The Delaware Department of Insurance has recently revised Form & Rate Bulletin No. 41 regarding the treatment of payment transaction fees by Property and Casualty insurance carriers. The key highlights are as follows:
- A P&C 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, if:
- The carrier only passes along the actual cost of the transaction fee without applying any additional charges;
- The fee is clearly disclosed to the customer prior to being charged; and
- The carrier offers at least one payment method that does not incur a transaction fee.
- 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.
Please note that carriers shall have 6 months from the initial issuance date of Form & Rate Bulletin No. 41, July 23, 2025, to bring filings into compliance with this guidance.
For any questions related to the above referenced bulletin in Delaware, please contact Westmont Associates!