UD Report: Captive Insurance Program Boosts Delaware’s GDP, Jobs, Incomes, Tax Revenue

UD Report: Captive Insurance Program Boosts Delaware’s GDP, Jobs, Incomes, Tax Revenue

Commissioner Stewart Celebrates Captive Bureau’s Economic Impact

DOVER, DE –Insurance Commissioner Karen Weldin Stewart today announced the release of a University of Delaware economic impact study which shows that the Department of Insurance’s captive insurance program contributes nearly $360 million to Delaware’s annual gross domestic product. The captive program also directly and indirectly supports 2,537 Delaware jobs, creates almost $109 million in additional income, and generates over $5 million for the state in tax revenue, the report shows.

The study, The Economic Contributions of the Captive Insurance Industry to the Delaware Economy, was conducted on behalf of the DOI by the University of Delaware’s Alfred Lerner College of Business & Economics’ Center for Applied Business & Economic Research (CABER), which has produced similar economic impact studies for the Firefly Music Festival and Delaware’s horseracing industry.

CABER surveyed 1081captive insurance companies doing business in Delaware and used data from businesses providing services to those companies. The report breaks out the program’s economic impact per $1,000 spent by the DOI for the captive industry. For every $1,000 spent, 1.95 jobs are created, $83,574 in income is generated, and $4,301 in taxes are collected. Captive program spending supports 950 jobs in finance and investment industry, 447 jobs in legal, accounting and professional support, and 209 retail jobs. The complete report may be found at http://captive.delawareinsurance.gov/docs/pdfs/captive-industry-impact-on-de-econ-caber-report-201608.pdf

“I instituted the Bureau of Captive and Financial Insurance Products in 2009 and I’ve watched it grow ever since,” said Commissioner Stewart. “Thanks to my captive director, Steve Kinion, and my topnotch captive staff, we are consistently one of the top captive domiciles in the US and in the world. But until now, I don’t think many people were aware of exactly what we contribute to Delaware’s economy. The CABER report rewards my faith in captives as a revenue generator for our state.”

Captive insurance entities are owned by the companies that they insure, and are generally formed by businesses who wish to better manage the cost and administration of their insurance coverage. DOI’s captive bureau is self-sustaining and currently contributes an annual surplus in tax and fee revenue of over $3 million to the Delaware general fund.

For more information please contact Jerry Grant at 302-577-5259

Commissioner Stewart Fines Three Insurers $114,500 for Market Misconduct

Dover, DE-Commissioner Karen Weldin Stewart fined the following companies a total of $114,500 during the second quarter of 2016 for violations of state insurance laws and regulations:


Name                                                                       Fine                                           Date
Bankers Life & Casualty Company                   $55,500.00                             4/27/2016
National Health Insurance Company               $25,000.00                             5/11/2016
USAA                                                                $34,000.00                             5/24/2016

The fines result from a market conduct examination of each company’s practices performed by the Delaware Department of Insurance. Details of the companies’ particular violations may be found in the Stipulation and Consent Order entered into by the parties and listed under “Consent Decrees” in the Enforcement Actions & Fines section of the Department website:
Click on the PDF link in the right-hand column to read each consent decree in its entirety. The market conduct examination report which provides the basis for the fines can be accessed by clicking on the company’s name in the left-hand column.
For more information, call the Department at 1-800-282-8611.

For more information please contact Jerry Grant at 302-674-7303

Delaware Department of Insurance | www.delawareinsurance.gov | Main Office Phone: 302-674-7300

Highmark, Aetna Request Substantial Health Insurance Rate Increases for 2017

Highmark, Aetna Request Substantial Health Insurance Rate Increases for 2017

Commissioner Stewart Announces Public Information Sessions

Dover, DE – Commissioner Karen Weldin Stewart announced today that she has received rate request filings from Highmark Blue Cross Blue Shield of Delaware, Aetna, Inc. and Aetna Life for individual and small group plans to be offered on Delaware’s Health Insurance Marketplace in 2017. Highmark is asking for a 32.5% increase in the individual market, while Aetna, Inc. requests 25.0% and Aetna Life 23.9%. In the small group market, Highmark seeks a 2.7% increase, Aetna, Inc. asks for 23.2%, and Aetna Life requests 18.6%.

“These large rate increase requests are occurring in many states across the country, and I know they will be a burden for many Delawareans,” said Stewart. “The proposed increases are substantial and I’m going to do my best to reduce them. As is the case with every rate request I receive, I am instructing my actuaries to aggressively examine Highmark’s and Aetna’s supporting data for their requests.”

“I remind consumers that these are proposed rates, not final rates,” added Commissioner Stewart, who also announced that the Insurance Department will conduct public information sessions to receive comment on the proposed increases. The sessions will take place at the following locations in the three counties:

Monday, June 20th at 6:00 p.m. Carvel State Office Building
Auditorium/Mezzanine Level
820 N. French Street
Wilmington, DE 19801

Tuesday, June 21st at 11:00 a.m. Delaware Tech Owens Campus
College Theater, Arts & Science Center
21179 College Drive
Georgetown, DE 19947

Tuesday, June 21st at 6:30 p.m. Delaware Department of Insurance
Sussex Conference Room, First Floor
841 Silver Lake Boulevard Dover, DE 19904

Representatives from Highmark and Aetna will be present at each session. Consumers and interested parties may also submit written comments to the Department at ratedivision@delaware.gov until July 15, 2016. Comments may also be submitted in writing to:

Delaware Department of Insurance

Attn: Health Insurance Rate Comments

841 Silver Lake Blvd.

Dover, DE 19904

According to Title 18 of the Delaware Code, insurance companies may not charge rates that are “excessive, inadequate or unfairly discriminatory.” The staff at DOI reviews rate filings and independent actuaries retained by DOI review the supporting data to see if the rate changes are justified by the circumstances as presented by the insurance companies. The rate requests and the insurers’ justifications will be posted at www.delawareinsurance.gov during the comment period. The Commissioner reviews the actuaries’ findings and the public comment and works with the insurers to arrive at a rate. That rate is submitted to the Centers for Medicare & Medicaid Services (CMS) for subsequent review. CMS must follow its own regulations and Delaware law before finally approving or denying the requests.



View the Health Insurance Rate Filings webpage: http://www.delawareinsurance.gov/departments/rates/ratefilings.shtml

www.delawareinsruance.gov | Main Office: 302-674-7300

Retirement Planning for All Ages: Commissioner Stewart Supports National Retirement Planning Week

Dover, DE – National Retirement Planning Week runs from April 11 to 15, and Insurance Commissioner Karen Weldin Stewart joins with the National Retirement Planning Coalition to recommend that Delawareans of all ages take time to review their existing retirement strategy, or to formulate a plan if they don’t already have one. It’s important to have a plan for financial stability in retirement besides relying on Social Security alone. While there’s no right or wrong way to plan for retirement, taking no action could be a recipe for disaster.

The Government Accountability Office’s May 2015 report, Retirement Security: Most Households Approaching Retirement Have Low Savings, found that more than half of people age 55 and up don’t have any money saved for retirement. And about half of that group won’t be getting a pension, leaving them with little to no retirement income outside of Social Security benefits. The report states, “[C]ompared to current retirees, workers age 55 and older expect to retire later and a higher percentage plan to work during retirement. However, one survey found that about half of retirees said they retired earlier than planned due to health problems, changes at their workplace, or other factors, suggesting that many workers may be overestimating their future retirement income and savings.”

Commissioner Stewart says, “Planning for retirement can seem like a daunting task but the earlier you start saving, the easier it will be to actually reach your goals. National Retirement Planning Week serves as a great reminder for people to see if their retirement planning strategies are going to provide the best benefits for their future needs. After completing a self-analysis or working with a professional, consumers should redefine their goals and take action to make necessary changes. Consulting with your life insurance agent or broker should be part of this analysis.”

The National Retirement Planning Coalition is a group of prominent education, consumer advocacy and financial services organizations. The goal of the initiative is to demonstrate that it is possible to “Retire On Your Terms” if comprehensive retirement plans are properly developed and managed. To support these education efforts, the coalition has collected the latest resources to help consumers and financial professionals focus on long-term financial goals. These tools are available year-round at www.retireonyourterms.org, which features life-stage specific resources to help Americans focus on their long-term financial goals.

For more information on topics related to retirement planning, consumers are also encouraged to visit the Delaware Department of Insurance website, www.delawareinsurance.gov, and the National Association of Insurance Commissioners’ consumer website, www.InsureUonline.org.


For more information:

Jerry Grant 302-674-7303


Commissioner Stewart: Make Sure Your Coverage Is In Place Before Your Drone Is In the Air

Dover, DE – The Federal Aviation Administration estimates more than one million drones will be sold during the upcoming holiday season. Everyone from photographers and farmers to law enforcement and hobbyists are taking to the air. As drones become more affordable and available, the skies are getting crowded. Insurance Commissioner Karen Weldin Stewart and the National Association of Insurance Commissioners advise that personal or commercial use of drones raises a number of critical insurance issues, ranging from personal injury and property damage to privacy concerns.


Drones are defined as remotely piloted aircraft systems and are also known as unmanned air vehicles (UAVs). According to the Federal Aviation Administration (FAA), pilots of unmanned aircrafts have the same responsibility to fly safely as manned aircraft pilots. Earlier this week, the FAA announced that drone owners must register their UAVs beginning December 21 and pay a $5 fee. States and municipalities may have their own laws regarding drone use. Before you take flight, first check local, state and federal laws. A link to the FAA release can be found below.



Drone Safety


Hobbyists have been flying model aircraft for decades. However, advances in technology allow drones to hover quietly and fly far from their pilot. According to the FAA, there will be 30,000 small unmanned UAVs used for business purposes by 2020. This number does not include drones used by hobbyists.


With some drones weighing up to 55 pounds, a fall from the sky can cause significant damage to property or bystanders. The FAA has issued these guidelines for drone hobbyists:


  *   Don’t fly higher than 400 feet and stay clear of surrounding obstacles.

  *   Keep the aircraft in sight at all times.

  *   Stay away from manned aircraft operations.

  *   Don’t fly within five miles of an airport unless you contact the airport and control tower before flying.

  *   Avoid flying near people or stadiums.

  *   Don’t fly an aircraft that weighs more than 55 pounds.

  *   Use caution when flying your unmanned aircraft.



Insurance for Private Use


Since UAVs are operated remotely, there’s no risk to passengers or crew. However, drones present a significant risk to property and life on the ground in the event of an accident. Drones can crash due to faulty and inappropriate operation, mechanical defects and component failure. Losses and damages could involve bodily injury to humans and animals as well as buildings and other structures.


Obtaining insurance for your drone for personal use isn’t difficult. Using a private drone as a hobby is generally covered under a homeowner’s insurance policy (subject to a deductible) which typically covers radio-controlled model aircraft. This also applies to a renter’s insurance policy. Look at the contents section of your policy, or talk to your agent to see if your drone will be covered if it is lost, stolen or damaged. If your drone falls onto your car, damage to your car may be covered if you have a comprehensive coverage auto policy.


A larger concern is liability for an accident caused by your UAV. If your drone crashes into a person or someone else’s vehicle, the accident is your responsibility. If you have a homeowners or renter’s policy, generally the policy will cover liability for an accident caused by your drone. Check with your agent or insurer to verify your policy contains this important coverage.


Privacy Concerns


You may be excited to obtain a drone for your own use, but how would you feel about your neighbors owning and operating drones near your home? Privacy is a legitimate concern when it comes to drone use.


UAVs are often equipped with on-board cameras and other data-collection capabilities which can pose a threat to privacy. Drones may capture private data that could be harmful or embarrassing if shared. Beyond intentional surveillance, drones may also unintentionally capture images during routine and unrelated flights. As a drone owner, remain mindful of privacy concerns. Insurers are developing policies to cover these liability exposures, so keep in touch with your insurer to make sure your use remains covered.


Commercial Drone Use


Currently, the commercial use of UAVs is largely restricted and operations are authorized on a case by case basis. The FAA has started regulating commercial drones with proposed rules such as requiring pilots to obtain special pilot certificates, keeping drones away from bystanders, and restricting when and where they can fly. The proposed rules also prohibit drone delivery of packages. Since final rules have not been implemented, they are not being enforced.


Future of Drone Insurance


Widespread use of drones—private and commercial—poses various risks, ranging from safety to privacy of individuals. Risks arising from the use of drones could best be managed by property and casualty insurers, but only after defined drone operational requirements and performance standards are in place. Complete and clear drone regulation, by the states and the FAA, is necessary before insurers can meet policyholder needs.


Registration of drones will allow authorities to trace a drone back to an owner, which means it’s vital that you’re in compliance with laws and regulations and have the appropriate insurance coverage.


The FAA press release, which contains important information on deadlines, fees and the benefits of early registration, can be found at




Contact:  Jerry Grant

(302) 674-7303