Delaware News

Insurers and Agents Required to Provide Rate Explanations

Captive | Captive Insurance | Insurance Commissioner | Date Posted: Tuesday, August 8, 2023


Official Seal of the Insurance Commissioner of Delaware

Recent reports of misleading comments in response to consumer questions prompt bulletin re-issuance

The Delaware Department of Insurance has been made aware of recent misrepresentations related to the basis for premium changes in consumer-facing communications. In response, the department is reminding agents, producers, and insurers of their obligations to provide full explanations of rate changes to policyholders when asked. Additionally, the department is reissuing Universally Applicable Bulletin No. 1 relating to False or Misleading Representations Concerning How Insurance Rates Are Set in Delaware.

“In order to adjust rates in our state, insurers go through a robust regulatory process during which they have to justify their rates to our team before they are approved,” said Insurance Commissioner Trinidad Navarro. “Consumers deserve understandable and accurate explanations too. And insurers, producers, and agents are required to provide that information by law. We will continue to enforce these provisions that ensure Delawareans are treated honestly and fairly in both the rates they experience, and the explanations they are afforded.”

The Department of Insurance does not set insurance rates, instead, its role is to analyze proposed rate changes against specific, actuarily justified criteria to determine whether rates are fair for both consumers and the insurance industry alike.

18 Del. C. § 2304(2) makes it unlawful to “…[make] any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of the insurance business, which is untrue, deceptive or misleading.”

The bulletin reiterates that when an insured questions a premium change, the Department expects that a full explanation be provided by the company or agent. Industry professionals who offer responses to consumers that are deliberately misleading or claim the department has required the rate change shall be considered to be knowingly violating the statute.

View Universally Applicable Bulletin No. 1

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Insurers and Agents Required to Provide Rate Explanations

Captive | Captive Insurance | Insurance Commissioner | Date Posted: Tuesday, August 8, 2023


Official Seal of the Insurance Commissioner of Delaware

Recent reports of misleading comments in response to consumer questions prompt bulletin re-issuance

The Delaware Department of Insurance has been made aware of recent misrepresentations related to the basis for premium changes in consumer-facing communications. In response, the department is reminding agents, producers, and insurers of their obligations to provide full explanations of rate changes to policyholders when asked. Additionally, the department is reissuing Universally Applicable Bulletin No. 1 relating to False or Misleading Representations Concerning How Insurance Rates Are Set in Delaware.

“In order to adjust rates in our state, insurers go through a robust regulatory process during which they have to justify their rates to our team before they are approved,” said Insurance Commissioner Trinidad Navarro. “Consumers deserve understandable and accurate explanations too. And insurers, producers, and agents are required to provide that information by law. We will continue to enforce these provisions that ensure Delawareans are treated honestly and fairly in both the rates they experience, and the explanations they are afforded.”

The Department of Insurance does not set insurance rates, instead, its role is to analyze proposed rate changes against specific, actuarily justified criteria to determine whether rates are fair for both consumers and the insurance industry alike.

18 Del. C. § 2304(2) makes it unlawful to “…[make] any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of the insurance business, which is untrue, deceptive or misleading.”

The bulletin reiterates that when an insured questions a premium change, the Department expects that a full explanation be provided by the company or agent. Industry professionals who offer responses to consumers that are deliberately misleading or claim the department has required the rate change shall be considered to be knowingly violating the statute.

View Universally Applicable Bulletin No. 1

image_printPrint

Related Topics:  , , , , , , , , ,


Graphic that represents delaware news on a mobile phone

Keep up to date by receiving a daily digest email, around noon, of current news release posts from state agencies on news.delaware.gov.

Here you can subscribe to future news updates.