Delaware announces IRS agreement

The Delaware Department of Insurance has issued a statement in the wake of the withdrawal of its application to the US Supreme Court for a stay in a legal case that the DDOI lost earlier this year.

Commissioner Trinidad Navarro said in the statement that the Internal Revenue Service (IRS) has agreed to abide by confidentiality provisions required by the Delaware Code for information to be supplied in response to an IRS document demand until the Supreme Court of the United States rules on the matter.

The agreement covers the Court’s consideration of a petition for review and, if review is granted, until the Court finally disposes of the matter. Based on the agreement, the Commissioner withdrew the Emergency Application to the Supreme Court of the United States to stay the matter filed last week.

The Court on Monday requested the IRS to file a response by Thursday. The Commissioner has notified the Supreme Court that an emergency review is not now necessary because of the agreement and that the Court may consider the yet-to-be-filed request for review in the normal course. 

The dispute involves a provision of Delaware law that prohibits the Commissioner from providing certain information to law enforcement in response to a request unless the requester agrees to abide by certain confidentiality agreements, which is what the Department has requested since this dispute began four years ago. The IRS had previously refused to abide by those restrictions, and the lower courts have ruled that they do not have to do so. The Commissioner is seeking a review of the standards used by the courts to resolve conflicting provisions of state insurance law and broader federal law.