Department of Insurance: Successes and Looking Forward Karen Weldin Stewart, CIR ML Insurance Commissioner 1
What Does The DOI Do? Our mission: Protecting Delawareans through regulation and education while providing oversight of the insurance industry to best serve the public. The Department of Insurance exists to: Protect insurance consumers Regulate companies to ensure ability to pay claims Review, approve, and/or disapprove rates submitted by insurance companies Prosecute insurance fraud License agents and brokers Save businesses money on premium costs Assist Medicare eligible seniors 2
About Commissioner Stewart Elected Delaware's 25th Insurance Commissioner in 2008, reelected in 2012 and now serving a second term, Karen Weldin Stewart heads the Delaware Department of Insurance (DOI), the largest consumer protection agency in the state. Commissioner Stewart contributes to numerous boards and is currently serving on the State Employee Benefits Committee, Delaware Health Care Commission, the Deferred Compensation Council and the Council on Health Promotion and Disease Prevention. 3
How Delaware Ranks Nationally Delaware has the 7 th lowest insurance department operating budget in the U.S. Delaware regulates 151 domestic insurance companies including 123 multi national and/or multi state companies Delaware has maintained its professional accreditation for 20 years Delaware ranks 10 th nationally in domestic written premiums *All data from calendar year 2014* 4
Department Contributions Where it comes from Premium Taxes Licensing Fees and Fines Gross Receipts General Fund Where it goes Fire/Ambulance/Police Pension Fund/Health Fund Fraud Fund Workers Comp Net General Fund FY14 Actual $88.3 million $6.3 million $94.6 million FY14 Actual $35.1 million $1.0 million $3.6 million $54.9 million 5
Bureau of Company Examination, Rehabilitation and Guaranty (BERG) What We Do Regulate 151 Delaware domiciled companies using financial analysis and on site exams (over $489 billion in assets) Monitor the licensing and solvency of approximately 1,800 insurance entities authorized, admitted, or approved to do business in Delaware FY14 Accomplishments Analyzed and approved approximately 600 filings related to insurance company dividend requests, affiliate transactions, new company admissions, redomestications, mergers and acquisitions Retained national accreditation through comprehensive and timely review of insurance company financial data 6
Fraud Bureau The Fraud Bureau is charged with investigating allegations of insurance fraud in all lines of insurance, as well as provider fraud (doctors, dentists, chiropractors, clinics, lawyers, etc.) and fraud committed by insurance companies, agents and brokers. What Fraud Costs the Consumer According to the FBI, insurance fraud costs each U.S. family an average of $400 $700 per year! 7
Consumer Services What We Do Investigate consumer complaints asserting improper treatment by agents and/or insurance companies. Assists consumers in resolving conflicts with insurance companies, health coverage providers, and agents. Educate consumers through focused outreaches Connect with community partners to create awareness of the DOI s purpose Help consumers to gain an understanding of their contractual and legal rights Provides arbitration hearings as a low cost alternative to civil litigation to resolve disputed consumer claims. Consumer Services recovered $1,259,634.92 on behalf of Delaware consumers $843,034.96 was awarded to policy holders through arbitration $2,102,669.88 Total amount that the DOI helped recoup for consumers in FY2014. Need Help? Contact Consumer Services for Assistance Phone: 1 800 282 8611 (toll free in DE) or 302 674 7310 E mail: consumer@state.de.us 8
Workplace Safety Program What We Do Provide participating Delaware employers a discount (up to 19%) on workers compensation insurance premiums Establish testing/inspection procedures to determine qualification FY14 Accomplishments Saved Delaware businesses $9.3 million in premium expenses Served 1,496 participating Delaware businesses Brought 78 new businesses into the program in CY 14 9
Delaware Medicare Assistance Bureau What We Do Provide free health insurance counseling to Medicare population Empower Medicare population to better understand their options related to Medigap (Medicare supplement insurance), Medicare Part D, Medicare Advantage plans, financial assistance programs, and more FY14 Accomplishments Assisted approximately 6,500 Medicare Beneficiaries Performed 94 outreach activities in all three counties, and provided DMAB materials via direct mailing efforts to more than 27,000 beneficiaries, caregivers, and service providers. Provided Part D counseling approximately to 2,800 Medicare beneficiaries Maintained effective partnership with Delaware Medicaid & Medical Assistance (DMMA) which resulted in Medicare beneficiaries saving approximately $609,000 10
Market Regulation and Enforcement What We Do Perform Market Analysis reviews and Market Conduct examination on companies and producers Review premium rate and form filings License agents, adjusters, surplus lines brokers, and Discount Medical Plans FY14 Accomplishments Performed 160 Market Analysis Reviews Agent Market Conduct: 332 investigations with restitution totaling $209,000 in calendar year 2014 Processed 74,451 producer appointments and issued 25,797 licenses Unit reviewed, certified Qualified health plan applications and established monitoring procedures for the Quality Health Plan Issuers consistent with the Affordable Care Act (ACA) 11
Captive Bureau About the Program Captive Insurance is Delaware s fastest growing industry. When the Commissioner formed the Captive Bureau in July 2009 it had 38 captives The Bureau licensed its 1000th active captive entity in October 2015 Delaware is the world s 6 th largest and the 3 rd largest U.S. captive domicile Accomplishments Increased calendar year captive premium from $2.4 billion in 2012 to $6.6 billion in 2013. Delaware is the 3 rd largest U.S. domicile in terms of premium. 12
Bureau of Captive and Financial Insurance Products Q: What is captive insurance? A: A captive insurer is generally defined as an insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer s underwriting profits. Captive insurance is utilized by insureds that choose to: put their own capital at risk by creating their own insurance company, working outside of the commercial insurance marketplace, to achieve their risk financing objectives. 13
Captive Bureau 2014 Achievements: The growth in the number of captive insurers results in a steady increase in the amount of annual premium taxes and fees. During Commissioner Stewart s tenure, the Captive Bureau has generated more than $11 million in revenue. $5,000,000.00 Annual Captive Revenue $4,500,000.00 $4,000,000.00 $3,500,000.00 $3,000,000.00 $2,500,000.00 $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 $ Gross expenses for 2014 are $1.2 million gross revenue is $4.4 million. The Captive Bureau is fulfilling Commissioner Stewart s promise of being a profit center! 14
DOI Successes in 2014 Transferred $54.9 Million to General Fund FY 14 Saved $9.3 Million in workers compensation insurance premiums for Delaware businesses through the Workplace Safety Program Recovered approximately $2.1 Million for Delaware consumers Restructured the Consumer Services Division in to Life & Health and Property & Casualty sections to better serve consumers Exceeded all expectations with the growth of the Captive Bureau ranking us 3 rd in the nation and 6 th globally 15
Delaware Insurance Department Questions? (302) 674 7300 www.delawareinsurance.gov Like us on Facebook at www.facebook.com/delawareinsurance.gov Follow us on twitter @Delaware_DOI Thank you for your time! 16