18 Del. Admin. Code § 801-4.0

Current through Register Vol. 28, No. 3, September 1, 2024

Section 801-4.0 - Requirement

4.1 New Policies

4.1.1 Insurers shall, for all new workmen's compensation policies written on or after December 1, 1982 provide the insured with a notice of election substantially similar to Delaware Insurance Form (B) (Attached). The insured shall sign the form acknowledging the offer of a deductible endorsement and his/her acceptance or rejection of the endorsement.

4.1.2 The employer's election shall be valid for the duration of the policy and subsequent renewals, subject to the employer's right to change his/her election on renewal (on the anniversary rating date or as provided in Rule l(G) of the Delaware Compensation Manual for applicable policies).

4.2 Renewal Policies

4.2.1 The insurer shall provide a notice of election to the policyholder of each policy now in force which is to be renewed on or after December 1, 1982. The notice of election form (Delaware Insurance Form B) shall request the insured to complete and return the form prior to the anniversary or renewal date of the policy.

4.2.2 The insurer may elect to make a one-time mailing to all policies in force or may send the notice of election form in conjunction with normal renewal procedures.

4.2.3 If no response is received within 30 days of the mailing date, the insured will be deemed to have rejected the deductible endorsement on the condition that the insurer can provide proof of mailing to the policyholder at his/her address of record. A certificate of mailing as described in 18 Del.C. § 3903(a)(4) c shall constitute adequate proof of mailing.

4.2.4 If the insured does not respond to the notice of election and the insurer elects to renew the policy, it shall issue the renewal on a nondeductible basis.

4.2.5 The insured's election shall remain in force for the duration of the policy and subsequent renewals, subject to the insured's right to change his/her election at each renewal (or anniversary date for applicable policies).

4.3 Deductible Endorsement

4.3.1 A deductible endorsement, filed by the Delaware Compensation Rating Bureau and approved for use by the Delaware Insurance Department, will be attached to and become a part of each policy for which the policyholder's election form requests a deductible endorsement. The endorsement shall give notice to the insured of the:

4.3.1.1 amount and conditions of the deductible;

4.3.1.2 insurer's discretion in claims settlement;

4.3.1.3 insurer's right to cancel the policy (after 10 days written notice by certified mail to the address of record) for the insured's failure to reimburse a deductible expense as defined herein;

4.3.1.4 fact that the deductible election is per occurrence as defined herein; and

4.3.1.5 that the deductible election may not be changed prior to the next renewal date.

4.4 Cancellation For Failure of the Insured to Reimburse

4.4.1 The insurer shall administer all claims for deductible policies in the same manner as for nondeductible policies. This includes payment of first dollar coverage. After payment is made for which the insurer is entitled to reimbursement, the insurer will provide the employer insured with a statement of payments made and request reimbursement.

4.4.2 If reimbursement is not received within 30 days of the statement mailing date, the insurer may send a notice of cancellation to the insured. Such notice must be by certified mail as defined in 18 Del.C. § 3903(a)(4) c. Cancellation may not become effective sooner than 10 days after the mailing date as established by postal receipts. A copy of the notice of cancellation shall be provided to the producer of record, the Industrial Accident Board and the Delaware Compensation Rating Bureau.

4.4.3 Provided payment is received by the insurer or its agent prior to the coverage cancellation date, the coverage will be continued in effect.

4.4.4 Policies which are cancelled because of the insured's failure to reimburse for deductible expenses may, at the insurer's option, be reinstated with no loss of coverage on receipt of the applicable reimbursement.

4.4.5 If the original insurer declines to reissue or reinstate the cancelled policy, the policyholder may make application to another insurer or may apply for coverage through the Delaware Workmen's Compensation Assigned Risk Plan.

4.4.6 An employer applying for workmen's compensation coverage through the Assigned Risk Plan will be deemed ineligible for coverage so long as there is an unsatisfied deductible reimbursement outstanding.

18 Del. Admin. Code § 801-4.0