Commissioner Stewart Posts Reports on Proposed Workers’ Compensation Rate Filings

Documents Available on New DOI Webpage

DOVER, DE – Insurance Commissioner Karen Weldin Stewart announced today that the Department of Insurance has posted three actuarial reports evaluating proposed 2016 workers’ compensation rates to the DOI website.

Milliman, Inc. and INS Consultants, Inc., two independent actuaries engaged by the Department of Insurance, and AIS Risk Consultants, a third independent actuary working for Delaware’s Ratepayer Advocate, have filed reports evaluating proposals for both residual market rates and involuntary market loss costs, as submitted by the Delaware Compensation Rating Bureau (DCRB) under Filing 1502.

The actuarial reports and all documents related to Filing 1502 are available on a new “Dockets” section of the DOI website, established by Commissioner Stewart to provide greater transparency in the workers’ compensation rate-making process. For access, go to http://www.delawareinsurance.gov/departments/documents/dockets/

Commissioner Stewart reminds the public that three public information sessions regarding Filing 1502, one in each county, have already been announced:

Tuesday, October 20, 2015, at 2:00 p.m.

Insurance Department

841 Silver Lake Blvd., Dover, DE 19904

Tuesday, October, 20, 2015, at 7:00 p.m.

Delaware Technical Community College – Owens Campus

Theater Auditorium – Arts & Science Center

21179 College Drive, Georgetown, DE 19947

Wednesday, October 21, 2015, at 6:00 p.m.

Carvel State Office Building, 2nd Floor Auditorium

820 North French Street, Wilmington, DE 19801

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For more information:  Jerry Grant 302-674-7303

Department of Insurance: www.delawareinsurance.gov | 302-674-7300

(DOVER, DE) – Insurance Commissioner Karen Weldin Stewart today released Delaware’s Qualified Health Plan rates for Plan Year 2016.  The Commissioner, after review, submitted her approved rates to the Centers for Medicare & Medicaid Services (CMS) in August. CMS has final authority on the rates. CMS concurred with the Commissioner’s recommendations and announced their approval on September 21, 2015.

It is the Commissioner’s duty to evaluate the reasonableness of rates to ensure rates are not excessive, inadequate or unfairly discriminatory.

The Commissioner recommended approval of a 22.4% rate increase in the individual market for Highmark Blue Cross Blue Shield of Delaware, a reduction of 3.0% from Highmark’s June request of 25.4%.  Highmark had made a second request in late August for an additional 8% increase, for an overall rate hike of more than 33% which the Commissioner rejected out of hand.

Aetna Life Insurance Company’s request for a 16% increase in the individual market was also approved. In the small group market, Highmark’s request for a 12.7% increase was granted, as was Aetna’s request for a 6.1% decrease.

“My actuaries took a hard look at Highmark’s submitted rate request, and we were able to reduce it by 3.0%,” said Commissioner Stewart. “But Blue Cross franchisees across the country are making requests for increases of 25% or more, claiming the Affordable Care Act has unleashed pent-up demand by persons who have not seen a doctor for years.  Regulators have been approving significant rate increases throughout the country.”

BCBS plans have requested rate hikes greater than 30% in Oklahoma, Tennessee and Minnesota.  Last month Blue Cross Blue Shield New Mexico pulled out of that state’s healthcare exchange when denied a 51.6% increase.

Commissioner Stewart said, “I’m continuing to meet with other insurance companies to persuade them to join Delaware’s Health Insurance Marketplace and increase competition. Insurers have been discouraged by our state’s high health care costs.” According to a 2013 Wall Street Journal report[1] on health care spending nationwide, Delaware ranks third-highest in prescription drug costs, fourth in the cost of physician and clinical services, and ninth in the cost of hospital care.

The Department of Insurance held public information sessions in each county in June to receive comment on the proposed rate increases. Written comments can be found at the department’s website. The department expects to post all of the rates on their website by October 15, 2015. For details visit the Health Insurance Rate Filings page, http://www.delawareinsurance.gov/departments/rates/ratefilings.shtml

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[1] JOURNAL REPORTS: HEALTH CARE Health-Care Costs: A State-by-State Comparison

By LOUISE RADNOFSKY, Updated April 8, 2013 4:00 p.m. ET, http://www.wsj.com/articles/SB10001424127887323884304578328173966380066

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For Immediate Release

For more information: Frank Pyle @ 302-674-7353

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

Department of Insurance Recovers Nearly $1 Million for Delaware Consumers through June 2015

Businesses Also Saved Almost $4 Million in Workers Comp Premiums

​DOVER, DE – Insurance Commissioner Karen Weldin Stewart and the Delaware Department of Insurance announced today that its Consumer Services Division has recovered $995,558.73 for consumers during the first six months of 2015. Delaware employers have also saved approximately $3,978,296.00 in workers compensation premiums during the same period through the Department’s Workplace Safety Program.

The Consumer Services Division received 2,345 formal insurance coverage complaints and inquiries regarding automobile, homeowner’s and health policies between January 1 and June 30, and directly recovered $543,052.39 from insurers on Delaware policyholders’ behalf. The Division also conducted arbitration hearings requested by or on behalf of policyholders, which netted consumers $452,506.34 in arbitration awards.

“Our Consumer Services Division staff continues to fight for Delaware consumers,” said Stewart. “We want people to know about their rights and options when dealing with insurance companies. Policyholders can always turn to us for free and unbiased assistance with their insurance questions.”

Commissioner Stewart is also happy that the Workplace Safety Program continues to save workers compensation costs for Delaware businesses.  “I know insurance premiums are a significant part of the cost of operating a business, big or small.  This program is great because it benefits employers and employees.”

The Workplace Safety Program incentivizes employers to establish and maintain safe workplaces. The program provides businesses with the opportunity to earn discounts of up to 19 percent on their workers’ compensation insurance premiums by meeting certain safety requirements and agreeing to undergo periodic inspections. The $3,978,296.00 savings figure, provided by the Delaware Compensation Ratings Bureau, is approximate because businesses may pay their workers compensation insurance premium annually, quarterly, or by some other schedule.

For help with general insurance matters, call the Department at (302) 674-7300. Call (800) 282-8611 for Consumer Services. For more information on the Workplace Safety Program call (302) 674-7377.Go to our website at www.delawareinsurance.gov, and visit our Facebook page, www.facebook.com/DelawareInsurance. Follow us on Twitter @Delaware_DOI.

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For immediate release.
Media Inquiries? Contact: Jerry Grant @ 302-674-7303
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Delaware Dept. of Insurance: www.delawareinsurance.gov | 302-674-7300

Would You Be Covered If Your Home Flooded?

Commissioner Stewart Offers Tips on Flood Insurance

​DOVER, DE – According to Delaware’s Department of Natural Resources and Environmental Control (DNREC), more than 331 square miles, or 17 percent, of Delaware’s land mass is within a high risk flood zone, including more than 18,000 structures statewide. Insurance Commissioner Karen Weldin Stewart and the National Association of Insurance Commissioners offer the following information to help you get smart about your flood insurance options.

Many people don’t know that a standard homeowners or renters insurance policy almost never covers damage to your home or its contents due to flood waters. If your home were to flood tomorrow, would you be covered by your insurance? Do you even know your home’s risk potential for a flood? Before you can decide what sort of coverage you may need, you need to know your risk.

To learn about your home’s risk for flooding visit our Flood Insurance webpage, http://delawareinsurance.gov/departments/consumer/flood.shtml, which has links to county-specific flood maps from DNREC and links to additional maps from FEMA.

Just because you don’t live near a body of water doesn’t mean that you’re safe from flooding. According to the National Flood Insurance Program (NFIP), floods are the number one natural disaster in the U.S., and consumers outside of high-risk flood areas may account for more than one in five flood insurance claims. The NFIP helps communities understand their risk by providing flood maps. Risk levels are divided into three categories:

• High-risk areas have at least a 1 percent chance of flooding annually. All homeowners in these areas with mortgages from the federally regulated or insured lenders are required to buy flood insurance.
• Moderate-to-low-risk areas have less chance of flooding annually, but the possibility is not completely removed. Flood insurance in these areas is not required, but it is recommended for all property owners and renters.
• Undetermined-risk areas are where flood-hazard analysis has not been conducted, but a flood risk still exists.

So if you’re at risk, are you covered? Generally, homeowners insurance does not offer protection against flood losses. You should check your policy under “exclusions.” If coverage for flood damage exists, it will probably be listed under “water damage.” Contact your agent or insurer to find out more about what your current policy covers.

While some private companies offer flood insurance, most flood insurance in the U.S. is backed by the federal government under the NFIP. It may be purchased through licensed property and casualty insurance agents or through many private insurance companies. Typically, there’s a 30-day waiting period from date of purchase before a policy goes into effect. There are also eligibility restrictions to qualify for National Flood Insurance. Please contact the NFIP with eligibility questions at (800) 427-4661 or visit the NFIP’s website, www.floodsmart.gov.

The standard flood insurance policy covers direct physical damage to your insured property up to the replacement cost or actual cash value of damages, or the policy limit of liability, whichever is less. It covers structural damage, including damage to the furnace, water heater, air conditioner, flooring and debris clean-up. Coverage for basements, crawlspaces and ground-level enclosures on elevated homes is limited, so talk to your agent about any restrictions in your policy. The contents of your home are not covered under a standard flood insurance policy.

Flood insurance generally covers damage caused by hurricanes, rivers, and tidal waters extending over at least two acres. Flood insurance covers overflow, inland or tidal waters, and unusual and rapid accumulation or runoff of surface waters of any source. The flood must be a general and temporary condition. Flooding from wind-driven rain entering through a wind-damaged window or door, hole in a wall, or the roof is typically not covered by a flood policy, but is generally included in most homeowners policies.

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The Delaware Department of Insurance mission: Protecting Delawareans through regulation
and education while providing oversight of the insurance industry to best serve the public.

For Immediate Release

Media Inquiries? Contact:  Jerry Grant at (302) 674-7303

Commissioner Stewart Celebrates Stepping Stones Credit Union’s
Partnership with Federal Home Loan Bank of Pittsburgh

House Bill 15 Encourages Delaware-domiciled Captive Insurers to Join FHLBank System

(DOVER, DE) – Commissioner Karen Weldin Stewart joined with Senator Tom Carper and state and federal banking officials on Monday, June 29 to celebrate Stepping Stones Community Federal Credit Union’s joining forces with the Federal Home Loan Bank of Pittsburgh to make more affordable housing dollars available to people who live or work in Wilmington.

Commissioner Stewart also announced that House Bill 15, signed into law by Governor Jack Markell on June 24, specifically states that Delaware-domiciled captive insurance companies may apply for membership in the FHLBank system.

“Partnering with the FHLBank of Pittsburgh allows Stepping Stones to expand the good work it’s been doing throughout Wilmington,” Stewart said at the ceremony, which took place across from Stepping Stones headquarters on North Church Street in Wilmington.  “And I know the increased liquidity provided by the FHLBank of Pittsburgh will only make Stepping Stones stronger.”

Since 2011, Stepping Stones has been serving its members in and around Wilmington with financial counseling and products including savings accounts, car loans, first mortgage loans and fixed and adjustable mortgages. Part of the Federal Home Loan Bank System,  FHLBank Pittsburgh serves financial institutions in Delaware, Pennsylvania and West Virginia, and will help Stepping Stones leverage its efforts in the low-income market it serves.

Captive insurance companies are owned by the entities that they insure, and are formed by businesses that wish to manage the cost and administration of their insurance coverage more efficiently. During Stewart’s administration, the captive division has flourished, growing from 38 companies in 2009 to over 1,000 entities today.

“As insurance commissioner, I am always looking for new ways to benefit my constituents,” said Stewart. “By coupling the FHLBanks and insurance companies, I am increasing the pool of money available for affordable housing opportunities to improve the lives of many Delawareans.” When insurance companies of all types borrow monies from the FHLBank system, the interest they pay on the borrowed funds is income for the FHLBanks. Each FHLBank is required to set side ten percent of its annual net earnings for affordable housing programs.  “I strongly encourage captive insurers to consider becoming members of FHLBank Pittsburgh.”

The FHLBank Pittsburgh’s affordable housing program provides grants and subsidized loans for costs associated with the acquisition, construction or rehabilitation of single or multi-family housing for individuals and families with incomes at 80 percent or less of the area median income.

In 1932, Congress established the FHLB system to fill a need for a stable source of funds for residential mortgages.  The FHLBs provide cash advances to their nearly 8,000 members, which include insurance companies, community banks, thrifts, credit unions, and community development financial institutions.  Members of the FHLB system use their access to FHLB credit to help finance affordable housing and economic development efforts in their service areas.

House Bill 15 is one more step in Stewart’s ongoing effort to improve Delaware’s insurance laws.  In 2014, she supported legislation that equalized the treatment for FHLBanks when lending to insurance companies regulated under state insolvency laws. FHLBanks now have the peace of mind to know that when making a loan to a Delaware domiciled insurer, their right to the collateral is protected and treated in the same manner as when FHLBanks lend to FDIC-insured depository institutions governed by federal banking law. Stewart noted, “Delaware is one of the only states that guarantee this level of protection to the FHLBanks.”

Another important part of House Bill 15 is providing clarification of the term “series captive insurance company.”  A series captive insurance company is an insurer whose organizational status is as a series either under Delaware’s Limited Liability Company Act or Statutory Trust Act.  Five years ago Delaware pioneered the licensing of series as captive insurance companies and this type of captive has become the flagship product.  Since 2009, Delaware has issued captive insurance licenses to 754 captive insurers whose organizational status is as a series.  House Bill 15 defines what a series captive insurance is and what it can do.  Delaware’s captive insurance program is built upon Delaware’s respected corporate and business entity laws.  “One of the reasons that the captive insurance program is successful is because I am promoting the formation of captive insurers under the laws of Delaware” said Stewart.

Since becoming insurance commissioner in 2009, Stewart has transformed Delaware into the nation’s third largest captive insurance domicile and the sixth largest in the world.  She has also made Delaware the number one state for the formation of risk purchasing groups.  “The captive insurance program under my administration is a clean, non-polluting industry that provides economic opportunities by attracting intelligent human capital and generating an annual surplus of tax and fee revenue for Delaware.  I am very proud that this program benefits my constituents.”

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Delaware’s Captive Insurance Program: http://captive.delawareinsurance.gov/

The Delaware Department of Insurance mission: Protecting Delawareans through regulation
and education  while providing oversight of the insurance industry to best serve the public.

Delaware Department of Insurance | www.delawareinsurance.gov | 302.674.7300

More news from the Department of Insurance: http://www.delawareinsurance.gov/newsroom.shtml

Media Questions? Contact Jerry Grant at (302) 674-7303