On February 3, 2022, Delaware Governor John Carney signed Senate Bill 203 (the “Bill”) into law, which allows corporations to purchase and maintain directors’ and officers’ (“D&O”) liability insurance through captive insurance companies. The Bill amended Title 8 of the Delaware Code regarding a corporation’s power to purchase and maintain D&O insurance by expressly providing that “insurance shall include any insurance provided directly or indirectly (including pursuant to any fronting or reinsurance arrangement) by or through a captive insurance company organized and licensed in compliance with the laws of any jurisdiction….” Del. Code Ann. tit. 8, § 145(g).
The Bill also provides that the inclusion of captive insurers under section 145 is contingent upon such insurers adhering to applicable codes of conduct. For example, the insurer shall not make any payment for personal profit and the determination to make a payment under such insurance shall be made by an independent claims administrator.
The text of the bill can be found here.