Hunton Insurance Recovery Blog

Last week, the Delaware Insurance Commissioner announced a series of process and regulatory improvements to the state’s captive regime. Building upon last year's significant amendments to DGCL 145(g) expressly permitting captives to cover D&O liability, Bulletin No. 14 outlines several requirements for captives to write Side A D&O policies for Delaware corporations, including several process changes intended to improve approval timelines and speed to market.

The Delaware legislature recently passed an amendment to the statute governing Delaware corporations’ ability to indemnify directors and officers. That statute—8 Del. Law 145—provides that Delaware corporations “may” purchase “insurance” to insure liability of their directors, officers, employees, and agents “whether or not the corporation would have the power to indemnify such person against such liability.” The recent amendment clarifies that “insurance” includes captive insurance. It states: “For purposes of this subsection, 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 . . . .”