2007 WISCONSIN ACT
170
An Act
to repeal
646.35 (6) (c) 1. a. and 646.35 (6) (c) 2. a.;
to renumber
646.33 (3), 646.35 (4) (a) and 646.35 (4) (b);
to renumber and amend
601.465, 605.02, 631.61 (1) (c), 646.12 (1) (a) and 646.31 (11);
to consolidate, renumber and amend
646.35 (6) (c) 1. (intro.) and b. and 646.35 (6) (c) 2. (intro.) and b.;
to amend
25.17 (3) (a), 76.68 (2), 76.68 (4), 601.41 (8) (b), 605.21 (4), 611.26 (3) (a), 611.26 (4) (a), 611.26 (4) (b), 611.72 (2), 632.745 (18) (b), 646.01 (1) (b) 14., 646.11 (4), 646.11 (5), 646.12 (1) (b), 646.12 (2) (a), 646.51 (3) (am) (intro.) and 646.51 (4) (a);
to create
25.14 (1) (a) 19., 600.03 (25) (a) 4., 601.465 (1m) (title), 601.465 (2m), 605.02 (2), 631.61 (1) (c) 1., 631.61 (1) (c) 2., 631.61 (1) (c) 3., 632.07, 646.12 (1) (a) 2., 646.12 (1) (a) 3., 646.13 (3) (d), 646.31 (11) (a), 646.31 (11) (c) and 646.51 (3) (b) of the statutes; and
to affect
2003 Wisconsin Act 261
, section
162 (1)
;
relating to:
the definition of a late enrollee; making group insurance certificates available electronically; prohibiting a lender from requiring property insurance in an amount that exceeds the replacement value of improvements; premium tax statute of limitations; miscellaneous changes to the insurance security fund; investments of the local government property insurance fund by the State of Wisconsin Investment Board, other miscellaneous insurance-related modifications; and granting rule-making authority.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
Section
1
.
25.14 (1) (a) 19. of the statutes is created to read:
25.14
(1)
(a) 19. The local government property insurance fund.
Section
2
.
25.17 (3) (a) of the statutes is amended to read:
25.17
(3)
(a) Invest the core retirement investment trust, state life fund,
local government property insurance fund,
veterans trust fund, and injured patients and families compensation fund in loans, securities, and any other investments authorized by s. 620.22, and in bonds or other evidences of indebtedness or preferred stock of companies engaged in the finance business whether as direct lenders or as holding companies owning subsidiaries engaged in the finance business. Investments permitted by sub. (4) are permitted investments under this subsection.
Section
3
.
76.68 (2) of the statutes is amended to read:
76.68
(2)
No suit may be brought to restrain or enjoin the collection of any license fee or tax imposed or provided for by this subchapter, and the fees required by s. 601.31. Any
insurer aggrieved by the payment of any such license or other fee or tax may maintain a suit against the state for the recovery thereof
action to recover any license fee or tax imposed or provided for by this subchapter or any fee required under s. 601.31, shall be brought
in the circuit court for Dane County within 6 months from the time of the payment. The state may be served in the suit as provided in s. 801.11 (3).
This subsection is the exclusive remedy by which to recover any license fee or tax imposed or provided for by this subchapter or any fee required under s. 601.31.
Section
4
.
76.68 (4) of the statutes is amended to read:
76.68
(4)
The attorney general shall institute suit in the circuit court for Dane County to recover any license fees or tax not paid within the time prescribed by this subchapter, and the fees required by s. 601.31.
Nothing in this subsection shall be construed as amending or modifying in any respect ch. 775.
Section
5
.
600.03 (25) (a) 4. of the statutes is created to read:
600.03
(25)
(a) 4. Coverage, including stop-loss coverage, of an employer or plan sponsor relating to claims incurred under the employer's or plan sponsor's self-funded employee welfare benefit plan, as defined in
29 USC 1002
(1).
Section
6
.
601.41 (8) (b) of the statutes is amended to read:
601.41
(8)
(b) In consultation with the
life and disability advisory council established
appropriate advisory council or committee designated
by the commissioner, the commissioner shall by rule develop a uniform employee application form that a small employer insurer must use when a small employer applies for coverage under a group health benefit plan offered by the small employer insurer. The commissioner shall revise the form at least every 2 years.
Section
7
.
601.465 of the statutes is renumbered 601.465 (1m), and 601.465 (1m) (c) (intro.) and 6., as renumbered, are amended to read:
601.465
(1m)
(c) (intro.) Testimony, reports, records, communications, and information that are obtained by the office from, or provided by the office to, any of the following, under a pledge of confidentiality or for the purpose of assisting
or participating in monitoring activities or
in the conduct of an
inquiry,
investigation
,
or examination:
6. An agent or employee of an agency described in
par. (e)
subd. 5
.
Section
8
.
601.465 (1m) (title) of the statutes is created to read:
601.465
(1m)
(title)
Types of information.
Section
9
.
601.465 (2m) of the statutes is created to read:
601.465
(2m)
Waiver and applicability of the privilege.
All of the following apply to the privilege under this section:
(a) The privilege may be waived only by the affirmative written and specific consent of the commissioner.
(b) The privilege may not be constructively waived.
(c) The privilege applies to testimony, reports, records, communications, and information obtained, created, or provided by any official, employee, or agent of the office for the purpose of assisting or participating in monitoring activities or in the conduct of an inquiry, investigation, or examination by, or coordinated through, the National Association of Insurance Commissioners.
(d) The privilege applies to testimony, reports, records, communications, and information in existence on or after the effective date of this paragraph .... [revisor inserts date].
Section
10
.
605.02 of the statutes is renumbered 605.02 (1) and amended to read:
605.02
(1)
Property of local governmental units.
Any local governmental unit may insure in the property fund its property or
, subject to sub. (2),
property for which it may be liable in the event of damage or destruction. Property insured under this section by a local governmental unit may not also be insured in any other manner unless the manager certifies that additional insurance is necessary, or unless the local governmental unit by resolution, a certified copy of which is filed with the manager, decides to insure specified personal property with insurers authorized to do business in this state.
Section
11
.
605.02 (2) of the statutes is created to read:
605.02
(2)
Requirements for nonowned property.
The property fund may cover a building or structure specified in sub. (1) that is not owned by a local governmental unit only if all of the following conditions are met:
(a) The building or structure is listed and described as a nonowned building or structure in the local governmental unit's statement of values.
(b) The local governmental unit is contractually liable in the event that the building or structure is damaged or destroyed.
(c) The building or structure is in the local governmental unit's care, custody, or control.
(d) The building or structure is used for a legitimate governmental purpose.
Section
12
.
605.21 (4) of the statutes is amended to read:
605.21
(4)
Insurance of personal property.
All personal property of the local governing unit is insured and premiums therefor must be paid under this section except to the extent that coverage is excluded by resolution under s. 605.02
(1)
.
Section
13
.
611.26 (3) (a) of the statutes is amended to read:
611.26
(3)
(a)
Authorization.
An insurance corporation may form or acquire subsidiaries to perform functions or provide services that are ancillary to its insurance operations. It may have up to 10% of its assets invested in such subsidiaries
, unless the commissioner by order or rule provides otherwise
.
Section
14
.
611.26 (4) (a) of the statutes is amended to read:
611.26
(4)
(a) Invest in
a subsidiary
one or more subsidiaries
more than 10 percent of its assets or 50 percent of its capital and surplus, whichever is less.
Section
15
.
611.26 (4) (b) of the statutes is amended to read:
611.26
(4)
(b) Invest in
a subsidiary
one or more subsidiaries
to the extent that the insurer's capital and surplus with regard to policyholders will not be reasonable in relation to the insurer's outstanding liabilities or adequate to meet the insurer's financial needs.
Section
16
.
611.72 (2) of the statutes is amended to read:
611.72
(2)
Approval required.
No proposed plan of merger under s. 180.1101 or 180.1104 or other plan for acquisition of control
may be submitted to the shareholders
of any domestic stock insurance corporation or its parent insurance holding corporation participating in the transaction
or
may be
executed unless it has been approved by the commissioner.
Section
17
.
631.61 (1) (c) of the statutes is renumbered 631.61 (1) (c) (intro.) and amended to read:
631.61
(1)
(c)
Method of providing certificates.
(intro.) The certificate shall be provided in a manner reasonably calculated to bring it to the attention of the certificate holder. The insurer may deliver or mail it directly to the certificate holder or may deliver or mail the certificates in bulk to the policyholder to transmit to certificate holders, unless the insurer has reason to believe that the policyholder will not promptly transmit the certificates. An affidavit by the insurer that it has mailed the certificates in the usual course of business creates a rebuttable presumption that it has done so.
As an alternative to delivering or mailing the certificate, the insurer may make the certificate available electronically through an online internet or policyholder network Web site. If the insurer makes the certificate available electronically, the insurer shall do all of the following:
Section
18
.
631.61 (1) (c) 1. of the statutes is created to read:
631.61
(1)
(c) 1. Request the policyholder to post the information, as well as instructions on how to access the certificate, in the policyholder's place of business or to publish the information and access instructions in a house organ that is reasonably calculated to bring the information to the attention of the certificate holders.
Section
19
.
631.61 (1) (c) 2. of the statutes is created to read:
631.61
(1)
(c) 2. Provide notice to the policyholder of any subsequent change in the certificate and request the policyholder to notify the certificate holders of the change in the manner specified in subd. 1.
Section
20
.
631.61 (1) (c) 3. of the statutes is created to read:
631.61
(1)
(c) 3. Provide a paper copy of the certificate to any certificate holder upon request.
Section
21
.
632.07 of the statutes is created to read:
632.07
Prohibiting requiring property insurance in excess of replacement value.
A lender may not require a borrower, as a condition of receiving or maintaining a loan secured by real property, to insure the property against risks to improvements on the real property in an amount that exceeds the replacement value or market value of the improvements, whichever is greater.
Section
22
.
632.745 (18) (b) of the statutes is amended to read:
632.745
(18)
(b) A special enrollment period under s. 632.746
(6) or
(7).
Section
23
.
646.01 (1) (b) 14. of the statutes is amended to read:
646.01
(1)
(b) 14. A policy issued by an insurer to
, or a contract entered into by an insurer with, a care management organization, as defined in s. 46.2805 (1), or
the department of health and family services
or any other governmental entity
under
s. 49.45 (2) (b) 2.
any state law
to provide prepaid health care to medical assistance recipients.
Section
24
.
646.11 (4) of the statutes is amended to read:
646.11
(4)
Liability.
No contributor to the fund
or
,
person acting on
its
the fund's
behalf
, insurer representative on the board, or alternate representative designated under s. 646.12 (1) (a) 3.
is personally liable for any obligations of the fund. The rights of creditors are solely against the assets of the fund.
Section
25
.
646.11 (5) of the statutes is amended to read:
646.11
(5)
Immunity.
No cause of action of any nature may arise against and no liability may be imposed upon the fund or its agents, employees, directors
, including alternate representatives designated under s. 646.12 (1) (a) 3.,
or contributor insurers, or the commissioner or the commissioner's agents, employees
,
or representatives, for any act or omission by any of them in the performance of their powers and duties under this chapter.
Section
26
.
646.12 (1) (a) of the statutes is renumbered 646.12 (1) (a) 1. and amended to read:
646.12
(1)
(a) 1. The fund shall be administered by a board of directors
which
that
shall consist of
not fewer than 7 nor more than 14 members. The
the
attorney general, the state treasurer
,
and the commissioner
are members with
, each of whom shall have
full voting rights
. Other members shall be chosen from representatives of insurers subject to this chapter under procedures specified by the commissioner by rule, provided that one member is a representative of a service insurance corporation. The rule may provide that, instead of natural persons, specific insurers or associations of insurers may be selected as members of the board and may act through any duly authorized representative
, and at least 9 but not more than 11 insurer representatives of domestic, foreign, and alien insurers subject to this chapter
.
Section
27
.
646.12 (1) (a) 2. of the statutes is created to read:
646.12
(1)
(a) 2. The commissioner shall appoint the insurer representative members for 3-year terms, after considering recommendations of the other board members currently serving terms. In recommending candidates to fill the positions, the board shall consider whether all insurers subject to this chapter are fairly represented, including property and casualty insurers, life and health insurers, health maintenance organizations and service insurance corporations, and domestic and nondomestic insurers.
Section
28
.
646.12 (1) (a) 3. of the statutes is created to read:
646.12
(1)
(a) 3. Each appointed insurer representative may designate an alternate representative to represent the insurer at any meeting of the board. Any person serving as an alternate representative shall, while serving, have all of the powers and responsibilities of the appointed insurer representative.
Section
29
.
646.12 (1) (b) of the statutes is amended to read:
646.12
(1)
(b)
Chairperson.
The person to chair the board shall be elected by the members of the board
under a rule promulgated by the commissioner
annually at the first meeting after June 1
.
Section
30
.
646.12 (2) (a) of the statutes is amended to read:
646.12
(2)
(a)
Subject to the commissioner's power to promulgate rules under sub. (1), adopt
Adopt
rules for the administration of this chapter, including delegation of any part of its powers and its own procedures.
Section
31
.
646.13 (3) (d) of the statutes is created to read:
646.13
(3)
(d) Except for claims under life insurance policies, annuities, or noncancelable or guaranteed renewable disability insurance policies, and except for claims determined to be excused late filings as provided in pars. (a) and (b), if no date for filing is set by the liquidator or court, with a liquidator or court after 18 months after the order of liquidation is entered.
Section
32
.
646.31 (11) of the statutes is renumbered 646.31 (11) (b) and amended to read:
646.31
(11)
(b)
The
An insurance entity may not assert a claim against the
fund
is not required to pay
for
any amount due from the insurer to
any reinsurer, insurer, insurance pool or underwriting association
the insurance entity
as subrogation, contribution, or indemnification recoveries or otherwise, except as provided in sub. (2) (a).
A reinsurer, insurer, insurance pool or underwriting association
An insurance entity
that has paid a claim and thereby has become subrogated or otherwise entitled to the amount of that claim may assert that claim against the liquidator of the insurer in liquidation but not against the insured of the insurer in liquidation.
Section
33
.
646.31 (11) (a) of the statutes is created to read:
646.31
(11)
(a) In this subsection:
1. "Health care costs" has the meaning given in s. 609.01 (1j).
2. "Insurance entity" means a reinsurer, an insurer, an insurance pool, or an underwriting association.
Section
34
.
646.31 (11) (c) of the statutes is created to read:
646.31
(11)
(c) Notwithstanding par. (b), an insurance entity may assert a claim against the fund for health care costs if all of the following conditions are met:
1. The insurance entity paid the claim for health care costs under a disability insurance policy issued by the insurance entity.
2. The insurance entity is not obligated to pay the health care costs under the express terms of the disability insurance policy because the claim arose out of, or in the course of, the claimant's employment.
3. The claim is covered by a worker's compensation insurance policy and would otherwise be an eligible claim under this section.
Section
35
.
646.33 (3) of the statutes is renumbered 646.33 (3) (a).
Section
36
.
646.35 (4) (a) of the statutes is renumbered 646.35 (4).
Section
37
.
646.35 (4) (b) of the statutes is renumbered 646.33 (3) (b).
Section
38
.
646.35 (6) (c) 1. (intro.) and b. of the statutes are consolidated, renumbered 646.35 (6) (c) 1. and amended to read:
646.35
(6)
(c) 1. Any benefit payment liability, arising on or after the date of entry of the order of liquidation, to the extent that the rate of interest on which it is based or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract and employed in calculating returns or changes in value exceeds the
smaller of the following: b. The
rate of interest, which may not be less than zero, determined by subtracting 3 percentage points from the monthly corporate bond yield average, as most recently published by Moody's investors service or its successor.
Section
39
.
646.35 (6) (c) 1. a. of the statutes is repealed.
Section
40
.
646.35 (6) (c) 2. (intro.) and b. of the statutes are consolidated, renumbered 646.35 (6) (c) 2. and amended to read:
646.35
(6)
(c) 2. Any benefit payment liability, arising before the date of entry of the order of liquidation, to the extent that the payment exceeds the
smaller of the following: b. The
rate of interest, which may not be less than zero, determined by subtracting 2 percentage points from the monthly corporate bond yield average, as published by Moody's investors service or its successor, when averaged over the 4-year period ending on the date of entry of the order of liquidation or averaged over such lesser period if the contract was issued less than 4 years before that date.
Section
41
.
646.35 (6) (c) 2. a. of the statutes is repealed.
Section
42
.
646.51 (3) (am) (intro.) of the statutes is amended to read:
646.51
(3)
(am)
General.
(intro.) Except as provided in
par.
pars. (b) and
(c), assessments shall be calculated as follows:
Section
43
.
646.51 (3) (b) of the statutes is created to read:
646.51
(3)
(b)
Life and health.
Except as provided in par. (c), with respect to annuity contracts or life or disability insurance policies, including policies issued by health maintenance organizations, assessments shall be calculated as a percentage of average annual premium received in this state by each insurer in the classes protected by the accounts for the 3 most recent years preceding the year of the entry of the order of liquidation.
Section
44
.
646.51 (4) (a) of the statutes is amended to read:
646.51
(4)
(a) Subject to pars. (b) and (d), the total of all assessments for an amount authorized by the board under this section with respect to an insurer may not, in one calendar year, exceed
2%
2 percent
of the insurer's
average annual
assessable
premiums
received in this state, during the 3 calendar years preceding the year of entry of the order of liquidation,
under sub. (3) (am) or (b)
on the types of policies and contracts that are covered by the account.
[
2003 Wisconsin Act 261
] Section 162 (1)
Insurance security fund.
(a)
The treatment of sections 609.98 (1) and (4) (a) and (b), 645.58 (1) (intro.), 646.01 (1) (a) 2. k. and L. and (b) 1., 9. (intro.), a., b., c., and d., 11., 11m., 15., 16.,
and
17.,
and 18.,
646.03 (1m), (2n), (2p), (4), and (5), 646.12 (2) (d) and (f) 2. and 3. and (4), 646.13 (title), (1) (intro.) and (b), (2) (intro.), (b), (c), (d), and (g), (3) (intro.), (a), (b), and (c) (intro.) and 2., and (4), 646.15 (title) and (1) (a) (intro.), 1., 2., and 4., 646.16, 646.21 (2), 646.31 (1) (d) 10. and 11., (2) (a) 1. and 2., (b) 1., 2. (intro.), a., and b., and 3., (f) (title) and 2., and (g), (3), (5), (6) (a) and (b), (7), (8), (9) (a), (b), (c), (cm), and (d), and (11), 646.32 (1), 646.325 (1) and (2) (intro.), (a) (intro.), and (b), 646.33 (2), (2m) (b), and (3), 646.35 (2), (3) (title), (intro.) (except 646.35 (3) (title)), (a), (b), and (c), (5), (6) (a), (b), (bm), and (c) (intro.), 1. (intro.) and b., and 2. (intro.) and b., (7), (8), (9), and (10), 646.51 (1), (1c), (2), (3) (a) (title), 1., and 2., (am) 2., (b), and (c), (5), (6), (7) (a), (8), and (9) (b) 1. and 2., 646.60 (1) (a), 646.61 (2), and 646.73 of the statutes, the renumbering and amendment of sections 646.11 (1), 646.31 (10) and (13), 646.33 (1), 646.35 (4), and 646.51 (4) of the statutes, and the creation of sections 646.11 (1) (d) and (e), 646.31 (10) (b) and (13) (b), (c), and (d), 646.33 (1) (b), (c), and (d), 646.35 (4) (b), and 646.51 (4) (a), (b), and (d) of the statutes first apply to
insurance company liquidations commenced or pending on the effective date of this paragraph.
(b) The treatment of section 646.01 (1) (b) 18. of the statutes first applies to
liquidation proceedings in which a liquidation order is issued on the effective date of this
subsection
paragraph
.
Section
46
.
Nonstatutory provisions.
(1)
Board of directors of insurance security fund.
Notwithstanding section 646.12 (1) (a) of the statutes, as affected by this act, each insurer representative member of the board of directors of the insurance security fund who is serving on the effective date of this subsection shall continue in that capacity until he or she resigns or his or her term expires, whichever occurs first.
(2)
Coverage of employers and plan sponsors.
The treatment of section 600.03 (25) (a) 4. of the statutes, as created by this act, applies to coverage of employers and plan sponsors issued prior to, on, or after the effective date of this subsection.
Section
47
.
Initial applicability.
(1)
Insurance security fund.
The treatment of sections 646.13 (3) (d), 646.33 (3), 646.35 (4) (a) and (b) and (6) (c) 1. (intro.), a., and b. and 2. (intro.), a., and b., and 646.51 (3) (am) (intro.) and (b) and (4) (a) of the statutes, the renumbering and amendment of section 646.31 (11) of the statutes, and the creation of section 646.31 (11) (a) and (c) of the statutes first apply to insurance company liquidations commenced or pending on the effective date of this subsection.
(2)
Restriction on property insurance.
The treatment of section 632.07 of the statutes first applies to property insurance coverage required by a lender on the effective date of this subsection.
(3)
Action to recover fees, taxes, and assessments.
The treatment of section 76.68 (2) and (4) of the statutes first applies to fees, taxes, and assessments that are due and payable on the effective date of this subsection.
