(a) Licensee’s duty to notify insured. — (1) No contract of insurance placed by a surplus lines broker under this chapter for a home state insured shall be binding upon the insured and no premium charged shall be due and payable until the surplus lines broker shall have notified the insured in writing, in a form acceptable to the Commissioner, a copy of which shall be maintained by the surplus lines broker with the records of the contract and available for possible examination, that:
a. The insurer with which the broker places the insurance is not licensed by this State and is not subject to its supervision; and
b. In the event of the insolvency of the surplus lines insurer, losses will not be paid by the state insurance guaranty fund.
(2) Nothing herein contained shall nullify any agreement by any insurer to provide insurance.
(3) This subsection shall not apply to an insured in this State who independently procures insurance.
(b) Every insurance contract procured and delivered as surplus lines coverage pursuant to this law shall have stamped or printed upon it, initialed by and bearing the name of the individual surplus lines broker who procured it, the following disclosure statement:
“This insurance contract is issued pursuant to the Delaware Insurance Laws by an insurer neither licensed by nor under the jurisdiction of the Delaware Insurance Department. This insurer does not participate in insurance guaranty funds created by state law. In the event of the insolvency of the surplus lines insurer, losses will not be paid by the state insurance guaranty fund.”
(c) When a contract is issued to an exempt commercial purchaser as described in § 1914 of this title, neither the nonadmitted insurer nor the surplus line broker is required to provide the notice required in this section except on the confirmation of insurance, the certificate of placement, or the policy, whichever is first provided to the insured, nor is the insurer or surplus line broker required to obtain the insured’s signature. The producer shall ensure that the notice affixed to the confirmation of insurance, certificate of placement, or the policy is provided to the insured.
(d) Paragraph (a)(1)a. and subsection (b) of this section shall not apply when the surplus lines coverage is procured from a domestic surplus lines insurer pursuant to § 1932 of this title.
18 Del. C. 1953, § 1909; 56 Del. Laws, c. 380, § 1; 78 Del. Laws, c. 176, § 2; 80 Del. Laws, c. 30, § 1.
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