Miscellaneous Fees Added to Insurance Policies

♦INSURANCE.DELAWARE.GOV♦ 1351 W. NORTH ST., SUITE 101, DOVER, DELAWARE 19904 (302) 674-7300 DOVER♦ (302) 259-7554 GEORGETOWN♦ (302) 577-5280 WILMINGTON TRINIDAD NAVARRO COMMISSIONER STATE OF DELAWARE DEPARTMENT OF INSURANCE FORMS AND RATES BULLETIN NO. 41 TO: ALL PROPERTY & CASUALTY INSURANCE CARRIERS DOING BUSINESS IN DELAWARE RE: MISCELLANEOUS FEES ADDED TO INSURANCE POLICIES DATED: July _23_, 2025 REVISED: September ___, 2025 The Department has seen an increase of rate filings by property and casualty insurance carriers that include various fees that are added to the cost of the issuance of an insurance policy. The original intent of Forms and Rates Bulletin No. 41 was to clarify the Department’s position regarding the charging of fees beyond the policy premiums on policies issued in the State of Delaware. This revised bulletin expands upon that guidance to specifically address the treatment of payment transaction fees. In formulating premium rates, Delaware law requires that due consideration be given for various factors, including, specifically, past and prospective expenses both countrywide and those specially applicable to Delaware, and other relevant factors. See 18 Del. C. § 2503(a)(3)e. and f. See also, 18 Del. C. § 2604(b)(1) and (6). It is the Department’s position that a carrier’s operating expenses are required to be included as part of the filed rates and incorporated into the policy premium. Carriers should not add fees to policies other than those charged for installments, late payments, reissuance or reinstatement fees resulting from policyholder action/inaction, or invalid or rejected payment methods. Transaction fees charged by a credit card company, vendor, or bank may be passed on to the customer as an allowable exception, provided all of the following conditions are met: • The carrier may only pass along the actual cost of the transaction fee and must not apply any additional charges; • The fee must be clearly disclosed to the customer prior to being charged; and • The carrier must offer at least one payment method that does not incur a transaction fee. Installment fees may vary based on the number and frequency of installments but may not vary based on the method of payment except as noted above. However, carriers may choose to waive installment fees for policyholders enrolled in automatic payment programs, provided such waivers are applied consistently and do not result in discriminatory practices. Policy, inspection, issuance, administrative, and similar fees are not allowed. 3 NOTE: This Bulletin is intended solely for informational purposes. It is not intended to set forth legal rights, duties, or privileges, nor is it intended to provide legal advice. Readers should consult applicable statutes and rules and contact the Delaware Department of Insurance if additional information is needed. 2 Fees for services that are provided in addition to the policy terms, that are optional and elected by the insured, may be charged for that service separately from the policy. All fees charged by a carrier must be actuarially justified and included in the carrier’s rate filings. Carriers currently charging installment, late payment, invalid/rejected payment fees and reissuance or reinstatement fees must ensure these are reflected in their filings, as such fees may not be charged outside of an approved filing. Carriers shall have 6 months from the initial issuance date of this Bulletin, July 23, 2025, to bring filings into compliance with this guidance. If additional time is needed, carriers must notify the Department and provide both the requested timeline for completion and a justification for the extension. This Bulletin applies to all policies issued or renewed after these conforming files have been made and is not intended to impact policies mid-term. Questions, comments, or requests for clarification about this Bulletin should be emailed to rate@delaware.gov. This Bulletin shall be effective immediately and shall remain in effect unless withdrawn or superseded by subsequent law, regulation, or bulletin. ____________________________________ Trinidad Navarro Delaware Insurance Commissioner