NEW CASTLE COUNTY – The Delaware Department of Insurance reported this month on the initial impact of HB 371, legislation sponsored by Representative Kim Williams and Senator Jack Walsh in the 152nd General Assembly.
HB 371 was filed in order to solve an issue brought forth by the Delaware Volunteer Fire Company (DFVA) and the Department of Insurance (DOI) relating to Fire Tax.
Insurance companies pay taxes on the total premiums reported during the previous calendar year. These taxes are collected by the DOI and distributed by the Treasurer to specific entities as directed by law, with the remainder deposited to the State of Delaware’s General Fund. Fire Tax represents a percentage of premium taxes that is to be disbursed via geographic allocation to volunteer fire companies throughout the State and to the City of Wilmington Fire Pension.
The DOI and fire companies noticed in recent years a discrepancy surrounding the Fire Tax, caused by insurers reporting geographic location via Wilmington addresses that are not actually within the city’s jurisdiction. This reduced the accuracy of the funds sent to New Castle County fire companies.
HB 371, signed into law in October 2024, permanently corrected that problem by creating a zip-code based system simplifying geographic designation, ensuring that allocations are determined in a clear and consistent manner from year to year between the City of Wilmington and New Castle County. The solution was tested by the DOI for a year prior to codification to ensure the outcome appropriately solved fire company concerns.
“Every year the General Assembly passes hundreds of bills, so it’s important that we follow up and ensure those laws are working as intended and truly serving Delawareans,” said Rep. Kim Williams.
“Thanks to data from the Department of Insurance, we know that HB 371 is doing exactly that and providing our brave firefighters with more resources to keep our communities safe. This has been a decades-long issue and I’m glad that we were able to come together with the Delaware Volunteer Fire Association, the Department of Insurance, the Treasurer, and the Controller General’s Office to address the problem.”
On May 15th, the Department of Insurance reported that since reform went into effect, each New Castle County fire company received about $381,000 more in funding, inclusive of an $174,000 year-over-year increase following enactment.
Over this period, there has been a roughly $8 million increase in allocated fire taxes across the county. The decrease in Wilmington’s pension allocations has only been approximately $1 million, which speaks to the growth of funds via non-Wilmington new developments, premium changes, and other factors. The Pension had been receiving higher-than-appropriate allocations for several years.
“Throughout the implementation of this reform, each of New Castle County’s volunteer fire companies are receiving more accurate funds for their services protecting residents and insured properties. This year, their total disbursement from this portion of premium tax will be more than $1.25 million each. We are grateful that Rep. Williams, Senator Walsh, and the General Assembly took action to make permanent the improved method of calculating these funds,” said Insurance Commissioner Trinidad Navarro.
“These dollars serve those that save lives, and I couldn’t be more proud to play a part in that process, which this year alone will provide more than $57 million dollars to companies up and down the state, and to the City of Wilmington Fire Pension.”
In addition to employing a zip-code based system, HB 371 also reduced the number of payments per year from two to one, and gave the Insurance Commissioner more time to ensure the accuracy of insurer-reported geographic data.
“Our first responders put their lives on the line every day to keep our communities safe. As legislators, it’s our duty to ensure they have the resources they need to do their life-saving work as safely as possible,” said Sen. Jack Walsh.
“I am glad to see that House Bill 371 is working as we had hoped.”
