Unfair Practices in the Insurance Business

What this document is

Delaware Code Title 18 Chapter 23 - Unfair Practices in the Insurance Business (Secs. 2301-2318) is a state statute published by Delaware Code Online (delcode.delaware.gov), Delaware General Assembly. It is one of the Delaware documents that insurance license exam questions are written from, including delaware life & health, delaware property & casualty practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• 18 Del. C. Chapter 23 § 2305A(a) (Banks acting as insurance agents or brokers)

  “Banks and subsidiaries thereof first authorized to conduct the business of insurance pursuant to § 761(a)(14) of Title 5 shall not act as insurance agents or brokers unless duly licensed to act as such pursuant to the provisions of Chapter 17 of this title; provided, that such banks or subsidiaries...”

• 18 Del. C. Chapter 23 § 2306 (Power of Commissioner)

  “The Commissioner shall have power to examine and investigate the affairs of every person engaged in the business of insurance in this State in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited...”

• 18 Del. C. Chapter 23 § 2304(3) (Defamation)

  “No person shall make, publish, disseminate or circulate, directly or indirectly, or aid, abet or encourage the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false, or maliciously critical of or derogatory...”

• 18 Del. C. Chapter 23 § 2302(4) (Definitions; "Person")

  “(4) “Person” shall mean any individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society and other legal entity engaged in the business of insurance, including agents, brokers and adjusters.”

• 18 Del. C. Chapter 23 § 2304(16)n. (Unfair claim settlement practices, denial explanation)

  “Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement.”

• 18 Del. C. Chapter 23 § 2304(16)l. (Unfair claim settlement practices, duplicative submissions)

  “Delaying the investigation or payment of claims by requiring an insured, claimant or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;”

• 18 Del. C. Chapter 23 § 2317A(d)(1) (Genetics-Based Discrimination Prohibited; Life Insurance and Annuities)

  “(d) A person engaged in the business of life insurance may not do any of the following: (1) a. Require or request that an individual or a member of the individual’s family take a genetic test. b. Take into consideration the refusal by an individual to take a genetic test.”

• 18 Del. C. Chapter 23 § 2307(a) (Procedures as to defined and undefined practices)

  “Whenever the Commissioner shall have reason to believe that any such person has been engaged or is engaging in this State in any unfair method of competition or in any unfair or deceptive act or practice, whether or not defined in § 2304 or § 2305 of this title, and that a proceeding by him or her...”

• 18 Del. C. Chapter 23 § 2305(a)(1) (Favored agent or insurer; coercion of debtors)

  “except that this provision shall not prevent the exercise by any such lender or vendor upon a reasonable basis of the right to approve or disapprove of the insurer and representative selected to underwrite the insurance. Such basis shall relate only to: a. The adequacy and terms of the coverage...”

• 18 Del. C. Chapter 23 § 2304(1)a. (Misrepresentations and False Advertising of Insurance Policies)

  “(1) Misrepresentations and false advertising of insurance policies. - No person shall make, issue, circulate or cause to be made, issued or circulated any estimate, circular, statement, sales presentation, omission or comparison which: a. Misrepresents the benefits, advantages, conditions or terms...”

• 18 Del. C. Chapter 23 § 2311(a) (Penalty for violation of cease and desist orders)

  “Any person who violates a cease and desist order of the Commissioner under § 2308 of this title, and while such order is in effect, may after notice and hearing and upon order of the Commissioner be subject at the discretion of the Commissioner to any one or more of the following: (1) A monetary...”

• 18 Del. C. Chapter 23 § 2304(15)d. (Practices not construed as rebates: commissions and policyholder dividends)

  “Nothing in this section shall be construed as prohibiting the payment of commissions or other compensation to licensed agents, brokers or solicitors, or as prohibiting any insurer from allowing or returning to its participating policyholders, members or subscribers dividends, savings or unabsorbed premium deposits.”

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More Delaware sources

• Del. Code tit. 18, ch. 29: Life insurance contracts - standard policy provisionsState statute
• Delaware Code Title 18, Ch. 017 - Licensing of Professional Insurance PersonnelState statute
• Delaware Code Title 18, Ch. 023 - Unfair Practices in the Insurance BusinessState statute
• Delaware Code Title 18, Ch. 29 - Life Insurance and Annuity ContractsState statute
• Delaware Code Title 18, Ch. 031 - Life Insurance ContractsState statute
• Delaware Code Title 18, Ch. 035 - Group and Blanket Health InsuranceState statute
• Delaware Code Title 18 Chapter 17 - Licensing of Professional Insurance Personnel (Secs. 1701-1724)State statute
• Delaware Code Title 18 Chapter 17A - Licensing of Public Adjusters (Secs. 1750-1761)State statute