DEPARTMENT OF INSURANCE
18 DE Admin. Code 703
Statutory Authority: 18 Delaware Code,
Sections 311, 2304, 2307 and 2312
(18 Del.C. §§311, 2034, 2307, 2312)
NOTICE OF PUBLIC HEARING
INSURANCE COMMISSIONER MATTHEW DENN hereby gives notice that a PUBLIC HEARING will be held on Thursday September 1, 2005 at 10:00 a.m. in the Consumer Services Conference Room of the Delaware Department of Insurance, 841 Silver Lake Boulevard, Dover, Delaware. The hearing is to receive public comment in Docket No. 2005-34, proposed Regulation 703 relating to PROHIBITED PRACTICES RELATED TO THE NONRENEWAL OF RESIDENTIAL HOMEOWNERS POLICIES.
The purpose for proposing Regulation 703 is to prohibit insurance companies from terminating or nonrenewing residential homeowners real and personal property insurance policies under circumstances where a policyholder merely makes an inquiry about the policy or how claims are handled by the insurer.
The hearing will be conducted in accordance with 18 Del.C. §311 and the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101. Comments are being solicited from any interested party. Comments may be in writing or may be presented orally at the hearing. Written comments, testimony or other written materials concerning the proposed change to the regulation must be received by the Department of Insurance no later than 9:00 a.m., Thursday September 1, 2005, and should be addressed to Deputy Attorney General Michael J. Rich, c/o Delaware Department of Insurance, 841 Silver Lake Boulevard, Dover, DE 19904, or sent by fax to 302.739.5566 or email to firstname.lastname@example.org.
703 Prohibited Practices Related to the Nonrenewal of Residential Homeowners Policies
This regulation is adopted by the Commissioner pursuant to the authority granted by 18 Del.C. §§311, 2304, 2307 and 2312, and promulgated in accordance with the Delaware Administrative Procedures Act, 29 Del.C. Chapter 101.
This regulation applies to homeowners insurance, as defined herein.
“Homeowners policy” or “homeowners insurance” means property insurance, as defined at 18 Del.C. §4103(4)d and 4120, insuring any real or personal property used by a person as a permanent or temporary place of residence.
“Inquiry” means any contact initiated by an insured that is not the filing or reporting of a claim to an insurer.
“Insurer” shall have the meaning assigned to it at 18 Del.C. §102(3)
“Nonrenew” shall have the meaning assigned to it at 18 Del.C. §4121(c).
“Predicate unfair trade practice” shall mean an act which shall constitute part of the pattern of acts necessary to show activity occurring with sufficient frequency to constitute an unfair trade practice under 18 Del.C. §2304(16).
An insurer that considers an inquiry regarding (1) a homeowners policy or (2) a loss under that policy to be a claim for purposes of making underwriting decisions, including but not limited to decisions to nonrenew a policy, shall have engaged in a predicate unfair trade practice.
An insurer that nonrenews a homeowners policy solely on the basis of claims asserted against that policy shall have engaged in a predicate unfair trade practice, provided that it shall not constitute a predicate unfair trade practice for an insurer to nonrenew a policy:
5.1 on the basis of claims asserted against that policy if the claim or claims demonstrate that there has been a substantial change or increase in the hazard or in the risk assumed by the carrier subsequent to the date the policy was issued and such nonrewnal is applied to other homeowners policies similarly situated; or
5.2 on the basis of the consumer’s refusal or failure to make necessary or material changes or repairs resulting from a notice by the insurer that failure to make such changes or repairs will constitute a breach of contractual duties, conditions or warranties that will change or increase in the hazard or in the risk assumed by the carrier subsequent to the date the policy was issued.
6.0 Non-Exclusive Remedy
Nothing in this regulation shall limit the Commissioner’s authority under 18 Del.C. §2307(a) to determine that acts which are not specifically enumerated in Title 18 of the Delaware Code constitute unfair trade practices.
If any provision of this Regulation or the application of any such provision to and person or circumstance shall be held invalid the remainder of such provisions, and the application of such provision to any person or circumstance other than those as to which it is held invalid, shall not be affected.
8.0 Prior Bulletins
This Regulation shall supersede Insurance Department Form and Rates Bulletin No. 28, issued January 20, 2004.
9.0 Effective Date
This Regulation shall become effective October 11, 2005.
9 DE Reg. 196 (08/01/05) (Prop.)