Section 611.26. Subsidiaries.

 

(1)   Insurance subsidiaries. An insurance corporation may form or acquire subsidiaries to do any lawful insurance business. There is no limit on the amount of investment in such subsidiaries except that the commissioner may by order or rule establish a limit and, for purposes of ss. 623.11 and 623.12 , the total value of the outstanding shares of such a subsidiary shall be deemed to equal the amount of surplus possessed by the subsidiary in excess of its security surplus, as determined by the commissioner under s. 623.12 .

(2)   Investment subsidiaries. An insurance corporation may form or acquire subsidiaries to hold or manage any assets that it might hold or manage directly. There is no limit on investment in such subsidiaries except that imposed by s. 620.23 (3) .

(3)   Ancillary subsidiaries.

(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 percent of its assets invested in such subsidiaries, unless the commissioner by order or rule provides otherwise.

(b) Purposes. Subsidiaries are ancillary subsidiaries if they are engaged principally in one or more of the following:

1. Acting as an insurance agent.

2. Investing, reinvesting or trading in securities, or acting as a securities broker, dealer or marketing representative, for its own account or for the account of any affiliate.

3. Managing of investment companies registered under the federal investment company act of 1940, as amended, including related sales and services.

4. Providing investment advice and services.

5. Acting as administrative agent for a government instrumentality performing an insurance, public assistance or related function.

6. Providing services related to insurance operations, including accounting, actuarial, appraisal, auditing, claims adjusting, collection, data processing, loss prevention, premium financing, safety engineering and underwriting services.

7. Holding or managing property used by the corporation alone or with its affiliates for the convenient transaction of its business.

8. Providing such other services or performing such other activities as the commissioner may declare ancillary by rule.

9. Owning corporations which would be authorized as subsidiaries under subds. 1. to 8. and under subs. (1) and (2) .

(4)   Other subsidiaries. An insurance corporation may form or acquire other subsidiaries than those under subs. (1) to (3) . The investment in such subsidiaries may be counted toward satisfaction of the compulsory surplus requirement of s. 623.11 and the security surplus standard of s. 623.12 to the extent that the investment is a part of the leeway investments of s. 620.22 (9) for the first $200,000,000 of assets or to the extent that the investment is within the limitations under s. 620.23 (2) (a) and (b) for other assets. The commissioner may limit investment in subsidiaries under this subsection by rule or order. Unless approved by the commissioner, an insurance corporation may not do any of the following:

(a) Invest in one or more subsidiaries more than 10 percent of its assets or 50 percent of its capital and surplus, whichever is less.

(b) Invest in 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.

(5)   Notice to commissioner. An insurance corporation shall notify the commissioner promptly of the formation or acquisition of any subsidiary under this section.

1971 c. 260 ; 1979 c. 279 s. 9 ; 1981 c. 307 ; 1999 a. 30 ; 2003 a. 261 ; 2007 a. 170 .