(a) A temporary Joint Underwriting Association is hereby provided for which shall consist of 2 categories of membership whose members shall be designated as category A members and category B members. The requirements for membership in, and the liabilities and obligations of membership in, either such category of the Association shall be as set forth in subsections (b) and (c) of this section.

(b) Category A of the Association shall consist of all insurers authorized to write and engaged in writing, within this State on a direct basis, casualty insurance, including insurers covering such peril package policies as defined in § 906(a) of this title. The liabilities and obligations of membership within this category of the Association shall be as set forth for members in this subchapter.

(c) Category B of the Association shall consist of:

(1) All insurers authorized to write and engaged in writing, within this State on a direct basis, health insurance as defined in § 903 of this title; and

(2) All health service corporations incorporated and offering insurance and/or health service contracts pursuant to Chapter 63 of this title.

The liabilities and obligations of membership within this category of the Association shall also be as set forth for members in this subchapter; provided, however, that the members of category B shall have no liabilities or obligations to the Association whatsoever pursuant to this subchapter until such time as the Association’s aggregate losses, before any attempts have been made by category A members to recoup such losses and after crediting against such aggregate losses all funds available for payment of such losses in the stabilization reserve fund, exceed 5 percent of the net direct premiums paid to all category A members for insurance written within this State on a direct basis during the most recent year of the Association’s existence. In the event that the members of category B of the Association are required to so share in the losses of the Association, then all members in both categories A and B shall participate on the same basis thereafter in all such additional losses of the Association above the 5 percent losses paid by the members of category A.

(d) Every such insurer shall be a member of the Association and shall remain a member as a condition of its authority to continue to transact such kind of insurance within this State.

(e) The purpose of the Association shall be to provide, for a period not exceeding 2 years from the date it commences underwriting operations, a market for health-care medical negligence insurance on a self-supporting basis without subsidy from its members.

(f) The Association shall commence underwriting operations only by separate category of health-care provider and only after the making by the Commissioner, upon due hearing and investigation, of the finding that such underwriting operations are necessary and 1 or more of the following findings:

(1) That health-care medical negligence insurance is not reasonably available for physicians in the voluntary market. Upon such determination the Association shall be authorized to issue policies of health-care medical negligence insurance to physicians and need not be the exclusive agency through which health-care medical negligence insurance may be written in this State on a primary basis for physicians;

(2) That general liability insurance or health-care medical negligence insurance, or both, are not reasonably available for hospitals in the voluntary market. Upon such determination the Association shall be authorized to issue policies of general liability and health-care medical negligence insurance to hospitals but need not be the exclusive agency through which such insurance may be written on a primary basis in this State; or

(3) That health-care medical negligence insurance is not reasonably available for another specific type or types of licensed health-care provider in the voluntary market. Upon such determination the Association shall be authorized to issue policies of health-care medical negligence insurance and need not be the exclusive agency through which health-care medical negligence insurance may be written in this State on a primary basis for such specific type of health-care provider.

(g) If the Commissioner determines at any time that health-care medical negligence insurance can be made reasonably available in the voluntary market for either:

(h) The Association shall, pursuant to this chapter and the plan of operation with respect to health-care medical negligence insurance, have the power on behalf of its members:

(1) To issue, or to cause to be issued, policies of insurance to applicants, including incidental coverages and subject to limits as specified in the plan of operation but not to exceed $1,000,000 for each claimant under 1 policy and $3,000,000 for all claimants under 1 policy in any 1 year;

(2) To underwrite such insurance and to adjust and pay losses with respect thereto, or to appoint a servicing company or companies to perform those functions;

(3) To assume reinsurance from its members; and

(4) To cede reinsurance.

(i) The Association and its members shall cooperate with the Commissioner, to the extent the Commissioner permits and with the Association’s actual or prospective policyholders, on all matters pertaining to the Commissioner’s duties and the insurance issued or to be issued by the Association.

60 Del. Laws, c. 373, § 1; 71 Del. Laws, c. 373, § 3.