Bill Text: DE SB203 | 2011-2012 | 146th General Assembly | Draft
Bill Title: An Act To Amend Title 18 Of The Delaware Code Relating To Captive Insurance And Risk Retention Groups.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2012-07-12 - Signed by Governor [SB203 Detail]
Download: Delaware-2011-SB203-Draft.html
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SPONSOR: |
Sen. Bushweller & Rep. B. Short |
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DELAWARE STATE SENATE 146th GENERAL ASSEMBLY |
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SENATE BILL NO. 203 |
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AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO CAPTIVE INSURANCE AND RISK RETENTION GROUPS. |
Section 1.Amend §6911, Title 18 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
§ 6911.Reinsurance.
(a)Any captive insurance company may provide reinsurance, on risks ceded by any other insurer, in accordance with §910 of this Title.
(b)With the exception of a risk retention group, Aany captive insurance company may take credit or a
reduction from liability for the reinsurance of risks or portions of risks
ceded to reinsurers in accordance with subchapter III of Chapter 9 of this Title,
or as otherwise approved by the Commissioner.
(c)A risk retention group may take credit or a reduction from liability for the reinsurance of risks or portions of risks ceded to reinsurers only in accordance with subchapter III of Chapter 9 of this Title.
Section 2.Amend §6916, Delaware Code, by making insertions as shown by underlining as follows:
§ 6916.Applicable laws.
(a)No provisions of this Title, other than those contained in this chapter or specifically referenced in this chapter, shall apply to captive insurance companies.
(b)Chapters 16, 18, and 50 and Section 909 of the Delaware Insurance Code shall apply to risk retention groups.
Section 2.This Act shall take effect immediately upon its enactment.
SYNOPSIS
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This Bill is pursuant to the NAIC Insurance Holding Company Systems Regulatory Act and the NAIC Model Risk Retention Act.This Bill results in Delaware domiciled risk retention groups (RRGs) complying with uniform standards established for all RRGs and will ensure compliance with the Part A accreditation standards for RRGs, which became required on January 1, 2011.It makes RRGs subject to similar policyholder protections applied to traditional coverage.Failure to adopt this Bill will cause Delaware to lose its accreditation.This Bill also limits an RRG from concentrating its coverage of risk on a single risk or policyholder. Consequently, this limitation prevents a material financial loss in the event the single risk has adverse insurance experience by mandating a spreading of the risk by making RRGs subject to Chapter 18, Title 18.The Bill's changes are pursuant to the NAIC Insurance Holding Company Systems Regulatory Act and the NAIC Model Risk Retention Act.It will result in Delaware domiciled RRGs complying with uniform standards established for all RRGs and will ensure compliance with the Part A accreditation standards for RRGs, which became required on January 1, 2011.It further makes RRGs comport with the rules governing managing general agents, which typically not only have the authority to solicit and sell insurance coverage, but they can also have expanded authority to settle claims, negotiate reinsurance, issue policies, or handle regulatory compliance, by making RRGs subject to Subchapter III of Chapter 9, Title 18.It mandates that RRGs comply with the credit for reinsurance statute which results in RRGs properly using reinsurance as a means to transfer risk, by making RRGs subject to Chapter 16, Title 18. The Bill also mandates that reinsurance brokers who assist RRGs in placing reinsurance are licensed as reinsurance intermediaries. Author: Senator Bushweller |
