Unfair Trade Practices in Marketing Insurance Products to Delaware Residents Eligible for Medicare

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TRINIDAD NAVARRO

COMMISSIONER

STATE OF DELAWARE

DEPARTMENT OF INSURANCE

DOMESTIC AND FOREIGN BULLETIN 162

PRODUCER AND ADJUSTER BULLETIN NO. 39

TO:

RE:

DATED:

ALL CARRIERS AND PRODUCERS TRANSACTING INSURANCE WITH

MEDICARE-ELIGIBLE RESIDENTS IN DELAWARE

UNFAIR TRADE PRACTICES IN MARKETING INSURANCE

PRODUCTS TO DELAWARE RESIDENTS ELIGIBLE FOR MEDICARE

October 31, 2025

This Bulletin supersedes Forms and Rates Bulletin No. 10, amended on April 15, 1992, and

clarifies the Delaware Department of Insurance’s (the Department) position on market conduct

practices that may violate Title 18, Chapter 23 of the Delaware Insurance Code. Specifically, it

addresses actions that manipulate the insurance market or restrict access to approved products for

Medicare-eligible consumers, including practices related to producer compensation and plan

availability.

This Bulletin also reinforces that such practices may violate federal guaranteed availability

protections under the Medicare statutes, which require individuals to have access to coverage

without discrimination or obstruction.

Applicability

This Bulletin applies to all carriers and producers offering Medicare Advantage and Medicare

Supplement plans to Delaware residents.

Carriers are reminded that any attempt to restrict access to approved products, such as removing

enrollment applications from public platforms, discouraging producers from selling specific

plans, or altering or withholding producer compensation, is prohibited under 18 Del. C. § 2304.

These actions constitute unfair trade practices and violate the principles of transparency,

accessibility, and good faith access required in the marketing and sale of Medicare-related

insurance products.

Additionally, such practices may conflict with federal guaranteed availability requirements under

Medicare law (42 U.S.C. § 1395ss)

oducer compensation, is prohibited under 18 Del. C. § 2304.

These actions constitute unfair trade practices and violate the principles of transparency,

accessibility, and good faith access required in the marketing and sale of Medicare-related

insurance products.

Additionally, such practices may conflict with federal guaranteed availability requirements under

Medicare law (42 U.S.C. § 1395ss). The Centers for Medicare & Medicaid Services (CMS) has

issued guidance clarifying that reducing or eliminating agent/broker compensation, particularly

during Special Enrollment Periods (SEPs), may undermine these federal protections.

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The Department considers the following actions to be unfair methods of competition or

deceptive acts under 18 Del. C. § 2304, even if not explicitly listed in the statute. Under 18 Del.

C. § 2307, the Commissioner may determine that other practices not specifically enumerated also

constitute violations if they are unfair, deceptive, or detrimental to the insurance-buying public:

•

Failing to make enrollment applications readily available and easily accessible in all

formats (e.g., printed, online, through appointed agents).

•

Discouraging or dissuading producers from marketing or selling approved products.

•

Modifying or eliminating producer compensation mid-year.

•

Withholding compensation on products that were filed with compensation built into the

rate structure.

•

Creating internal policies or incentives that steer consumers away from certain approved

products, regardless of suitability.

•

Delaying or obstructing producer access to enrollment tools, training, or materials

necessary to support sales.

•

Retaliating against producers who raise concerns about compensation practices or

consumer access barriers.

The Department emphasizes that compensation is not a discretionary tool to manage market

performance or profitability

from certain approved

products, regardless of suitability.

•

Delaying or obstructing producer access to enrollment tools, training, or materials

necessary to support sales.

•

Retaliating against producers who raise concerns about compensation practices or

consumer access barriers.

The Department emphasizes that compensation is not a discretionary tool to manage market

performance or profitability. Discontinuing commissions on filed products, particularly when

carriers have appointed agents, commissions were historically paid, or failed to provide advance

notice of zero-commission status, undermines consumer access and violates Delaware law.

These actions also adversely impact fair competition in the Medicare market.

Carrier and Producer Responsibilities

All carriers and producers must act in good faith and in full compliance with Delaware and

federal law. Products that have been filed and approved for sale must be marketed without

artificial barriers, discriminatory practices, or disincentives.

If a product was filed with the expectation of producer compensation, carriers must honor that

commitment. Only carriers that explicitly filed plans with a documented zero-commission

structure may avoid paying commissions. Any other attempt to suppress compensation or

manipulate sales incentives is considered unlawful.

Producers have a legal and ethical duty to prioritize the best interests of the consumer. They must

assist individuals in selecting plans that best meet their needs, with consideration given to

prescription drug coverage, provider access, overall cost, and affordability.

Prohibited Conduct

ons. Any other attempt to suppress compensation or

manipulate sales incentives is considered unlawful.

Producers have a legal and ethical duty to prioritize the best interests of the consumer. They must

assist individuals in selecting plans that best meet their needs, with consideration given to

prescription drug coverage, provider access, overall cost, and affordability.

Prohibited Conduct

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Compliance and Enforcement

The Department will actively monitor market conduct to ensure compliance with both Delaware

law and federal guaranteed availability protections under Medicare statutes.

Violations may result in enforcement actions, including but not limited to:

•

Orders to cease and desist from unfair or deceptive practices.

•

Suspension or revocation of licenses under 18 Del. C. §§ 520 and 1712.

•

Administrative penalties under 18 Del. C. § 2308, including applicable fines.

Carriers and producers are strongly encouraged to review their compensation policies, marketing

practices, and enrollment procedures to ensure full compliance.

Questions about this Bulletin should be emailed to compliance@delaware.gov.

This Bulletin shall be effective immediately and shall remain in effect unless withdrawn or

superseded by subsequent law, regulation or bulletin.

______________________________________

Trinidad Navarro

Delaware Insurance Commissioner

Note: This Bulletin is intended solely for informational purposes. It is not intended to set forth legal rights, duties, or privileges,

nor is it intended to provide legal advice. Readers should consult applicable statutes and rules and contact the Delaware

Department of Insurance if additional information is needed