DELAWARE GENERAL ASSEMBLY CONCLUDES 2009 - 2010 SESSION
WASHINGTON, DC, July 2, 2010 - The Delaware General Assembly adjourned sine die yesterday, according to the American Insurance Association (AIA). The 2009-2010 legislative session was particularly active with regard to property-casualty insurance issues.
“Legislators in the First State addressed a number of important issues facing our industry,” said Eric M. Goldberg, AIA associate general counsel and manager, state programs. “It was a busy session this year, with a few key decisions made in the final hours before adjourning. Fortunately, the Assembly acted judiciously in assessing the legislative initiatives affecting property-casualty insurers.”
Specifically, the General Assembly failed to approve SB 237, which would have required notices of cancellation or nonrenewal, except cancellations for nonpayment of premiums, to be sent to the policyholder via certified mail, or by e-mail if the insured has authorized e-mail notifications. This requirement would have been in addition to a separate notice sent by first class mail.
“SB 237 would have added unnecessary time and costs to the cancellation/nonrenewal process,” said Goldberg. “AIA worked with other industry representatives to inform policymakers of the negative consequences associated with this onerous legislation.”
Lawmakers also failed to approve HB 255, which would have converted uninsured motorist (UIM) coverage from "gap" to "excess” coverage, meaning Delaware drivers could have faced increased UIM loss costs. AIA testified against HB 255 as well as sent a letter to all legislators expressing serious concerns with the bill.
“Defeating HB 255 was a priority issue for AIA this session. UIM is meant to be ‘gap’ coverage, and is priced accordingly,” Goldberg said. “Expanding these coverages is misguided, particularly in the current economic environment. More drivers should be encouraged to purchase this important coverage.”
The legislative session concluded without approving HB 422, which would have legitimized non-recourse litigation lenders. “AIA and other industry representatives expressed strong concerns about the legality of the practice of non-recourse lending,” said Goldberg. “We would like to see an outright ban of this questionable practice, but will continue to work with the legislature to ensure that non-recourse lenders are, at the very least, subject to meaningful oversight and regulation.”
Finally, the legislature approved HB 247 which provides the attorney general with enhanced enforcement authority over unfair trade practices and fraud. Property-casualty insurers were exempted from the attorney general’s increased oversight.
“Lawmakers correctly recognized that the Department of Insurance is charged with regulating insurers, and that this regulatory structure is effective,” Goldberg concluded.