1101 Listed Surplus Lines Carriers Intending to Establish an Office in Delaware [Formerly Regulation 4]
1.0 Authority and scope
Pursuant to 18 Del.C. §314, the following rules and regulations are hereby promulgated and adopted. They are applicable to all surplus lines insurers who wish to establish offices in this State.
2.0 No surplus lines insurer may maintain an office in Delaware pursuant to 18 Del.C. §1907(c) until:
2.1 The insurer is declared eligible to write surplus lines coverages in Delaware pursuant to 18 Del.C. §1907(b); and
2.2 The insurer has been authorized by the Commissioner to establish a Delaware office.
2.3 An eligible surplus lines insurer desiring to establish an office in Delaware shall apply to the Commissioner for authorization. In the application, the insurer shall:
2.3.1 State the address of the Delaware office and the name and residence address of the person regularly in charge of that office.
2.3.2 Specify whether the insurer's business at the Delaware office is to be managed by an independent agent or other person not directly employed by the insurer, and if so, the insurer shall state the name and address of the managing agent, and summarize the salient terms of the management agreement.
2.3.3 Describe the surplus lines coverages proposed to be offered through the Delaware office, including kinds or types of coverage or risks, and the limits of liability to be assumed under each.
2.3.4 State the ratio to be maintained between premium writings and the value of the trust funds established by the insurer for the benefit of its United States policyholders.
2.3.5 Certify that the insurer will issue insurance coverage to the public only through duly licensed surplus lines brokers in accordance with the surplus lines laws and regulations of this State, and the applicable laws and regulations of other states where the insurer may lawfully do business on a surplus lines basis.
2.3.6 Agree to maintain books and records at the Delaware office which accurately reflect all business affairs conducted at that office.
2.3.7 Authorize the Commissioner to inspect the books, records, and affairs of the insurer as often as the Commissioner reasonably deems advisable in order to determine the nature and extent of business conducted by the insurer at its Delaware office.
2.4 Upon receipt of notice that the Commissioner does not object to the application, the insurer may establish a Delaware office. However, the insurer shall not operate the office for any purpose until it deposits not less than $50,000.00 with the Commissioner (in registered bonds, or funds in other form satisfactory to the Commissioner) for the benefit of its policyholders and creditors.
2.5 Within sixty days after end of its fiscal year, every insurer maintaining a Delaware office pursuant to 18 Del.C. §1907(c) shall submit a report summarizing the nature and extent of business conducted during the past year by the Delaware office, and the nature and extent of business proposed to be conducted by that office during the ensuing year. In a separate section denominated "Changes," the report must specify any change or proposed change in method of operation which departs from the representations made in the application to establish the Delaware office.