303 Supplement to Annual Statement of Property or Casualty Insurers [Formerly Regulation 57]
1.0 Purpose and Authority
1.1 The purpose of this regulation is to set forth the financial reporting requirements and the form in which such reports shall be submitted to the Commissioner as authorized by 18 Del.C. §§314 and 526A.
2.0 Reporting Requirements
2.1 Annual Requirements
2.1.1 As required by 18 Del.C. §526A, each property or casualty insurer, licensed or authorized in this State, shall submit as a supplement to Schedule T of its annual statement, a report showing its direct writings and experience, prior to reinsurance, in this State and the United States.
2.1.2 This information shall be submitted annually on or before the lst of April, on the forms attached hereto. Additional forms may be reproduced by the insurer as needed. Each report shall include the required data for the previous year ending on the 31st of December. The report for the year 1986 is due on or before April 1, 1987.
2.2 Special Nine Year Reporting Requirement
2.2.2 By May 1, 1987, each insurer shall report data in the form required for the 1986 data for the years 1977-1985, unless such data was destroyed prior to May 23, 1986. If such data for any of the nine preceding years (1977-1985) has been destroyed, an affidavit attesting to the destruction of the data must be submitted. The affidavit shall be signed by the President or Vice President of the company.
3.1 "Other Professional Malpractice" means all coverages written for professional liability for persons engaged in a vocation or occupation requiring advanced education and training that are not included in medical malpractice or attorney malpractice coverages.
3.2 "Municipalities" include boroughs, cities, towns, townships and villages.
3.3 "Other Authorities" include all other governmental entities.
4.0 Procedure for Completion of Forms
4.1 General Requirements
4.1.1 Each insurer shall complete two copies of each form. The first copy shall contain the insurer's Delaware experience data only. The second copy of each form shall contain the insurer's countrywide data including Delaware. The name of the company must be plainly printed or stamped at the top of each form. The insurer shall clearly check the appropriate box in the upper right corner of each form. The statements filed shall contain responses to all items. In the event an insurer does not write the line of coverage requested, or is exempt from reporting as set forth in Section 5.0 of this regulation, a response of "NONE" or "EXEMPT" shall be inserted in the appropriate column.
4.1.2 A detailed statement or footnote shall be submitted with respect to any item or items requiring special comments or explanation.
4.1.3 Any insurer that files its annual statement on a group basis may file this supplemental report as a group.
4.1.4 Each report shall be verified by the oath of the insurer's president or vice-president and secretary or actuary, as applicable, or in the absence of the foregoing, by two other principal officers, that the information submitted is a full and true statement of the condition and affairs of the insurer to the best of their knowledge and belief. This verification shall be submitted as a cover letter and include a contact person and phone number.
4.1.5 Each insurer is responsible for reproducing the attached forms as needed by their company.
4.2.1 Form 1 is a display of all lines and sublines of insurance as required in 18 Del.C. §526A to be reported. In addition to the lines of insurance in 18 Del.C. §526A, the experience for the line of coverage entitled "Title Insurance" shall also be reported.
4.2.2 In the event an insurer does not collect premiums on the lines or sublines required on a separate basis, the insurer must divide the premium in proportion to losses incurred. All entries shall be expressed in whole dollar amounts.
4.2.3 Form 1A is a display of medical malpractice by specialty. Information for completion of this form will be forwarded to medical malpractice insurers shortly. These instructions will be inserted as Appendix I.
4.2.4 Form 1B is a display of entertainment, recreational and sporting liability by specialty. Each insurer must enter in the blank columns provided the name and class code for each specialty written. Each insurer shall report all coverages written by specialty in accordance with the Insurance Services Office (ISO) Commercial Risk Statistical Plan, as categorized in Appendix II. The total experience for entertainment, recreational and sporting liability shall be reported in Form 1.
4.2.5 Form 2 is a report of closed claims. The reserves shown for each year shall be the initial reserve set on each claim. An insurer shall complete the two required copies for every line of insurance written.
4.3 Specific Requirements and Calculations
4.3.1 Line 2 — To determine earned premium, do not deduct dividends paid or credited to policyholders on direct business.
4.3.2 Line 3 — To calculate investment income on unearned premium and loss reserves, refer to the formula used in the 1986 Insurance Expense Exhibit.
4.3.3 Line 13 — Total underwriting expense equals: Commissions + Advertising + Other Acquisition Costs + General Office Expenses + Taxes, Licenses & Fees + All Other Expenses.
4.3.4 Line 15 — Net Underwriting Gain or Loss shall be calculated as follows: Earned Premium minus Total Incurred Claim Losses and Loss Adjustment Expenses minus Total Underwriting Expenses.
4.3.5 Line 16 — Net Operating Gain or Loss including Investment Income equals: Investment Income on Unearned Premium and Loss Reserves + Net Underwriting Gain or Loss.
4.3.6 Line 17 — Pure Loss Experience Ratio equals Incurred Loss divided by Earned Premium.
4.3.7 Line 18 — Net Operating Ratio equals: Total Incurred Claim Loss + Total Incurred Loss Adjustment Expenses + Total Underwriting Expenses divided by the sum of Earned Premium and Investment Income on Unearned
5.0 Exemption from 18 Del.C. §526A.
5.1 General Exemption
5.1.1 Every property or casualty insurer licensed or admitted in this State shall comply with the requirements of 18 Del.C. §526A. Insurers are exempt from this requirement for an individual line if their direct premiums earned during calendar year 1986 and their incurred losses during calendar year 1986 are less than the amounts indicated below:
126.96.36.199 Private Passenger Automobile No-Fault — $75,000.00.
188.8.131.52 Private Passenger Automobile Other Liability — $340,000.00.
184.108.40.206 Commercial Automobile No-Fault — $5,000.00.
220.127.116.11 Commercial Automobile Other Liability — $100,000.00.
18.104.22.168 Medical Malpractice — $500,000.00.
22.214.171.124 Workers' Compensation — $195,000.00.
126.96.36.199 Other Liability — $120,000.00.
(Total of all of premiums written)
5.1.2 This exemption will significantly reduce the number of companies reporting while capturing 90% of the direct writings and experience by line of property and casualty insurers in this State.
5.1.3 Each insurer that qualifies for exemption is required to file an affidavit with the Commissioner on or before April 1, 1987.
5.2 Additional Exemption for Medical Malpractice Insurers
5.2.1 Any medical malpractice insurer required to submit a report shall be exempt from reporting any specialty/class code in which their direct written premium, direct earned premium and incurred losses each total less than $10,000.
6.0 Commissioner's Report
6.1 The Commissioner shall annually compile and review all reports submitted by insurers to aid in determining the appropriateness of premium rates for property or casualty insurance in this State. The Commissioner's findings and filings shall be published and made available to any interested insured or citizen.
7.1 Failure to comply with the requirements set forth in this regulation shall subject an insurer to suspension or revocation of its Certificate of Authority.
8.1 If any provision of this regulation shall be held invalid, the remainder of the regulation shall not be affected thereby.
9.0 Effective Date
9.1 This Regulation shall become effective 30 days after signature.