or limit any other powers or duties of the Commissioner under such laws, including, but not limited to, Chapter 59 of this title and 18 DE Admin. Code 304.
(b) The Commissioner may adopt reasonable rules necessary for the implementation of this subchapter II.
(c) The Commissioner may exempt from the application of this subchapter II a domestic health organization that:
(1) Writes direct business only in this State;
(2) Assumes no reinsurance in excess of 5% of direct premium written; and
(3) Writes direct annual premiums for comprehensive medical business of $2,000,000 or less; or
(4) Is a limited health service organization that covers less than 2,000 lives.
79 Del. Laws, c. 425, §  3;