DE 21-IB11 2021-05-12

Can a Maryland-based researcher use Delaware FOIA or 18 Del. C. § 314 to get captive-insurance-company licenses?

Short answer: No. The Delaware AG ruled the Department of Insurance properly denied a Maryland-based researcher's FOIA request for licenses of captive insurance companies. Delaware FOIA is citizens-only. The AG declined to address whether 18 Del. C. § 314 might independently require disclosure, since that statute is outside the AG's FOIA-petition authority.

Disclaimer: This is an official Delaware Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Delaware attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original AG opinion (PDF)

Official title

21 – IB11 05/12/2021 FOIA Opinion Letter to Jason M. Schupp re: FOIA Complaint Concerning the Delaware Department of Insurance

Plain-English summary

Jason Schupp, working for Centers for Better Insurance, LLC (a Maryland LLC), asked the Delaware Department of Insurance for "documents representing the licenses issued to active captive insurance companies domiciled in the State of Delaware." The Department denied on two grounds: Schupp is not a Delaware citizen, and the licenses are confidential under 18 Del. C. § 6920. Schupp resubmitted under 18 Del. C. § 314, an insurance-specific inspection statute that requires the Commissioner to permit "persons found to have an identified and proper interest" to inspect Department records. The Department again pointed him to a FOIA appeal.

When Schupp petitioned, the AG sustained the denial.

The Office's citizens-only interpretation of FOIA, traced through McBurney v. Young (2013) and a long string of AG opinions (19-IB66, 18-IB54, 18-IB50, 18-IB18, 17-IB14, 16-IB20), settled the FOIA question. Schupp himself conceded he is a Maryland citizen and his LLC is organized in Maryland. The Department met its burden to deny.

Schupp's separate argument under 18 Del. C. § 314, that the Department had failed to make the required determinations of "identified and proper interest" and "prejudicial to public interest," was outside the AG's FOIA-petition authority. The AG's office consistently declines to interpret non-FOIA statutes through this petition channel, citing AG Opinion 18-IB50 ("no authority under FOIA to direct [the public body] with regard to this Office's interpretation of any other Delaware statute") and AG Opinion 96-IB28.

A footnote also flagged that Schupp likely lacked standing to file an AG petition at all, but the Office issued a merits ruling.

Currency note

This opinion was issued in 2021. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Can an LLC use Delaware FOIA if it has a Delaware-citizen owner?

The opinion does not directly address that scenario. Here, Schupp's LLC was a Maryland LLC, and the Department argued that the managing member's citizenship determines an LLC's citizenship for these purposes. The AG accepted the citizens-only outcome without weighing in on the test for LLC citizenship. The safest route is to have the FOIA request filed by an actual Delaware citizen.

Is 18 Del. C. § 314 broader than FOIA?

It uses different language ("persons found to have an identified and proper interest"), which on its face is not limited to citizens. Whether and how that statute reaches non-citizens is a question for litigation in court, since the AG declined to interpret it through the FOIA petition.

What about 18 Del. C. § 6920? Does that matter for citizens?

The Department also asserted § 6920 as an independent confidentiality basis for captive-insurance-company licenses. The AG did not reach that question because the citizens-only ground disposed of the case. A future case brought by a Delaware citizen would likely face the § 6920 question head-on.

Does the AG ever look at non-FOIA statutes?

Indirectly, when interpretation is needed to apply § 10002(l)(6), which exempts records "specifically exempted from public disclosure by statute or common law." But the AG-petition channel cannot be used to mount a freestanding challenge to compliance with non-FOIA statutes. Those have to go to court.

What are captive insurance companies?

Insurance companies formed by a parent organization to insure that parent's risks. Delaware is a leading captive-insurance domicile. Captive licenses can reveal which corporations have set up captives in Delaware, which is exactly the data point researchers and watchdogs often want.

Background and statutory framework

Delaware's citizens-only FOIA interpretation rests on the General Assembly's framing in 29 Del. C. § 10001 (rights "to its citizens") and § 10003(a) (right of access "to any citizen"). The U.S. Supreme Court's 2013 decision in McBurney v. Young, 569 U.S. 221, upheld Virginia's analogous statute against constitutional challenge, and Delaware aligns with that.

18 Del. C. § 314 is the Delaware Insurance Code's inspection provision. It runs parallel to FOIA and uses different access criteria. The AG's office consistently treats it as outside FOIA-petition authority, even when a requester invokes both statutes.

18 Del. C. § 6920 is part of Delaware's captive-insurance regulatory regime. Captive licenses, applications, and certain related records are statutorily confidential, with limited exceptions.

The string of AG opinions cited (19-IB66 through 16-IB20) reflects consistent application of citizens-only across different requester profiles: out-of-state lawyers, claims administrators, researchers, and others. The result is uniform.

Citations

29 Del. C. §§ 10001-10007 (Delaware FOIA)
29 Del. C. § 10005, § 10005(e)
18 Del. C. § 314 (insurance records inspection)
18 Del. C. § 6920 (captive insurance confidentiality)
McBurney v. Young, 569 U.S. 221 (2013)
Del. Op. Att'y Gen. 19-IB66, 2019 WL 6839917 (Nov. 26, 2019)
Del. Op. Att'y Gen. 18-IB54, 2018 WL 6591819 (Dec. 5, 2018)
Del. Op. Att'y Gen. 18-IB50, 2018 WL 6015765 (Oct. 12, 2018)
Del. Op. Att'y Gen. 18-IB18, 2018 WL 2267112 (Apr. 6, 2018)
Del. Op. Att'y Gen. 17-IB14, 2017 WL 3426252 (July 6, 2017)
Del. Op. Att'y Gen. 16-IB20, 2016 WL 5888776 (Sept. 30, 2016)
Del. Op. Att'y Gen. 96-IB28, 1996 WL 517455 (Aug. 8, 1996)

Source

Original opinion text

DEPARTMENT OF JUSTICE
NEW CASTLE COUNTY
820 NORTH FRENCH STREET
WILMINGTON, DELAWARE 19801

KATHLEEN JENNINGS
ATTORNEY GENERAL

CIVIL DIVISION (302) 577-8400
FAX: (302) 577-6630
CRIMINAL DIVISION (302) 577-8500
FAX: (302) 577-2496
FRAUD DIVISION (302) 577-8600
FAX: (302) 577-6499

OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF DELAWARE
Attorney General Opinion No. 21-IB11
May 12, 2021

VIA EMAIL
Jason M. Schupp
9006 Bush Creek Circle
Frederick, MD 21704
[email protected]

RE: FOIA Petition Regarding the Delaware Department of Insurance

Dear Mr. Schupp:

We write in response to your correspondence, alleging that the Delaware Department of Insurance ("Department") violated Delaware's Freedom of Information Act, 29 Del. C. §§ 10001-10007 ("FOIA") in connection with your request for records. We treat your correspondence as a Petition for a determination pursuant to 29 Del. C. § 10005 regarding whether a violation of FOIA has occurred or is about to occur. As discussed below, we find that no violation of FOIA occurred as alleged.

BACKGROUND

On March 26, 2021, you submitted a FOIA request to the Department, signed as a representative of Centers for Better Insurance, LLC of Frederick, Maryland, and seeking "documents representing the license[s] issued to active captive insurance companies domiciled in the State of Delaware." The Department denied the request because FOIA does not require that public bodies provide records to non-citizens, and you are not a citizen of Delaware. In addition, the Department stated that these licenses are confidential pursuant to 18 Del. C. § 6920. You resubmitted this same request under 18 Del. C. § 314, which states "[e]xcept where the Commissioner deems the same to be prejudicial to the public interest, the Commissioner shall permit inspection of the papers, records and filings in the Department by persons found to have an identified and proper interest therein." A few days later, the Department responded, advising you of the ability to file a petition to appeal its decision under the FOIA statute. This Petition followed.

The Petition alleges that the Department's response to your request was inadequate. The Petition contends that that Department "clearly regards its obligations to allow public inspection pursuant to 18 Del. C. § 314 as an expansion of and integral with its obligations under the FOIA statute." Thus, you allege the Department's denial of this request under 18 Del. C. § 314 is arbitrary and capricious, as the Department failed to determine whether an interest in the requested records had been identified, whether that interest is proper, and whether the inspection would be prejudicial to the public interest.

On April 22, 2021, the Department's counsel replied to your Petition ("Response"). The Department argues that the Petition should be denied because you are not a Delaware citizen, citing various records demonstrating your Maryland citizenship and noting that Better Insurance, LLC is a Pennsylvania limited liability company. As a limited liability company, the Department contends that the managing member's citizenship determines the citizenship of the limited liability company and accordingly, the Department asserts that your request was appropriately denied. In addition, the Department argues that this Office does not have the authority to address 18 Del. C. § 314 and that the FOIA statute supersedes 18 Del. C. § 314 because it is a later-enacted statute covering the entire field that 18 Del. C. § 314 occupies.

On April 22, 2021, you submitted correspondence conceding that you are a citizen of Maryland and the Centers for Better Insurance, LLC is organized under the laws of Maryland. You argue that the Department seeks to merge its obligations under FOIA and 18 Del. C. § 314 to impermissibly restrict its obligation to disclose records under 18 Del. C. § 314 to "citizens," as provided by FOIA, instead of to "persons" as provided by 18 Del. C. § 314. Moreover, you contend that the Department's arguments fail because the Department also acknowledged in its Response that this Office does not have the authority to make determinations about a statute other than FOIA.

DISCUSSION

Consistent with McBurney v. Young, our Office interprets Delaware's FOIA statute to apply to Delaware citizens only, thereby permitting a public body to deny a FOIA request solely because it is submitted by a non-citizen of Delaware. The factual record indicates that you are not a citizen of the State of Delaware. In accordance with this Office's established precedent, we determine that the Department did not violate FOIA in denying your request. As this Office's authority is limited to determining whether a violation of FOIA occurred, the remaining issue related to the Department's obligations under 18 Del. C. § 314 is not addressed in this Opinion.

CONCLUSION

For the reasons set forth above, we find that the Department did not violate FOIA as alleged in the Petition.

Very truly yours,
/s/ Alexander S. Mackler
Alexander S. Mackler
Chief Deputy Attorney General

cc:

Kathleen P. Makowski, Deputy Attorney General
Dorey L. Cole, Deputy Attorney General