Subchapter III. Self-Insurance
TITLE 18
Insurance Code
Insurance
CHAPTER 65. INSURANCE FOR THE PROTECTION OF THE STATE
Subchapter III. Self-Insurance
§ 6530. Placement of self-insurance.
When the Committee shall determine and declare it to be advisable to insure against a certain risk or risks through a self-insurance program, then as to such risk or risks there shall be established a State Self-Insurance Fund, hereinafter in this chapter referred to as the Fund, which Fund shall be established pursuant to the hereinafter provided for schedule and through which Fund said risk or risks shall be insured for each year thereafter until the contrary is determined and declared to be advisable by the Committee or by subsequent legislation.
18 Del. C. 1953, § 6530; 57 Del. Laws, c. 187, § 2.;
§ 6531. Capitalization of the State Self-Insurance Fund.
(a) The Fund shall be capitalized in the following manner:
(1) The Fund shall be capitalized in the amount of $2,000,000. Each year the General Assembly shall appropriate to the Fund an amount equal to the claims and expenses paid out from the Fund for the prior fiscal year less the income derived from the investments of the Fund during the same period.
(2) In the event that payment of losses from the Fund exceeds $2,000,000 during any fiscal year, the General Assembly shall give prompt consideration to the enactment of appropriate special funding legislation. Funds derived from such special funding legislation shall be deposited in the Fund and shall be utilized for the payment of such losses.
(b) In the event that the Committee shall elect to procure commercially insurance on risks which are self-insured, they may direct that the initial premium for such commercial policies covering such risk or risks shall be paid from the Fund.
18 Del. C. 1953, § 6531; 57 Del. Laws, c. 187, § 2; 59 Del. Laws, c. 279, § 1.;
§ 6532. Payment of premium allocations.
The amount of the appropriation necessary to sustain the Fund at $2,000,000 shall be computed by the Committee, under the formula provided in § 6531(a)(1) of this title for each fiscal year and made a part of the budget request of the Insurance Department as submitted by the Insurance Commissioner for the fiscal year, and upon approval by the General Assembly in the annual budget shall be paid to the Fund by the State Treasurer. However, in starting the self-insurance program as to any particular risk, the Committee may direct that the funds theretofore allocated for the payment of commercial insurance premiums for commercial policies covering such risk or risks shall be paid into the Fund as the initial premium for such self-insurance coverage, and upon such direction, as communicated to the State Treasurer by the Insurance Commissioner, the State Treasurer shall so reallocate such specified sum to the Fund.
18 Del. C. 1953, § 6531A; 57 Del. Laws, c. 187, § 2; 59 Del. Laws, c. 279, § 2.;
§§ 6533, 6534. Maximum level of effective capitalization and termination of premium payments; Emergency Back-Up Fund.
Repealed by 59 Del. Laws, c. 279, § 3, eff. Mar. 27, 1974.
§ 6535. Administration and custody of the State Self-Insurance Fund.
The Director, subject to the supervision and control of the Insurance Commissioner, shall be the administrator of the Fund. The State Treasurer shall be custodian of the Fund.
18 Del. C. 1953, § 6532; 57 Del. Laws, c. 187, § 2; 63 Del. Laws, c. 142, § 38.;
§ 6536. Investment of moneys in the Fund.
(a) The State Treasurer shall invest and reinvest such portion of the Fund as is not required to meet regular anticipated expenses in accordance with the investment guidelines established by the Cash Management Policy Board.
(b) All income from such investments shall be continued in the Fund to pay the obligations of the Fund and provide for its growth.
18 Del. C. 1953, § 6533; 57 Del. Laws, c. 187, § 2; 63 Del. Laws, c. 142, § 39.;
§ 6537. Provisions for deductible limits.
The Committee, from time to time, may declare and enforce such deductible limits on any insured risk covering loss to state-owned property, both real, personal and mixed, as it shall deem appropriate.
18 Del. C. 1953, § 6534; 57 Del. Laws, c. 187, § 2.;
§ 6538. Provisions for reinsurance.
The Committee, from to time, may determine the advisability of purchasing commercial reinsurance contracts as to any risk or risks covered by the Fund and direct the Coverage Office to place such insurance, in such amount as the Committee shall have determined to be most feasible, in the manner herein provided for the placement of other commercial insurance coverage.
18 Del. C. 1953, § 6535; 57 Del. Laws, c. 187, § 2.;
§ 6539. Adjusting claims and paying losses.
The Coverage Office shall have the responsibility of adjusting all claims and paying all losses in risks covered by the Fund, and shall carry out its duties in conformity with appropriate regulations promulgated for that purpose by the Insurance Commissioner, which regulations shall be in general conformity with the accepted practice in the commercial insurance industry in such matters, and shall be calculated to provide for prompt, efficient and equitable settlement procedures. The Coverage Office shall keep such records and files as shall be necessary and proper in its fulfillment of this obligation.
18 Del. C. 1953, § 6536; 57 Del. Laws, c. 187, § 2.;
§ 6540. Arbitration of disputes and litigation of claims.
(a) Any dispute between the Coverage Office and a state agency claimant, which cannot be amicably resolved, shall be referred to arbitration before an arbitrator selected by the Secretary of State. The expense of such arbitration will be borne by the disputants equally. The decision of the arbitrator will be final and binding upon the disputants.
(b) Any dispute between the Coverage Office and a claimant under the workers' compensation coverage, should same be covered by the Fund, which cannot be amicably resolved, shall be handled in the manner of a claim against a commercial insurer before the Industrial Accident Board with all normal rights of appeal.
(c) Any dispute between the Coverage Office and a claimant not otherwise covered in subsections (a) and (b) of this section, which cannot be amicably resolved, may be made the subject of litigation in any court of competent jurisdiction in this State.
18 Del. C. 1953, § 6537; 57 Del. Laws, c. 187, § 2; 71 Del. Laws, c. 84, § 26.;
§ 6541. Inspections of insured property.
The Coverage Office shall have available to it the services of the State Fire Marshal and the State Fire Marshal's deputies for the purpose of inspecting self-insured real and personal property of the State, and may call upon the Fire Marshal and the State Fire Marshal's deputies to conduct such inspections of such property as are reasonable and necessary to determine the risk involved in insuring same and to provide the basis for requests or suggestions as to how undesirable hazards may be corrected; and the Fire Marshal and the State Fire Marshal's deputies shall cooperate with the Coverage Office in this regard, conducting such investigations as are requested and reporting the results thereof to the Coverage Office together with such recommendations as the investigator shall deem to be appropriate.
All state agencies, officials and employees will render full cooperation to the Fire Marshal and the Coverage Office in these matters and shall promptly correct such hazards as are found to exist, and failure to do so shall be referred to the Governor by the Coverage Office for such remedial executive action as the Governor shall deem appropriate.
18 Del. C. 1953, § 6538; 57 Del. Laws, c. 187, § 2; 70 Del. Laws, c. 186, § 1.;
§ 6542. Independent contractors.
The Director shall first employ all resources available in the Coverage Office, the Insurance Department, the office of the State Fire Marshal, the Justice Department, and the Auditor's Office before retaining independent contractors, but in the event that special expertise is required for the performance of the Director's duties not otherwise available or not readily available to the Director when required, then the Director is authorized and directed to contract for the services of such independent contractors as shall be best equipped to render such services, including, but not limited to, accountants, actuaries, claims adjusters and investigators, attorneys and engineers, which contracts shall be on an ad hoc or per case basis, and for which the Director is authorized to make payment by drafts upon the Fund, subject to the approval of the Insurance Commissioner, as an administrative expense of the Fund.
18 Del. C. 1953, § 6539; 57 Del. Laws, c. 187, § 2; 70 Del. Laws, c. 186, § 1.;
§ 6543. Fidelity bonds.
In the event that the Committee determines and declares it advisable to self-insure the statutory required fidelity bonds of the officials and/or employees of the State or its herein covered subdivisions, and establishes a self-insurance program in that regard, then those provisions of the several statutes of this State requiring that such bonds be with corporate surety are superseded as to such bonds as are covered by such self-insurance program to the extent that said statutes required corporate surety.
18 Del. C. 1953, § 6540; 57 Del. Laws, c. 187, § 2.;