Authenticated PDF VersionThis regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311, 520, 2304(16), and 2312, and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Ch. 101.
The purpose of this regulation is to set forth requirements for prompt payment of settled insurance claims by persons as required by 18 Del.C. §2304(16)(f).
“Claimant” means a person covered under an insurance policy or a representative designated by such person and who is entitled to make claims on that person’s behalf including that person’s legal representative, but does not include any provider or other third party who has provided services to a claimant.
“Commissioner” means the Commissioner of the Delaware Department of Insurance.
“Person” shall mean any individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society and other legal entity engaged in the business of insurance, including agents, brokers and adjusters. Person shall also mean medical service plans and hospital service plans as defined in 18 Del.C. §6302. For purposes of this regulation, medical hospital service plans shall be deemed to be engaged in the business of insurance.
5.1 Under 18 Del.C. §2304(16)(f), persons are required in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. A person shall make prompt payment of a claim that has settled. For purposes of this regulation, prompt payment is defined as remittance of the check or electronic payment within 30 days from any one of the following dates:
5.1.2 The date a final order is issued by the court;
5.2 Payment shall be made in accordance with the following:
5.2.2 If the claimant chooses to receive an electronic payment, the person shall not:
5.2.2.2 Impose any charges or fees upon the claimant in connection with the electronic payment;
5.2.4 Notwithstanding anything in this regulation to the contrary, payments for settled workers compensation claims shall be made in the form required by 19 Del.C. §2344.
6.0 Penalties for Failure to Remit Prompt Payment of a Settled Claim
6.1 If the Department determines that a person has failed to remit prompt payment of a settled claim as required by 18 Del.C. §2304(16)(f) and this regulation in bad faith and with such frequency as to indicate a general business practice, the Department may file an administrative action against the person in accordance with 18 Del.C. §323 and the Administrative Procedures Act. If the Commissioner finds after a hearing that the person has violated 18 Del.C. §2304(16)(f) and this regulation, the Commissioner may:
6.1.2 Fine the person according to the provisions outlined in 18 Del.C. §329 and impose other such penalties as provided in 18 Del.C. §520.
6.1.3 Fine any person involved with the claim or settlement according to the provisions outlined in 18 Del.C. §2308(a)(1).
7.1 Within a 36-month period, three instances of a person’s failure to make prompt payment, as defined in Section 5.0 of this regulation, shall give rise to a rebuttable presumption that the person is in violation of 18 Del.C. §2304 (16)(f).
9.0 Causes of Action and Defenses
This regulation shall not create a cause of action for any person or entity, other than the Delaware Insurance Commissioner, against a person or the person’s representative based upon a violation of 18 Del.C. §2304(16). In the same manner, nothing in this regulation shall establish a defense for any party to any cause of action based upon a violation of 18 Del.C. §2304(16).
