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HB 406

AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO UNFAIR TRADE PRACTICES IN AUTOMOBILE INSURANCE.

153rd General Assembly (2025-2026) Introduced by Bill Bush and 8 co-sponsors

Delaware HB 406 would strengthen protections for auto insurance consumers by clarifying and expanding prohibited practices, and enhancing enforcement and remedies for unfair trade

Passed By Senate. Votes: 21 YES
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WeVote Research Nonpartisan
Bill Summary · HB 406

Bill Overview

  • Bill and session: HB 406, 153rd Delaware General Assembly
  • Jurisdiction: Delaware
  • Title: AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO UNFAIR TRADE PRACTICES IN AUTOMOBILE INSURANCE
  • Sponsors: Ed Osienski; Bryant Richardson; Claire Snyder-Hall; Spiros Mantzavinos; Ray Seigfried; Bill Bush
  • Committee action: Reported out of the Economic Development/Banking/Insurance & Commerce Committee on May 19, 2026, with 7 favorable votes and 2 on its merits
  • Introduced: May 7, 2026
  • Impact status: Pending full chamber consideration after committee reporting

Purpose and Intent

HB 406 aims to amend Delaware’s Title 18 to address unfair trade practices specifically within the automobile insurance market. The bill’s core objective is to strengthen protections for consumers and ensure fair competition among insurers by updating or clarifying prohibited practices, remedies, and enforcement mechanisms related to auto insurance.

Key Provisions (as described by bill title and typical scope of amendments to unfair trade practices)

  • Definition refinement: Clarifies what constitutes an unfair trade practice in auto insurance, potentially including deceptive practices, misrepresentation, or unfair settlement handling.
  • Prohibition updates: Expands or specifies prohibited actions by insurers or their representatives in underwriting, rating, claims handling, or marketing.
  • Enforcement tools: Enhances regulatory authority or remedies available to the state Department of Insurance (or relevant regulatory body) to deter and sanction unfair practices.
  • Consumer protections: Strengthens rights for insureds and claimants, potentially including disclosures, transparency in pricing, and fair claim settlement standards.
  • Penalty framework: Establishes or adjusts penalties, fines, or enforcement timelines for violations of unfair trade practices in auto insurance.
  • Effective dates: Provides effective dates for new provisions and may include transition periods for insurers to come into compliance.

Note: The summary above reflects typical content of amendments to unfair trade practices in auto insurance. The bill’s precise language would determine the exact scope of prohibited conduct, definitions, and penalties.

Who Would Be Affected

  • Consumers/Policyholders: Enhanced protections in auto insurance practices, claim handling, and disclosures.
  • Insurance Companies and Licensees: Obligations to comply with clarified or expanded prohibitions, potential changes to pricing, marketing, underwriting, and claims processes.
  • Regulatory Agencies: Likely increased authority or clear mandate for enforcement, investigations, and penalties related to unfair practices.
  • Prospective insureds and claimants: Potentially improved transparency and fairness in interactions with insurers.

Procedural and Timeline Aspects

  • Committee stage: Introduced May 7, 2026; assigned to Economic Development/Banking/Insurance & Commerce Committee.
  • Committee reporting: Reported out on May 19, 2026 with favorable votes (7) and two “on its merits” votes, indicating support for moving forward.
  • Next steps: If advanced, the bill would proceed to the full House for consideration, then potentially to the Senate, and eventually to the governor for signature or veto. Any effective dates would be specified in the bill text.

Potential Impacts and Considerations

  • If enacted, the bill could tighten standards for auto insurance practices in Delaware, improving consumer protections and possibly influencing insurer operations and pricing strategies.
  • The exact impact would depend on the final language, including definitions, scope of prohibited conduct, and enforcement provisions.
  • Stakeholders may include consumer advocacy groups, insurance industry associations, and policyholders who interact with auto insurers.

If you’d like, I can tailor this summary to focus on specific sections once the bill’s text is available (definitions, prohibited practices, penalties, and enforcement provisions).

Compiled from official sources — confirm details with the bill’s official record.

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