Wis. Admin. Code Ins — Office of the Commissioner of Insurance

Chapter Ins 1 FRATERNAL INSURANCE

Wis. Admin. Code § Ins 1.01 Premiums and surplus refunds for accident and health benefits {#sec-ins-1.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 1.01}

(1) Scope. This rule shall apply to all contracts issued by fraternal benefit societies which provide any type of accident and health or total and permanent disability benefits as authorized in s. 632.94 (4), 1977 Stats.

(2) Premiums to be reasonable. The premiums charged for accident and health benefits shall be reasonable in relation to the benefits promised. Benefits will be considered “amply provided for” in compliance with s. 623.15 (2), Stats., if the premiums are determined in accordance with reasonable actuarial assumptions as to morbidity, persistency, interest, and expenses and with sound actuarial margins.

(3) Surplus refunds. Any surplus developed in excess of reasonable funding requirements as to contingency and solvency of the society shall be refunded to certificate holders in a reasonably equitable manner. The society shall maintain adequate records by certificate classes so that experience and refundable surplus may be determined with reasonable equity.

Note: Morbidity tables which will be considered as providing data based on reasonable actuarial assumptions are: Tables based on recent society of actuaries reports regarding experience under individual disability policies or under individual medical expense policies, actual credible morbidity experience of the society providing the benefits, or other credible industry experience.

History

1-2-56; r. and recr. Register, August, 1970, No. 176, eff. 9-1-70; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; corrections in (1) and (2) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 1.02 Automatic surrender value in fraternal certificates {#sec-ins-1.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 1.02}

Section 614.96, Stats., does not require that sickness insurance certificates shall contain an automatic surrender value.

History

1-2-56; emerg. am. eff. 6-22-76; am. Register, September, 1976, No. 249, eff. 10-1-76.

Chapter Ins 2 LIFE INSURANCE

Wis. Admin. Code § Ins 2.01 Estoppel by report of medical examiner {#sec-ins-2.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.01}

No company or fraternal benefit society shall issue in this state a contract, based on a medical examination, providing for disability benefits, the provisions of which are in conflict with ss. 632.50 and 632.71, Stats., or shall indulge in any practice which is at variance with said section.

History

1-2-56; emerg. am. eff. 6-22-76; am. Register, September, 1976, No. 249, eff. 10-1-76.

Wis. Admin. Code § Ins 2.03 Policies not dated back to lower insurance age {#sec-ins-2.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.03}

(1) No company shall issue for delivery in this state any policy or contract of life insurance which purports to be issued or take effect as of a date more than 6 months before the application therefor was made, if thereby the premium on such policy or contract is reduced below the premium which would be payable thereon as determined by the nearest birthday of the insured at the time when such application was made. The date of application must be considered to be the date on which the application (Part I) or the medical examination (Part II) is completed, whichever is the later.

(2) This ruling does not prohibit the exchange, alteration or conversion of policies of life insurance as of the original date of such policies if the amount of insurance provided under the new policy does not exceed the amount of insurance under the original policy or the amount of insurance which the premium paid for the original policy would have purchased if the new policy had been originally applied for, whichever is greater; nor prohibit the exercise of any conversion privilege contained in any policy or contract.

Wis. Admin. Code § Ins 2.05 Separate statement of premiums for certain disability insurance benefits included in life or endowment insurance policies {#sec-ins-2.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.05}

(1) Purpose. This rule provides guidelines to determine which disability coverages may be included in life or endowment insurance policies without a separate statement of premium charge. This rule interprets and implements the separation of premium requirements stated in s. 632.44 (1), Stats., as they relate to the inclusion of disability insurance by policy provision or rider in life or endowment insurance policies such as authorized by s. Ins 6.70 and s. 627.06, Stats.

(2) Scope. This rule shall apply to the kinds of disability insurance authorized by s. Ins 6.75 (1) (a) and (c), when such insurance is provided in a life or endowment policy either by specific policy provision or by a rider attached to such policy.

(3) Definitions.

(a) Life or endowment insurance. The basic life or endowment insurance coverage provided by the policy and additional disability benefits which have been determined by the standards in sub. (4) to be benefits which are life or endowment insurance or an integral part of such coverages.

(b) Disability insurance benefit. Insurance coverages written under the authority of s. Ins 6.75 (1) (a) and (c), to indemnify persons in whole or in part for financial loss due to bodily injury, death by accident, or health of persons.

(c) Separate statement of premium. Individual statement of the exact gross premium charged for each distinct disability insurance coverage required by this rule to be stated separately from the premium charge for the basic life or endowment insurance coverage.

(4) Standards and procedures for determination. The following criteria or standards in pars. (a) through (e) shall be used to determine whether a disability benefit, coverage, or clause may be included in the basic life or endowment policy without a separate statement of the premium charged for such disability benefit. Subject to the approval of the commissioner of insurance, a disability benefit, coverage, or clause which satisfies the standards listed below may be included in the basic life or endowment coverage without a separate statement of cost. Disability coverages not meeting these standards may be included in or attached to the policy only with a separate statement of the premium if they otherwise meet the statutory requirements in respect to combination of coverages. The rule in no way requires that a disability benefit, coverage, or clause be included in the premium charge for the basic life or endowment coverage if the company desires to show the premium separately.

(a) Small or very nominal cost for the disability coverage when compared with the cost of the basic life or endowment coverage.

(b) Logical reason for including the disability benefit without a separate statement of premium.

(d) Inclusion of the disability coverage could be easily understood by the applicant and is not subject to possible misinterpretation.

(e) Custom of the insurance business has classed the disability coverage as basically a life insurance benefit.

(5) Disability benefits which require a separate statement. The following list constitutes a partial listing of disability coverages considered by the commissioner to be additional benefits which generally require a separate statement of premium charge if they are attached to or included in life or endowment coverage in accordance with other statutory requirements. Any such benefit may be included in a life or endowment insurance policy without a separate statement of premium if it is demonstrated that it meets the requirements listed in sub. (4).

(a) Waiver of premium benefit for death and/or disability of payor.

(b) Loss of sight and/or dismemberment benefit.

(d) Hospital insurance.

(e) Basic or primary medical insurance.

(f) Major medical benefit.

(g) Surgical benefit.

(6) Disability benefits not listed. Disability benefits which are not specifically listed above will be examined at the time of filing to determine whether a separate statement of premium is required.

(7) Reserve values. Reserve values, on account of included provisions, will be based upon the requirements of s. 623.06, Stats., or other applicable statutes or, in the absence of specific requirements, on such additional standards as the commissioner of insurance may prescribe.

(8) Effective date. On or after April 1, 1965, no life insurance policy shall be approved for use and no such policy heretofore approved shall be issued or delivered in this state unless it meets the requirements of this rule.

Note: See historical note relating to s. Ins 2.05 as printed with this rule as released in December, 1984.

History

1-2-56; r. and recr. Register, March, 1965, No. 111, eff. 4-1-65; emerg. am. (1), (2) and (3) (b), eff. 6-22-76; am. (1), (2) and (3)(b), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), (2) and (3) (b), Register, March, 1979, No. 279, eff. 4-1-79; r. (9) under s. 13.93 (2m) (b) 16., Stats., Register December, 1984, No. 348; corrections made under s. 13.93 (2m) (b) 6., Stats., Register, June, 1997, No. 498.

Wis. Admin. Code § Ins 2.07 Replacement of life insurance or annuity contracts; disclosure requirements {#sec-ins-2.07 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.07}

(1) Purpose. The purpose of this section is:

(a) To regulate the activities of insurers and producers with respect to the replacement of existing life insurance and annuities.

(b) To protect the interests of life insurance and annuity purchasers by establishing minimum standards of conduct to be observed in replacement or financed purchase transactions to assure that purchasers receive information with which a decision can be made in the purchaser’s best interest, reduce the opportunity for misrepresentation and incomplete disclosure, and establish penalties for failure to comply with requirements of this section.

(2) Scope. This section shall apply to the solicitation of life insurance and annuities authorized by s. Ins 6.75 (1) (a) and (b), covering residents of this state, and issued by insurers including insurance corporations, fraternal benefit societies, or the State Life Insurance Fund. Except as specifically stated, this section shall not apply to transactions involving any of the following:

(a) Credit life insurance.

(b) Group life insurance or group annuities where there is no direct solicitation of individuals by a producer. Direct solicitation shall not include any group meeting held by a producer solely for the purpose of educating or enrolling individuals or, when initiated by an individual member of the group, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual. Group life insurance or group annuity certificates marketed through direct response solicitation shall be subject to the provisions of sub. (8).

(d) An application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the commissioner; or, when a term conversion privilege is exercised among corporate affiliates.

(e) Proposed life insurance that is to replace life insurance under a binding or conditional receipt issued by the same insurer.

(f) Policies or contracts used to fund an employee pension or welfare benefit plan that is covered by the Employee Retirement Income Security Act, ERISA, 29 USC 1001 et. seq., a plan described by sections 401(a), 401(k) or 403(b) of the Internal Revenue Code, where the plan, for purposes of ERISA, is established or maintained by an employer, a governmental or church plan defined in section 414 of the Internal Revenue Code, a governmental or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457 of the Internal Revenue Code, or a nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor. This section shall apply to policies or contracts used to fund any plan or arrangement that is funded solely by contributions an employee elects to make, whether on a pre-tax or after-tax basis, and where the insurer has been notified that plan participants may choose from among 2 or more insurers and there is a direct solicitation of an individual employee by a producer for the purchase of a contract or policy. As used in this subsection, direct solicitation shall not include any group meeting held by a producer solely for the purpose of educating individuals about the plan or arrangement or enrolling individuals in the plan or arrangement or, when initiated by an individual employee, assisting with the selection of investment options offered by a single insurer in connection with enrolling that individual employee.

(g) Where new coverage is provided under a life insurance policy or contract and the cost is borne wholly by the insured’s employer or by an association of which the insured is a member.

(h) Existing life insurance that is a non-convertible term life insurance policy that will expire in 5 years or less from the date of issue and cannot be renewed.

(i) Immediate annuities that are purchased with proceeds from an existing annuity contract. Immediate annuities purchased with proceeds from an existing life insurance policy are not exempted from the requirements of this section.

(j) Structured settlements.

(k) Registered contracts shall be exempt from the requirements of subs. (6) (a) 2. and (7) (b) with respect to the provision of illustrations or policy summaries; however, premium or contract contribution amounts and identification of the appropriate prospectus or offering circular shall be required instead.

(3) Definitions. In this section:

(a) “Direct response solicitation” means a solicitation through a sponsoring or endorsing entity or individually solely through mail, telephone, the Internet or other mass communication media.

(b) “Existing insurer” means the insurer whose policy or contract is or will be changed or affected in a manner described within the definition of “replacement.”

(c) “Existing policy or contract” means an individual life insurance policy or annuity contract in force, including a policy under a binding or conditional receipt or a policy or contract that is within an unconditional refund period.

(d) “Financed purchase” means the purchase of a new policy involving the actual or intended use of funds obtained by the withdrawal or surrender of, or by borrowing from values of an existing policy to pay all or part of any premium due on the new policy. For purposes of a regulatory review of an individual transaction only, if a withdrawal, surrender or borrowing involving the policy values of an existing policy is used to pay premiums on a new policy owned by the same policyholder and issued by the same insurer within 4 months before or 13 months after the effective date of the new policy, it will be deemed prima facie evidence of the policyholder’s intent to finance the purchase of the new policy with existing policy values. This prima facie standard is not intended to increase or decrease the monitoring obligations contained in sub. (5) (a).

(e) “Illustration” means a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years as defined in s. Ins 2.17.

(f) “Policy summary” for policies or contracts other than universal life policies, means a written statement regarding a policy or contract which shall contain to the extent applicable, but need not be limited to, the following information: current death benefit; annual contract premium; current cash surrender value; current dividend; application of current dividend; and amount of outstanding loan. For universal life policies “policy summary” means a written statement that shall contain at least the following information: the beginning and end date of the current report period; the policy value at the end of the previous report period and at the end of the current report period; the total amounts that have been credited or debited to the policy value during the current report period, identifying each by type, for example, interest, mortality, expense and riders; the current death benefit at the end of the current report period on each life covered by the policy; the net cash surrender value of the policy as of the end of the current report period; and the amount of outstanding loans, if any, as of the end of the current report period.

(g) “Producer” shall include intermediaries, agents, brokers and producers.

(h) “Registered contract” means a variable annuity contract or variable life insurance policy subject to the prospectus delivery requirements of the Securities Act of 1933, 15 USC 77a et. seq.

(i) “Replacement” means a transaction in which a new policy or contract is to be purchased, and it is known or should be known to the proposing producer, or to the proposing insurer if there is no producer, that by reason of the transaction, an existing policy or contract has been or is to be lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer or otherwise terminated, converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values, amended so as to effect either a reduction in benefits or in the term for which coverage would otherwise remain in force or for which benefits would be paid, reissued with any reduction in cash value, or used in a financed purchase.

(j) “Replacing insurer” means the insurer that issues or proposes to issue a new policy or contract that replaces an existing policy or contract or is a financed purchase.

(k) “Sales material” means a sales illustration and any other written, printed or electronically presented information created, or completed or provided by the insurer or producer and used in the presentation to the policy or contract owner related to the policy or contract purchased.

(4) Duties of producers.

(a) A producer who initiates an application shall submit to the insurer, with or as part of the application, a statement signed by both the applicant and the producer as to whether the applicant has existing policies or contracts. If the answer is “no,” the producer’s duties with respect to replacement are complete.

(b) If the applicant answered “yes” to the question regarding existing coverage referred to in par. (a), the producer shall present and read to the applicant, not later than at the time of taking the application, a notice regarding replacements in the form as described in Appendix I or other substantially similar form approved by the commissioner. However, no approval shall be required when amendments to the notice are limited to the omission of references not applicable to the product being sold or replaced. The notice shall be signed by both the applicant and the producer attesting that the notice has been read aloud by the producer or that the applicant did not wish the notice to be read aloud, in which case the producer need not have read the notice aloud, and left with the applicant.

(c) The notice shall list all life insurance policies or annuities proposed to be replaced, properly identified by name of insurer, the insured or annuitant, and policy or contract number if available and shall include a statement as to whether each policy or contract will be replaced or whether a policy will be used as a source of financing for the new policy or contract. If a policy or contract number has not been issued by the existing insurer, alternative identification, such as an application or receipt number, shall be listed.

(d) In connection with a replacement transaction the producer shall leave with the applicant at the time an application for a new policy or contract is completed the original or a copy of all sales material. With respect to electronically presented sales material, it shall be provided to the policy or contract owner in printed form no later than at the time of policy or contract delivery.

(e) Except as provided in sub. (6) (c), in connection with a replacement transaction the producer shall submit to the insurer to which an application for a policy or contract is presented, a copy of each document required by this section, a statement identifying any preprinted or electronically presented company approved sales materials used, and copies of any individualized sales materials, including any illustrations related to the specific policy or contract purchased.

(5) Duties of insurers that use producers. Each insurer shall do all of the following:

(a) Maintain a system of supervision and control to insure compliance with the requirements of this section that shall at a minimum: inform its producers of the requirements of this section and incorporate the requirements of this section into all relevant producer training manuals prepared by the insurer, provide to each producer a written statement of the insurer’s position with respect to the acceptability of replacements providing guidance to its producer as to the appropriateness of these transactions, establish and maintain a system to review the appropriateness of each replacement transaction that the producer does not indicate is in accord with the written statement of the insurer’s position with respect to the acceptability of replacements, establish and maintain procedures to confirm that the requirements of this section have been met, and establish and maintain procedures to detect transactions that are replacements of existing policies or contracts by the existing insurer, but that have not been reported as such by the applicant or producer. Compliance with this paragraph may include systematic customer surveys, interviews, confirmation letters, or programs of internal monitoring.

(b) Have the capacity to monitor each producer’s life insurance policy and annuity contract replacements for that insurer, and shall produce, upon request, and make such records available to the commissioner. The capacity to monitor shall include the ability to produce records for each producer’s replacements, including financed purchases, as a percentage of the producer’s total annual sales for life insurance, number of lapses of policies by the producer as a percentage of the producer’s total annual sales for life insurance, annuity contract replacements as a percentage of the producer’s total annual annuity contract sales, number of transactions that are unreported replacements of existing policies or contracts by the existing insurer detected by the insurer’s monitoring system, and replacements, indexed by replacing producer and existing insurer.

(c) Require with or as a part of each application for life insurance or an annuity a signed statement by both the applicant and the producer as to whether the applicant has existing policies or contracts.

(d) Require with each application for life insurance or an annuity that indicates an existing policy or contract a completed notice regarding replacements as contained in Appendix I.

(e) When the applicant has existing policies or contracts, each insurer shall, upon request of the commissioner, produce copies of any sales material required by sub. (4) (e), the basic illustration and any supplemental illustrations related to the specific policy or contract that is purchased, and the producer’s and applicant’s signed statements with respect to financing and replacement for at least 5 years after the termination or expiration of the proposed policy or contract.

(f) Ascertain that the sales material and illustrations required by sub. (4) (e) meet the requirements of this section and are complete and accurate for the proposed policy or contract.

(g) If an application does not meet the requirements of this section, notify the producer and applicant and fulfill the outstanding requirements.

(h) Maintain records in paper, photograph, microprocess, magnetic, mechanical or electronic media or by any process that accurately reproduces the actual document.

(6) Duties of replacing insurers that use producers.

(a) When a replacement is involved in a transaction, the replacing insurer shall do all of the following:

Verify that the required forms are received and are in compliance with this section.
Notify any other existing insurer that may be affected by the proposed replacement within 5 business days of receipt of a completed application indicating replacement or when the replacement is identified if not indicated on the application, and mail a copy of the available illustration or policy summary for the proposed policy or available disclosure document for the proposed contract within 5 business days of a request from an existing insurer.
Be able to produce copies of the replacement notification required in sub. (4) (b) indexed by producer, for at least 5 years or until conclusion of the next regular examination conducted by the insurance department of its state of domicile, whichever is later.
Provide to the policy or contract owner notice of the right to return the policy or contract within 30 days of the delivery of the contract and receive an unconditional full refund of all premiums or considerations paid on it, including any policy fees or charges or, in the case of a variable or market value adjustment policy or contract, a payment of the cash surrender value provided under the policy or contract plus the fees and other charges deducted from the gross premiums or considerations or imposed under the policy or contract. The notice may be included in Appendix I or III.

(b) In transactions where the replacing insurer and the existing insurer are the same or subsidiaries or affiliates under common ownership or control, allow credit for the period of time that has elapsed under the replaced policy’s or contract’s incontestability and suicide period up to the face amount of the existing policy or contract. With regard to financed purchases, the credit may be limited to the amount the face amount of the existing policy is reduced by the use of existing policy values to fund the new policy or contract.

(c) If an insurer prohibits the use of sales material other than that approved by the insurer, as an alternative to the requirements made of an insurer pursuant to sub. (4) (e) the insurer may do all of the following:

Require with each application a statement signed by the producer that represents that the producer used only insurer-approved sales material, and states that copies of all sales material were left with the applicant in accordance with sub. (4) (d).
Within 10 days of the issuance of the policy or contract notify the applicant by sending a letter or by verbal communication with the applicant by a person whose duties are separate from the marketing area of the insurer, that the producer has represented that copies of all sales material have been left with the applicant in accordance with sub. (4) (d), provide the applicant with a toll free number to contact insurer personnel involved in the compliance function if such is not the case, and stress the importance of retaining copies of the sales material for future reference, and be able to produce a copy of the letter or other verification in the policy file for at least 5 years after the termination or expiration of the policy or contract.

(7) Duties of the existing insurer. Where a replacement is involved in the transaction, the existing insurer shall do all of the following:

(a) Retain and be able to produce all replacement notifications received, indexed by replacing insurer, for at least 5 years or until the conclusion of the next regular examination conducted by the insurance department of its state of domicile, whichever is later.

(b) Send a letter to the policy or contract owner of the right to receive information regarding the existing policy or contract values including, if available, an in force illustration or policy summary if an in force illustration cannot be produced within 5 business days of receipt of a notice that an existing policy or contract is being replaced. The information shall be provided within 5 business days of receipt of the request from the policy or contract owner.

(c) Upon receipt of a request to borrow, surrender or withdraw any policy values, send a notice, advising the policy owner that the release of policy values may affect the guaranteed elements, non-guaranteed elements, face amount or surrender value of the policy from which the values are released. The notice shall be sent separately from the check if the check is sent to anyone other than the policy owner. In the case of consecutive automatic premium loans, the insurer is only required to send the notice at the time of the first loan.

(8) Duties of insurers with respect to direct response solicitations.

(a) In the case of an application that is initiated as a result of a direct response solicitation, the insurer shall require, with or as part of each completed application for a policy or contract, a statement asking whether the applicant, by applying for the proposed policy or contract, intends to replace, discontinue or change an existing policy or contract. If the applicant indicates a replacement or change is not intended or if the applicant fails to respond to the statement, the insurer shall send the applicant, with the policy or contract, a notice regarding replacement as described in Appendix II, or other substantially similar form approved by the commissioner.

(b) If the insurer has proposed the replacement or if the applicant indicates a replacement is intended and the insurer continues with the replacement, the insurer shall do all of the following:

Provide to applicants or prospective applicants with the policy or contract a notice, as described in Appendix III, or other substantially similar form approved by the commissioner. In these instances the insurer may delete the references to the producer, including the producer’s signature, and references not applicable to the product being sold or replaced, without having to obtain approval of the form from the commissioner. The insurer’s obligation to obtain the applicant’s signature shall be satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the notice referred to in this subdivision. The requirement to make a diligent effort shall be deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed notice referred to in this subdivision.
Comply with the requirements of sub. (6) (a) 2., if the applicant furnishes the names of the existing insurers, and the requirements of sub. (6) (a) 3. and 4. and (b).

(9) Violation.

(a) Any failure to comply with this section shall be considered a violation of s. 628.34, Stats. Examples of violations include any deceptive or misleading information set forth in sales material, failing to ask the applicant in completing the application the pertinent questions regarding the possibility of financing or replacement, the intentional incorrect recording of an answer, advising an applicant to respond negatively to any question regarding replacement in order to prevent notice to the existing insurer, or advising a policy or contract owner to write directly to the insurer in such a way as to attempt to obscure the identity of the replacing producer or insurer.

(b) Policy and contract owners have the right to replace existing life insurance policies or annuity contracts after indicating in or as a part of applications for new coverage that replacement is not their intention; however, patterns of such action by policy or contract owners of the same producer shall be deemed prima facie evidence of the producer’s knowledge that replacement was intended in connection with the identified transactions, and these patterns of action shall be deemed prima facie evidence of the producer’s intent to violate this section.

(c) When it is determined that the requirements of this section have not been met, the replacing insurer shall provide to the policy owner or contract owner an in force illustration if available or policy summary for the replacement policy or available disclosure document for the replacement contract and the appropriate notice regarding replacements in Appendix I or III.

(d) Any violation of this section shall be subject to s. 601.64, Stats. Failure to comply with the requirements of this section shall not alter the requirements of any insurer with respect to claims.

History

Cr. Register, March, 1972, No. 195, eff. 6-1-72; emerg. am. (1) and (2) eff. 6-22-76; am. (1) and (2); Register, September, 1976, No. 249, eff. 10-1-76; am. (2), Register, March, 1979, No. 279, eff. 4-1-79; r. and recr. Register, January, 1982, No. 313, eff. 3-1-82; r. (8), under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; CR 08-107: r. and recr. Register June 2009 No. 642, eff. 7-1-09.

Wis. Admin. Code § Ins 2.08 Special policies and provisions; prohibitions, regulations, and disclosure requirements {#sec-ins-2.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.08}

(1) Purpose. The interest of the public and the maintenance of a fair and honest life insurance market must be safeguarded by identifying and prohibiting certain types of policy forms and policy provisions and by requiring certain insurance premiums to be separately stated. This rule implements and interprets applicable statutes including ss. 628.34, 631.20, 632.44 (1) and 632.62, Stats.

(2) Scope. This rule shall apply to the kinds of insurance authorized by s. Ins 6.75 (1) (a), and shall also apply to fraternal benefit societies.

(3) Definitions. For the purpose of this rule certain life insurance policy forms and provisions referred to herein shall have the following meaning:

(a) “Coupon policy” is any policy form which includes a series of coupons prominently and attractively featured in combination with an insurance contract. Such coupons are one-year pure endowments whether or not so identified and whether or not physically attached to the insurance contract. The coupons are devised to give the appearance of the interest coupons that are frequently attached to investment bonds. Although the face amount of the coupon benefit is essentially a refund of premium previously paid by a policyholder, it is frequently represented that is the earnings or return on the investment of the policyholder in life insurance.

(b) “Charter policy” is a term or name assigned by an insurance company to a policy form. Such a policy is usually issued by a newly organized company and it is sold on the basis that its availability will be limited to a specific predetermined number of units of a fixed dollar amount. Such policies generally provide that the policyholder shall participate in the earnings resulting from either or both participating policies and non-participating policies. It is characteristic of such a policy that in its presentation to the public it is represented that the policyholder will receive a special advantage in any future distribution of earnings, profits, dividends or abatement of premium. It is also represented that such advantage will not be made available to the persons holding other types of policies issued by the company. Other names such as Founders, President, and Executive Special are frequently used for policies of the type herein described, and for the purpose of this rule when they are so used they shall be considered as charter policies.

(c) A “Profit-sharing policy” is any policy form which contains provisions representing that the policyholder will be eligible to participate, with special advantage not available to the persons holding other types of policies issued by the same company, in any future distribution of general corporate profits. Such policy forms are so drafted that it appears to a prospective policyholder that he or she is purchasing a preferential share of the future profit and earnings of the insurance corporation rather than purchasing a life insurance policy which may be subject to refund of excess premium payments. The provisions of the policy may incorrectly represent the amount and source of surplus that will be available for apportionment and return to policyholders in the form of dividends. Policy forms using such terms as profits, surplus, or surplus-sharing in the manner herein described shall, for the purpose of this rule, be considered as profit-sharing policies.

(4) Prohibitions, regulations, and disclosure requirements. In accordance with the purpose expressed in sub. (1) and in consideration of the apparent intent of the legislature, the use in this state of certain types of policy forms and policy provisions shall be subject to the following prohibitions and regulations:

(a) Coupon policy forms misrepresent, distort, and disguise the true nature of the insurance purchased. Therefore, no coupon policy shall be approved for use and no coupon policy heretofore approved shall be issued or delivered in this state on or after June 15, 1962.

(b) Any policy, except a policy which is only used as a funding medium to provide gifts to a corporation without profit, as provided in s. 615.04, Stats., containing a series of one-year pure endowments or a series of guaranteed periodic benefits maturing during the premium-paying period of the policy in which the amount of any pure endowment or periodic benefit or benefits payable during any policy year is less than the total annual policy premium for such year has special characteristics making such policy peculiarly susceptible to misrepresentation and misunderstanding. Such policies are founded on the utmost good faith of the company, and the public interest requires that the premium charged for such benefits shall be fully and fairly disclosed to the policyholder without deception or misrepresentation. Therefore, on or after April 1, 1965, no such policy herein described shall be approved for use and no such policy heretofore approved shall be issued or delivered in this state unless:

Note: Section 615.04, Stats., was repealed.

The policy is nonparticipating.
The payment of a pure endowment or guaranteed periodic benefit is not contingent on the payment of premiums falling due on or after the time such pure endowment has matured,
The gross premium for the pure endowment or guaranteed periodic benefits is shown prominently and separately in the policy distinct from the regular insurance premium,
The gross premium for the pure endowment or guaranteed periodic benefits is based on reasonable assumptions as to interest, mortality, and expense,
The number of one-year endowment or guaranteed periodic benefits provided by the policy equals the number of annual premiums for such benefits,
All advertisements, sales materials, agent’s presentations, and other representations of the policy to the public represent the pure endowment or guaranteed periodic benefits of the policy to be nothing other than insurance benefits for which a premium is being paid,
All representations of the total premium for the policy contract also show the gross premium for the pure endowment or guaranteed periodic benefits to an extent such that the prospect or purchaser is fully informed as to the separate costs involved.

(c) Charter policy forms are defined by s. 628.33, 1987 stats., to be an unfair method of competition. They purport to provide a means to an end result that is not authorized by statute and an end result that is without reasonable expectation of achievement. Such policy forms misrepresent the responsibility and obligation of the company for equitable distribution of dividends or abatement of premiums. Therefore, no charter policy shall be approved for use and no charter policy heretofore approved shall be issued or delivered in this state on or after June 15, 1962.

(d) Profit-sharing policy forms are contrary to statute and the public interest by representing as an inducement to insurance that the person who purchases such a policy is procuring a preferential interest in the future profits and earnings of the insurance corporation. Any distribution to a policyholder of the company of earnings, profits, or surplus is a refund of the excess premiums paid by that policyholder. Such distribution must be fair and equitable to all policyholders, it must not discriminate unfairly between individuals of the same class and equal expectation of life, and it must be in the best interest of the company and its policyholders. Therefore, no profit-sharing policy shall be approved for use and no profit-sharing policy heretofore approved shall be issued or delivered in this state on or after June 15, 1962. Further, on or after June 15, 1962, no participating policy shall be approved and no participating policy heretofore approved shall be issued or delivered in this state unless the policy provides without deception or misrepresentation that the source of any dividends or abatement of premium is limited to the divisible surplus derived from participating business.

Note: See historical note relating to s. Ins 2.08 as printed with this rule as released in December, 1984.

History

Cr. Register, May, 1962, No. 77, eff. 6-15-62; am. (4) (b), Register, August 1964, No. 104, eff. 12-1-64; am. (4) (b) (intro. par.), Register, March, 1965, No. 111, eff. 4-1-65. emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (2), Register, March, 1979, No. 279, eff. 4-1-79; am. (4) (b) (intro.), Register, January, 1984, No. 337, eff. 2-1-84; r. (5) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; correction in (4) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; correction in (2) (c) made under s. 13.93 (2m) (b) 5., Stats., Register, June, 1997, No. 498.

Wis. Admin. Code § Ins 2.09 Separate and distinct representations of life insurance {#sec-ins-2.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.09}

(1) Purpose. The interests of policyholders and purchasers of life insurance which is sold in connection with any security must be safeguarded by providing them with clear and unambiguous written proposals and statements in which all material relating to life insurance is set forth separately from any other material. This rule implements and interprets s. 628.34, Stats., by establishing minimum standards for the form of proposals and statements used to solicit, service, or collect premiums for life insurance which is sold in connection with a mutual fund or other security.

(2) Scope. This rule shall apply to the solicitation of, negotiation for, procurement of, or joint billing of any insurance specified in s. Ins 6.75 (1) (a), within this state or involving a resident of this state where it is known to the insurer or the insurance agent that the sale of any mutual fund or other security has been, may become, or is a part of any such transaction.

(3) Definitions. For the purposes of this rule:

(a) “Proposal” includes any estimate, illustration, or statement which involves a representation of any premium charge, dividends, terms, or benefits of any policy of life insurance within sub. (2).

(b) “Life insurance” includes life insurance, annuities, and endowments.

(4) Responsibility of insurer and agent. No insurer and no insurance agent shall make, in connection with any transaction within sub. (2), a proposal or billing other than in accordance with this rule. Every insurer must inform its agents involved with the solicitation of life insurance on residents of this state of the requirements of this rule.

(5) Written proposal. In any solicitation or sale within sub. (2), the prospect or policyholder must be furnished with a copy of a clear and unambiguous written proposal not later than at the time the solicitation or proposal is made.

(6) Contents of proposal. Any proposal referred to in this rule must:

(a) Be dated and signed by the insurance agent or by the insurer if no agent is involved;

(b) State the name of the company in which the life insurance is to be written;

(d) Contain no misrepresentations or false, deceptive or misleading statements;

(e) Show the premium charge for life insurance separately from any other charge;

(f) If values which may accrue prior to the death of the insured are involved in the presentation, show the value of the life insurance separately from any other values;

(g) Show, if it is involved in the presentation, the amount of the death benefit for the life insurance separately from any other benefit which may accrue upon the death of the insured;

(h) Set forth all matters pertaining to life insurance separately from any matter not pertaining to life insurance;

(i) Contain only such representations as will accurately reflect the actual conditions applicable to the proposed insured.

(7) Statements to be separate. Any bill, statement, or representation sent or delivered to any prospect or policyholder must show the premium charge for the life insurance and any other information mentioned concerning life insurance separately from any other charges or values shown in the same billing.

(8) Violation. Any violation of this rule shall be deemed to be a misrepresentation of the nature of the life insurance involved.

History

Cr. Register, October, 1963, No. 94, eff. 11-1-63; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; r. (9) under s. 13.93 (2m) (b) 16, Stats., Register, December, 1984, No. 348.

Wis. Admin. Code § Ins 2.12 Exceptions to unfair discrimination {#sec-ins-2.12 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.12}

The following practices, without being all-inclusive, shall not be considered unfairly discriminatory as considered by s. 628.34, Stats.:

(1) Issuing life insurance policies or life annuity contracts on a salary savings, salary allotment, bank draft, pre-authorized check, or payroll deduction plan or other similar plan at a reduced rate or with special underwriting considerations reasonably related to the savings made by use of such plan.

(2) Issuing life insurance policies or annuity contracts at premiums determined by rating plans which provide for modification of premiums based on the amount of insurance; but any such rating plans shall not result in reduction in premiums in excess of the savings reasonably related to the savings made by use of the plan. All cost factors must be given proper recognition in order to preserve equity between various classes of policyholders.

(3) Issuing so-called “family plan’ life insurance policies which include insured, spouse, and their children with the premium calculated on the basis of the family unit. The rating plan must give recognition to all cost factors in order to preserve equity between various classes of policyholders.

(4) Issuing policies under the authority of s. Ins 6.75 (1) (a), with the premium calculated on the basis of the average age of those insured or calculated in some other manner which is appropriate for the coverage offered, provided that the rate must be reasonably related to the coverage provided and to the savings made by use of the rating procedure.

(5) Issuing life insurance policies or life annuity contracts at special rates or with special underwriting considerations, reasonably related to the savings made, in connection with:

(a) Employee benefit trusts or plans conforming to the requirements of s. 815.18 (3) (j), Stats.

(b) Plans used to fund retirement benefits under the Federal Self-Employed Individuals Tax Retirement Act of 1962.

(c) Plans used to fund retirement benefits for employees of certain organizations exempt from Federal income tax and public schools (so-called tax sheltered annuity plans).

History

Cr. Register, May, 1964, No. 101, eff. 6-1-64; emerg. am. (intro.), (4) and (5) (d), eff. 6-22-76; am. (intro.), (4) and (5) (d), Register, September, 1976, No. 249, eff. 10-1-76; am. (4) and (5) (a), Register, March, 1979, No. 279, eff. 4-1-79; r. (5) (d), Register, June, 1982, No. 318, eff. 7-1-82; reprinted to correct error in (5), Register, August, 1982, No. 320; correction in (5) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 2.13 Separate accounts and variable contracts {#sec-ins-2.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.13}

(1) Purpose. This section creates standards for establishing separate accounts and for issuing contracts on a variable basis, both as provided by ss. 611.25 and 632.45 (1), Stats.

(2) Definitions. In this section:

(a) “Agent” means a person who sells or offers to sell any contract on a variable basis.

(b) “Contract on a variable basis” or “variable contract”means a policy or contract which provides for insurance or annuity benefits which may vary according to the investment experience of any separate account maintained by the insurer as to the policy or contract, as provided for in s. 632.45 (1), Stats., including contracts defined in pars. (e) and (f).

(d) “Issue” means to issue for delivery or deliver.

(e) “Modified guaranteed annuity” means a deferred annuity contract, the underlying assets of which are held in a separate account and the values of which are guaranteed if held for specified periods, containing nonforfeiture values based on a market-value adjustment formula if held for shorter periods, which formula may or may not reflect the value of assets held in the separate account.

(f) “Modified guaranteed life insurance policy” means an individual policy of life insurance, the underlying assets of which are held in a separate account and the values of which are guaranteed if held for specified periods, containing nonforfeiture values based on a market-value adjustment formula if held for shorter periods, which formula may or may not reflect the value of assets held in the separate account.

(g) “Policy processing day” means the day on which charges authorized in the policy are deducted from the policy’s cash value.

(3) Qualification of insurer to issue variable contracts.

(a) No insurer may issue variable contracts in this state unless:

It is licensed or organized to do a life insurance or annuity business in this state; and
The commissioner is satisfied that its condition or method of operation in connection with the issuance of variable contracts will not render its operation hazardous to the public or its policyholders in this state. In determining the qualification of an insurer requesting authority to issue variable contracts in this state, the commissioner shall consider among other things:

a. The history and financial condition of the insurer;

b. The character, responsibility and fitness of the officers and directors of the insurer; and

c. The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts.

(b) If the insurer is a subsidiary of an admitted life insurance company, or affiliated with an admitted life insurance company by common management or ownership, the commissioner may deem it to have satisfied par. (a) 2. if either it or the admitted life insurance company satisfies the provisions of par. (a) 2. The commissioner may deem any licensed insurer which has a satisfactory record of doing business in this state for a period of at least 3 years to have satisfied the provisions of par. (a) 2.

A general description of the kinds of variable contracts it intends to issue;
If requested by the commissioner, a copy of the statutes and regulations of its state of domicile under which it is authorized to issue variable contracts; and
If requested by the commissioner, biographical data with respect to its officers and directors.

(4) Separate accounts.

(a) A domestic insurer issuing variable contracts shall establish one or more separate accounts pursuant to s. 611.25, Stats., subject to the following provisions:

Except as provided in this subsection, an insurer may invest and reinvest amounts allocated to and accumulating in any separate account without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies. This subdivision applies only if the insurer maintains in any separate account its reserve liability with regard to benefits guaranteed as to amount and duration and funds guaranteed as to principal or rate of interest, and a portion of the assets of the separate account at least equal to the reserve liability, or another amount approved by the commissioner, is invested in accordance with the laws of this state governing the investments of life insurance companies. No investments in a separate account may be taken into account in applying the investment limitations applicable to the investments of the insurer.
With respect to 75% of the market value of the total assets in a separate account, no insurer may purchase or otherwise acquire the securities of any issuer, other than securities issued or guaranteed as to principal or interest by the United States if, immediately after the purchase or acquisition, the market value of the investment, together with prior investments of the separate account in the security taken at market, would exceed 10% of the market value of the assets of the separate account. The commissioner may waive this limitation if he or she believes that the waiver will not render the operation of the separate account hazardous to the public or the insurer’s policyholders in this state.
No insurer may, either for its separate accounts or otherwise, invest in the voting securities of a single issuer in an amount exceeding 10% of the total issued and outstanding voting securities of the issuer. This limitation does not apply with respect to securities held in separate accounts, the voting rights in which are exercisable only in accordance with instructions from persons having interests in the accounts.
The limitations provided in subds. 2. and 3. do not apply to the investment with respect to a separate amount in the securities of an investment company registered under the investment company act of 1940, 29 USC 80a-1 to 80a-64, as amended, if the investments of the investment company comply in substance with subds. 2. and 3.

(b) Unless otherwise approved by the commissioner, an insurer shall value assets allocated to a separate account at their market value on the date of valuation, or if there is no readily available market, then as provided under the terms of the contract or the rules or other written agreement applicable to the separate account, except that the insurer shall value the portion of the assets of the separate account equal to the insurer’s reserve liability with regard to the benefits and funds described in par. (a) 1., if any, in accordance with the rules otherwise applicable to the insurer’s assets.

(c) To the extent provided under any applicable contract, no portion of the assets of any separate account established under this subsection equal to the reserves and other applicable contract liabilities of the account are chargeable with liabilities arising out of any other business the insurer may conduct.

(d) Notwithstanding any other provision of law, an insurer may:

With respect to any separate account registered with the securities and exchange commission as a unit investment trust, exercise voting rights in connection with any securities of a regulated investment company registered under the investment company act of 1940, 15 USC 80a-1 to 80a-64, as amended, which are held in separate accounts in accordance with instructions from persons having interests in the accounts ratably as determined by the insurer; or

a. With respect to any separate account registered with the securities and exchange commission as a management investment company, establish for the account a committee, board or other body, the members of which may or may not be otherwise affiliated with the insurer and may be elected to membership by the vote of persons having interests in the account ratably as determined by the insurer.

b. A committee, board or other body established under subd. 2. a. may, alone or in conjunction with others, manage the separate account and the investment of its assets.

c. An insurer or a committee, board or other body established under subd. 2. a. may make other provisions for any separate account established under this subsection in order to facilitate compliance with federal or state law, if the commissioner approves the provisions as not hazardous to the public or the insurer’s policyholders in this state.

(e)

An insurer may not transfer assets between any of its separate accounts or between any other investment account and a separate account except that an insurer may transfer assets into a separate account solely to establish the account or to support the operation of the contracts with respect to the separate account to which the transfer is made.
An insurer may transfer assets under subd. 1. only as follows:

a. By a transfer of cash; or

b. By a transfer of securities having a readily determined market value, if the transfer is approved by the commissioner.

Notwithstanding subd. 2., the commissioner may authorize other transfers among accounts if he or she believes that the transfers would not be inequitable.

(f) The insurer shall maintain in each separate account established under this subsection assets with a value at least equal to the reserves and other contract liabilities with respect to the account, except as otherwise approved by the commissioner.

(g) Section 611.60, Stats., applies to the members of any separate account’s committee, board or other body established under par. (d) 2. a. No officer or director of the insurer nor any member of a committee, board or body of a separate account may receive directly or indirectly any commission or any other compensation with respect to the purchase or sale of assets of the separate account.

(5) Filing of contract forms.

(a) No variable contract may be issued in this state until the commissioner has approved the form or until the form and rates have been filed with the commissioner for 30 days.

(b) The filing letter shall be in duplicate and shall contain the following information:

An identifying form number and title for each form submitted.
A general description of each form.
A listing of the types of policies to which rider or endorsement forms will be attached.
The form number and date of approval by the commissioner of any form to be superseded.

(c) One copy of all forms or rates submitted or approval shall be submitted with a copy of the application attached if the application is to be a part of the contract. If the application was previously approved, the form number and date of approval will suffice.

(d) Each form shall include hypothetical data showing its use, a correct table of values and an explanation of all variable information.

(e) Each filing shall include an actuarial statement of methods used to calculate values in the contract.

(6) Variable benefits.

(a) Any variable contract issued in this state shall contain a statement of the essential features of the procedures to be followed by the insurer in determining the amount of the variable benefits. Each variable contract, including a group contract and any certificate issued under a group contract, shall state that the amount of benefits will vary to reflect investment experience and shall contain on its first page, in a prominent position, a clear statement that the benefits under the contract are on a variable basis and the location in the contract of the details of the variable provisions.

(b) No illustration of benefits payable under any variable contract may include a projection of past investment experience into the future or a prediction of future investment experience. This paragraph does not prohibit the use of hypothetical assumed rates of return to illustrate possible levels of benefits.

(c) No insurer may issue an individual variable annuity contract calling for periodic stipulated payments in this state unless the contract contains in substance all of the following provisions or provisions which in the opinion of the commissioner are more favorable to the holder of the contract:

A grace period of 30 days or one month within which the holder may make any stipulated payment, other than the first payment, due the insurer. During the grace period the contract shall continue in force. The contract may include a statement of the basis on which the insurer determines the date that it will apply any stipulated payment received during the grace period to produce the values under the contract arising from the application of the payment.
A right to reinstatement of the contract at any time within 3 years from the date of default in making periodic stipulated payments to the insurer during the life of the annuitant, upon payment to the insurer of the overdue payments as required by the contract, and of all indebtedness, including interest, on the contract. The right to reinstatement does not apply if the insurer has paid the cash surrender value of the contract. The contract may include a statement of the basis on which the insurer determines the date that it will apply the amount to cover the overdue payments and indebtedness to produce the values under the contract arising from the application of the payment.
The options available in the event of default in a periodic stipulated payment. The options may include an option to surrender the contract for a cash value as determined by the contract, and shall include an option to receive a paid-up annuity if the contract is not surrendered for cash. The amount of the paid-up annuity shall be determined by applying the value of the contract at the annuity commencement date in accordance with the terms of the contract.

(d) Any individual variable annuity contract issued in this state shall stipulate the expense, mortality and investment increment factors to be used in computing the amount of variable benefits or other contractual payments or values, and may guarantee that no expense or mortality results, or both, will adversely affect the amount of benefits. The expense factors may exclude some or all taxes, as stipulated in the contract. In computing the amount of variable benefits or other contractual payments or values under an individual variable annuity contract:

No annual net investment increment assumption may exceed 5%, except with the approval of the commissioner; and
To the extent that the level of benefits may be affected by mortality results, the insurer shall determine the mortality factor from the 1983 Table ‘a’, as defined in s. Ins 2.30 (2) (b), or any modification of that table not having a higher mortality rate at any age.

(e) The insurer shall establish the reserve liability for variable annuities under s. 623.06, Stats., in accordance with actuarial procedures that recognize the variable nature of the benefits provided.

(7) Modified guaranteed life insurance.

(a) An insurer that issues modified guaranteed life insurance policies in this state shall comply with all of the following requirements:

The insurer shall bear mortality and expense risks. The mortality and expense charges shall be subject to the maximum stated in the contract.
For scheduled premium policies, the insurer shall provide a minimum death benefit in an amount at least equal to the initial face amount of the policy as long as premiums are paid, subject to par. (d) 2.
The insurer shall determine the cash value of each policy at least monthly. Each policy shall describe the method of computing cash values and other nonforfeiture benefits and shall state the market-value adjustment formula the insurer uses to determine nonforfeiture benefits. The formula shall apply to both upward and downward adjustments.
With the form filing under s. 631.20, Stats., the insurer shall submit an actuarial statement of the basis for the market-value adjustment formula which states that the formula provides reasonable equity to both the policyholder and the insurer. The form filing shall demonstrate that, if the interest credits at all times during which the policy is in effect equal those guaranteed in the policy, with premiums and benefits determined under the terms of the policy, then, ignoring any market-value adjustment, the resulting cash values and other nonforfeiture benefits shall be at least equal to the minimum values required by s. 632.43, Stats., for a fixed benefit general account policy with the same premiums and benefits.
Guaranteed interest credits in each year for any period of time for which interest credits are guaranteed shall be reasonably related to the average guaranteed interest credits over that period of time.
At the end of any specified guarantee period, the policyholder may select a new guarantee period of not more than 5 years or until the end of the coverage period, whichever is shorter.

(b) Each modified guaranteed life insurance policy form filed for approval shall contain all of the following:

A cover page, or pages corresponding to a cover page, which shall include all of the following:

a. A prominent statement that cash values may increase or decrease in accordance with the market-value adjustment formula.

b. A captioned notice that the policyholder may return the policy within 10 days of its receipt, and receive a refund equal to the sum of (i) the difference between premiums paid, including policy fees and other charges, and the amounts allocated to any separate accounts under the policy, and (ii) the value of the amounts allocated to any separate accounts under the policy, on the date the insurer or its agent receives the returned policy, as determined by the market-value adjustment formula.

c. Any other item required by statute or administrative rule for fixed benefit life insurance policies which is not inconsistent with this section.

If settlement options are provided, a provision that at least one of the options shall be provided on a fixed basis only.
A description of the basis for computing the cash value and the surrender value under the policy.
A separate statement of premiums or charges for incidental insurance benefits.
Any other policy provision required by this section.
Any other item required by statute or administrative rule for fixed benefit life insurance policies which is not inconsistent with this section.
A provision for nonforfeiture insurance benefits. The insurer may establish a reasonable minimum cash value below which any nonforfeiture insurance options will not be available.

(c) Each modified guaranteed life insurance policy issued in this state shall provide that the policyholder may borrow at least 75% of the policy’s cash surrender value after the policy has been in force for at least 3 years unless the policy includes a policy loan provision that is no less favorable to the policyholder. Each policy loan provision shall provide all of the following:

The amount borrowed shall bear interest as provided under s. 632.475, Stats.
The insurer shall deduct any indebtedness from the proceeds payable on death.
The insurer shall deduct any indebtedness from the cash surrender value upon surrender or in determining any nonforfeiture benefit.
For scheduled premium policies, whenever the indebtedness exceeds the cash surrender value, the insurer shall give notice of any intent to cancel the policy if the excess indebtedness is not repaid within 31 days after the date the notice is mailed. For flexible premium policies, whenever the total charges authorized by the policy that are necessary to keep the policy in force until the next policy processing day exceed the amount available under the policy to pay those charges, the insurer shall mail the policyholder a report containing the information specified in par. (g) 2.
If the policy specifies a minimum amount which may be borrowed, the minimum may not apply to any automatic premium loan provision.
The policy loan provision does not apply if the policy is under an extended insurance nonforfeiture option.
A policyholder who has not exercised the policy loan provision may not be disadvantaged by exercising it.
Upon the exercise of any policy loan provision, the insurer shall withdraw from the separate account the amount paid to the policyholder and shall return that amount to the separate account upon repayment, except that a stock insurer may provide the amount for a policy loan from the general account.

(d) A modified guaranteed life insurance policy or related form issued in this state may, in substance, include one or more of the following provisions:

An exclusion for suicide within 2 years after the date the policy takes effect, except that, if the policy includes an increased death benefit as a result of the policyholder’s application after the date the policy takes effect, the exclusion applies only to the amount of the increased benefit.
Incidental insurance benefits on a fixed or variable basis.
If the policy is issued on a participating basis, an offer to pay dividends in cash and other dividend options.
A provision allowing a policyholder to elect in writing, either in the application or after issuance of the policy, an automatic premium loan on a basis not less favorable than the requirements under par. (c), except that the insurer may restrict this provision to the payment of not more than 2 consecutive premiums.
A provision allowing the policyholder to make partial withdrawals.
Any other policy provision approved by the commissioner.

(e)

An insurer issuing any modified guaranteed life insurance policy in this state shall, before or at the time the application is taken, deliver to the applicant and obtain from the applicant a written acknowledgment of receipt of all of the following information:

a. A non-technical summary of the principal features of the policy, including a description of the manner in which the nonforfeiture benefits will be affected by the market-value adjustment formula and the factors which affect the variation. The summary shall include the notice required by par. (b) 1. b.

b. A summary of the federal income tax aspects of the policy applicable to the insured, the policyholder and the beneficiary.

c. Illustrations, prepared by the insurer, of benefits payable under the policy. No illustration may include a projection of past investment experience into the future or a prediction of future investment experience. This subparagraph does not prohibit the use of hypothetical assumed rates of return to illustrate possible levels of benefits if the insurer makes it clear that such assumed rates are hypothetical only.

An insurer may satisfy the requirements of subd. 1. by delivering to the policyholder a disclosure containing the information required by subd. 1., either in the form of a prospectus which is part of an effective registration statement under the securities act of 1933, 15 USC 77a to 77aa or, if the policies are exempt from the registration requirements of the securities act of 1933, all information and reports required by the federal employee retirement income security act of 1974, 29 USC 1001 to 1461.

(f) The application for a modified guaranteed life insurance policy shall contain all of the following:

Immediately before the signature line, a statement that amounts payable under the policy are subject to a market-value adjustment before a date or dates specified in the policy.
A request for information which will enable the insurer to determine the suitability of modified guaranteed life insurance for the applicant.

(g)

In this paragraph, “unadjusted cash value” means the cash value before applying any surrender charge or market-value adjustment formula.
An insurer shall mail to each holder of a modified guaranteed life insurance policy, at his or her last known address, an annual report showing the unadjusted cash value, the cash surrender value, death benefit, any partial withdrawal or policy loan, any interest charge and any optional payments allowed under the policy. The report shall also specify the surrender charge and market-value adjustment formula used to determine the cash surrender value. Each report shall state that the cash values may increase or decrease in accordance with the market-value adjustment formula. The report shall prominently identify any stated value that may be recomputed before the next annual report.
For flexible premium policies, if the unadjusted cash value and cash surrender value are different, the annual report shall contain a reconciliation of these values based on payments made less deductions for expense charges, withdrawals, investment experience, insurance charges and any other charges made against the cash value. The annual report shall also show the projected unadjusted cash value and cash surrender value, if different, as of one year from the end of the period covered by the report assuming all of the following:

a. Planned periodic premiums, if any, are paid as scheduled.

b. Guaranteed costs of insurance are deducted.

c. Interest is credited at the guaranteed rate or, in the absence of a guaranteed rate, at a rate not greater than zero. If the projected unadjusted cash value is less than zero, the report shall include a warning stating that the policy may be in danger of terminating without value in the next 12 months unless additional premium is paid.

The insurer shall mail each annual report within 30 days after one of the following dates:

a. The policy anniversary date, in which case the amounts reported shall be computed as of the policy anniversary date.

b. Another date specified in the policy, in which case the amounts reported shall be computed as of a date no earlier than 60 days before the mailing date.

(h) For flexible premium policies, the insurer shall also send a report to the policyholder whenever the amount available under the policy on any policy processing day to pay the charges authorized by the policy are less than the amount necessary to keep the policy in force until the next policy processing day. The report shall state the minimum payment required under the terms of the policy to keep it in force and the length of the grace period for payment.

(8) Modified guaranteed annuities.

(a) Each insurer issuing modified guaranteed annuities in this state shall provide each contract holder with an annual report showing both the account value and the cash surrender value. The report shall clearly state that the account value does not include the application of any surrender charge or market-value adjustment formula. The annual report shall also specify the surrender charge and market-value adjustment formula used to determine the cash surrender value.

(b)

Each modified guaranteed annuity contract issued in this state shall describe the essential features of the procedures the insurer uses in determining the amount of nonforfeiture benefits.
No insurer may issue in this state a modified guaranteed annuity contract calling for periodic stipulated payments unless it contains in substance all of the following provisions:

a. A grace period of 30 days or one month within which the policyholder may make any stipulated payment, other than the first payment, due the insurer. During the grace period the contract shall continue in force. The contract may include a statement of the basis on which the insurer determines the date that it will apply any stipulated payment received during the grace period to produce the values under the contract arising from the application of the payment.

b. A right to reinstatement of the contract at any time within one year from the date of default in making periodic stipulated payments to the insurer during the life of the annuitant, upon payment to the insurer of the overdue payments as required by the contract, and of all indebtedness, including interest, on the contract. The right to reinstatement does not apply if the insurer has paid the cash surrender value of the contract. The contract may include a statement of the basis on which the insurer determines the date that it will apply the amount to cover the overdue payments and indebtedness to produce the values under the contract arising from the application of the payment.

Each modified guaranteed annuity contract shall state the market-value adjustment formula the insurer uses to determine nonforfeiture benefits. The formula shall apply to both upward and downward adjustments. With each policy form filed under s. 631.20, Stats., the insurer shall submit an actuarial statement of the basis for the market-value adjustment formula which states that the formula provides reasonable equity to both the contract holder and the insurer.
Unless provided under any applicable contract, the portion of the assets of any separate account equal to the reserves and other applicable contract liabilities of the account are not chargeable with liabilities arising out of any other business of the insurer.

(c)

Subdivisions 2. to 10. do not apply to any of the following:

a. Reinsurance.

b. A group annuity contract purchased in connection with a retirement plan or deferred compensation plan established or maintained by or for one or more employers, including partnerships, sole proprietorships, employee organizations or any combination thereof, other than plans providing individual retirement accounts or individual retirement annuities under 26 USC 408, as amended.

c. A premium deposit fund.

d. An investment annuity.

e. An immediate annuity.

f. A deferred annuity contract after annuity payments have commenced.

g. A reversionary annuity.

h. A contract which will be issued outside this state through an agent or other representative of the insurer.

No insurer may issue a modified guaranteed annuity contract in this state unless it contains in substance all of the following provisions:

a. A plan that complies with subd. 4. for granting a paid-up annuity benefit upon cessation of payment of considerations under the contract. The contract shall describe the plan and shall include a statement of the mortality table, if any, and guaranteed or assumed interest rates used in calculating annuity payments.

b. If the contract provides for a lump sum settlement at maturity or at any other time, a provision for the payment of a cash surrender benefit that complies with subd. 5. instead of a paid-up annuity benefit, upon surrender of the contract at or before the commencement of annuity payments. The contract shall describe the cash surrender benefit and may provide that the insurer may defer payment of the cash surrender benefit for a period of 6 months after demand.

In establishing the minimum value of a paid-up annuity, cash surrender or death benefit available under a modified guaranteed annuity contract, the insurer shall base the value on nonforfeiture amounts meeting the requirements of this subdivision and subd. 4. The unadjusted minimum nonforfeiture amount on any date before the annuity commencement date shall equal the percentages of net considerations, as specified in subd. 4., increased by the interest credits allocated to the percentage of net considerations. The insurer shall reduce this amount to reflect the effect of all of the following:

a. Any partial withdrawals from or partial surrender of the contract.

b. The amount of any indebtedness on the contract, including interest due and accrued.

c. An annual contract charge which shall equal the lesser of $30 or 2% of the end-of-year contract value less the amount of any annual contract charge deducted from any gross considerations credited to the contract during the contract years. The contract charge may not be less than $0.00.

d. A transaction charge of $10 for each transfer to another investment division with the same contract.

For purposes of subd. 3.:

a. Guaranteed interest credits in each year for any period of time for which interest credits are guaranteed shall be reasonably related to the average guaranteed interest credits over that period of time.

b. The minimum nonforfeiture amount shall be the unadjusted minimum nonforfeiture amount adjusted by the market-value adjustment formula contained in the contract.

c. The annual contract charge of $30 and the transaction charge of $10 shall be adjusted to reflect changes in the consumer price index as provided in subd. 5. c.

The percentages of net considerations used to define the minimum nonforfeiture amount under subd. 3. shall meet all of the following requirements:

a. If the contract provides for periodic considerations, the net considerations for a given contract year used to define the minimum nonforfeiture amount shall not be less than $0.00 and shall equal the corresponding gross considerations credited to the contract during that contract year less an annual contract charge of $30 and less a collection charge of $1.25 per consideration credited to the contract during that contract year and less any charge for premium taxes. The percentages of net considerations shall be 65% for the first contract year and 871⁄2% for the 2nd and subsequent contract years except that the percentage shall be 65% of the portion of the total net consideration for any renewal contract year which exceeds, by not more than 2 times, the sum of those portions of the net considerations in all prior contract years for which the percentage was 65%.

b. With respect to contracts providing for a single consideration, the net consideration used to define the minimum nonforfeiture amount shall be the gross consideration less a contract charge of $75 and less any charge for premium taxes. The percentage of the net consideration shall be 90%.

c. The annual contract charge of $30 and the collection charge of $1.25 under subd. 5. a. and the single consideration contract charge of $75 under subd. 5. b., shall be adjusted annually to reflect changes in the consumer price index by multiplying each charge by the ratio of the consumer price index for June of the year preceding the date of filing to the consumer price index for June, 1979. “Consumer price index” means the index for all urban consumers for all items as published by the bureau of labor statistics of the United States department of labor or any successor agency. If publication of the consumer price index ceases, or if the index otherwise becomes unavailable or is altered so as to be unusable for purposes of this paragraph, the commissioner may substitute another suitable index.

An insurer shall use any paid-up annuity benefit available under a modified guaranteed annuity contract that has a present value on the annuity commencement date that is at least equal to the minimum nonforfeiture amount on the date. The insurer shall compute the present value using the mortality table, if any, and the guaranteed or assumed interest rates used in calculating the annuity payments.
For modified guaranteed annuity contracts which provide cash surrender benefits, the cash surrender benefit at any time before the annuity commencement date shall be equal to or greater than the minimum nonforfeiture amount next computed after the insurer receives a request for surrender. The death benefit under the contract shall be at least equal to the cash surrender benefit.
Any modified guaranteed annuity contract which does not provide either a cash surrender benefit or a death benefit at least equal to the minimum nonforfeiture amount before the annuity commencement date shall include, in a prominent place in the contract, a statement that these benefits are not provided.
Notwithstanding any other requirement of this paragraph, a modified guaranteed annuity contract may provide that the insurer, at its option, may cancel the annuity and pay the contract holder the larger of the unadjusted minimum nonforfeiture amount or the minimum nonforfeiture amount, and that the payment shall release the insurer from any further obligation under the contract. This option shall apply only under one of the following conditions:

a. At the time the annuity becomes payable, the larger of the unadjusted minimum nonforfeiture amount or the minimum nonforfeiture amount is less than $2,000, or would provide an income the initial amount of which is less than $20 per month.

b. Before the annuity becomes payable under a periodic payment contract, the insurer has not received any considerations under the contract for a period of 2 years and the total consideration paid before the 2-year period, reduced to reflect any partial withdrawals from or partial surrenders of the contract, plus the larger of the unadjusted minimum nonforfeiture amount or the minimum nonforfeiture amount is less than $2,000.

For any modified guaranteed annuity contract which provides in the same contract, by rider or supplemental contract provision, both annuity benefits and life insurance benefits that exceed the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall equal the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the insurance portion computed as if each portion were a separate contract. Notwithstanding subd. 2., in determining the minimum nonforfeiture amounts and paid-up annuity, cash surrender and death benefits required by this paragraph, the insurer shall disregard additional benefits payable in the event of the total and permanent disability of the contract holder, as reversionary annuity or deferred reversionary annuity benefits or as other policy benefits additional to life insurance, endowment and annuity benefits and considerations for all such additional benefits. The inclusion of such additional benefits is not required in any paid-up benefits unless the additional benefits would, if provided separately, require minimum nonforfeiture amounts and paid-up annuity, cash surrender and death benefits.

(d) The application for a modified guaranteed annuity shall contain, immediately before the signature line, a prominent statement that amounts payable under the contract are subject to a market-value adjustment before a date or dates specified in the contract.

(9) Provisions applicable to modified guaranteed life insurance and annuities.

(a) Before any insurer issues any modified guaranteed life insurance policy or modified guaranteed annuity contract in this state, the commissioner may require the insurer to file a copy of any prospectus or other sales material to be used in connection with the marketing of the modified guaranteed life insurance policy or modified guaranteed annuity contract. The sales material shall clearly illustrate that there can be both upward and downward adjustments due to the application of the market-value adjustment formula in determining nonforfeiture benefits.

(b) An insurer issuing a modified guaranteed life insurance policy or a modified guaranteed annuity in this state shall submit to the commissioner all of the following:

A separate account annual statement which shall include the business of these policies or contracts.
Any additional information required by the commissioner.

(c) The commissioner may disapprove any material required to be filed if the commissioner finds that the material does not comply with this section.

(d) The statutes and administrative rules governing individual life insurance and individual annuity form filings also apply to modified guaranteed life insurance policies and modified guaranteed annuity contracts. Each filing shall demonstrate in a form satisfactory to the commissioner that the nonforfeiture provisions of the policy or contract comply with this section.

(e)

An insurer shall establish reserve liabilities in accordance with actuarial procedures that recognize all of the following:

a. The market-value basis of the assets of the separate account.

b. The variable nature of the benefits provided.

c. Any mortality guarantees.

The separate account liability shall equal the surrender value based on the market-value adjustment formula contained in the modified guaranteed life insurance policy or modified guaranteed annuity contract. If that liability is greater than the market value of the assets, the insurer shall transfer assets into the separate account so that the market value of the assets at least equals that of the liabilities. The insurer shall establish any additional reserve that is needed to cover future guaranteed benefits.
An insurer shall consider the market-value adjustment formula, the interest guarantees and the degree to which projected cash flow of assets and liabilities are matched. The statement of actuarial opinion accompanying each annual statement shall include an opinion on whether the assets in the separate account are adequate to provide all future guaranteed benefits.
An insurer shall maintain in the general account reserve liabilities for all fixed incidental insurance benefits and any guarantees associated with variable incidental insurance benefits.

(10) Required reports.

(a) Each insurer issuing individual variable contracts shall mail to each contractholder, at least once in each contract year after the first, at his or her last address known to the insurer, a statement reporting the investments held in the separate account and, in the case of contracts under which payments have not yet commenced, a statement reporting either of the following as of a date not more than 4 months before the date of mailing:

The number of accumulation units credited to the contract and the dollar value of a unit.
The value of the contractholder’s account.

(b) The insurer shall submit annually to the commissioner a statement of the business of each of its separate accounts in the form as required by the annual statement form designated as Life and Accident and Health Association Edition-Variable Life Insurance Separate Account.

(11) Foreign companies. If the law or regulation in the place of domicile of a foreign insurer provides protection to the policyholders and the public which is substantially equal to that provided by this section, the commissioner, to the extent he or she considers appropriate, may consider compliance with that law or regulation as compliance with this section.

(12) Agent qualifications. Prior to April 1, 2010, any person selling or offering for sale a variable contract shall have a valid license under s. Ins 6.59 (4) (an) authorizing the solicitation of variable life insurance and variable annuity products as defined in s. Ins 6.50 (2) (a) 6. or a valid license under s. Ins 6.59, authorizing the solicitation of life insurance as listed in s. Ins 6.50 (2) (a), and shall provide verification of required registration by the Financial Industry Regulatory Authority (FINRA) registered for Series 6 or Series 7.

(a) General Securities Registered Representation Examination.

(b) Investment Company Products/Variable Contracts Limited Representative Qualification Examination.

(d) General Securities Principal Qualification.

(e) Investment Company Products/Variable Contracts Limited Principal Qualification Examination.

(12m) Agent qualifications. On or after April 1, 2010, any person selling or offering for sale a variable contract shall have a valid license under s. Ins 6.59 (4) (an), authorizing the solicitation of variable life insurance and variable annuity products as defined in s. Ins 6.50 (2) (a) 6.

(13) Nonapplicability. To the extent that any provision of sub. (7) or (8) is inconsistent with a provision of sub. (6) or (10), sub. (6) or (10) does not apply to a policy or contract described in sub. (7) or (8).

History

Cr. Register, October, 1968, No. 154, eff. 11-1-68; emerg. am. (1), (2) (a), (4) (a) and (g), eff. 6-22-76; am. (1), (2) (a), (4) (a) and (g), Register, September, 1976, No. 249, eff. 10-1-76; am. (6) (e), Register, March, 1979, No. 279, eff. 4-1-79; r. (2) (d) 5., (9) (g), to (m) and (p), am. (2) (b) to (d) (intro.), (6) (a), (9) (a) to (f), cr. (9) (g) to (i), renum. (9) (n) and (o) to be (9) (j) and (k), Register, May, 1979, No. 281, eff. 6-1-79; r. and recr. (2) and (9), Register, October, 1981, No. 310, eff. 11-1-81; am. (1), (3) (a) (intro.) and 2., (b), (c) (intro.), 2. and 3., (4) (a) to (g), (5) (a), (b) 2., (d), (e) and (6), renum. (2) (a) and (b), (7) to (9) to be (2) (b) and (a), (10) to (12) and am. (2) (a) and (b), (10) (a) (intro.) and 1., (b), (11) and (12), cr. (2) (intro.), (c) to (g), (7) to (9) and (13), Register, April, 1990, No. 412. eff. 5-1-90; CR 09-022: am. (12) (intro.), cr. (12m) Register August 2009 No. 644, eff. 9-1-09; CR 14-076: am. (6) (d) 2. Register August 2015 No. 716, eff. 9-1-15.

Wis. Admin. Code § Ins 2.14 Life insurance solicitation {#sec-ins-2.14 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.14}

(1) Purpose. The purpose of this section is to require insurers to deliver to purchasers of life insurance information which will improve the buyer’s ability to select the most appropriate plan of life insurance for the buyer’s needs, improve the buyer’s understanding of the basic features of the policy, and improve the ability of the buyer to evaluate the relative costs of similar plans of life insurance. This section does not prohibit the use of additional material which is not in violation of this section or any other Wisconsin statute or rule. This section interprets ss. 628.34 and 628.38, Stats. This section is in addition to and not a substitute for the requirements set forth in ss. Ins 2.16 and 2.17.

(2) Scope.

(a) Except as stated in par. (b), this section applies to any solicitation, negotiation, or procurement of life insurance occurring within this state. This section applies to any issuer of life insurance contracts including fraternal benefit societies and the state life Insurance fund.

(b) Unless otherwise specifically included, this section does not apply to:

Annuities.
Credit life insurance.
Group life insurance.
Life insurance policies issued in connection with pension and welfare plans as defined by and which are subject to the federal employee retirement income security act of 1974 (ERISA), 29 U.S.C. sections 1001 to 1461.
Variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account.

(3) Definitions. For the purposes of this section, the following definitions shall apply:

(a) “Cost comparison index” means a number corresponding to the cost of a policy, which can be used to compare similar policies within a company or between companies.

(b) “Equivalent level death benefit” of a policy or term life insurance rider is an amount calculated as follows:

Accumulate the guaranteed amount payable upon death, regardless of the cause of death, at the beginning of each policy year for 10 and 20 years at 5% interest compounded annually to the end of the tenth and twentieth policy years, respectively.
Divide each accumulation of subd. 1. by an interest factor that converts it into one equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in subd. 1. over the respective periods stipulated in subd. 1. If the period is 10 years, the factor is 13.207 and if the period is 20 years, the factor is 34.719.

(d) “Life insurance buyer’s guide” means the document published by the national association of insurance commissioners entitled life insurance buyer’s guide.

(e) “Net payment cost index” means a cost comparison index calculated in the same manner as the comparable surrender cost index except that the cash surrender value is set at zero.

(f) “Policy summary” means a written statement in substantially the same format for all companies and describing only the guaranteed elements of the policy including but not limited to:

A prominently placed title as follows: STATEMENT OF POLICY COST AND BENEFIT INFORMATION.
The name and address of the insurance intermediary, or, if no insurance intermediary is involved, a statement of the procedure to be followed in order to receive responses to inquiries regarding the policy summary.
The full name and home office or administrative office address of the company in which the life insurance policy is to be or has been written.
The generic name of the basic policy and each rider.
The following amounts, where applicable, for the first 20 policy years and at least one age from 60 through 65 or maturity whichever is earlier:

a. The annual premium for the basic policy.

b. The annual premium for each optional rider.

c. Guaranteed amount payable upon death, at the beginning of the policy year regardless of the cause of death other than suicide, or other specifically enumerated exclusions, which is provided by the basic policy and each optional rider, with benefits provided under the basic policy and each rider shown separately.

d. Total guaranteed cash surrender values at the end of the year with values shown separately for the basic policy and each rider.

e. Guaranteed endowment amounts payable under the policy which are not included under guaranteed cash surrender values in subd. 5. d.

The effective policy loan annual percentage interest rate, if the policy contains this provision, specifying whether this rate is applied in advance or in arrears. If the policy loan interest is variable, the policy summary shall include the maximum annual percentage rate.
The date on which the policy summary is prepared.

(g) “Surrender cost index” means a cost comparison index calculated by applying the following steps:

Determine the guaranteed cash surrender value, if any, available at the end of the tenth and twentieth policy years.
Divide the result of subd. 1. by an interest factor that converts it into an equivalent level annual amount that, if paid at the beginning of each year, would accrue to the value in subd. 1. over the respective periods stipulated in subd. 1. If the period is 10 years, the factor is 13.207 and if the period is 20 years, the factor is 34.719.
Determine the equivalent level premium by accumulating each annual premium payable for the basic policy or rider (if the annual premium includes supplemental benefits without a separate identifiable charge, a reasonable adjustment may be made) at 5% interest compounded annually to the end of the period stipulated in subd. 1. and dividing the result by the respective factors stated in subd. 2. This amount is the annual premium payable for a level premium plan.
Subtract the result of subd. 2. from subd. 3.
Divide the result of subd. 4. by the number of thousands of the equivalent level death benefit to arrive at the surrender cost index.

(4) Disclosure requirements.

(a) The insurer shall provide a policy summary upon delivery of the policy, if the policy form was identified by the insurer under s. Ins 2.17 (4) as one to be marketed without an illustration.

(b) The policy summary shall consist of a separate document. All information required to be disclosed shall be set out in a manner that does not minimize any information or make any information obscure. Any amounts which remain level for 2 or more years of the policy may be represented by a single number if it is clearly indicated what amounts are applicable for each policy year. If more than one insured is covered under one policy or rider, guaranteed death benefits shall be displayed separately for each insured or for each class of insured if death benefits do not differ within the class. Zero amounts shall be displayed as zero and shall not be displayed as a blank space.

(c) The insurer shall provide to all prospective purchasers of any policy subject to this section a copy of the latest published version of the life insurance buyer’s guide, at the time the application is taken, except that insurers which do not market policies through an intermediary may provide the life insurance buyer’s guide at the time the policy is delivered provided they guarantee to the policyholder a 30 calendar day right to return the policy for a full refund of premium.

Note: Copies of the life insurance buyer’s guide can be obtained from the National Association of Insurance Commissioners, 120 West 12th Street, Suite 1100, Kansas City, MO 64105-1925.

(d) Cost comparison indexes, if illustrated, shall be representative of guaranteed values only.

(e) The surrender cost index and the net payment cost index are the only cost comparison indexes which may be illustrated.

(f) Cost comparison indexes, if illustrated, must be shown for year 10 and year 20. Additionally, separate indexes must be displayed for the basic policy and for each optional term life insurance rider. Such indexes need not be included for optional riders which are limited to benefits such as accidental death benefits, disability waiver of premium, preliminary term life insurance coverage of less than 12 months and guaranteed insurability benefits nor for the basic policies or optional riders covering more than one life.

(g) If cost comparison indexes are illustrated, the insurer shall provide a statement regarding the use of the cost comparison indexes, including an explanation to the effect that indexes are useful only for the comparison of the relative costs of 2 or more similar policies.

(5) General requirements.

(a) Each insurer shall maintain at its home office or principal office, a complete file containing one copy of each document authorized by the insurer for use pursuant to this section. The file shall contain one copy of each authorized form for a period of 3 years following the date of its last authorized use. The requirements of this paragraph are in addition to the requirements set forth in ss. Ins 2.16 (30) and 2.17 (8) (d).

(b) An intermediary shall inform the prospective purchaser, prior to commencing a life insurance sales presentation, that the intermediary is acting as a life insurance intermediary and inform the prospective purchaser of the full name of the insurance company which the intermediary is representing to the buyer. In sales situations in which an intermediary is not involved, the insurer shall identify its full name.

(c) Terms such as financial planner, investment advisor, financial consultant, or financial counseling shall not be used in such a way as to imply that the insurance intermediary is generally engaged in an advisory business in which compensation is unrelated to sales unless such is actually the case.

(d) Any reference to policy dividends shall include a statement that dividends are not guaranteed. If dividends are illustrated, such illustration must comply with the requirements of s. Ins 2.17.

(e) Any sales presentation subject to this section shall comply with the requirements of s. Ins 2.16 (7) (b) and (c).

(f) Recommendations made by a person subject to this section concerning the purchase or replacement of any life insurance policy are subject to the requirements of s. Ins 2.16 (6);

(g) A system or presentation which does not recognize the time value of money through the use of appropriate interest adjustments shall not be used for comparing the cost of 2 or more life insurance policies.

(h) Except for an illustration as defined in s. Ins 2.17 (3) (i) no presentation of benefits may display guaranteed and nonguaranteed benefits as a single sum unless the guaranteed benefits are shown separately in close proximity and with equal prominence. The requirements of this paragraph are in addition to the requirements set forth in s. Ins 2.16 (21).

(i) For the purposes of this section, the annual premium for a basic policy or rider, for which the company reserves the right to change the premium, shall be the maximum annual premium.

(6) Unusual circumstances. Insurers with unique difficulties in implementing provisions of this section may petition the commissioner for allowance to meet the requirements of the section through alternative approaches.

History

Cr. Register, March, 1972, No. 195, eff. 4-1-72; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, 1976, No. 249, eff. 10-1-76; r. and recr. Register, November, 1978, No. 275, eff. 1-1-79; am. (3) (a) and (6), r. and recr. appendices, Register, January, 1980, No. 289, eff. 2-1-80; r. (3) (a) and (f), (4) (a) and (c), Appendices 1, 2 & 3, renum. (3) (b) to (e) and (g) to be (3) (a) to (e), (4) (b), (d) and (e) to be (4) (a) to (c), Register, May, 1984, No. 341, eff. 6-1-84; r. (10) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; am. (1) and (3) (e) 1. i., cr. (4) (am) and appendix 1, Register, October, 1986, No. 370, eff. 11-1-86; am. (1), (2) (a) and (b) (intro.) and 4., (3) (intro.), (e) 1., (4) (b) and (c), (5) (a), (h) and (k), r. (3) (d) 4., (6), (8) and (9), r. and recr. (5) (e) and (f), renum. (7) to be (6) and am. Register, July, 1989, No. 403, eff. 8-1-89; correction in (3) (e) made under s. 13.93 (2m) (b) 1., Stats., Register, April, 1992, No. 436; correction in (3) (f) and (5) (b) made under s. 13.93 (2m) (b) 5. and 7., Stats., Register, June, 1997, No. 498; r. and recr. Register, March, 1998, No. 507, eff. 4-1-98; CR 14-075: cons. (4) (g) (intro.), 2., renum. to (4) (g) and am., r. (4) (g) 1. Register August 2015 No. 716, eff. 9-1-15.

Wis. Admin. Code § Ins 2.15 Annuity benefit solicitations {#sec-ins-2.15 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.15}

(1) Findings. Information on file in the office of the commissioner of insurance and submitted as Exhibit 4 at the hearing February 28, 1980 shows that some of the brochures, presentations, illustrations and other sales material which have been used by insurers and their representatives to sell annuity contracts to Wisconsin residents are confusing, misleading and incomplete, and that annuity purchasers are not receiving the information needed to make sound purchase decisions. The commissioner of insurance finds that such presentations and sales material are misleading, deceptive and restrain competition unreasonably as considered by s. 628.34 (12), Stats., and that their continued use would constitute an unfair trade practice under s. 628.34 (12), Stats., and would result in misrepresentation as defined and prohibited in s. 628.34 (1), Stats.

(2)

(a) The purpose of this section is to require insurers to deliver to prospects for deferred annuity contracts or deposit funds, riders or provisions accepted in conjunction with insurance policies or annuity contracts, information which helps the prospect select an annuity benefit appropriate to the prospect’s needs, improves the prospect’s understanding of the basic features of the plan under consideration and improves the prospect’s ability to evaluate the relative benefits of similar plans. This section does not prohibit the use of additional material which is not in violation of any other Wisconsin rule or statute. This section is in addition to and not a substitute for the requirements set forth in s. Ins 2.16.

(b) This section interprets and implements s. 628.34 (12), Stats.

(3) Scope.

(a) Except as specified in par. (b), this section shall apply to any solicitation, negotiation or procurement of annuity or deposit fund arrangements occurring within this state. This section shall apply to any issuer of life insurance policies or annuity contracts, including fraternal benefit societies.

(b) This section shall not apply to:

Non-registered variable annuities issued exclusively to an accredited investor or qualified purchaser as those terms are defined by the Securities Act of 1933 (15 U.S.C. Section 77a et seq.), the Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.), or the regulations promulgated under either of those acts, and offered for sale and sold in a transaction that is exempt from registration under the Securities Act of 1933 (15 U.S.C. Section 77a et seq.);
Transactions involving variable annuities and other registered products in compliance with Securities and Exchange Commission (SEC) rules and Financial Industry Regulatory Authority (FINRA) rules relating to disclosures and illustrations;

a. Notwithstanding subdivision 2. above, the delivery of the applicable Buyer’s Guide is required in sales of variable annuities and, when appropriate, in sales of other registered products.

b. Nothing in this subdivision will limit the Commissioner’s ability to enforce the provisions of this regulation or to require additional disclosures.

Group annuity and pure endowment contracts purchased under a retirement plan or plans of deferred compensation established or maintained by an employer (including a partnership or sole proprietorship) or by an employee organization, or both;
Immediate annuity contracts (arrangements under which payments begin within 13 months of the issue date);
Policies or contracts issued in connection with employee benefit plans as defined by 29 USC 1002 (3) of the federal employee retirement income security act of 1974 (ERISA), except policies or contracts issued in connection with plans providing for the purchase of annuity contracts solely by reason of salary reduction agreements under 26 USC 403 (b) of the internal revenue code;
Individual retirement accounts and individual retirement annuities as described in 26 USC 408 of the internal revenue code;
A single advance payment of specified premiums equal to the discounted value of such premiums;
A policyholder’s deposit account established solely to facilitate payment of regular premiums;
Settlement options under life insurance or annuity contracts.

(4) Definitions.

(a) “Contract Summary”means a written statement to be provided to the buyer at the time of contract delivery describing the elements of the annuity contract or deposit fund in the manner set out in sub. (6).

(b) “Preliminary Contract Summary” means a written statement to be provided to the buyer prior to sale which describes the elements of the annuity contract or deposit fund in the manner set out in sub. (5).

(c) “Buyer’s Guide” means one of the following buyer’s guides adopted by the National Association of Insurance Commissioners (NAIC):

With respect to sales of fixed or fixed indexed annuities, either:

a. The Buyer’s Guide for Deferred Annuities (2013); or

b. The Buyer’s Guide for Deferred Annuities Fixed (2013).

With respect to sales of variable annuities, either:

a. The Buyer’s Guide for Deferred Annuities (2013); or

b. The Buyer’s Guide for Deferred Annuities Variable (2013).

(d) “Yields” means those effective annual interest rates at which the accumulation of 100% of all gross considerations would be equal to the guaranteed and illustrated cash surrender values at the points specified. For contracts without surrender values the yields shall be figured on the basis of the contract values used to determine annuity payments at the points specified.

(5) Preliminary contract summary. The Preliminary Contract Summary shall include:

(a) A prominently placed title, PRELIMINARY CONTRACT SUMMARY, followed by an identification of the arrangement to which the statement applies;

(b) The name and address of the insurance intermediary or, if no intermediary is involved, a statement of the procedure to be followed in order to receive responses to inquiries;

(d) A statement as to whether the arrangement provides any guaranteed death benefits during the deferral period;

(e) A prominent statement that the contract does not provide cash surrender values, if such is the case;

(f) For arrangements under which guaranteed cash surrender values at any duration are less than the total scheduled considerations paid, a prominent statement that such contract or fund may result in loss if kept for only a few years;

(g) Any minimum or maximum premium limitations;

(h) A prominent description of all fees, charges, and loading amounts that are or may be deducted from initial or subsequent considerations paid or that are or may be deducted from the contract or fund values prior to or at contract maturity, including but not limited to, any surrender penalties, discontinuance fees, partial surrender or withdrawal penalties or fees, transaction fees, and account maintenance fees;

(i) In the event any sales promotion literature or oral representation illustrates values or annuity payments which are based on dividends, excess interest credits, or current annuity rates, then the Preliminary Contract Summary shall contain a statement that such dividends, excess interest credits, and current annuity purchase rates are not guaranteed and that any corresponding values and annuity amounts are illustrations only and are not guaranteed;

(j) A statement that the insurer shall provide the prospective customer a Contract Summary upon request.

(6) Contract summary. The Contract Summary shall include:

(a) A prominently placed title, CONTRACT SUMMARY, followed by an identification of the arrangement to which the statement applies;

(b) The name and address of the insurance intermediary or, if no intermediary is involved, a statement of the procedure to be followed in order to receive responses to inquiries;

(d) Any guaranteed death benefits during the deferral period, and the form of annuity payment selected for pars. (f), (g) and (i);

(e) A prominent statement that the contract does not provide cash surrender values if such is the case;

(f) The amount of the guaranteed annuity payments at the scheduled commencement thereof, based on the assumption that all scheduled considerations are paid and there are no prior withdrawals from or partial surrenders of the arrangement and no indebtedness to the insurer on the contract;

(g) Illustrative annuity payments on a current basis, if shown, must be on the same basis as for par. (f) except for guarantees, and may not be greater in amount than those based on:

The current dividend scale and the interest rate currently used to accumulate dividends under such arrangements, or the current excess interest rate credited by the insurer, and
Current annuity purchase rates;

(h) For arrangements under which guaranteed cash surrender values at any duration are less than the total considerations paid, a prominent statement that such contract or fund may result in loss if kept for only a few years and showing the number of years such a relationship exists, together with a reference to the schedule of guaranteed cash surrender values required by par. (i) 3.;

(i) The following amounts, where applicable, for the first 5 years and representative years thereafter sufficient to illustrate clearly the patterns of considerations and benefits, including but not limited to the tenth and twentieth contract years and at least one age from 60 through 65 or the scheduled commencement of annuity payments:

The gross consideration for the arrangement;
Any minimum or maximum premium limitation;
The total guaranteed cash surrender value at the end of the year or, if no guaranteed cash surrender values are provided, the total guaranteed paid-up annuity at the end of the year;
If other than guaranteed cash values are shown, the total illustrative cash value or paid-up annuity at the end of the year may not be greater in amount than that based on:

a. The current dividend scale and the interest rate currently used to accumulate dividends under such arrangements or the current excess interest rate credited by the insurer, and

b. Current annuity purchase rates.

(im) If the annuity payments have not yet commenced, the yield on gross considerations at the end of 10 years and at the scheduled commencement of annuity payments. For contracts without surrender values, only the yield at the scheduled commencement of annuity payments need be shown. The yield shall be figured on the basis of the contract value used to determine the annuity payments. These yield figures shall be shown on a guaranteed basis and, if current annuity payments or cash surrender values are shown, on an illustrative basis also.

(in) A statement of the interest rates used in calculating the guaranteed and illustrative contract or fund values.

(j) For a Contract Summary which includes values based on the current dividend scale or the current dividend accumulation or excess interest rate, a statement that such values are illustrations and are not guaranteed;

(k) The date on which the Contract Summary is prepared.

(7) Preparation of preliminary contract summary and contract summary. The following must be considered in preparing the Preliminary Contract Summary and the Contract Summary:

(a) The Preliminary Contract Summary and the Contract Summary must be separate documents;

(b) All information required to be disclosed must be set out in such a manner as not to minimize or render any portion thereof obscure;

(c) Any amounts which remain level for 2 years or more contract years may be represented by a single number if it is clearly indicated what amounts are applicable for each contract year;

(d) Amounts in sub. (6) (d), (f), (g) and (i) shall, in the case of flexible premium annuity arrangements, be determined either according to an anticipated pattern of consideration payments or on the assumption that considerations payable will be a specified level amount, such as $100 or $1,000 per year;

(e) If not specified in the contract, annuity payments shall be assumed to commence at age 65 or 10 years from issue, whichever is later;

(f) A dividend scale or excess interest rate which has been publicly declared by the insurer with an effective date not more than two months subsequent to the date of declaration shall be considered a current dividend scale or a current excess interest rate.

(8) Disclosure requirements.

(a) The insurer and its intermediaries shall provide, to all prospective purchasers of any contract or arrangement subject to this section, a buyer’s guide and a properly completed Preliminary Contract Summary or Contract Summary prior to accepting the applicant’s initial consideration for the annuity contract, or, in the case of a rider or provision, prior to acceptance of the applicant’s initial consideration for the associated insurance policy or annuity contract. Insurers which do not market contracts through an intermediary may provide the Contract Summary, and a buyer’s guide at the point of contract delivery provided they:

Guarantee to the contractholder the right to return the contract for a full refund of premium any time during a 30 day period commencing on the date such contractholder receives the Contract Summary and a buyer’s guide;
Alert the prospective contractholder, in advertisements or direct mail solicitations, of his or her right to obtain a buyer’s guide and a Preliminary Contract Summary prior to the sale.

(b) The insurer and its intermediaries shall provide a Contract Summary upon delivery of the contract, if it has not been delivered beforehand;

(c) The insurer and its intermediaries shall provide a buyer’s guide and a Contract Summary to individual prospective purchasers upon reasonable request;

(d) Any statement provided subsequent to sale to a contractholder which purports to show the then current value of an arrangement subject to this section shall show the then current guaranteed cash surrender value or, if no guaranteed cash surrender value is provided the then current guaranteed paid-up annuity.

(9) General requirements.

(a) Each insurer shall maintain at its home office or principal office a complete file containing one copy of each document authorized by the insurer for use pursuant to this section. The file shall contain one copy of each authorized form for a period of at least 3 years following the date of its last authorized use. The requirements of this paragraph are in addition to the requirements set forth in s. Ins 2.16 (30);

(b) An intermediary shall inform the prospective purchaser, prior to commencing a sales presentation, that the intermediary is acting as an insurance intermediary and shall inform the prospective purchaser of the full name of the insurer which the intermediary is representing to the buyer. In sales situations in which an intermediary is not involved, the insurer shall identify its full name;

(d) Any reference to dividends or to excess interest credits must include a statement that such dividends or credits are not guaranteed;

(f) Recommendations made by any person subject to this section concerning the purchase or replacement of any arrangement subject to this section are subject to the requirements of s. Ins 2.16 (6);

(g) No presentation of benefits may display guaranteed and non-guaranteed benefits as a single sum unless guaranteed benefits are shown separately in close proximity thereto and with equal prominence. The requirements of this paragraph are in addition to the requirements set forth in s. Ins 2.16 (21);

(h) Sales promotion literature and contract forms shall not state or imply that annuity arrangements are the same as savings accounts or deposits in banking or savings institutions. The use of policies or certificates which resemble savings bank passbooks is prohibited. If savings accounts or deposits in banking and savings institutions are utilized in connection with such annuity arrangements, this shall not prohibit the use of an accurate description of the annuity arrangement.

History

Cr. Register, October, 1980, No. 298, eff. 1-1-81; am. (1) and (2) (b) and appendix I, Register, June, 1982, No. 318, eff. 7-1-82; r. (11) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; r. and recr. (4) and appendix 1, am. (5) (intro.), (a), (i) and (j), (6) (intro.), (a), (j) and (k), (7) (intro.), (a), (8) (a), (b) and (c), cr. (6) (im) and (in), r. (9) (e) and (12), Register, July, 1987, No. 379, eff. 8-1-87; reprinted to correct error in appendix I, Register, October, 1987, No. 382; am. (2) (a), (3) (b) 5. and 6., (9) (a) and (g), r. and recr. (9) (f), r. (10), Register, July, 1989, No. 403, eff. 8-1-89; CR 14-075: am. (3) (b) 1., 2., (4) (c), (8) Register August 2015 No. 716, eff. 9-1-15; correction in (3) (b) 2. b., (8) (a) 1., 2. under s. 35.17, Stats. Register August 2015 No. 716.

Wis. Admin. Code § Ins 2.16 Advertisements of and deceptive practices in life insurance and annuities {#sec-ins-2.16 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.16}

(1) Purpose. This section safeguards the interests of prospective purchasers of life insurance and annuities by providing the prospective purchasers with clear and unambiguous statements, explanations, advertisements and written proposals concerning the life insurance policies and annuity contracts offered to them. The commissioner may best achieve this purpose by establishing certain minimum standards of and guidelines for conduct in the advertising and sale of life insurance and annuities. These minimum standards and guidelines prevent unfair competition among insurers and are conducive to the accurate presentation and description to the insurance buying public of policies or contracts of life insurance and annuities. This section interprets and implements, including but not limited to, the following Wisconsin statutes: ss. 601.01 (2) and (3) and 628.34, Stats. The requirements of this section are in addition to and not a substitute for the requirements set forth in ss. Ins 2.14, 2.15, and 2.17.

(2) Scope.

(a) Unless otherwise provided under a particular provision of this section, the section applies to any person who makes, directly or indirectly on behalf of an insurer, fraternal benefit society, or intermediary, an advertisement, representation, or solicitation in this state of any insurance specified in s. Ins 6.75 (1) (a).

(b) This section does not apply to:

Credit life insurance.
Group life insurance purchased, established, or maintained by an employer including a corporation, partnership, or sole proprietorship, or by an employee organization, or both, except for group life insurance purchased, established or maintained by these persons in connection with a multiple employer welfare arrangement as defined under 29 USC 1002 (40).
Life insurance policies issued in connection with pension and welfare plans as defined by and which are subject to the federal employee retirement income security act of 1974 (ERISA), 29 USC 1001 to 1461.
Variable life insurance policies under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account.
Variable annuities.
Group annuity and pure endowment contracts purchased under a retirement plan or plans of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or both.
Immediate annuity contracts, which are arrangements under which payments begin within 13 months of the issue date.
Annuity contracts issued in connection with employee benefit plans as defined by 29 USC 1002 (3) of the federal employee retirement income security act of 1974 (ERISA), except annuity contracts issued in connection with plans providing for the purchase of annuity contracts solely by reason of salary reduction agreements under 26 USC 403 (b) of the internal revenue code.
A policyholder’s deposit account established solely to facilitate payment of regular premiums.
Settlement options under life insurance or annuity contracts.

(3) Definitions. In this section:

(a)

“Advertisement” means:

a. Printed and published material, audio visual material and descriptive literature of an insurer or intermediary used in direct mail, newspapers, magazines, other periodicals, radio and TV scripts, billboards and similar displays, excluding advertisements prepared for the sole purpose of obtaining employees, intermediaries or agencies;

b. Descriptive literature and sales aids of all kinds authored, issued, distributed or used by an insurer, intermediary or third party for presentation to members of the public, including but not limited to circulars, leaflets, booklets, depictions, illustrations and form letters. Descriptive literature and sales aids do not include material in house organs of insurers, communications within an insurer’s own organization not intended for dissemination to the public, individual communications of a personal nature, and correspondence between a prospective group or blanket policyholder and an insurer in the course of negotiating a group or blanket policy, and general announcements from group or blanket policyholders to eligible individuals that a contract has been written;

c. Prepared sales talks, presentations and material for use by intermediaries and representations made by intermediaries in accordance therewith, excluding materials to be used solely by an insurer for the training and education of its employees or intermediaries; and

d. Packaging, including but not limited to envelopes, used in connection with subd. 1. a., b., and c.

Advertisement does not include a policy summary as defined in s. Ins 2.14 (3) (d), the “buyer’s guide to life insurance” as set forth in s. Ins 2.14, an illustration as defined in s. Ins 2.17 (3) (i), a contract summary as defined in s. Ins 2.15 (4) (a), a preliminary contract summary as defined in s. Ins 2.15 (4) (b), and a buyer’s guide as defined in s. Ins 2.15 (4) (c).

(b) “Analysis” means the separation of a life insurance policy or annuity contract into constituent parts for comparison, special emphasis, or other purposes.

(c) “Appraisal” means an evaluation or estimate of the quality or other features of a life insurance policy or annuity contract. Appraisal does not include a statement which is also an endorsement or testimonial.

(d) “Endorsement” means any statement promoting the insurer, its policy, or both, made by an individual, group of individuals, society, association or other organization which makes no reference to the endorser’s experience under the policy.

(e) “Guaranteed interest rate” means the lowest rate of interest which an insurer may pay under the terms of a policy during the duration of the policy.

(f) “Illustrated rate” means a rate shown in an advertisement, representation, or solicitation which an insurer may guarantee for a limited period of time, but not guarantee for the duration of the policy.

(g) “Individual policy issued on a group basis” means an individual policy issued for which:

Coverage is provided to employees or members or classes of employees or members defined in terms of conditions pertaining to employment or membership in an association or other group which is eligible for franchise or group insurance as defined in s. 600.03 (22) and (23), Stats.;
The coverage is not available to the general public and can be obtained and maintained only because of the covered person’s membership in or connection with the group;
The employer, association or other group, or a designated person acting on behalf of one of these persons, pays premiums or subscription charges to the insurer; and
The employer, association or other group sponsors the insurance plan.

(h) “Institutional advertisement” means an advertisement which is prepared solely to promote the reader’s or listener’s interest in the concept of life insurance or annuities, or of promoting the insurer sponsoring the advertisement, or both.

(i) “Intermediary” has the meaning provided in s. 628.02 (1), Stats.

(j) “Policy” means any document, including a policy, plan, contract, agreement, rider or endorsement, used to set forth in writing life insurance or annuity benefits.

(k) “Representation” means any communication, other than an advertisement or solicitation, relating to an insurance policy, the insurance business, any insurer, or any intermediary.

(L) “Solicitation” means an attempt to persuade a person to make an application for an insurance policy.

(m) “Testimonial” means any statement made by a policyholder, certificate holder or other person covered by the insurer which promotes the insurer and its policy or contract by describing the person’s benefits, favorable treatment or other experience under the policy or contract.

(4) Application of this section.

(a) The commissioner shall construe this section in a manner which does not unduly restrict, inhibit or retard the promotion, sale and expansion of life insurance policies or annuity contracts. The commissioner shall consider differences in the purposes served by various advertisements and in the insurance product being advertised when interpreting this section. When applying this section to a specific advertisement, the commissioner shall consider the detail, character, purpose, use and entire content of the advertisement.

(b) The extent to which a person subject to this section shall disclose policy provisions in an advertisement will depend on the content, detail, character, purpose and use of the advertisement and the nature of any qualifications involved. The principal criterion is whether the advertisement has the capacity or tendency to mislead or deceive if such a provision is not disclosed.

(c) The commissioner shall determine whether an advertisement has the capacity or tendency to mislead or deceive from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.

(5) Advertisements, representations, and solicitations in general.

(a) Advertisements, representations, and solicitations shall be truthful and not misleading in fact or in implication and shall accurately describe the policy, the insurance business, any insurer, or any intermediary to which they apply. No advertisement may contain words or phrases the meaning of which is clear only by implication or by familiarity with insurance terminology.

(b) Oral representations and solicitations shall conform to the requirements of this section.

(6) Suitability of policies. No insurer or intermediary may recommend to a prospective buyer the purchase or replacement of any individual life insurance policy or annuity contract without reasonable grounds to believe that the recommendation is not unsuitable to the applicant. The insurer or intermediary shall make all necessary inquiries under the circumstances to determine that the purchase of the insurance is not unsuitable for the prospective buyer. This subsection does not apply to an individual policy issued on a group basis.

(7) Deceptive words, phrases or illustrations.

(a) No person subject to this section may use an advertisement that exaggerates a benefit or minimizes cost by overstatement, understatement or incompleteness. No advertisement may omit information or contain words, phrases, statements, references or illustrations if the omission or use has the capacity, tendency, or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered, premium payable or state or federal tax consequences. An advertisement referring to any policy benefit payable, loss covered, premium payable, or state or federal tax consequences shall be sufficiently complete and clear as to avoid deception or the capacity or tendency to mislead or deceive.

(b) No advertisement may state or imply that life insurance arrangements are the same as savings accounts or deposits in banking or savings institutions. No person subject to this section may use policies which resemble savings bank passbooks. If savings accounts or deposits in banking and savings institutions are utilized in connection with life insurance arrangements, this paragraph does not prohibit the use of an accurate description of the life insurance arrangement.

Note: Annuity contracts are subject to the same limitations under s. Ins 2.15 (9) (h).

(c) No advertisement may contain the terms “investment,” “investment plan,” “founder’s plan,” “charter plan,” “deposit,” “expansion plan,” “profit,” “profits,” “profit sharing,” “interest plan,” “savings,” “savings plan,” or other similar terms in connection with a policy in a context or under circumstances or conditions as to have the capacity or tendency to mislead a purchaser or prospective purchaser of the policy to believe that he or she will receive, or that it is possible that he or she will receive, something other than a policy or some benefit not available to other persons of the same class and equal expectation of life.

(d) An advertisement may refer to immediate coverage or guaranteed issuance of a policy only if suitable administrative procedures exist so that the policy is issued within a reasonable time after the application is received.

(e) No advertisement may refer to a policy or coverage as“special” unless a person subject to this section can show that a reasonable basis exists for the use of this term.

(8) Identity of insurer.

(a) Each advertisement shall clearly identify the insurer. If an application is a part of the advertisement, the application shall show the name of the insurer.

(b) No advertisement may contain a trade name, an insurance group designation, the name of the parent company of the insurer, the name of a government agency or program, the name of a department or division of an insurer, the name of an agency, the name of any other organization, a service mark, a slogan, a symbol or any other device which has the capacity or tendency to mislead or deceive as to the identity of the insurer or create the impression that an entity other than the insurer has any responsibility for the financial obligation under any policy.

(c) No advertisement may contain any combination of words, symbols or materials which, by its content, phraseology, shape, color, nature or other characteristics, is so similar to combinations of words, symbols or materials used by federal, state or local government agencies that it tends to confuse or mislead prospective buyers into believing that the solicitation is in some manner connected with such a government agency.

(d) No advertisement may refer to an affiliate of the insurer without disclosing that the 2 organizations are separate legal entities.

(e) No advertisement may indicate an address for an insurer in any manner that may mislead or deceive as to the insurer’s identity or licensing status. An advertisement which indicates an address for an insurer other than that of its home office shall clearly identify the address other than that of its home office and clearly disclose the actual city and state of domicile of the insurer.

(9) Testimonials, endorsements, appraisals, analysis or commendations by third parties.

(a) No advertisement may contain a testimonial, endorsement or other commendatory statement concerning the insurer, its policies or activities by any person who receives any pay or remuneration, directly or indirectly, from the insurer in connection with the testimonial, endorsement or statement unless the advertisement, testimonial or endorsement includes a full and prominent disclosure therein of the relationship, direct or indirect, including but not limited to the existence of any financial interest, remuneration, or both, between the insurer and the person making the testimonial, endorsement or statement. The provisions of this paragraph do not apply to any person holding a Wisconsin intermediary’s license nor to any radio or television announcer or other person employed or compensated on a salaried or union wage scale basis.

(b) A testimonial, endorsement, appraisal, or analysis used in an advertisement shall be genuine, represent the current opinion of the author, apply to the policy advertised and be accurately reproduced.

Which is fictional;
If the insurer has information indicating a substantial change of view on the part of the author;
If a reasonable person would conclude that the views expressed do not correctly reflect the current opinion of the author;
For more than 2 years after the date on which it was originally given or 2 years after the date of a prior confirmation without obtaining a confirmation that the statement represents the author’s current opinion;
Which does not accurately reflect the present practices of the insurer;
To advertise a policy other than the policy for which the author gave the statement, unless the statement clearly has some reasonable application to the second policy;
Which effects a change or omission which alters or distorts its meaning or intent as originally written; or
Which does not disclose the true nature of the insurance coverage under which the benefits were paid if it contains a description of benefit payments.

(d) No advertisement may state or imply, unless true, that an individual, group of individuals, society, association or other organization approves or endorses an insurer or a policy. An advertisement shall disclose any affiliated relationship between the society, association or other organization and the insurer. If the insurer or the person or persons who own or control the insurer has formed or owns or controls the society, association or other organization, the advertisement shall clearly disclose this fact.

(e) If a testimonial refers to benefits received under a policy, the insurer shall retain a summary of the pertinent claim information including claim number and date of loss with the advertisement in the advertising file required by sub. (30).

(f) No advertisement may state or imply that a government publication commends or recommends the insurer or its policy.

(10) Jurisdictional licensing; approval by governmental agency.

(a) No advertisement which may be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed may state or imply licensing beyond those limits.

(b) In any advertisement any reference to licensing shall contain an appropriate disclaimer that the viewer, listener, or reader should not construe the reference as an endorsement or implied endorsement of the insurer or its products by any agency of this state or the commissioner of insurance.

(c) No advertisement may state or imply that the insurer, its financial condition or status, the payment of its claims, its policy forms or the merits or desirability of its policy forms or kinds or plans of insurance are approved, endorsed or accredited by any agency of this state or the federal government.

(d) No advertisement may contain a reproduction of a portion of a state insurance department report of examination.

(11) Introductory, initial or special offers and limited enrollment periods.

(a) No advertisement may state or imply, unless true, that a policy or combination of policies is an introductory, initial or special offer and that the applicant will receive advantages not available at a later date by accepting the offer, that only a limited number of policies will be sold, that a time is fixed for the discontinuance of the sale of the policy advertised because of special advantages available in the policy, or that an individual will receive special advantages by enrolling within an open enrollment period or by a deadline date.

(b) No advertisement may state or imply that enrollment under a policy is limited to a specific period unless the advertisement discloses the period of time permitted to enroll. This period of time may not be less than 10 days and not more than 40 days from the date of the advertisement.

(c) If the insurer making an introductory, initial or special offer has previously offered the same or similar policy on the same basis or intends to repeat the current offer for the same or similar policy, the advertisement shall disclose this fact.

(d) No insurer may establish for residents of this state a limited enrollment period within which a person may purchase an individual policy less than 6 months after the close of an earlier limited enrollment period for the same or similar policy. The restriction shall apply to all advertisements in newspapers, magazines and other periodicals circulated in this state, all mail advertisements sent to residents of this state and all radio and TV advertisements broadcast in this state. This restriction does not apply to the solicitation of enrollments under individual policies issued on a group basis.

(e) Where an insurer is an affiliate of a group of insurers under common management and control, the word “insurer” for the purposes of this subsection means the insurance group. The requirements and restrictions applicable to an insurer shall apply to the insurance group.

(12) Mail order refusal form. No person subject to this section may use a mail order advertisement which requires the recipient, in order to refuse a policy, to sign a refusal form and return it to a specified person or insurer.

(13) Group, quasi-group or special class implications. No advertisement may state or imply, unless true, that prospective policyholders or members of a particular class of individuals become group or quasi-group members or are uniquely eligible for a special policy or coverage and will be subject to special rates or underwriting privileges or that a particular coverage or policy is exclusively for preferred risks, a particular segment of people, or a particular age group or groups.

(14) Inspection of policy.

(a) An offer in an advertisement of free inspection of a policy or an offer of a premium refund shall not be a cure for misleading or deceptive statements contained in such advertisement.

(b) An advertisement which refers to the provision in the policy advertised regarding the right to return the policy shall disclose the time limitation applicable to this right.

(15) Identification of plan or number of policies.

(a) When an advertisement refers to a choice regarding benefit amounts, it shall disclose that the benefit amounts provided will depend upon the plan selected and that the premium will vary with the amount of the benefits.

(b) When an advertisement refers to various benefits, all of which can be obtained only by purchasing 2 or more policies, it shall disclose that the benefits are provided only through a combination of such policies.

(16) Use of statistics.

(a) An advertisement which sets out the dollar amounts of claims paid, the number of persons insured or other statistical information shall identify the source of the statistical information. No person subject to this section may use an advertisement unless it accurately reflects all of the relevant facts. No advertisement may contain irrelevant statistical data.

(b) No advertisement may imply that the statistical information given is derived from the insurer’s experience under the policy advertised unless true. The advertisement shall specifically so state if the information applies to other policies or plans.

(c) An advertisement which sets out the dollar amounts of claims paid shall also indicate the period during which such claims have been paid.

(17) Claims. No advertisement may:

(a) Contain untrue statements with respect to the time within which claims are paid;

(b) State or imply that claim settlements will be liberal or generous or use words of similar import;

(d) Contain a description of a claim which involves unique or highly unusual circumstances.

(18) Statements about an insurer. No advertisement may contain untrue statements or statements that by implication mislead with respect to the insurer’s assets, corporate structure, financial standing, age, experience or relative position in the insurance business.

(19) Disparaging comparisons and statements. No advertisement may directly or indirectly contain unfair or incomplete comparisons of policies or benefits or falsely or unfairly disparage, discredit or criticize competitors, their policies, services or business methods or competing marketing methods.

(20) Premiums.

(a) An advertisement for a policy with nonlevel premiums shall contain a prominent description of the premium changes.

(b) No person subject to this section may describe in an advertisement a life insurance policy under which the insurer reserves the right to change the amount of the premium during the policy term unless this feature is prominently described in the advertisement.

(c) Except as otherwise allowed under this paragraph, no advertisement may contain a statement or representation that an insured may withdraw under the terms of the policy any premiums paid for a life insurance policy. The advertisement may refer to amounts paid into an advance premium fund, which are intended to pay premiums at a future time, to the effect that they may be withdrawn under the conditions of the prepayment agreement. The advertisement may also refer to withdrawal rights under any unconditional premium refund offer.

(d) No advertisement may state or imply that a pure endowment benefit is a “profit” or “return” on the premium paid rather than a policy benefit for which a specified premium is paid.

(21) Nonguaranteed policy elements.

(a) No advertisement may contain a description of or otherwise refer to nonguaranteed policy elements in a manner which is misleading or has the capacity or tendency to mislead.

(b) No advertisement may state or imply that the payment or amount of nonguaranteed policy elements is guaranteed. If an insurance policy’s or annuity contract’s nonguaranteed policy elements are illustrated, they may not be more favorable to the policyholder than those based on the current interest rates, dividend scales, mortality tables, and other variable components currently used by the insurer for that insurance policy or annuity contract. The illustration shall contain a statement to the effect that the viewer, listener, or reader should not construe the nonguaranteed policy elements as guarantees or estimates of amounts to be paid in the future.

(c) No advertisement may state or imply that illustrated nonguaranteed policy elements will be or can be sufficient at any future time to assure, without the further payment of premiums, the receipt of benefits, such as a paid-up policy, unless the advertisement clearly and precisely explains what benefits or coverage would be provided at the future time and under what conditions this would occur.

(d)

No advertisement may refer to dividends as “tax free”or contain words of similar import, unless the tax treatment of dividends is accurately explained and the nature of the dividend as a return of premium is indicated clearly.
The requirements of this subsection are in addition to the requirements set forth in ss. Ins 2.14 (5) (h) and 2.15 (9) (g).

(22) Policies sold to students.

(a) A person subject to this section may address an advertisement for policies sold to students to the parents of students. No address on the advertisement may include any combination of words which imply that the correspondence is from a school, college, university or other education or training institution nor may it imply that the institution has endorsed the material or supplied the insurer with information about the student unless true.

(b) All advertisements, including but not limited to information flyers used in the solicitation of insurance, shall contain clear identification that the advertisement comes from an insurer or intermediary, if this is the case, and these entities shall be clearly identified as insurers or intermediaries.

(c) No return address on the advertisement may state or imply that the soliciting insurer or insurance intermediary is affiliated with a university, college, school, or other educational or training institution, unless true.

(23) Individual deferred annuity products or deposit funds. For individual deferred annuity products or deposit funds, the following shall apply:

(a) Any illustrations or statements containing or based upon interest rates higher than the guaranteed accumulation interest rates for the annuity product or deposit fund shall likewise set forth with equal prominence comparable illustrations or statements containing or based upon the guaranteed accumulation interest rates. No higher interest rate may be greater than those currently being credited by the insurer unless the higher rate has been publicly declared by the insurer with an effective date for new issues not more than 2 months subsequent to the date of declaration.

(b) If an advertisement states the net premium accumulation interest rate, whether guaranteed or not, it shall also disclose in close proximity thereto and with equal prominence, the actual relationship between the gross and net premiums.

(c) If any policy does not provide a cash surrender benefit prior to commencement of payment of any annuity benefits, any illustrations or statements concerning the policy shall prominently state that cash surrender benefits are not provided.

(24) Advertisements showing a specific rate of return on premiums or cash values. All life insurance or annuity solicitations, representations, and advertisements used in Wisconsin which show a specific rate of return on premiums or cash values shall also show, in close proximity thereto and with equal prominence, the following:

(a) A general statement describing the existence of first-year and annual expense charges, mortality charges and surrender charges which will be deducted from the premium before the interest rate is applied.

(b) The guaranteed rate of interest paid on the cash value.

(c) The amounts of the cash value or premium to which the guaranteed and the illustrated rates are applied; for example, an advertisement, representation, or solicitation shall disclose if interest on the first $1,000 of cash value is limited to the guaranteed rate.

(d) An indication that the interest rate credited on cash value amounts which have been borrowed is different from that for cash values which have not been borrowed, if that is the case.

(e) An indication of any other significant factors which affect the manner in which cash values are computed.

(25) Graded or modified benefits after a policy is issued.

(a) An advertisement, representation, or solicitation for a policy containing graded or modified benefits shall prominently disclose this fact. If applicable, an advertisement, representation, or solicitation shall prominently disclose the fact that the premium is level and coverage decreases or increases with age or duration. Graded or modified benefits shall include, but are not limited to, life insurance policies that, within a specified period after the policy is issued, may pay no death benefits or death benefits that are less than premiums paid should the insurer pay the death benefits.

(b) The prominent disclosure required in par. (a) shall mean the following for the specified type of advertisement:

For television advertisements, an announcement describing the graded or modified benefits to be displayed during the advertisement for at least 10 seconds.
For radio advertisements, an announcement describing the graded or modified benefits.
For pre-printed advertisements intended for general distribution, a written description of the graded or modified benefits printed on the first page of the advertisement and in at least 12 point bold type.

(26) Miscellaneous disclosure requirements.

(a) In the event an advertisement uses “Nonmedical,” “No Medical Examination Required,” or similar terms where issue is not guaranteed, the terms shall be accompanied by a further disclosure in close proximity thereto and with equal prominence to the effect that issuance of the policy may depend upon the answers to the health questions set forth in the application.

(b) No advertisement may contain as the name or title of a life insurance policy any phrase which does not include the words“life insurance” unless accompanied by other language clearly indicating it is life insurance.

(d) No advertisement of an insurance policy marketed by direct response techniques may state or imply, unless the condition is true, that because there is no intermediary or commission involved there will be a cost saving to prospective purchasers.

(e) No advertisement may state or imply in any way that interest charged on a policy loan or the reduction of death benefits by the amount of outstanding policy loans is unfair, inequitable, or in any manner an incorrect or improper practice.

(f) If nonforfeiture values are shown in any advertisement, the advertisement shall show the values either for the entire amount of the basic life policy death benefit or for each $1,000 of initial death benefit.

(g) No advertisement may contain the words “free,” “no cost,” “without cost,” “no additional cost,” “at no extra cost,” or words of similar import with respect to any benefit or service being made available with a policy, unless the insured is not charged for any benefit or service. If the insured is not charged, then the advertisement shall prominently disclose the identity of the payor.

(27) Method of disclosure of required information.

(a) A person subject to this section shall set out all information required to be disclosed by this section clearly, conspicuously and in close proximity to the statements to which the information relates or under appropriate captions of sufficient prominence that it shall be readily noticed and not minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisements so as to be confusing or misleading.

(b) No person subject to this section may set out information required by this section under inappropriate captions or headings or under inappropriate questions where a question and answer format is used.

(28) Form number. A person subject to this section shall identify by form number an advertisement other than an institutional advertisement defined in sub. (3) (h) which is mass-produced. The form number shall be sufficient to distinguish it from any other advertising form or any policy, application or other form used by the insurer.

(29) Insurer’s responsibility for advertisements.

(a) The insurer whose policy is advertised has responsibility for the content, form and method of dissemination of all advertisements, regardless of by whom designed, created, written, printed or used.

(b) An insurer shall require its intermediaries and all other persons or agencies acting on its behalf in preparing advertisements to submit proposed advertisements to it for approval prior to use.

(30) Insurer’s advertising file. Each insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of its policies hereafter disseminated in the state. With respect to group, blanket and franchise policies, all proposals prepared on the same printed form need not be included in the file; only typical examples of these proposals shall be included. A notation shall be attached to each such advertisement in the file indicating the manner and extent of distribution and the form number of any policy, amendment, rider, or endorsement form advertised. The file shall be subject to regular and periodic inspection by the office of the commissioner of insurance. A person subject to this section shall maintain all of these advertisements in the file while in use and for a period of 3 years after an advertisement’s authorized use. If applicable, a person subject to this section shall also maintain files in accordance with ss. Ins 2.14 (5) (a) and 2.15 (9) (a).

History

Cr. Register, October, 1982, No. 322, eff. 11-1-82; r. (5) (b) 1. and 2. and (6) (b), Register, May, 1984, No. 341, eff. 6-1-84; r. (7) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; r. and recr. Register, July, 1989, No. 403, eff. 8-1-89; am. (1) and (3) (a) 2., Register, March, 1998, No. 507, eff. 4-1-98; CR 14-075: am. (3) (a) 2. Register August 2015 No. 716, eff. 9-1-15.

Wis. Admin. Code § Ins 2.17 Life insurance illustrations {#sec-ins-2.17 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.17}

(1) Purpose. This section provides rules for life insurance policy illustrations that will protect consumers and foster consumer education. This section provides illustration formats, prescribes standards to be followed when illustrations are used, and specifies the disclosures that are required in connection with illustrations. The goals of this rule are to ensure that illustrations do not mislead purchasers of life insurance and to make illustrations more understandable. Insurers will, as far as possible, eliminate the use of footnotes and caveats and define terms used in the illustration in language that would be understood by a typical person within the segment of the public to which the illustration is directed. The requirements of this section are in addition to and not a substitute for the requirements set forth in ss. Ins 2.14 and 2.16.

(2) Scope. This section applies to all group and individual life insurance policies and certificates except:

(a) Variable life insurance.

(b) Individual and group annuity contracts.

(d) Life insurance policies with no illustrated death benefits on any individual exceeding $10,000.

(3) Definitions. In this section:

(a) “Actuarial standards board” means the board established by the American academy of actuaries to develop and promulgate standards of actuarial practice.

(b) “Basic illustration” means a ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and non-guaranteed elements.

(c) “Contract premium” means the gross premium that is required to be paid under a fixed premium policy, including the premium for a rider for which benefits are shown in the illustration.

(d) “Currently payable scale” means a scale of non-guaranteed elements in effect for a policy form as of the preparation date of the illustration or declared to become effective within the next 95 days.

(e) “Disciplined current scale” means a scale of non-guaranteed elements that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer.

(f) “Generic name” means a short title descriptive of the policy being illustrated such as “whole life,” “term life” or “flexible premium adjustable life.”

(g) “Guaranteed elements” means the premiums, benefits, values, credits or charges under a policy of life insurance that are guaranteed and determined at issue.

(h) “Illustrated scale” means a scale of non-guaranteed elements currently being illustrated that is not more favorable to the policy owner than the lesser of:

The disciplined current scale; or
The currently payable scale.

(i) “Illustration” means a presentation or depiction that includes non-guaranteed elements of a policy of life insurance over a period of years and is one of the three illustrations described in pars. (b), (k), and (s).

(j) “Illustration actuary” means an actuary meeting the requirements of sub. (10).

(k) “In force illustration” means an illustration furnished at any time after the policy that it depicts has been in force.

(L) “Lapse-supported illustration” means an illustration of a policy form failing the test of self-supporting as defined in this section, under a modified persistency rate assumption using persistency rates underlying the disciplined current scale for the first 5 years and 100% policy persistency thereafter.

(m) “Minimum assumed expenses” means the minimum expenses that may be used in the calculation of the disciplined current scale for a policy form. The insurer may choose to designate each year the method of determining assumed expenses for all policy forms from the following:

Fully allocated expenses.
Marginal expenses may be used only if greater than a generally recognized expense table. If no generally recognized expense table is approved, fully allocated expenses must be used.
A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the commissioner.

(n) “Non-guaranteed elements” means the premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.

(o) “Non-term group life” means a group policy or individual policies of life insurance issued to members of an employer group or other permitted group under all of the following conditions:

Every plan of coverage was selected by the employer or other group representative.
Some portion of the premium is paid by the group or through payroll deduction.
Group underwriting or simplified underwriting is used.

(p) “Policy owner” means the owner named in an individual policy or the certificate holder in the case of a group policy.

(q) “Premium outlay” means the amount of premium assumed to be paid by the policy owner or other premium payer out-of-pocket.

(r) “Self-supporting illustration” means an illustration of a policy form for which it can be demonstrated that, when using experience assumptions underlying the disciplined current scale, for all illustrated points in time on or after the fifteenth policy anniversary or the twentieth policy anniversary for second-or-later-to-die policies or upon policy expiration if sooner, the accumulated value of all policy cash flows equals or exceeds the total policy owner value available. For this purpose, policy owner value includes cash surrender values and any other illustrated benefit amounts available at the policy owner’s election.

(s) “Supplemental illustration” means an illustration furnished in addition to a basic illustration.

(4) Policies to be illustrated.

(a) Each insurer marketing policies to which this section is applicable shall notify the commissioner whether a policy form is to be marketed with or without an illustration. For all policy forms being actively marketed on January 1, 1998, the insurer shall identify in writing those forms and whether or not an illustration will be used with them. For policy forms filed after January 1, 1998, the identification shall be made at the time of filing. Any previous identification may be changed by notice to the commissioner.

(b) If an insurer identifies a policy form as one to be marketed without an illustration, any use of an illustration for any policy using that form prior to the first anniversary is prohibited.

(c) If a policy form is identified by the insurer as one to be marketed with an illustration, a basic illustration prepared and delivered in accordance with this section is required, except that a basic illustration need not be provided to individual members of a group or to individuals insured under multiple lives coverage issued to a single applicant unless the coverage is marketed to these individuals. The illustration furnished an applicant for a group life insurance policy or policies issued to a single applicant on multiple lives may be either an individual or composite illustration representative of the coverage on the lives of members of the group or the multiple lives covered.

(d) Potential enrollees of non-term group life subject to this regulation shall be furnished a quotation with the enrollment materials. The quotation shall show potential policy values for sample ages and policy years on a guaranteed and non-guaranteed basis appropriate to the group and the coverage. This quotation shall not be considered an illustration for purposes of this section, but all information provided shall be consistent with the illustrated scale. A basic illustration shall be provided at delivery of the certificate to enrollees for non-term group life who enroll for more than the minimum premium necessary to provide pure death benefit protection. In addition, the insurer shall make a basic illustration available to any non-term group life enrollee who requests it.

(5) General rules and prohibitions.

(a) An illustration used in the sale of a life insurance policy shall satisfy the applicable requirements of this section, be clearly labeled “life insurance illustration” and contain all of the following basic information:

Name of insurer.
Name and business address of agent or insurer’s authorized representative, if any.
Name, age and sex of proposed insured, except where a composite illustration is permitted under this section.
Underwriting or rating classification upon which the illustration is based.
Generic name of policy, the insurer’s product name, if different, and form number.
Initial death benefit.
Dividend option election or application of non-guaranteed elements, if applicable.

(b) When using an illustration in the sale of a life insurance policy, an insurer or its agent or other authorized representatives shall not:

Represent the policy as anything other than a life insurance policy.
Use or describe non-guaranteed elements in a manner that is misleading or has the capacity or tendency to mislead.
State or imply that the payment or amount of non-guaranteed elements is guaranteed.
Use an illustration that does not comply with the requirements of this section.
Use an illustration that at any policy duration depicts policy performance more favorable to the policy owner than that produced by the illustrated scale of the insurer whose policy is being illustrated.
Provide an applicant with an incomplete illustration.
Represent in any way that premium payments will not be required for each year of the policy in order to maintain the illustrated death benefits, unless that is the fact.
Use the term “vanish” or “vanishing premium,” or a similar term that implies the policy becomes paid up, to describe a plan for using non-guaranteed elements to pay a portion of future premiums.
Except for policies that can never develop nonforfeiture values, use an illustration that is “lapse-supported”.
Use an illustration that is not “self-supporting.”

(c) If an interest rate used to determine the illustrated non-guaranteed elements is shown, it shall not be greater than the earned interest rate underlying the disciplined current scale.

(d) In determining the disciplined current scale an insurer may use standards established by the actuarial standards board that meet all of the following criteria:

Are consistent with all provisions of this section.
Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred.
Do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date.
Do not permit assumed expenses to be less than minimum assumed expenses.

(6) Standards for basic illustrations.

(a) A basic illustration shall conform with the following requirements:

The illustration shall be labeled with the date on which it was prepared.
Each page, including any explanatory notes or pages, shall be numbered and show its relationship to the total number of pages in the illustration.
The assumed dates of payment receipt and benefit pay-out within a policy year shall be clearly identified.
If the age of the proposed insured is shown as a component of the tabular detail, it shall be issue age plus the numbers of years the policy is assumed to have been in force.
The assumed payments on which the illustrated benefits and values are based shall be identified as premium outlay or contract premium, as applicable. For policies that do not require a specific contract premium, the illustrated payments shall be identified as premium outlay.
Guaranteed death benefits and values available upon surrender, if any, for the illustrated premium outlay or contract premium shall be shown and clearly labeled guaranteed.
If the illustration shows any non-guaranteed elements, they cannot be based on a scale more favorable to the policy owner than the insurer’s illustrated scale at any duration. These elements shall be clearly labeled non-guaranteed.
The guaranteed elements, if any, shall be shown before corresponding non-guaranteed elements. Any page of an illustration that shows or describes only the non-guaranteed elements shall include a reference to the page where guaranteed elements are shown and a statement that guaranteed elements are found on that page.
The account or accumulation value of a policy, if shown, shall be identified by the name this value is given in the policy being illustrated and shown on the same page in close proximity to the corresponding value available upon surrender.
The value available upon surrender shall be identified by the name this value is given in the policy being illustrated and shall be the amount available to the policy owner in a lump sum after deduction of surrender charges, policy loans and policy loan interest, as applicable.
Illustrations may show policy benefits and values in graphic or chart form in addition to the tabular form.
Any illustration of non-guaranteed elements shall be accompanied by a statement indicating that the benefits and values are not guaranteed, that the assumptions on which they are based are subject to change, and that actual results may be more or less favorable.
If the illustration shows that the premium payer may have the option to allow policy charges to be paid using non-guaranteed values, the illustration shall clearly disclose that a charge continues to be required and that, depending on actual results, the premium payer may need to continue or resume premium outlays. Similar disclosure shall be made for premium outlay of lesser amounts or shorter durations than the contract premium. If a contract premium is due, the premium outlay display shall not be left blank or show zero unless accompanied by an asterisk or similar mark to draw attention to the fact that the policy is not paid up.
If the applicant plans to use dividends or policy values, guaranteed or non-guaranteed, to pay all or a portion of the contract premium or policy charges, or for any other purpose, the illustration may reflect those plans and the impact on future policy benefits and values.

(b) A basic illustration shall include the following narrative summary:

A brief description of the policy being illustrated, including a statement that it is a life insurance policy.
A brief description of the premium outlay or contract premium, as applicable, for the policy. For a policy that does not require payment of a specific contract premium, the illustration shall show the premium outlay that must be paid to guarantee coverage for the term of the contract, subject to maximum premiums allowable to qualify as a life insurance policy under the applicable provisions of the Internal Revenue Code.
A brief description of any policy features, riders or options, guaranteed or non-guaranteed, shown in the basic illustration and the impact they may have on the benefits and values of the policy.
Identification and a brief definition of column headings and key terms used in the illustration.
A statement containing in substance the following: “This illustration assumes that the currently illustrated nonguaranteed elements will continue unchanged for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown.”

A summary of the death benefits and values and the premium outlay and contract premium, as applicable. For a policy that provides for a contract premium, the guaranteed death benefits and values shall be based on the contract premium. This summary shall be shown for at least policy years 5, 10 and 20 and at age 70, if applicable, on the three bases shown below in subds. 2., 3., and 4. For multiple life policies the summary shall show policy years 5, 10, 20 and 30.
Policy guarantees.
Insurer’s illustrated scale.
Insurer’s illustrated scale used but with the non-guaranteed elements reduced as follows:

a. Dividends at 50% of the dividends contained in the illustrated scale used.

b. Non-guaranteed credited interest at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.

c. All non-guaranteed charges, including but not limited to, term insurance charges, mortality and expense charges, at rates that are the average of the guaranteed rates and the rates contained in the illustrated scale used.

If coverage would cease prior to policy maturity or age 100, the year in which coverage ceases shall be identified for each of the three bases shown above in subds. 2., 3. and 4.

(d) Statements substantially similar to the following shall immediately follow the numeric summary and be signed by the applicant, or the policy owner in the case of an illustration provided at time of delivery, as required in this section.

A statement to be signed and dated by the applicant or policy owner reading as follows: “I have received a copy of this illustration and understand that any non-guaranteed elements illustrated are subject to change and could be either higher or lower. The agent has told me they are not guaranteed.”
A statement to be signed and dated by the agent or other authorized representative of the insurer reading as follows: “I certify that this illustration has been presented to the applicant or policy owner and that I have explained that any non-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration.”

(e) The following elements shall be shown in tabular detail:

A basic illustration shall include the following for at least each policy year from 1 to 10 and for every 5th policy year thereafter ending at age 100, policy maturity or final expiration; and except for term insurance beyond the 20th year, for any year in which the premium outlay and contract premium, if applicable, is to change:

a. The premium outlay and mode the applicant plans to pay and the contract premium, as applicable.

b. The corresponding guaranteed death benefit, as provided in the policy.

c. The corresponding guaranteed value available upon surrender, as provided in the policy.

For a policy that provides for a contract premium, the guaranteed death benefit and value available upon surrender shall correspond to the contract premium.
Non-guaranteed elements may be shown if described in the contract. In the case of an illustration for a policy on which the insurer intends to credit terminal dividends, they may be shown if the insurer’s current practice is to pay terminal dividends. If any non-guaranteed elements are shown they must be shown at the same durations as the corresponding guaranteed elements, if any. If no guaranteed benefit or value is available at any duration for which a non-guaranteed benefit or value is shown, a zero shall be displayed in the guaranteed column.

(7) Standards for supplemental illustrations.

(a) A supplemental illustration may be provided so long as it complies with all of the following:

It is appended to, accompanied by or preceded by a basic illustration that complies with this section.
The non-guaranteed elements shown are not more favorable to the policy owner than the corresponding elements based on the scale used in the basic illustration.
It contains the same statement required of a basic illustration that non-guaranteed elements are not guaranteed.
For a policy that has a contract premium, the contract premium underlying the supplemental illustration is equal to the contract premium shown in the basic illustration. For policies that do not require a contract premium, the premium outlay underlying the supplemental illustration shall be equal to the premium outlay shown in the basic illustration.

(b) The supplemental illustration shall include a statement informing the reader to consult the basic illustration for guaranteed elements and the other important information it contains.

(8) Delivery of illustration and record retention.

(a) If a basic illustration is used by an agent or other authorized representative of the insurer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with this section, shall be submitted to the insurer at the time of policy application. A copy also shall be provided to the applicant. If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued shall be sent with the policy. The revised illustration shall conform to the requirements of this section, shall be labeled “Revised Illustration” and shall be signed and dated by the applicant or policy owner and agent or other authorized representative of the insurer no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

(b) If no illustration is used by an agent or other authorized representative in the sale of a life insurance policy or if the policy is applied for other than as illustrated, the agent or representative shall certify to that effect in writing on a form provided by the insurer. On the same form the applicant shall acknowledge that no illustration conforming to the policy applied for was provided and shall further acknowledge an understanding that an illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. This form shall be submitted to the insurer at the time of policy application. If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.

(c) If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it shall include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer. The insurer’s obligation under this subsection shall be satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort shall be deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.

(d) A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used or that the policy was applied for other than as illustrated, shall be retained by the insurer until 3 years after the policy is no longer in force. A copy need not be retained if no policy is issued.

(9) Annual report; notice to policy owners.

(a) Except as provided in par. (b), in the case of a policy designated as one for which illustrations will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that shall contain at least the following information:

For universal life policies, the report shall include the following:

a. The beginning and end date of the current report period.

b. The policy value at the end of the previous report period and at the end of the current report period.

c. The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders).

d. The current death benefit at the end of the current report period on each life covered by the policy.

e. The net cash surrender value of the policy as of the end of the current report period.

f. The amount of outstanding loans, if any, as of the end of the current report period.

g. For fixed premium policies, in addition to the information described in subd. 1. a. through f. if, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments, the policy’s net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect shall be included in the report.

h. For flexible premium policies, in addition to the information described in subd. 1. a. through f. if, assuming guaranteed interest, mortality and expense loads, the policy’s net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect shall be included in the report.

For all other policies, where applicable:

a. Current death benefit.

b. Annual contract premium.

c. Current cash surrender value.

d. Current dividend.

e. Application of current dividend.

f. Amount of outstanding loan.

(b) Insurers writing life insurance policies that do not build nonforfeiture values shall only be required to provide an annual report with respect to these policies for those years when a change has been made to nonguaranteed policy elements by the insurer.

(c) If the annual report does not include an in force illustration, it shall contain the following notice displayed prominently: “IMPORTANT POLICY OWNER NOTICE: You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling [insurer’s phone number], writing to [insurer’s name] at [insurer’s address] or contacting your agent. If you do not receive a current illustration of your policy within 30 days from your request, you should contact your state insurance department.” The insurer may vary the sequential order of the methods for obtaining an in force illustration.

(d) Within 25 calendar days of receipt of a request from the policy owner, the insurer shall furnish an in force illustration of current and future benefits and values based on the insurer’s present illustrated scale. This illustration shall comply with the requirements of subs. (5) (a), (5) (b), (6) (a) and (6) (e). No signature or other acknowledgment of receipt of this illustration is required.

(e) If an adverse change in non-guaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report shall contain a notice of that fact and the nature of the change prominently displayed.

(10) Annual certifications.

(a) The board of directors of each insurer shall appoint one or more illustration actuaries.

(b) The illustration actuary shall certify that the disciplined current scale used in illustrations is in conformity with the actuarial standard of practice for compliance with the national association of insurance commissioners model regulation on life insurance illustrations promulgated by the actuarial standards board, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of this section.

Be a member in good standing of the American academy of actuaries.
Be familiar with the standard of practice regarding life insurance policy illustrations.
Not have been found by the commissioner, following appropriate notice and hearing to have done any of the following:

a. Violated any provision of, or any obligation imposed by, the insurance law or other law in the course of the actuary’s dealings as an illustration actuary.

b. Been found guilty of fraudulent or dishonest practices.

c. Demonstrated the actuary’s incompetence, lack of cooperation, or untrustworthiness to act as an illustration actuary.

d. Resigned or been removed as an illustration actuary within the past 5 years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards.

Not fail within 30 calendar days to notify the commissioner of any action taken by a commissioner of another state similar to that under subd. 3.
Disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous 5 years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale. If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies, this shall be disclosed in the annual certification. If nonguaranteed elements illustrated for both new and in force policies are not consistent with the non-guaranteed elements actually being paid, charged or credited to the same or similar forms, this shall be disclosed in the annual certification.
Disclose in the annual certification which of the following methods is used to allocate overhead expenses for all illustrations:

a. Fully allocated expenses.

b. Marginal expenses.

c. A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the commissioner.

(d) The illustration actuary shall file a certification with the board and with the commissioner annually for all policy forms for which illustrations are used and before a new policy form is illustrated. If an error in a previous certification is discovered, the illustration actuary shall notify the board of directors of the insurer and the commissioner within 30 calendar days of discovery.

(e) If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary shall notify the board of directors of the insurer and the commissioner of the actuary’s inability to certify within 30 calendar days of that determination.

(f) A responsible officer of the insurer, other than the illustration actuary, shall certify annually all of the following:

That the illustration formats meet the requirements of this section and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary.
That the insurer has provided its agents with information about the expense allocation method used by the insurer in its illustrations and disclosed as required in par. (c) 6.

(g) The annual certifications shall be provided to the commissioner each year by a date determined by the insurer.

(h) If an insurer changes the illustration actuary responsible for all or a portion of the insurer’s policy forms, the insurer shall notify the commissioner of that fact within 30 calendar days and disclose the reason for the change.

(11) Penalties. In addition to any other penalties provided by the laws of this state, an insurer or agent that violates a requirement of this section is guilty of a violation of s. 628.34, Stats.

History

Cr. Register, September, 1997, No. 501, eff. 1-1-98.

Wis. Admin. Code § Ins 2.18 Life settlement contracts {#sec-ins-2.18 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.18}

(1) Purpose. The purpose of this regulation is to interpret and implement s. 632.69, Stats.

(2) Definitions. In addition to the definitions contained in s. 632.69 (1), Stats., in this section:

(a) “Commissioner” means the commissioner of insurance.

(b) “Firm” means a corporation, partnership or other legal entity.

(d) “Term life insurance” means life insurance which provides coverage at a fixed rate of payment for a limited period of time and which provides no guaranteed nonforfeiture or endowment benefits.

(3) Licensing.

(a) Application. An individual or firm applying for an initial or renewal license as a broker or provider shall submit an application to the office in the form prescribed by the office. With the application, the individual or firm shall submit all of the following:

If the applicant is a broker, with the initial application, a professional liability insurance policy in the amount of $1 million total annual aggregate for all claims during the policy period. Proof that the required professional liability insurance policy continues in force shall accompany each renewal application.
If the applicant is a provider, applicants shall provide satisfactory evidence of financial responsibility in compliance with s. 632.69 (2) (g) 4. a., Stats.
If the applicant is a provider, audited financial statements of the applicant for the most recently completed fiscal year. The financial statements shall be available for public inspection.
Electronic confirmation of completion of the training requirements under s. 632.69 (3), Stats., and sub. (4) if electronic confirmation is available. If electronic confirmation is not available the applicant shall provide evidence satisfactory to the commissioner of completion of the training requirements.
Any documentation required in answer to questions on the application.
If the applicant is an individual, his or her social security number or, if the applicant does not have a social security number, a statement made or subscribed under oath or affirmation that the applicant does not have a social security number, and a statement that he or she intends to act as a broker or provider in good faith and in compliance with all applicable laws of this state and rules and orders of the commissioner.
If the applicant is a firm applying for a broker’s license, the applicant must identify a designated responsible Wisconsin-licensed individual representative on the application.
If the applicant is a firm, its federal identification number, the state and year of its incorporation, or year of its formation and a statement that it intends to act as a broker or provider in good faith and in compliance with all applicable laws of this state, and with rules and orders of the commissioner and the courts of this state with respect to all matters pertaining to activities as a licensee.
If the applicant is an individual who is not a resident of this state or a firm that is not organized under the laws of this state, a statement that the applicant agrees to be subject to the jurisdiction of the commissioner and the courts of this state with respect to all matters pertaining to activities as a licensee and to accept service of process as provided under ss. 601.72 and 601.73, Stats. A firm that is organized under the laws of another state shall provide a certificate of good standing from the state of domicile.
Fingerprint identification may be required for individual resident broker applicants and the Wisconsin-licensed individual representative of a broker firm, in a format specified by the commissioner, and an electronic confirmation of criminal history from the Wisconsin department of justice, crime information bureau, and the federal bureau of investigation, to be completed not more than 180 days prior to making application.
Any other information requested by the office.
The fee specified under s. 601.31 (1) (mm) or (mp), Stats., as appropriate for a provider, or s. 601.31 (1) (mr) or (ms), Stats., as appropriate for a broker, which fee shall be nonrefundable.

(b) Renewal application deadline. Applications for license renewal shall be submitted pursuant to par. (a) on or before July 1 of each year.

‘Criminal record.’ The conviction for crimes which are substantially related to the circumstances of holding a broker or provider license.
‘Accuracy of information.’ Any material misrepresentation in the information submitted on the application form.
‘Regulatory action.’ Any regulatory action taken with regard to any occupational license held, including insurance licenses, real estate licenses, and security licenses.
‘Other criteria.’ Other criteria which the commissioner considers relevant in assessing trustworthiness or competence, including any of the following:

a. Providing incorrect, misleading, incomplete, or materially untrue information in the license application.

b. Violating any insurance laws, or violating any rule, subpoena, or order of the insurance commissioner or of another state’s insurance commissioner.

c. Obtaining or attempting to obtain a license through misrepresentation or fraud.

d. Improperly withholding, misappropriating, or converting any monies or properties received in the course of engaging in the business of life settlements.

e. Misrepresenting the terms of an actual or proposed life settlement contract.

f. Having been convicted of any felony or misdemeanor of which criminal fraud is an element or having plead other than not guilty with respect to any felony or misdemeanor of which criminal fraud or moral turpitude is an element, regardless whether a judgment of conviction has been entered by the court.

g. Having admitted or been found to have committed any unfair trade practice or fraud.

h. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere.

i. Having a life settlement license or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory.

j. Forging another’s name to an application or to any document related to a life settlement transaction.

k. Failing to comply with an administrative or court order imposing a child support obligation.

L. Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

(4) Training.

(a) An individual licensed as a broker shall comply with the training requirements set forth in s. 632.69 (3), Stats.

(b) A firm licensed as a broker shall certify to the commissioner on its application for initial and renewal licensing that the firm’s designated responsible Wisconsin-licensed individual representative has complied with the training requirements set forth in s. 632.69 (3), Stats.

(c) Each compliance period for recurring training required under s. 632.69 (3), Stats., shall commence on July first immediately following the preceding compliance period and shall end 24 months later on June 30.

(d) Recurring training required under s. 632.69 (3) (e), Stats., shall be completed and reported at a rate of not less than 2 hours each 12 months of each compliance period.

(5) Notification of formal administrative actions, criminal proceedings and lawsuits. A licensed broker or provider shall notify the commissioner in writing of the following within 30 days:

(a) Except for action taken by the Wisconsin office of the commissioner of insurance, any formal administrative action against the broker or provider taken by any state’s regulatory agency, commission or board or other regulatory agency which licenses the person for any occupational activity. The notification shall include a description of the basis for the administrative action and any action taken as a result of the proceeding, a copy of the notice of hearing and other documents describing the problem, a copy of the order, consent to order, stipulation, final resolution, and other relevant documents.

(b) Any initial pretrial hearing date related to any criminal prosecution of the broker or provider taken in any jurisdiction, other than a misdemeanor charge related to the use of a motor vehicle or the violation of a fish and game regulation. The notification shall include a copy of the initial criminal complaint filed, the order resulting from the hearing and any other relevant legal documents.

(c) Any felony conviction or misdemeanor conviction of the licensee in any jurisdiction, other than a misdemeanor conviction related to the use of a motor vehicle or the violation of a fish and game regulation. The notification shall include a copy of the initial criminal complaint or criminal charging document filed, the judgment of conviction, the sentencing document, the broker’s explanation of what happened to cause criminal proceedings, the licensee’s reasons why no action should be taken regarding the life settlement and any other relevant legal documents.

(d) Any lawsuit filed against the licensee in which there are allegations of misrepresentation, fraud, theft or embezzlement involving the licensee. The notification shall include a copy of the initial suit documents, the licensee’s explanation of what happened to cause the civil proceedings, why no action should be taken regarding the life settlement broker’s license, and any other relevant legal documents.

(6) Notification to office. A licensee shall notify the office in writing of any of the following within 30 days after the date of the occurrence:

(a) The cessation of business activities as a broker or provider. A notification under this subsection shall include the name and address of the custodian of the licensee’s business records and the location of the records.

(b) Any change in the broker’s or provider’s business mailing address or the location of its business records.

(c) New or revised information about officers, partners, directors, members, designated employees, or stockholders, except stockholders owning fewer than ten percent of the shares of a provider or broker whose shares are publicly traded.

(7) Filing and approval of forms. In fulfilling the requirements of s. 632.69 (5), Stats., a licensee shall comply with the provisions of s. 631.20 (1) (a), Stats.

(8) Notices.

(a) Purpose. This subsection interprets and implements s. 632.69, Stats., by specifying the content of certain notices required to be given to policyholders, owners and purchasers.

(b) Notice format. An insurer shall use the forms in Appendices I, II, and III to comply with this subsection. Each notice shall be in no less than 10-point type, and shall include the issuer’s address, toll free telephone number, if available, and telephone number in no less than 12-point type.

This par. (c) does not apply to term life insurance.
For each life insurance policy issued, life insurers shall provide to individual life insurance policyholders at the time the policy is issued the notice prescribed in Appendix I to this section.
In addition, life insurers shall provide a statement informing the policyholder that if the policyholder is considering making changes in the status of a policy, the policyholder should consult with a licensed insurance agent or financial advisor to find an alternative best suited to the policyholder’s needs. The statement shall advise the policyholder that additional information is available from the office of the commissioner of insurance at its website address: http://oci.wi.gov or by telephone at 1-800-236-8517. The statement shall be sent to the policyholder annually, and may be included in notices or mailings otherwise provided to policyholders.
The commissioner shall make information concerning policy alternatives available to the public.
Compliance by insurers with the requirements of par. (c) shall commence three months after September 1, 2012.

(d) Disclosure to owner. In accordance with s. 632.69 (8) (a) 2., Stats., at the time disclosures required by s. 632.69 (8) (a) 1., Stats., are provided by the broker or provider with each application for a life settlement, the broker or provider shall provide to the owner a brochure entitled “Wisconsin Guide to Understanding Life Settlements” as prescribed in Appendix II to this section.

(e) Disclosure to purchaser. In accordance with s. 632.69 (9) (a) 2., Stats., at the time disclosures required by s. 632.69 (9) (a) 1., Stats., are provided by the provider to the purchaser, and prior to the date that a life settlement purchase agreement is signed by all parties, a provider shall provide to the purchaser a brochure entitled “Wisconsin Guide to Purchase of a Life Settlement” as prescribed in Appendix III to this section.

History

CR 10-051: cr. Register August 2012 No. 680, eff. 9-1-12.

Wis. Admin. Code § Ins 2.19 Military sales practices {#sec-ins-2.19 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.19}

(1) Purpose.

(a) The purpose of this section is to set forth standards to protect active duty service members of the United States Armed Forces from dishonest and predatory insurance sales practices by declaring certain identified practices to be false, misleading, deceptive or unfair.

(b) This section does not create or imply a private cause of action for a violation of this section.

(2) Scope. This section shall apply only to the solicitation or sale of any life insurance or annuity product by an insurer or insurance producer to an active duty service member of the United States Armed Forces.

(3) Authority. This section is issued under the authority of ss. 601.41 (3), 628.34 and 628.347, Stats.

(4) Exemptions.

(a) This section does not apply to solicitations or sales involving any of the following:

Credit insurance.
Group life insurance or group annuities where there is no in-person, face-to-face solicitation of individuals by an insurance producer or where the contract or certificate does not include a side fund.
An application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the commissioner; or, when a term conversion privilege is exercised among corporate affiliates.
Individual stand-alone health policies, including disability income policies.
Contracts offered by Servicemembers’ Group Life Insurance or Veterans’ Group Life Insurance, as authorized by 38 U.S.C. section 1965 et seq.
Life insurance contracts offered through or by a non-profit military association, qualifying under section 501 (c) (23) of the Internal Revenue Code, and which are not underwritten by an insurer.
Contracts used to fund any of the following:

a. An employee pension or welfare benefit plan that is covered by 29 U.S.C. chapter 18.

b. A plan described by sections 401(a), 401(k), 403(b), 408(k) or 408(p) of the Internal Revenue Code, as amended, if established or maintained by an employer.

c. A government or church plan defined in section 414 of the Internal Revenue Code, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under section 457 of the Internal Revenue Code.

d. A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.

e. Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process.

f. Prearranged funeral contracts.

(b) Nothing in this section shall be construed to abrogate the ability of nonprofit organizations or other organizations to educate members of the United States Armed Forces in accordance with Department of Defense DoD Instruction 1344.07 — Personal Commercial Solicitation on DoD Installations or a successor directive.

(c) For purposes of this section, general advertisements, direct mail and internet marketing does not constitute solicitation. Telephone marketing shall not constitute solicitation provided the caller explicitly and conspicuously discloses that the product concerned is life insurance and makes no statements that avoid a clear and unequivocal statement that life insurance is the subject matter of the solicitation. Nothing in this paragraph shall be construed to exempt an insurer or insurance producer from this section in any in-person, face-to-face meeting established as a result of the solicitation exemptions identified in this paragraph.

(5) Definitions. In this section:

(a) “Active duty” means full-time duty in the active military service of the United States and includes members of the reserve component (National Guard and Reserve) while serving under published orders for active duty or full-time training. The term does not include members of the reserve component who are performing active duty or active duty for training under military calls or orders specifying periods of less than 31 calendar days.

(b) “Department of Defense personnel” means all active duty service members and all civilian employees, including nonappropriated fund employees and special government employees, of the U.S. Department of Defense.

(c) “Door to door” means a solicitation or sales method whereby an insurance producer proceeds randomly or selectively from household to household without prior specific appointment.

(d) “General advertisement” means an advertisement having as its sole purpose the promotion of the reader’s or viewer’s interest in the concept of insurance, or the promotion of the insurer or the insurance producer.

(e) “Insurance producer” means a person required to be licensed under the laws of this state to sell, solicit or negotiate life insurance, including annuities.

(f) “Insurer” means an insurance company required to be licensed under the laws of this state to provide life insurance products, including annuities.

(g) “Known” or “knowingly” means, depending on its use in this section, the insurance producer or insurer had actual awareness, or in the exercise of ordinary care should have known, at the time of the act or practice complained of, that the person solicited is any of the following:

A service member.
A pay grade of E-4 or below.

(h) “Life insurance” means insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income and, unless otherwise specifically excluded, includes individually issued annuities.

(i) “Military installation” means any federally owned, leased, or operated base, reservation, post, camp, building, or other facility to which service members are assigned for duty, including barracks, transient housing, and family quarters.

(j) “MyPay” means a Defense Finance and Accounting Service web-based system that enables service members to process certain discretionary pay transactions or provide updates to personal information data elements without using paper forms.

(k) “Service member” means any active duty officer, commissioned and warrant, or enlisted member of the United States Armed Forces.

(L) “Side fund” means a fund or reserve that is part of or otherwise attached to a life insurance policy, excluding individually issued annuities, by rider, endorsement or other mechanism which accumulates premium or deposits with interest or by other means. The term does not include any of the following:

Cumulated value or cash value or secondary guarantees provided by a universal life policy.
Cash values provided by a whole life policy which are subject to standard nonforfeiture law for life insurance.
A premium deposit fund which complies with all of the following:

a. Contains only premiums paid in advance which accumulate at interest.

b. Imposes no penalty for withdrawal.

c. Does not permit funding beyond future required premiums.

d. Is not marketed or intended as an investment.

e. Does not carry a commission, either paid or calculated.

(m) “Specific appointment” means a prearranged appointment agreed upon by both parties and definite as to place and time.

(n) “United States Armed Forces” means all components of the Army, Navy, Air Force, Marine Corps, and Coast Guard.

(6) Practices declared false, misleading, deceptive or unfair on a military installation or using military personnel or programs.

(a) No insurer or insurance producer may engage in any of the following acts or practices on a military installation with respect to the in-person, face-to-face solicitation of life insurance:

Knowingly soliciting the purchase of any life insurance product door to door or without first establishing a specific appointment for each meeting with the prospective purchaser.
Soliciting service members in a group or mass audience or in a captive audience where attendance is not voluntary.
Knowingly making appointments with or soliciting service members during their normally scheduled duty hours.
Making appointments with or soliciting service members in barracks, day rooms, unit areas, or transient personnel housing or in other areas where the installation commander has prohibited solicitation.
Soliciting the sale of life insurance without first obtaining permission from the installation commander or the commander’s designee.
Posting unauthorized bulletins, notices or advertisements.
Fail to present Department of Defense Form 2885, Personal Commercial Solicitation Evaluation, to service members solicited or encouraging service members solicited not to complete or submit a Department of Defense Form 2885.
Knowingly accepting an application for life insurance or issuing a policy of life insurance on the life of an enlisted member of the United States Armed Forces without first obtaining for the insurer’s files a completed copy of any required form which confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance established by regulations, directives or rules of the Department of Defense or any branch of the United States Armed Forces.

(b) No insurer or insurance producer may do any of the following:

Use Department of Defense personnel, directly or indirectly, as a representative or agent in any official or business capacity with or without compensation with respect to the solicitation or sale of life insurance to service members.
Participate in any United States Armed Forces sponsored education or orientation program for the purpose of solicitation of the sale of life insurance to service members.

(7) Practices declared false, misleading, deceptive or unfair regardless of location. No insurer or insurance producer may do any of the following regardless of location:

(a) Submit, process or assist in the submission or processing of any allotment form or similar device used by the United States Armed Forces to direct a service member’s pay to a third party for the purchase of life insurance. This includes, but is not limited to, using or assisting in using a service member’s MyPay account or other similar internet or electronic medium for such purposes. This subdivision does not prohibit assisting a service member by providing insurer or premium information necessary to complete any allotment form.

(b) Knowingly receive funds from a service member for the payment of premium from a depository institution with which the service member has no formal banking relationship. For purposes of subsection, a formal banking relationship is established when the depository institution does all of the following:

Provides the service member a deposit agreement and periodic statements and makes the disclosures required by 12 U.S.C. section 4301 et seq. and the regulations promulgated thereunder.
Permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums.

(c) Employ any device or method or enter into any agreement whereby funds received from a service member by allotment for the payment of insurance premiums are identified on the service member’s leave and earnings statement or equivalent or successor form as savings or checking and where the service member has no formal banking relationship as defined in par. (b).

(d) Enter into any agreement with a depository institution for the purpose of receiving funds from a service member whereby the depository institution, with or without compensation, agrees to accept direct deposits from a service member with whom it has no formal banking relationship.

(e) Use Department of Defense personnel, directly or indirectly, as a representative or agent in any official or unofficial capacity with or without compensation with respect to the solicitation or sale of life insurance to service members who are junior in rank or grade, or to the family members of such personnel.

(f) Offer or give anything of value, directly or indirectly, to Department of Defense personnel to procure their assistance in encouraging, assisting or facilitating the solicitation or sale of life insurance to another service member.

(g) Knowingly offer or give anything of value to a service member with a pay grade of E-4 or below for his or her attendance at any event where an application for life insurance is solicited.

(h) Advise a service member with a pay grade of E-4 or below to change his or her income tax withholding or state of legal residence for the sole purpose of increasing disposable income to purchase life insurance.

(i) Make any representation, or use any device, title, descriptive name or identifier that has the tendency or capacity to confuse or mislead a service member into believing that the insurer, insurance producer or product offered is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, the United States Armed Forces, or any state or federal agency or government entity, including, but not limited to, use of any of the following titles: “Battalion Insurance Counselor,” “Unit Insurance Advisor,” “Servicemen’s Group Life Insurance Conversion Consultant” or “Veteran’s Benefits Counselor.” Nothing is this subdivision shall be construed to prohibit a person from using a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an accredited institution of higher learning, including, but are not limited to, Chartered Life Underwriter, Chartered Financial Consultant, Certified Financial Planner, Master of Science in Financial Services, and Masters of Science of Financial Planning.

(j) Solicit the purchase of any life insurance product through the use of or in conjunction with any third party organization that promotes the welfare of or assists members of the United States Armed Forces in a manner that has the tendency or capacity to confuse or mislead a service member into believing that either the insurer, insurance producer or insurance product is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government or the United States Armed Forces.

(k) Use or describe the credited interest rate on a life insurance policy in a manner that implies that the credited interest rate is a net return on premium paid.

(L) Excluding individually issued annuities, misrepresent the mortality costs of a life insurance product, including stating or implying that the product costs nothing or is free.

(m) Make any representation regarding the availability, suitability, amount, cost, exclusions or limitations to coverage provided to a service member or dependents of a service member by Servicemembers’ Group Life Insurance or Veterans’ Group Life Insurance, which is false, misleading or deceptive.

(n) Make any representation regarding conversion requirements, including the costs of coverage, or exclusions or limitations to coverage of Servicemembers’ Group Life Insurance or Veterans’ Group Life Insurance to private insurers which is false, misleading or deceptive.

(o) Suggest, recommend or encourage a service member to cancel or terminate his or her Servicemembers’ Group Life Insurance or issue a life insurance policy which replaces an existing Servicemembers’ Group Life Insurance policy unless the replacement will take effect upon or after the service member’s separation from the United States Armed Forces.

(p) Deploy, use or contract for any lead generating materials designed exclusively for use with service members that do not clearly and conspicuously disclose that the recipient will be contacted by an insurance producer, if that is the case, for the purpose of soliciting the purchase of life insurance.

(q) Fail to disclose that a solicitation for the sale of life insurance will be made when establishing a specific appointment for an in-person, face-to-face meeting with a prospective purchaser.

(r) Excluding individually issued annuities, fail to clearly and conspicuously disclose the fact that the product being sold is life insurance.

(s) Fail to make, at the time of sale or offer to an individual known to be a service member, the written disclosures required by 10 U.S.C. 992 note section 10.

(t) Excluding individually issued annuities, when the sale is conducted in-person face-to-face with an individual known to be a service member, fail to provide the applicant at the time the application is taken all of the following:

An explanation of any free look period with instructions on how to cancel if a policy is issued.
Either a copy of the application or a written disclosure. The copy of the application or the written disclosure shall clearly and concisely set out the type of life insurance, the death benefit applied for and its expected first year cost. A basic illustration that meets the requirements of s. Ins 2.17 shall be deemed sufficient to meet this requirement for a written disclosure.

(u) Excluding individually issued annuities, recommend the purchase of any life insurance product which includes a side fund to a service member in pay grades E-4 and below unless the insurer and insurance producer have reasonable grounds for believing that the life insurance death benefit, standing alone, is suitable. The offer for sale, or sale, of a life insurance product which includes a side fund to a service member in pay grades E-4 or below who is currently enrolled in Servicemembers’ Group Life Insurance is presumed unsuitable unless, after the completion of a needs assessment, the insurer demonstrates that the applicant’s Servicemembers’ Group Life Insurance death benefit, together with any other military survivor benefits, savings and investments, survivor income, and other life insurance are insufficient to meet the applicant’s insurable needs for life insurance. For the purpose of this paragraph:

“Insurable needs” are the risks associated with premature death taking into consideration the financial obligations and immediate and future cash needs of the applicant’s estate, survivors or dependents.
“Other military survivor benefits” include: the Death Gratuity, Funeral Reimbursement, Transition Assistance, Survivor and Dependents’ Educational Assistance, Dependency and Indemnity Compensation, TRICARE Healthcare Benefits, Survivor Housing Benefits and Allowances, Federal Income Tax Forgiveness, and Social Security Survivor Benefits.

(v) Excluding individually issued annuities, offer for sale or sell any life insurance contract which includes a side fund to an individual known to be a service member:

Unless interest credited accrues from the date of deposit to the date of withdrawal and permits withdrawals without limit or penalty;
Unless the applicant has been provided with a schedule of effective rates of return based upon cash flows of the combined product. For this disclosure, the effective rate of return shall consider all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender values available to the policyholder in addition to life insurance coverage. This schedule shall be provided for at least each policy year from one to ten and for every fifth policy year thereafter ending at the earliest of age 100, policy maturity or final expiration; and
Which by default diverts or transfers funds accumulated in the side fund to pay, reduce or offset any premiums due.

(w) Excluding individually issued annuities, offer for sale or sell any life insurance contract which after considering all policy benefits, including but not limited to endowment, return of premium or persistency, does not comply with standard nonforfeiture law for life insurance.

(x) Sell any life insurance product to an individual known to be a service member that excludes coverage if the insured’s death is related to war, declared or undeclared, or any act related to military service except for an accidental death coverage, including a double indemnity, which may be excluded.

History

CR 07-108: cr. Register March 2009 No. 639, eff. 4-1-09.

Wis. Admin. Code § Ins 2.20 Unisex nonforfeiture values in certain life insurance policies {#sec-ins-2.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.20}

(1) Purpose. The purpose of this section is to allow insurers who have elected an operative date under s. 632.43 (6m) (h), Stats., to provide for cash surrender and paid-up nonforfeiture benefits which do not vary with the sex of the life insured. Some life insurance policies are subject to the decision of the United States supreme court in Arizona Governing Committee v. Norris,103 Supreme Court Reporter 3492, which makes it illegal for an employer to make contributions after August 1, 1983, to a defined contribution pension plan if the benefits derived from those contributions differ by sex. Separate provisions are set forth in this section for unisex policies that may be subject to that decision and for unisex policies in general.

(2) Scope. Except as provided for in sub. (4) (b), this section applies only to those policies issued in this state for which the insurer or employer has determined that the implications of Norris would prohibit the use of cash surrender and paid-up nonforfeiture benefits which vary with the sex of the insured.

(3) Definitions.

(a) “lx” means the number of lives surviving to age x.

(b) “1000 qx” means the yearly death rate per thousand at age x.

(c)

“Table A” means the 1980 CSO Mortality Table and the 1980 CET Mortality Table for male lives, with or without 10-Year Select Mortality Factors. The yearly death rate per thousand, 1000 qx, for these tables is published in Appendix A and Appendix B, pages 618 and 619, Volume 33, Transactions of the Society of Actuaries.
“Tables NA and SA” means the corresponding 1980 nonsmoker and smoker mortality tables for male lives.

(d)

“Table G” means the 1980 CSO Mortality Table and the 1980 CET Mortality Table for female lives, with or without 10-Year Select Mortality Factors. The yearly death rate per thousand, 1000 qx, from these tables is published in Appendix A and Appendix B, pages 618 and 619, Volume 33, Transactions of the Society of Actuaries.
“Tables NG and SG” means the corresponding 1980 nonsmoker and smoker mortality tables for female lives.

(e)

“Tables B through F” means the blended 1980 CSO and 1980 CET Mortality Tables for policies issued on an age nearest birthday basis with varying proportions of male lives to total lives. The ratio of male lives to total lives is 80% for Table B, 60% for Table C, 50% for Table D, 40% for Table E and 20% for Table F. These tables are published in the proceedings of the National Association of Insurance Commissioners for the 1983 December meeting, pages 396 last birthday basis, the tables shall be modified by interpolation between values of lx.
“Tables NB through NF and SB through SF” means the corresponding 1980 blended nonsmoker and smoker mortality tables.

(f) “1980 CSO and CET Nonsmoker and Smoker Mortality Tables”means the mortality tables with separate rates of mortality for nonsmokers and smokers derived from the 1980 CSO and 1980 CET Mortality Tables and adopted by the NAIC in December 1983. Mortality rates for these tables are published on pp. 406-409, Proceedings of the National Association of Insurance Commissioners, 1984, Vol. 1, and pp. 521-530 Proceedings of the National Association of Insurance Commissioners, 1987, Vol. 1.

(4) Cash value and paid-up nonforfeiture benefits.

(a)

For any policy of life insurance which falls within sub. (2) of this section and is delivered or issued for delivery in this state after the operative date of s. 632.43 (6m) (h), Stats., applicable to the policy, the cash surrender and paid-up nonforfeiture benefits provided under the policy may be calculated using one of the sets of tables designated as Table A through Table G. Tables A and G may not be used for policies issued on or after January 1, 1985 except where the proportion of persons insured is anticipated to be 90% or more of one sex or the other or except for certain policies converted from group insurance. Such group conversions issued on or after January 1, 1986, shall use mortality tables based on the blend of lives by sex expected for such policies if such group conversions are considered extensions of the Norris decision.
In place of Tables A through G under sub. (1), corresponding Tables NA through NG and SA through SG may be used in situations where separate rates for nonsmokers and smokers are used.

(b)

An insurer may elect one of the Tables B through F in lieu of the 1980 CSO and CET tables for all life insurance policies under which all contractual requirements and guarantees are independent of the sex of the life insured, without regard to any opinion as to the applicability of Norris; provided that the Table so elected may not be changed unless the insurer can demonstrate to the satisfaction of the commissioner that a different Blend is more appropriate.
In lieu of the above, corresponding Tables NB through NF and SB through SF may be used in situations where separate rates for nonsmokers and smokers are used.

(5) Reserves. The minimum reserve standards for life insurance policies are set forth in s. 623.06, Stats., and are not affected by this section.

History

Emerg. cr. eff. 5-19-84; cr. Register, August, 1984, No. 344, eff. 9-1-84; r. (6) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; renum. (3)(c), (d), (e), (4)(a) and (b) to be (3)(c)1., (d)1., (e)1., (4)(a)1. and (b)1. and am. (4)(a)1. and (b)1., cr. (3)(c)2., (d)2., (e)2., (f), (4)(a)2. and (b)2., Register, November, 1988, No. 395, eff. 12-1-88.

Wis. Admin. Code § Ins 2.30 Annuity mortality tables {#sec-ins-2.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.30}

(1) Purpose. The purpose of this section is to adopt, pursuant to s. 623.06 (2a) (b) and (d), Stats., mortality tables for use in determining the minimum standard of valuation for annuity and pure endowment contracts.

(2) Definitions.

(a) “1983 GAM table” means those male and female group annuity mortality tables adopted for the valuation of group annuity and pure endowment contracts in December of 1983 by the NAIC and published on pages 414-415, NAIC proceedings, vol. I, 1984.

(b) “1983 table ‘a’” means that mortality table adopted for the valuation of individual annuity and pure endowment contracts in June of 1982 by the NAIC and published on page 454, NAIC proceedings, vol. II 1982.

(c) “1994 GAR table” means the group annuity reserving table adopted for the valuation of group annuity and pure endowment contracts in December of 1996 by the NAIC as published on pages 866 and 867, vol. XLVII, transactions, society of actuaries, 1995.

(d) “2012 Individual Annuity Mortality Period Life Table” or “2012 IAM Period Table” means the Period Table containing loaded mortality rates for calendar year 2012. This table contains rates, qx2012, developed by the society of actuaries committee on life insurance research, and published in the 2012 proceedings of the NAIC, Fall Volume I, pages 149-150.

(e) “2012 IAR Table” means that generational mortality table developed by the society of actuaries committee on life insurance research and containing rates, qx2012+n, derived from a combination of the 2012 IAM Period Table and Projection Scale G2, using the methodology stated in Section 3m.

(f) “Annuity 2000 mortality table” means those male and female mortality tables adopted for the valuation of individual annuity and pure endowment contracts in December of 1996 by the NAIC as published on page 240, vol. XLVII, transactions, society of actuaries, 1995.

(g) “Generational mortality table” means a mortality table containing a set of mortality rates that decrease for a given age from one year to the next based on a combination of a Period table and a projection scale containing rates of mortality improvement.

(h) “NAIC” means the national association of insurance commissioners.

(i) “Period table” means a table of mortality rates applicable to a given calendar year.

(j) “Projection Scale G2” or “Scale G2” is a table of annual rates, G2x, of mortality improvement by age for projecting future mortality rates beyond calendar year 2012. This table was developed by the society of actuaries committee on life insurance research, and published in the 2012 proceedings of the NAIC, Fall Volume I, pages 151-152.

(3) Individual annuity or pure endowment contracts.

(a) The 1983 table ‘a’ may be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after November 8, 1977 but before January 1, 1986.

(b) Either the 1983 table ‘a’ or the annuity 2000 mortality table shall be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1986 but before January 1, 1999.

(c) Except as provided in par. (d) the annuity 2000 mortality table shall be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 1999, but before January 1, 2015.

(cm) Except as provided in par. (d) the 2012 IAR Table may be used to determine the minimum standard of valuation for any individual annuity or pure endowment contract issued on or after January 1, 2015. For any individual annuity or pure endowment contract issued on or after January 1, 2016, the 2012 IAR Table shall be used.

(d) The 1983 table a without projection shall be used for determining the minimum standards of valuation for an individual annuity or pure endowment contract issued on or after January 1, 1999 when the contract is based on life contingencies and is issued to fund periodic benefits arising from any of one of the following:

Settlements of various forms of claims pertaining to court settlements or out of court settlements from tort actions.
Settlements involving similar actions such as worker’s compensation claims.
Settlements of long term disability claims where a temporary or life annuity has been used in lieu of continuing disability payments.

(3m) Application of the 2012 IAR Table.

(a) In using the 2012 IAR Table, the mortality rate for a person age x in year (2012 + n) is calculated as follows:

(b) The resulting qx 2012+n shall be rounded to three decimal places per 1,000, e.g., 0.741 deaths per 1,000. The rounding shall occur according to the formula in par. (a), starting at the 2012 period table rate.

Note: For example, for a male age 30, qx 2012 = 0.741. qx 2013 = 0.741 * (1 – 0.010) ^{1 = 0.73359, which is rounded to 0.734. qx 2014 = 0.741 * (1 – 0.010)} 2 = 0.7262541, which is rounded to 0.726.

Note: A method leading to incorrect rounding would be to calculate qx 2014 as qx 2013 * (1 – 0.010), or 0.734 * 0.99 = 0.727. It is incorrect to use the already rounded qx 2013 to calculate qx 2014.

(4) Group annuity or pure endowment contracts.

(a) Either the 1983 GAM table, the 1983 table ‘a’, or the 1994 GAR table may be used to value any annuity or pure endowment purchased on or after November 8, 1977 but before January 1, 1986 under a group annuity or pure endowment contract.

(b) Either the 1983 GAM table or the 1994 GAR table shall be used to determine the minimum standard of valuation for any annuity or pure endowment contract purchased on or after January 1, 1986 but before January 1, 1999 under a group annuity or pure endowment contract.

(c) The 1994 GAR table shall be used for determining the minimum standard of valuation for any annuity or pure endowment contract purchased on or after January 1, 1999 under a group annuity or pure endowment contract.

(5) Application of 1994 GAR table.

(a) In using the 1994 GAR table the mortality rate for a person age x in year (1994 + n) is calculated as follows:

History

Cr. Register, November, 1985, No. 359, eff. 12-1-85; am. Register, October, 1998, No. 514, eff. 1-1-99; CR 14-076: r. and recr. (2), am. (3) (c), cr. (3) (cm), (3m) Register August 2015 No. 716, eff. 9-1-15.

Wis. Admin. Code § Ins 2.35 Smoker and nonsmoker mortality tables for minimum reserve liabilities and minimum nonforfeiture benefits {#sec-ins-2.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.35}

(1) Purpose. This section implements ss. 623.06 (2) (am) 3. and 632.43 (6m) (e) 3. f., Stats., by permitting the use of mortality tables that reflect differences in mortality between smokers and nonsmokers. These mortality tables are used in determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits for plans of insurance with separate premium rates for smokers and nonsmokers.

(2) Definitions. In this section:

(a) “1980 CSO table, with or without 10-year select mortality factor” means that mortality table, consisting of separate rates of mortality for male and female lives, incorporated in ss. 623.06 (2) (am) 3 and 632.43 (6m) (e) 3. f., Stats., and referred to in those statutes as the commissioner’s 1980 standard ordinary mortality table, with or without 10-year select mortality factors.

(b) “1980 CET table” means that mortality table consisting of separate rates of mortality for male and female lives incorporated in ss. 623.06 (2) (am) 3. and 632.43 (6m) (e) 3. f., Stats., and referred to in those statutes as the commissioner’s 1980 extended term insurance table.

(c) “1980 CSO smoker and nonsmoker mortality tables” means the mortality tables with separate rates of mortality for smokers and nonsmokers derived from the tables defined in par. (a), and adopted by the National Association of Insurance Commissioners in December 1983.

Note: Mortality rates for these tables are published on pp. 406-413, Proceedings of the National Association of Insurance Commissioners, 1984 Vol. I.

(d) “1980 CET smoker and nonsmoker mortality tables” means the mortality tables with separate rates of mortality for smokers and nonsmokers derived from the tables defined in par. (b), and adopted by the National Association of Insurance Commissioners in December 1983.

Note: Mortality rates for these tables are published on pp. 406-413, Proceedings of the National Association of Insurance Commissioners, 1984 Vol. I.

(e) “Composite mortality tables” means the mortality tables defined in pars. (a) and (b), as originally published with rates of mortality that do not distinguish between smokers and nonsmokers.

(3) Alternate tables. At the option of the company and subject to the condition that the company use the same select factors for both smoker and nonsmoker tables, and the conditions stated in sub. (4), for any policy of insurance delivered or issued for delivery in this state after the operative date of s. 632.43 (6m) (h), Stats., for that policy form:

(a) The company may substitute the 1980 CSO smoker and nonsmoker mortality tables, with or without 10-year select mortality factors for the 1980 CSO table, with or without 10-year select mortality factors, for use in determining minimum reserve liabilities, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; and

(b) The company may substitute the 1980 CET smoker and nonsmoker mortality tables for the 1980 CET Table for use in determining minimum reserve liabilities, minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

(4) Conditions. For each plan of insurance with separate rates for smokers and nonsmokers the company may:

(a) Use composite mortality tables to determine minimum reserve liabilities, minimum cash surrender values and amounts of paid-up nonforfeiture benefits;

(b) Use 1980 CSO or 1980 CET smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by s. 623.06 (7), Stats., and use composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or

(c) Use 1980 CSO or 1980 CET smoker and nonsmoker mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

History

Cr. Register, November, 1988, No. 395, eff. 12-1-88.

Wis. Admin. Code § Ins 2.40 Annuity contracts without life contingencies {#sec-ins-2.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.40}

(1) Purpose. This section implements and interprets s. 632.66, Stats., by authorizing life insurers to issue annuity contracts without life contingencies and setting forth the conditions under which these annuity contracts may be issued.

(2) Scope. This section applies to all annuity contracts without life contingencies and which are classified as life and disability insurance under s. Ins 6.75 (1).

(3) Grant of authority. A life insurer that holds a valid certificate of authority to transact the business of life insurance and annuities in this state may issue in this state annuity contracts without life contingencies, subject to the following conditions:

(a) No insurer may base the consideration to be paid to the insurer for the annuity contract without a life contingency upon the age or condition of health of the purchaser of the contract or any other person, or on any mortality or morbidity contingencies.

(b) An insurer shall base the amounts guaranteed to be paid under an annuity contract without a life contingency upon reasonable assumptions as to investment income and expenses, determined in a manner which is equitable to all holders of such contracts.

(c) An insurer may offer to the public an annuity contract without a life contingency only through licensed intermediaries or directly by the insurer.

(4) Applicable statutes and administrative rules. An annuity contract without a life contingency is deemed to be an annuity for purposes of chs. 600 to 645, Stats., and all rules adopted thereunder, including, but not limited to, ch. 623, Stats., ss. 631.20 to 631.27, Stats., and ss. Ins 2.07, 2.15, 6.05, and 51.80.

History

Cr. Register, December, 1988, No. 396, eff. 1-1-89; correction in (4) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1999, No. 522.

Wis. Admin. Code § Ins 2.45 Charitable organizations; insurable interest {#sec-ins-2.45 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.45}

(1) Purpose. The purpose of this section is to interpret s. 631.07, Stats., with respect to the insurable interest of charitable organizations. This section does not limit or abridge any insurable interest existing at common law or by statute.

(2) Scope. This section applies to life insurance policies issued in this state, including, but not limited to, policies in force on March 1, 1994.

(3) Definitions. In this section:

(a) “Charitable organization” means an organization described in 26 USC 170 (c) or 26 USC 501 (c) (3).

(b) “Life insurance” includes endowment policies and annuities.

(4) Insurable interest. A charitable organization may be the applicant, owner or beneficiary of a life insurance policy issued on the life of any individual. A charitable organization is deemed to have an insurable interest in the individual. For insurance applied for on or after March 1, 1994, the charitable organization has an insurable interest only if it obtains the consent of the individual in writing or by other means authorized by common law or by statute.

History

Cr. Register, February, 1994, No. 458, eff. 3-1-94.

Wis. Admin. Code § Ins 2.80 Valuation of life insurance policies {#sec-ins-2.80 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.80}

(1) Purpose.

(a) This section establishes minimum standards under ch. 623, Stats., for life insurance policy reserves by providing tables of select mortality factors, establishing rules concerning a minimum standard for the valuation of plans with non-level premiums or benefits, and establishing rules concerning a minimum standard for the valuation of plans with secondary guarantees.

(b) The method for calculating basic reserves defined in this section constitutes the commissioner’s reserve valuation method for policies to which this section is applicable.

(2) Scope. This section applies to all life insurance policies, wherever sold, with or without nonforfeiture values, issued on or after January 1, 2000, subject to the following exceptions and conditions:

(a) This section does not apply to any individual life insurance policy issued on or after January 1, 2000, if the policy is issued in accordance with and as a result of the exercise of a reentry provision contained in the original life insurance policy of the same or greater face amount that was issued before January 1, 2000 that guarantees the premium rates of the new policy. This section also does not apply to subsequent policies issued as a result of the exercise of such a provision in the new policy.

(b) This section does not apply to any of the following:

Any universal life policy that meets all the following requirements:

a. The secondary guarantee period, if any, is 5 years or less.

b. The specified premium for the secondary guarantee period is not less than the net level reserve premium for the secondary guarantee period based on the CSO valuation tables as defined in sub. (3) (f) and the applicable valuation interest rate.

c. The initial surrender charge is not less than 100% of the first year annualized specified premium for the secondary guarantee period.

Any variable life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.
Any variable universal life insurance policy that provides for life insurance, the amount or duration of which varies according to the investment experience of any separate account or accounts.
Group life insurance certificates, unless the certificates provide for a stated or implied schedule of maximum gross premiums required in order to continue coverage in force for a period in excess of one year.

(c) Calculation of the minimum valuation standard for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, other than universal life policies, or both, shall be in accordance with the provisions of sub. (5).

(d) Calculation of the minimum valuation standard for flexible premium and fixed premium universal life insurance policies, that contain provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period shall be in accordance with the provisions of sub. (6).

(e) This section applies to policies that are subject to s. Ins 2.81 in the manner specified in that section.

(3) Definitions. In this section:

(a) “Basic reserves” means reserves calculated in accordance with the principles of s. 623.06 (3), Stats.

(b) “Contract segmentation method” means the method of dividing the period from issue to mandatory expiration of a policy into successive segments, with the length of each segment being defined as the period from the end of the prior segment, or from policy inception for the first segment, to the end of the latest policy year as determined below. All calculations are made using the 1980 CSO valuation table and, if elected, the optional minimum mortality standard for deficiency reserves in sub. (4) (b). The length of a particular contract segment shall be set equal to the minimum of the value t for which Gt is greater than Rt. If Gt never exceeds Rt the segment length is deemed to be the number of years from the beginning of the segment to the mandatory expiration date of the policy. Gt and Rt are defined as follows:

Note: The purpose of the one percent tolerance in the R factor is to prevent irrational segment lengths due to such things as premium rounding. For example, consider a plan in which gross premiums are designed at some point to be a ratio times the underlying ultimate mortality rates, where the ratio varies by issue age. The resulting segments may be greater than one year, because the gross premiums are not expressed in fractional cents. The tolerance factor allows the creation of one-year segments for a plan in which premiums parallel the underlying valuation mortality table.

(c) “Deficiency reserves” means the excess, if greater than zero, of minimum reserves calculated in accordance with the principles of s. 623.06 (7), Stats., over basic reserves.

(d) “Guaranteed gross premiums” means the premiums under a policy of life insurance that are guaranteed and determined at issue.

(e) “Maximum valuation interest rates” means the interest rates defined in s. 623.06 (2m), Stats., that are to be used in determining the minimum standard for the valuation of life insurance policies.

(f) “1980 CSO valuation table” means the commissioner’s’ 1980 standard ordinary mortality table without 10-year select mortality factors, incorporated into the 1980 amendments to the national association of insurance commissioner’s standard valuation law, as provided in s. 623.06 (2) (am), Stats., and variations of the 1980 CSO valuation table approved by the national association of insurance commissioners, such as the unisex and smoker and non-smoker versions approved in December 1983 and adopted by ss. Ins 2.20 and 2.35.

Note: This paragraph defines the 1980 CSO valuation table without the existing 10 year select mortality factors to assure that, if select mortality factors are elected, only one set of factors may be applied to the base valuation mortality table.

(g) “Scheduled gross premium” means the smallest illustrated gross premium at issue for other than universal life insurance policies. For universal life insurance policies, “scheduled gross premium” means the smallest specified premium described in sub. (6) (c), if any, or else the minimum prescribed in sub. (6) (d).

(h) “Segmented reserves” means reserves, calculated using segments produced by the contract segmentation method, equal to the present value of all future guaranteed benefits less the present value of all future net premiums to the mandatory expiration of a policy, where the net premiums within each segment are a uniform percentage of the respective guaranteed gross premiums within the segment. The uniform percentage for each segment is such that, at the beginning of the segment, the present value of the net premiums within the segment is calculated in the following manner:

The present value of the death benefits within the segment, plus
The present value of any unusual guaranteed cash value, as provided in sub. (5) (g), occurring at the end of the segment, less
Any usual guaranteed cash value occurring at the start of the segment, plus
For the first segment only, the excess of subd. 4. a. over subd. 4. b., as follows:

a. A net level annual premium equal to the present value, at the date of issue, of the benefits provided for in the first segment after the first policy year, divided by the present value, at the date of issue, of an annuity of one per year payable on the first and each subsequent anniversary within the first segment on which a premium falls due. However, the net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy.

b. A net one-year term premium for the benefits provided for in the first policy year.

The length of each segment is determined by the contract segmentation method.
The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the sum of the length of all segments of the policy.
For both basic reserves and deficiency reserves computed by the contract segmentation method, present values shall include future benefits and net premiums in the current segment and in all subsequent segments.

Note: The segmentation requirement should not be limited to plans with no cash surrender values; otherwise companies could avoid segmentation entirely by designing policies with minimal (positive) cash values. Segmentation for plans with cash surrender values should be based solely upon gross premium levels. Basing segmentation upon the level of cash surrender values introduces complications because of the interrelationship between minimum cash surrender values and gross premium patterns. The requirements of this section relating to reserves or plans with unusual cash values and to reserves if cash values exceed calculated reserves serve to link required reserves and cash surrender values. The calculation of segmented reserves shall not be linked to the occurrence of a positive unitary terminal reserve at the end of a segment. The requirement of this section to hold the greater of the segmented reserve or the unitary reserve eliminates the need for any linkage.

(i) “Tabular cost of insurance” means the net single premium at the beginning of a policy year for one-year term insurance in the amount of the guaranteed death benefit in that policy year.

(j) “Ten-year select factors” means the select factors adopted with the 1980 amendments to the national association of insurance commissioner’s standard valuation law as provided in s. 623.06 (2) (am), Stats.

(k) “Unitary reserves” means the present value of all future guaranteed benefits less the present value of all future modified net premiums, where all of the following occur:

Guaranteed benefits and modified net premiums are considered to the mandatory expiration of the policy.
Modified net premiums are a uniform percentage of the respective guaranteed gross premiums, where the uniform percentage is such that, at issue, the present value of the net premiums equals the present value of all death benefits and pure endowments, plus the excess of:

a. A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one year payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan of insurance of the same renewal year equivalent level amount at an age one year higher than the age at issue of the policy, over

b. A net one-year term premium for the benefits provided for the first policy year.

The interest rates used in the present value calculations for any policy may not exceed the maximum valuation interest rate, determined with a guarantee duration equal to the length from issue to the mandatory expiration of the policy.

Note: The purpose of this paragraph is to define as specifically as possible what has become commonly called the unitary method. The national association of insurance commissioners standard valuation law does not define the term “unitary” for policies with nonlevel premiums or benefits; its requirements for reserves “computed by a method that is consistent with the principles of the national association of insurance commissioners standard valuation law” has not been uniformly interpreted.

(L) “Universal life insurance policy” means any individual life insurance policy under the provisions of which separately identified interest credits, other than in connection with dividend accumulations, premium deposit funds, or other supplementary accounts, and mortality or expense charges are made to the policy.

(4) General calculation requirements for basic reserves and premium deficiency reserves.

(a) At the election of the insurer for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using the 1980 CSO valuation table with select mortality factors. If select mortality factors are elected, they may be any of the following:

The 10-year select mortality factors incorporated into the 1980 amendments to the national association of insurance commissioners standard valuation law, as provided in s. 623.06 (2) (am), Stats.
The select mortality factors in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in april 1999.

Note: The select mortality factors for durations 1 through 15 in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in april 1999 reflect the society of actuaries’ data for the years 1983 through 1986 (designated as “83-86 SOA inter-company experience” in the tables), split by sex and smoking status, with fifteen years of select mortality improvement, based on the society of actuaries’ projection scale A applied. A 50% margin was added. The factors were then graded to the 1980 CSO valuation table over the next five durations. A 50% margin was deemed appropriate to provide a reasonable margin, with little likelihood that actual experience for significant blocks of business would exceed it.

(b) Deficiency reserves, if any, are calculated for each policy as the excess, if greater than zero, of the quantity A over the basic reserve. The quantity A is obtained by recalculating the basic reserve for the policy using guaranteed gross premiums instead of net premiums when the guaranteed gross premiums are less than the corresponding net premiums. At the election of the insurer for any one or more specified plans of insurance, the quantity A and the corresponding net premiums used in the determination of quantity A may be based upon the 1980 CSO valuation table with select mortality factors. If select mortality factors are elected, they may be any of the following:

The 10-year select mortality factors incorporated into 1980 amendments to the national association of insurance commissioners standard valuation law.
The select mortality factors in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in april 1999.

Note: The select mortality factors in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in April 1999 do not reflect the underwriting risk classes that have evolved since the period of the underlying experience. In light of this consideration, and the recent recognition of the regulatory value of actuarial opinions, this section allows actuarial judgement to be used for deficiency reserves.

For durations in the first segment, X % of the select mortality factors in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in April 1999, subject to all of the following:

a. X may vary by policy year, policy form, underwriting classification, issue age, or any other policy factor expected to affect mortality experience.

d. X is such that, when using the valuation interest rate used for basic reserves, the actuarial present value of future death benefits calculated using the mortality rates resulting from the application of X is greater than or equal to the actuarial present value of future death benefits calculated using anticipated mortality experience without recognition of mortality improvement beyond the valuation date.

e. X is such that the mortality rates resulting from the application of X are at least as great as the anticipated mortality experience, without recognition of mortality improvement beyond the valuation date, in each of the first 5 years after the valuation date.

f. The appointed actuary shall increase X at any valuation date where it is necessary to continue to meet all the requirements of this subdivision.

g. The appointed actuary may decrease X at any valuation date as long as X continues to meet all the requirements of this subdivision.

h. The appointed actuary shall specifically take into account the adverse effect on expected mortality and lapsation of any anticipated or actual increase in gross premiums.

i. If X is less than 100% at any duration for any policy, the appointed actuary shall annually prepare an actuarial opinion and memorandum for the company in conformance with the requirements of s. Ins 50.78; the appointed actuary shall disclose in the regulatory asset adequacy issues summary the impact of any insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods; and the appointed actuary shall annually offer an opinion for all policies subject to this section as to whether the mortality rates resulting from the application of X meet the requirements of this subdivision. This opinion shall be supported by an actuarial report, subject to appropriate actuarial standards of practice promulgated by the actuarial standards board of the American academy of actuaries. It shall reflect anticipated future mortality, without recognition of mortality improvement beyond the valuation date, taking into account relevant emerging experience.

(c) This paragraph applies to both basic reserves and deficiency reserves. Any set of select mortality factors may be used only for the first segment. However, if the first segment is less than 10 years, the appropriate 10-year select mortality factors incorporated into the 1980 amendments to the national association of insurance commissioners standard valuation law, as provided in s. 623.06 (2) (am), Stats., may be used thereafter through the 10th policy year from the date of issue.

Note: This section does not allow the use of the select mortality factors beyond the first segment. The rationale is that the result of a premium increase that is sufficient to require a new segment will be increased lapsation, leading to mortality deterioration after the increase. However, this section allows the use of the ten-year select mortality factors incorporated into the 1980 amendments to the national association of insurance commissioners standard valuation law, see s. 623.06 (2) (am), Stats., beyond the first segment (but in no case beyond the tenth policy year) in recognition that the mortality deterioration is unlikely to occur to a significant degree within the first 10 years.

(d) In determining basic reserves or deficiency reserves, guaranteed gross premiums without policy fees may be used where the calculation involves the guaranteed gross premium but only if the policy fee is a level dollar amount after the first policy year. In determining deficiency reserves, policy fees may be included in guaranteed gross premiums even if not included in the actual calculation of basic reserves.

(e) Reserves for policies that have changes to guaranteed gross premiums, guaranteed benefits, guaranteed charges, or guaranteed credits that are unilaterally made by the insurer after issue and that are effective for more than one year after the date of the change shall be the greatest of the following:

Reserves calculated ignoring the guarantee.
Reserves assuming the guarantee was made at issue.
Reserves assuming that the policy was issued on the date of the guarantee.

(f) The commissioner may require that the company document the extent of the adequacy of reserves for specified blocks, including but not limited to policies issued prior to the effective date of this regulation. This documentation may include a demonstration of the extent to which aggregation with other non-specified blocks of business is relied upon in the formation of the appointed actuary opinion pursuant to and consistent with the requirements of s. Ins 50.78.

(5) Calculation of minimum valuation standard for policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits, other than universal life policies.

(a) Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both the segmented reserves and the unitary reserves for any policy shall use the same 1980 CSO valuation table and the same select mortality factors. At the option of the insurer, in calculating segmented reserves and net premiums, either of the following adjustments may be made:

Treat the unitary reserve, if greater than zero, applicable at the end of each segment as a pure endowment and subtract the unitary reserve, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.
Treat the guaranteed cash surrender value, if greater than zero, applicable at the end of each segment as a pure endowment and subtract the guaranteed cash surrender value, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.

(b) The deficiency reserve at any duration shall be calculated as follows:

Using unitary reserves if the corresponding basic reserve determined by par. (a) is unitary.
Using segmented reserves if the corresponding basic reserve determined by par. (a) is segmented.
Using segmented reserves if the corresponding basic reserve determined by par. (a) is equal to both the segmented reserve and the unitary reserve.

(c) Paragraphs (b), (d), and (e) shall apply to any policy for which the guaranteed gross premium at any duration is less than the corresponding modified net premium calculated by the method used in determining the basic reserves, but using the minimum valuation standards of mortality specified in sub. (4) (b) and rate of interest.

(d) Deficiency reserves, if any, shall be calculated for each policy as the excess, if greater than zero, for the current and all remaining periods, of the quantity A over the basic reserve, where A is obtained as indicated in sub. (4) (b).

(e) For deficiency reserves determined on a contract segmentation method, the quantity A is determined using segment lengths equal to those determined for segmented basic reserves.

(f) Basic reserves may not be less than the tabular cost of insurance for the balance of the policy year, if mean reserves are used. Basic reserves may not be less than the tabular cost of insurance for the balance of the current modal period or to the paid-to-date, if later, but not beyond the next policy anniversary, if mid-terminal reserves are used. The tabular cost of insurance shall use the same valuation mortality table and interest rates as that used for the calculation of the segmented reserves. However, if select mortality factors are used, they shall be the ten-year select factors incorporated into the 1980 amendments of the national association of insurance commissioners standard valuation law. In no case may total reserves, including basic reserves, deficiency reserves and any reserves held for supplemental benefits that would expire upon contract termination, be less than the amount that the policyowner would receive (including the cash surrender value of the supplemental benefits, if any) exclusive of any deduction for policy loans, upon termination of the policy.

(g) For any policy with an unusual pattern of guaranteed cash surrender values, the reserves actually held prior to the first unusual guaranteed cash surrender value may not be less than the reserves calculated by treating the first unusual guaranteed cash surrender value as a pure endowment and treating the policy as an n-year policy providing term insurance plus a pure endowment equal to the unusual cash surrender value, where n is the number of years from the date of issue to the date the unusual cash surrender value is scheduled.

Note: This requirement is independent of both the segmentation process and the unitary process. After the greater of the segmented or the unitary reserve has been determined, then pars. (g), (h), and (i) impose an additional floor of the ultimate reserve. The purpose of pars. (g), (h) and (i) is to assure adequate funding of significant increases in guaranteed cash surrender values.

(h) The reserves actually held subsequent to any unusual guaranteed cash surrender value may not be less than the reserves calculated by treating the policy as an n-year policy providing term insurance plus a pure endowment equal to the next unusual guaranteed cash surrender value, and treating any unusual guaranteed cash surrender value at the end of the prior segment as a net single premium, where all of the following apply:

n is the number of years from the date of the last unusual guaranteed cash surrender value prior to the valuation date to the earlier of the date of the next unusual guaranteed cash surrender value, if any, that is scheduled after the valuation date or the mandatory expiration date of the policy.
The net premium for a given year during the n-year period is equal to the product of the net-to-gross ratio and the respective gross premium.
The net-to-gross ratio is equal to the present value, at the beginning of the n-year period, of death benefits payable during the n-year period plus the present value, at the beginning of the n-year period, of the next unusual guaranteed cash surrender value, if any, minus the amount of the last unusual guaranteed cash surrender value, if any, scheduled at the beginning of the n-year period divided by the present value, at the beginning of the n-year period, of the scheduled gross premiums payable during the n-year period.

(i) For purposes of pars. (g) and (h), a policy is considered to have an unusual pattern of guaranteed cash surrender values if any future guaranteed cash surrender value exceeds the prior year’s guaranteed cash surrender value by more than the sum of all of the following:

One hundred ten percent of the scheduled gross premium for that year.
One hundred ten percent of one year’s accrued interest on the sum of the prior year’s guaranteed cash surrender value and the scheduled gross premium using the nonforfeiture interest rate used for calculating policy guaranteed cash surrender values.
Five percent of the first policy year surrender charge, if any.

(j) At the option of the insurer, the following approach for reserves on yearly renewable term reinsurance may be used:

Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.
Basic reserves may not be less than the tabular cost of insurance for the appropriate period, as defined in par. (f).
For deficiency reserves for each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium. Deficiency reserves may not be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with this subdivision.
For purposes of this paragraph, the calculations use the maximum valuation interest rate and the 1980 CSO valuation table with or without 10-year select mortality factors.
A reinsurance agreement shall be considered yearly renewable term reinsurance for purposes of this paragraph if only the mortality risk is reinsured.
If the assuming company chooses this optional exemption, The ceding company’s reserve credit shall be limited to the amount of reserve held by the assuming company for the affected policies.

Note: Traditional reserves for yearly renewable term reinsurance, the calculations of which par. (j) describes, are already adequate and sufficient. However, without this option, yearly renewable term reinsurance would be subject to the more complex segmentation calculations.

(k) At the option of the insurer, the following approach for reserves for attained-age-based yearly renewable term life insurance policies may be used:

Calculate the valuation net premium for each future policy year as the tabular cost of insurance for that future year.
Basic reserves may not be less than the tabular cost of insurance for the appropriate period, as defined in par. (f).
For deficiency reserves for each policy year, calculate the excess, if greater than zero, of the valuation net premium over the respective maximum guaranteed gross premium. Deficiency reserves may not be less than the sum of the present values, at the date of valuation, of the excesses determined in accordance with this subdivision.
For purposes of this paragraph, the calculations use the maximum valuation interest rate and the 1980 CSO valuation table with or without 10-year select mortality factors.
A policy shall be considered an attained-age-based yearly renewable term life insurance policy for purposes of this paragraph if both of the following apply:

a. The premium rates, on both the initial current premium scale and the guaranteed maximum premium scale, are based upon the attained age of the insured such that the rate for any given policy at a given attained age of the insured is independent of the year the policy was issued.

b. The premium rates, on both the initial current premium scale and the guaranteed maximum premium scale, are the same as the premium rates for policies covering all insureds of the same sex, risk class, plan of insurance and attained age.

For policies that become attained-age-based yearly renewable term policies after an initial period of coverage, the approach of this paragraph may be used after the initial period if both the following apply:

a. The initial period is either constant or runs to a common attained age for all insureds of the same sex, risk class and plan of insurance.

b. After the initial period of coverage, the policy meets the conditions of subd. 5.

If the election in this paragraph is made, this approach shall be applied in determining reserves for all attained-age-based yearly renewable term life insurance policies issued on or after the effective date of this section.

Note: Traditional reserves for attained-age-based yearly renewable term policies, the calculations of which this paragraph describes, are already adequate and sufficient. However, without this option, these policies would be subject to the more complex segmentation calculations.

(L) Unitary basic reserves and unitary deficiency reserves need not be calculated for a policy if all of the following conditions are met:

The policy consists of a series of n-year periods, including the first period and all renewal periods, where n is the same for each period, except that for the final renewal period, n may be truncated or extended to reach the expiry age, provided that this final renewal period is less than 10 years and less than twice the size of the earlier n-year periods, and for each period, the premium rates on both the initial current premium scale and the guaranteed maximum premium scale are level.
The guaranteed gross premiums in all n-year periods are not less than the corresponding net premiums based upon the 1980 CSO valuation table with or without the 10-year select mortality factors.
There is no cash surrender value in any policy year.

Note: Without this exemption, companies issuing certain n-year renewable term policies could be forced to hold reserves higher than n-year term reserves, even though in many cases gross premiums are well above valuation mortality rates.

(m) Unitary basic reserves and unitary deficiency reserves need not be calculated for a juvenile policy if, based upon the initial current premium scale at issue, all of the following conditions are met:

At issue, the insured is age 24 or younger.
Until the insured reaches the end of the juvenile period, which shall occur at or before age 25, the gross premiums and death benefits are level, and there are no cash surrender values.
After the end of the juvenile period, gross premiums are level for the remainder of the premium-paying period, and death benefits are level for the remainder of the life of the policy.

Note: The jumping juvenile policy described has traditionally been valued in two segments. This exemption will allow that practice to continue without requiring the calculation of reserves on a unitary basis. However, within each segment, both basic and deficiency reserves shall comply with the segmented reserve requirements.

(6) Calculation of minimum valuation standard for flexible premium and fixed premium universal life insurance policies that contain provisions resulting in the ability of a policyowner to keep a policy in force over a secondary guarantee period.

(a) Policies with a secondary guarantee include any of the following:

A policy with a guarantee that the policy will remain in force at the original schedule of benefits subject only to the payment of specified premiums.
A policy in which the minimum premium at any duration is less than the corresponding one-year valuation premium, calculated using the maximum valuation interest rate and the 1980 CSO valuation table with or without 10-year select mortality factors.
A policy with any combination of the features described in subds. 1. and 2.

(b) A secondary guarantee period is the period for which the policy is guaranteed to remain in force subject only to a secondary guarantee. When a policy contains more than one secondary guarantee, the minimum reserve shall be the greatest of the respective minimum reserves at that valuation date of each unexpired secondary guarantee, ignoring all other secondary guarantees. Secondary guarantees that are unilaterally changed by the insurer after issue shall be considered to have been made at issue. Reserves described in pars. (g) and (h) shall be recalculated from issue to reflect these changes.

(c) Specified premiums mean the premiums specified in the policy, the payment of which guarantees that the policy will remain in force at the original schedule of benefits, but which otherwise would be insufficient to keep the policy in force in the absence of the guarantee if maximum mortality and expense charges and minimum interest credits were made and any applicable surrender charges were assessed.

(d) For purposes of this subsection, the minimum premium for any policy year is the premium that, when paid into a policy with a zero account value at the beginning of the policy year, produces a zero account value at the end of the policy year. The minimum premium calculation shall use the policy cost factors, including mortality charges, loads and expense charges, and the interest crediting rate, which are all guaranteed at issue.

(e) The one-year valuation premium means the net one-year premium based upon the original schedule of benefits for a given policy year. The one-year valuation premiums for all policy years are calculated at issue. The select mortality factors defined in sub. (4) (a) 2. and sub. (4) (b) 2. and 3. may not be used to calculate the one-year valuation premiums.

(f) The 1-year valuation premium should reflect the frequency of fund processing, as well as the distribution of deaths assumption employed in the calculation of the monthly mortality charges to the fund.

(g) Basic reserves for the secondary guarantees shall be the segmented reserves for the secondary guarantee period. In calculating the segments and the segmented reserves, the gross premiums shall be set equal to the specified premiums, if any, or otherwise to the minimum premiums, that keep the policy in force and the segments shall be determined according to the contract segmentation method.

(h) Deficiency reserves, if any, for the secondary guarantees shall be calculated for the secondary guarantee period in the same manner as described in sub. (5) (b), (c), (d), and (e) with gross premiums set equal to the specified premiums, if any, or otherwise to the minimum premiums that keep the policy in force.

(i) The minimum reserves during the secondary guarantee period are the greater of the following:

The basic reserves for the secondary guarantee plus the deficiency reserve, if any, for the secondary guarantees.
The minimum reserves required by other rules governing universal life plans.

Note: The tables at pages 21 through 43 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in April 1999 contains tables of select mortality factors that are the bases to which the respective percentage of sub. (4) (a) 2., (b) 2., and 3. are applied. The 6 tables of select mortality factors include: (1) male aggregate, (2) male nonsmoker, (3) male smoker, (4) female aggregate, (5) female nonsmoker, and (6) female smoker. These tables apply to both age last birthday and age nearest birthday mortality tables.

For sex-blended mortality tables, compute select mortality factors in the same proportion as the underlying mortality. For example, for the 1980 CSO-B Table, the calculated select mortality factors are 80% of the appropriate male table in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in April 1999, plus 20% of the appropriate female table in the tables at pages 18 through 35 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in April 1999.

Section Ins 2.20 allows the use of sex-blended mortality table for the purposes of determining nonforfeiture values, but sex-blended tables are not allowed for the purposes of valuing minimum reserve liabilities under s. Ins 2.80 or s. 623.06, Stats.

Note: Copies of the tables at pages 21 through 43 of the national association of insurance commissioners valuation of life insurance policies model regulation updated and published by the national association of insurance commissioners model regulation service in April 1999 for use with s. Ins 2.80, Wis. Adm. Code, are available from the Office of the Commissioner of Insurance, P.O. Box 1768, Madison WI 53707-7873 or from the OCI website: http://oci.wi.gov, at information for companies, OCI rule-making information.

History

Cr. Register, March, 1998, No. 507, eff. 1-1-99; r. and recr. Register, June, 1999, No. 522, eff. 7-1-99; CR 04-071: cr. (2) (e), am. (4) (b) 3. (intro.), r. Appendix I, Register December 2004 No. 588, eff. 1-1-05; CR 14-008: r. (4) (b) 3. b., c., am. (4) (b) 3. g., i. Register August 2014 No. 704, eff. 9-1-14.

Wis. Admin. Code § Ins 2.81 Recognition of the 2001 CSO mortality table for use in determining minimum reserve liabilities and nonforfeiture benefits {#sec-ins-2.81 omnilex-key=us-wi-regs-official--agency-ins--Ins 2.81}

(1) Authority. This section is promulgated by the commissioner of insurance pursuant to s. 623.06 (2) (am) 3, Stats., standard valuation law, and s. 632.43 (6m) (e) 3. f., Stats., standard nonforfeiture law for life insurance.

(2) Purpose. The purpose of this section is to recognize, permit and prescribe the use of: the 2001 commissioners’ standard ordinary CSO mortality table in accordance with s. 623.06 (2) (am) 3., Stats., standard valuation law, and s. 632.43 (6m) (e) 3. f., Stats., standard nonforfeiture law for life insurance; the 2001 CSO mortality table in s. Ins 2.20 unisex nonforfeiture values in certain life insurance policies, s. Ins 2.35 smoker and nonsmoker mortality tables for minimum reserve liabilities and minimum nonforfeiture benefits, and s. Ins 2.80 valuation of life insurance policies; mortality tables that reflect differences in mortality between preferred and standard lives in determining minimum reserve liabilities in accordance with s. 623.06 (2) (am) 3., Stats., standard valuation law, and s. Ins 2.80 valuation of life insurance policies; and the 1980 commissioners’ standard ordinary CSO mortality table for determining the minimum standard of valuation of reserves and the minimum standard nonforfeiture values for funeral policies.

(3) Definitions. In this section:

(a) “2001 CSO mortality table” means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the valuation basic mortality table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO mortality table is included in the Proceedings of the NAIC (2nd Quarter 2002) and is supplemented by the 2001 CSO preferred class structure mortality table and may be obtained from the office. Unless the context indicates otherwise, the “2001 CSO mortality table” includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables.

Note: The 2001 CSO mortality table may be obtained from the website of the Office of the Commissioner of Insurance (http://oci.wi.gov) or by writing to the Office.

(b) “2001 CSO mortality table (F)” means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO mortality table.

(c) “2001 CSO mortality table (M)” means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO mortality table.

(cm) “2001 CSO preferred class structure mortality table” means mortality tables with separate rates for super preferred nonsmokers, preferred nonsmokers, residual standard nonsmokers, preferred smokers, and residual standard smoker splits of the 2001 CSO nonsmoker and smoker tables as adopted by the NAIC at the September, 2006 national meeting and published in the Proceedings of the NAIC (3rd Quarter 2006). Unless the context indicates otherwise, the “2001 CSO preferred class structure mortality table” includes both the ultimate form of that table and the select and ultimate form of that table. It includes both the smoker and nonsmoker mortality tables. It includes both the male and female mortality tables and the gender composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality table.

Note: The 2001 CSO preferred class structure mortality table may be obtained from the website of the Office of the Commissioner of Insurance (http://oci.wi.gov) or by writing to the Office.

(d) “Commissioner” means the commissioner of insurance.

(e) “Composite mortality tables” means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

(em) “Funeral policies” means life insurance policies as defined in s. 632.415, Stats.

(f) “NAIC” means the national association of insurance commissioners.

(g) “Office” means the office of the commissioner of insurance.

(h) “Smoker and nonsmoker mortality tables” means mortality tables with separate rates of mortality for smokers and nonsmokers.

(i) “Statistical agent” means an entity with proven systems for protecting the confidentiality of individual insured and insurer information, demonstrated resources for and history of ongoing electronic communications and data transfer ensuring data integrity with insurers, which are its members or subscribers, and a history of and means for aggregation of data and accurate promulgation of the experience modifications in a timely manner.

(j) “Ultimate 1980 CSO” means the commissioners 1980 standard ordinary mortality table without 10-year select mortality factors, incorporated into the standard valuation law as provided in s. 623.06 (2) (am) 1., Stats.

Note: The Ultimate 1980 CSO mortality table may be obtained from the website of the Office of the Commissioner of Insurance (http://oci.wi.gov) or by writing to the Office.

(4) 2001 cso mortality table.

(a) Except as provided in sub. (8), at the election of the company for any one or more specified plans of insurance and subject to the conditions stated in this section, the 2001 CSO mortality table may be used as the minimum standard for policies issued on or after January 1, 2005 and before the date specified in par. (b) to which s. 623.06 (2) (am) 3. or 632.43 (6m) (e) 3. f., Stats., or s. Ins 2.20, 2.35, or 2.80 are applicable. If the company elects to use the 2001 CSO mortality table, it shall do so for both valuation and nonforfeiture purposes.

(b) Except as provided in sub. (8), and subject to the conditions stated in this section, the 2001 CSO mortality table shall be used in determining minimum standards for policies issued on and after January 1, 2009, to which s. 623.06 (2) (am) 3. or 632.43 (6m) (e) 3. f., Stats., or s. Ins 2.20, 2.35, or 2.80 are applicable.

(c) At the election of the insurer, for each calendar year of issue, for any one or more specified plans of insurance and subject to satisfying the conditions stated in this paragraph and sub. (5) (e) 1. to 3., the 2001 CSO preferred class structure mortality table may be elected in place of the smoker mortality table found in the 2001 CSO mortality table or the nonsmoker mortality table found in the 2001 CSO mortality table or both as the minimum valuation standard for policies issued on or after January 1, 2007. For policies issued on or after January 1, 2005, and prior to January 1, 2007, the 2001 CSO preferred class structure mortality table may be elected in place of the smoker and nonsmoker mortality tables found in the 2001 CSO mortality table with the consent of the commissioner and subject to the conditions of sub. (5) (e) 1. to 4. In considering a request by a foreign insurer for such consent, the commissioner may rely on the consent of the commissioner of the foreign company’s state of domicile. No such election may be made until the insurer demonstrates to the commissioner in a form acceptable to the commissioner that at least 20% of the business to be valued on this table is in one or more of the preferred classes. A table from the 2001 CSO preferred class structure mortality table used in place of a 2001 CSO mortality table, pursuant to the requirements of this section, will be treated as part of the 2001 CSO mortality table only for purposes of reserve valuation.

Note: There is no new Commissioners Extended Term (CET) table being proposed to replace the 1980 CET Table. Therefore, the new minimum basis for the computation of values related to extended term benefits will be the 2001 CSO Mortality Table.

(5) Conditions.

(a) For each plan of insurance with separate rates for smokers and nonsmokers an insurer may use:

Composite mortality tables to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits;
Smoker and nonsmoker mortality tables to determine the valuation net premiums and additional minimum reserves, if any, required by s. 623.06 (7), Stats., and composite mortality tables to determine the basic minimum reserves, minimum cash surrender values and amounts of paid-up nonforfeiture benefits; or
Smoker and nonsmoker mortality to determine minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits.

(b) For plans of insurance without separate rates for smokers and nonsmokers the composite mortality tables shall be used.

(c) For the purpose of determining minimum reserve liabilities and minimum cash surrender values and amounts of paid-up nonforfeiture benefits, the 2001 CSO mortality table may, at the option of the company for each plan of insurance, be used in its ultimate or select and ultimate form, subject to the restrictions of sub. (6) and s. Ins 2.80 relative to use of the select and ultimate form.

(d) When the 2001 CSO mortality table is the minimum reserve standard for any plan for a company, the actuarial opinion in the annual statement filed with the commissioner shall be based on an asset adequacy analysis as specified in s. Ins 50.75 (1). The commissioner may exempt a company from this requirement if it only does business in this state and in no other state.

(e) The following conditions are applicable for plans of insurance using the 2001 CSO preferred class structure mortality table:

For each plan of insurance with separate rates for preferred and standard nonsmoker lives, an insurer may use the super preferred nonsmoker, preferred nonsmoker, and residual standard nonsmoker tables to substitute for the nonsmoker mortality table found in the 2001 CSO mortality table to determine minimum reserves. At the time of election and annually thereafter, except for business valued under the residual standard nonsmoker table, the appointed actuary shall certify that both of the following are true:

a. The present value of death benefits over the next 10 years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class, and

b. The present value of death benefits over the future life of the contracts, using anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the valuation basic table corresponding to the valuation table being used for that class.

For each plan of insurance with separate rates for preferred and standard smoker lives, an insurer may use the preferred smoker and residual standard smoker tables to substitute for the smoker mortality table found in the 2001 CSO mortality table to determine minimum reserves. At the time of election and annually thereafter, for business valued under the preferred smoker table, the appointed actuary shall certify that both of the following are true:

a. The present value of death benefits over the next 10 years after the valuation date, using the anticipated mortality experience without recognition of mortality improvement beyond the valuation date for each class, is less than the present value of death benefits using the preferred smoker valuation basic table corresponding to the valuation table being used for that class, and

Unless exempted by the commissioner under s. 600.13, Stats., every insurer using the 2001 CSO preferred class structure mortality table shall annually file with the commissioner, with the NAIC, or with a statistical agent designated by the NAIC and acceptable to the commissioner, statistical reports showing mortality and such other information as the commissioner may deem necessary or expedient for the administration of the provisions of this section. The form of the reports shall be established by the commissioner or the commissioner may require the use of a form acceptable to the commissioner established by the NAIC or by a statistical agent designated by the NAIC.

Note: The form for the annual report required under s. Ins 2.81 (5) (e) 3. may be obtained from the website of the Office of the Commissioner of Insurance (http://oci.wi.gov) or by writing to the office.

The use of the 2001 CSO preferred class structure mortality table for the valuation of policies issued prior to January 1, 2007 is not permitted in any statutory financial statement in which a company reports, with respect to any policy or portion of a policy coinsured, as specified under subd. 4. a. or b.:

a. In cases where the mode of payment of the reinsurance premium is less frequent than the mode of payment of the policy premium, a reserve credit that exceeds, by more than the amount specified in this subdivision paragraph as Y, the gross reserve calculated before reinsurance. Y is the amount of the gross reinsurance premium that provides coverage for the period from the next policy premium due date to the end of the policy year or the next reinsurance premium due date whichever is earlier, and that would be refunded to the ceding entity upon the termination of the policy.

b. In cases where the mode of payment of the reinsurance premium is more frequent than the mode of payment of the policy premium, a reserve credit that is less than the gross reserve, calculated before reinsurance, by an amount that is less than the amount specified in this subdivision paragraph as Z. Z is the amount of the gross reinsurance premium that the ceding entity would need to pay the assuming company to provide reinsurance coverage from the period of the next reinsurance premium due date to the next policy premium due date minus any liability established for the proportionate amount not remitted to the reinsurer.

For purposes of the condition described in subd. 4., both the reserve credit and the gross reserve before reinsurance for the mean reserve method shall be defined as the mean reserve minus the deferred premium asset, and for the mid-terminal reserve method shall include the unearned premium reserve. A company may estimate and adjust its accounting on an aggregate basis in order to meet the conditions to use the 2001 CSO preferred class structure table.

(6) Applicability of the 2001 cso mortality table to s. ins 2.80, valuation of life insurance policies.

(a) The 2001 CSO mortality table may be used in applying s. Ins 2.80 in the following manner, subject to the transition dates for use of the 2001 CSO mortality table in sub. (4):

Section Ins 2.80 (2) (b) 1. b.: The net level reserve premium is based on the ultimate mortality rates in the 2001 CSO mortality table.
Section Ins 2.80 (3) (b): All calculations are made using the 2001 CSO mortality table, and, if elected, the optional minimum mortality standard for deficiency reserves stipulated in subd. 4. The value of “qx+k+t–1” is the valuation mortality rate for deficiency reserves in policy year k +t, but using the unmodified select mortality rates if modified select mortality rates are used in the computation of deficiency reserves.
Section Ins 2.80 (4) (a): The 2001 CSO mortality table is the minimum standard for basic reserves.
Section Ins 2.80 (4) (b): The 2001 CSO mortality table is the minimum standard for deficiency reserves. If select mortality rates are used, they may be multiplied by X percent for durations in the first segment, subject to the conditions specified in subd. 3. In demonstrating compliance with those conditions, the demonstrations may not combine the results of tests that utilize the 1980 CSO mortality table with those tests that utilize the 2001 CSO mortality table, unless the combination is explicitly required by law or necessary to be in compliance with relevant actuarial standards of practice.
Section Ins 2.80 (5) (f): The valuation mortality table used in determining the tabular cost of insurance shall be the ultimate mortality rates in the 2001 CSO mortality table.
Section Ins 2.80 (5) (j): The calculations specified in s. Ins 2.80 (5) (j) shall use the ultimate mortality rates in the 2001 CSO mortality table.
Section Ins 2.80 (5) (k): The calculations specified in s. Ins 2.80 (5) (k) shall use the ultimate mortality rates in the 2001 CSO mortality table.
Section Ins 2.80 (5) (L): The calculations specified in s. Ins 2.80 (5) (L) shall use the ultimate mortality rates in the 2001 CSO mortality table.
Section Ins 2.80 (6) (a) 2.: The one-year valuation premium shall be calculated using the ultimate mortality rates in the 2001 CSO mortality table.

(b) Nothing in this subsection shall be construed to expand the applicability of s. Ins 2.80 to include life insurance policies exempted under s. Ins 2.80 (2) (a) and (b).

(7) Gender-blended tables.

(a) For any ordinary life insurance policy delivered or issued for delivery in this state on and after January 1, 2005, that utilizes the same premium rates and charges for male and female lives or is issued in circumstances where applicable law does not permit distinctions on the basis of gender, a mortality table that is a blend of the 2001 CSO mortality table (M) and the 2001 CSO mortality table (F) may, at the option of the company for each plan of insurance, be substituted for the 2001 CSO mortality table for use in determining minimum cash surrender values and amounts of paid-up nonforfeiture benefits. No change in minimum valuation standards is implied by this subsection of the regulation.

(b) The company may choose from among the blended tables developed by the American Academy of Actuaries CSO Task Force and adopted by the NAIC in December 2002.

Note: The blended tables may be obtained from the website of the Office of the Commissioner of Insurance (http://oci.wi.gov) or by writing to the Office.

(c) It shall not, in and of itself, be a violation of s. 628.34, Stats., for an insurer to issue the same kind of policy of life insurance on both a sex-distinct and sex-neutral basis.

(8) Funeral policies.

(a) For funeral policies, the minimum mortality standard for determining reserve liabilities and nonforfeiture values for both male and female insureds shall be the Ultimate 1980 CSO, except as provided in par. (b).

(b) For funeral policies issued on or after January 1, 2009, and before January 1, 2012, the 2001 CSO mortality table may be used as the minimum mortality standard for determining reserve liabilities and nonforfeiture values for both male and female insureds.

(c) If an insurer elects to use the 2001 CSO mortality table as a minimum standard for any funeral policy issued on or after January 1, 2009, and before January 1, 2012, the insurer shall provide, as a part of the regulatory asset adequacy issues summary submitted in support of the insurer’s asset adequacy testing, an annual written notification to the domiciliary commissioner which shall include all of the following:

A complete list of all funeral policy forms that use the 2001 CSO mortality table as a minimum standard.
A certification signed by the appointed actuary stating that the reserve methodology employed by the insurer in determining reserves for the funeral policies issued on or after January 1, 2009, and before January 1, 2012, using the 2001 CSO mortality table as a minimum standard, develops adequate reserves. For purposes of the certification, the funeral policies using the 2001 CSO mortality table as a minimum standard may not be aggregated with any other policies.
Supporting information regarding the adequacy of reserves for funeral policies issued on or after January 1, 2009, and before January 1, 2012, and using the 2001 CSO mortality table as a minimum standard for reserves.

(d) For funeral policies issued on or after January 1, 2012, the Ultimate 1980 CSO mortality table shall be used as the minimum mortality standard for determining reserve liabilities and nonforfeiture values.

(9) This section may be enforced under s. 601.41 or 601.64, ch. 645, Stats., or any other enforcement provision of chs. 600 to 646, Stats.

History

CR 04-071: cr. Register December 2004 No. 588, eff. 1-1-05; CR 07-070: am. (2) and (3) (a), cr. (3) (cm), (i), (4) (c) and (5) (e) Register December 2007 No. 624, eff. 1-1-08; corrections in (4) (a) and (b) made under s. 13.92 (4) (b) 7., Stats., Register August 2009 No. 644; CR 09-027: am. (2), (4) (a) and (b), cr. (3) (em), (j) and (8), renum. (8) to be (9) Register September 2009 No. 645, eff. 10-1-09; CR 10-026: am. (4) (c), cr. (5) (e) 4. and 5. Register August 2010 No. 656, eff. 9-1-10; numbering of (5) (e) 5. and corrections in (5) (e) 4. and 5. made under s. 13.92 (4) (b) 1. and 7., Stats., Register August 2010 No. 656.

Chapter Ins 3 CASUALTY INSURANCE

Wis. Admin. Code § Ins 3.01 Accumulation benefit riders attached to health and accident policies {#sec-ins-3.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.01}

Except where such rider is used only on a policy replacing the company’s own policy, and so recites, no rider providing for accumulations of benefits will be approved for use upon any policy of health and accident insurance, whether it is proposed to issue such rider with or without an additional premium. Such rider operates as an aid to twisting the policies of another company in such manner as to make its use a direct encouragement of this practice.

Wis. Admin. Code § Ins 3.02 Automobile fleets, vehicles not included in {#sec-ins-3.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.02}

Individually owned motor vehicles cannot be included or covered by fleet rates. The determining factor for inclusion under fleet coverage must be ownership and not management or use.

Wis. Admin. Code § Ins 3.04 Dividends not deducted from premiums in computing loss reserves {#sec-ins-3.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.04}

Premiums returned to policyholders as dividends may not be deducted from the earned premiums in computing loss reserves under s. 623.04, Stats.

History

1-2-56; emerg. am. eff. 6-22-76; am. Register, September, 1976, No. 249, eff. 10-1-76.

Wis. Admin. Code § Ins 3.08 Municipal bond insurance {#sec-ins-3.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.08}

(1) Purpose. This section implements and interprets ss. 601.42, 611.19 (1), 618.21, 623.03, 623.04, 627.05, 628.34 (2), 632.14, and 632.17, Stats., for the purpose of establishing minimum requirements for the transaction of a type of surety insurance known as municipal bond insurance.

(2) Scope. This section shall apply to the underwriting, marketing, rating, accounting and reserving activities of insurers which write municipal bond insurance.

(3) Definitions.

(a) “Annual statement” means the fire and casualty annual statement form specified in s. Ins 7.02, Forms 22-010 and 22-011.

(b) “Contingency reserve” means a reserve established for the protection of policyholders covered by policies insuring municipal bonds against the effect of excessive losses occurring during adverse economic cycles.

(c) “Cumulative net liability” means one-third of one percent of the insured unpaid principal and insured unpaid interest covered by in-force policies of municipal bond insurance.

(d) “Municipal bonds” means securities which are issued by or on behalf of or are paid or guaranteed by:

Any state, territory or possession of the United States of America;
Any political subdivision of any such state, territory or possession; or
Any agency, authority or corporate or other instrumentality of any one or more of the foregoing, or which are guaranteed by any of the foregoing.

(e) “Municipal bond insurance” means a type of surety insurance authorized by s. Ins 6.75 (2) (g) which is limited to the guaranteeing of the performance and obligations of municipal bonds.

(f) “Municipal bond insurer” means an insurer which issues municipal bond insurance.

(g) “Total net liability” means the average annual amount due, net of reinsurance, for principal and interest on the insured amount of any one issue of municipal bonds.

(h) “Person” means any individual, corporation for profit or not for profit, association, partnership or any other legal entity.

(i) “Policyholders’ surplus” means an insurer’s net worth, the difference between its assets and liabilities, as reported in its annual statement.

(4) Minimum capital or permanent surplus. The minimum capital or permanent surplus of a municipal bond insurer shall be $2 million for an insurer first authorized to do business in Wisconsin on or before January 1, 1984, or the amount required by statute or administrative order after that date for other municipal bond insurers.

(5) Limitations and restrictions.

(a) Policies of municipal bond insurance shall be issued only to provide coverage on bonds of the type defined in sub. (3) (d).

(b) A municipal bond insurer may not have total net liability in respect to any one issue of municipal bonds in excess of an amount representing 10% of its policyholders’ surplus.

(c) A municipal bond insurer may not have outstanding cumulative net liability, under in-force policies of municipal bond insurance, in an amount which exceeds the sum of:

Its capital and surplus, plus
The contingency reserve under sub. (9).

(d) A municipal bond insurer may not have more than 25% of the principal amount which it has insured represented by the principal amount of municipal bonds issued primarily to finance property for use in a trade or business carried on by any person other than a governmental unit, and secured by a pledge of payments to be made by the person or of revenues to be derived from the trade or business.

(6) Premium. The total consideration charged for municipal bond insurance policies, including policy and other fees or similar charges, shall be considered premium and shall be subject to the reserve requirements of subs. (8) and (9).

(7) Financial statements and reporting.

(a) The financial condition and operations of a municipal bond insurer shall be reported on the annual statement.

(b) The total contingency reserve required by sub. (9) shall be reported as a liability in the annual statement. This liability may be reported as unpaid losses or other appropriately labeled write-in item. Appropriate entries shall be made in the underwriting and investment exhibit—statement of income of the annual statement. The change in contingency reserve for the year shall be reported in the annual statement as a reduction of or a deduction from underwriting income. If the contingency reserve is recorded as a loss liability, the change in the reserve shall be excluded from loss development similar to fidelity and surety losses incurred but not reported.

(c) A municipal bond insurer shall compute and maintain adequate case basis loss reserves to be reported in the underwriting and investment exhibit, unpaid losses and loss adjustment expenses, of the annual statement. The method used to determine the loss reserve shall accurately reflect loss frequency and loss severity and shall include components for claims reported and unpaid, and for claims incurred but not reported, provided:

No deduction may be made for anticipated salvage in computing case basis loss reserves.
If the amount of insured principal and interest on a defaulted issue of municipal bonds which is due and payable over the period of the next 3 years exceeds 10% of a municipal bond insurer’s capital, surplus and contingency reserve, its case basis reserve so established shall be supported by a report from a qualified independent source.

(8) Unearned premium reserve. A municipal bond insurer shall compute and maintain an unearned premium reserve on an annual or on a monthly pro rata basis on all unexpired coverage, except that in the case of premiums paid more than one year in advance, the premium shall be earned proportionally with the expiration of exposure except as provided under sub. (12).

(9) Contingency reserve.

(a) A municipal bond insurer shall establish a contingency reserve which shall consist of allocations of sums representing 50% of the earned premium on policies of municipal bond insurance except as provided under sub. (12).

(b) The contingency reserve established by this subsection shall be maintained for 240 months. That portion of the contingency reserve established and maintained for more than 240 months shall be released and may no longer constitute part of the contingency reserve except as provided under sub. (12).

(c) Subject to the approval of the commissioner, withdrawals may be made from the contingency reserve in any year in which the actual incurred losses on municipal bond insurance policies exceed 35% of the earned premiums on municipal bonds insurance policies except as provided under sub. (12).

(d) A municipal bond insurer may invest the contingency reserve in tax and loss bonds purchased pursuant to 26 USC 832(e). The contingency reserve shall otherwise be invested only in classes of securities or types of investments specified in s. 620.22 (1), Stats., except as provided under sub. (12).

(10) Conflicts of interest prohibited. No municipal bond insurer may pay any commission or make any gift of money, property or other valuable thing to any employee, agent, or representative of any issuer of municipal bonds or to any employee, agent or representative of any underwriter of any issue of the bonds as an inducement to the purchase of, or at any time there is in force, a policy insuring bonds, and no employee, agent or representative of the insurer or underwriter shall receive any payment or gift. However, violation of the provisions of this subsection does not render void the municipal bond insurance policy.

(11) Transition. Unearned premium reserves and contingency loss reserves shall be computed and maintained on risks insured after the effective date of this section as required by subs. (8) and (9).

(12) Laws or regulations of other jurisdictions. Whenever the laws or regulations of another jurisdiction in which a municipal bond insurer is licensed, require a larger unearned premium reserve or a larger contingency reserve in the aggregate than that set forth in this section, the establishment and maintenance of the larger aggregated, unearned premium reserve and contingency reserve complies with this rule.

History

Emerg. cr. eff. 6-5-84; cr. Register, October, 1984, No. 346, eff. 11-1-84; am. (3) (d) intro., (5) (c) and (9) (c), Register, March, 1986, No. 363, eff. 4-1-86; correction in (3) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, July, 1999, No. 523.

Wis. Admin. Code § Ins 3.09 Mortgage guaranty insurance {#sec-ins-3.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.09}

(1) Purpose. This section implements and interprets s. Ins 6.75 (2) (i) and (j) and ss. 601.01, 601.42, 611.19 (1), 611.24, 618.21, 620.02, 623.02, 623.03, 623.04, 623.11, 627.05 and 628.34 (12), Stats., for the purpose of establishing minimum requirements for the transaction of mortgage guaranty insurance.

(2) Scope. This rule shall apply to the underwriting, investment, marketing, rating, accounting and reserving activities of insurers which write the type of insurance authorized by s. Ins 6.75 (2) (i) and (j).

(3) Definitions.

(a) “Amount at risk” means the coverage percentage or the claim settlement option percentage multiplied by the face of amount of a mortgage or by the insured amount of a lease.

(b) “Annual statement” means the fire and casualty annual statement form specified in s. Ins 7.02, Forms 22-010 and 22-011.

(c) “Contingency reserve” means the reserve established for the protection of policyholders against the effect of losses resulting from adverse economic cycles.

(d) “Equity” means the complement of the Loan-to-Value.

(e) “Face amount” means the entire indebtedness under an insured mortgage before computing any reduction because of an insurer’s option limiting its coverage.

(f) “Loan-to-value” means the ratio of the entire indebtedness to value of the collateral property expressed as a percentage.

(g) “Mortgage guaranty account” means the portion of the Contingency Reserve which complies with 26 USC 832 (e) as amended.

(h) “Mortgage guaranty insurance” means that kind of insurance authorized by s. Ins 6.75 (2) (i).

(i) “Mortgage guaranty insurer” means an insurer which:

Insures pursuant to s. Ins 6.75 (2) (i), or
Insures pursuant to s. Ins 6.75 (2) (j) against loss arising from failure of debtors to meet financial obligations to creditors under evidences of indebtedness secured by a junior lien or charge on real estate.

(j) “Mortgage guaranty insurers report of policyholders position” means the annual supplementary report required by s. Ins 7.02, Forms 22-090 and 22-091.

(k) “NAIC Ratio—Investment Yield” means net investment income earned after taxes from the annual statement divided by mean invested assets.

(L) “Person” means any individual, corporation, association, partnership or any other legal entity.

(m) “Policyholders position” includes the contingency reserve established under sub. (14), the deferred risk charge established under sub. (13) (b) and surplus as regards policyholders. “Minimum policyholders position” is calculated as described in sub. (5).

(n) “Surplus as regards policyholders” means an insurer’s net worth, the difference between its assets and liabilities, as reported in its annual statement.

(4) Discrimination. No mortgage guaranty insurer may discriminate in the issuance or extension of mortgage guaranty insurance on the basis of the geographic location of the property or the applicant’s sex, marital status, race, color, creed or national origin.

(5) Minimum policyholders position.

(a) For the purpose of complying with s. 623.11, Stats., a mortgage guaranty insurer shall maintain at all times a minimum policyholders position in the amount required by this section. The policyholders position shall be net of reinsurance ceded but shall include reinsurance assumed.

(b) If a mortgage guaranty insurer does not have the minimum amount of policyholders position required by this section it shall cease transacting new business until such time that its policyholders position is in compliance with this section.

(c) If a policy of mortgage guaranty insurance insures individual loans with a percentage claim settlement option on such loans, a mortgage guaranty insurer shall maintain a policyholders position based on: each $100 of the face amount of the mortgage; the percentage coverage; and the loan-to-value category. The minimum amount of policyholders position shall be calculated in the following manner:

If the loan-to-value is greater than 75%, the minimum policyholders position per $100 of the face amount of the mortgage for the specific percent coverage shall be as shown in the schedule below:
If the loan-to-value is at least 50% and not more than 75%, the minimum amount of the policyholders position shall be 50% of the minimum of the amount calculated under subd. 1.
If the loan-to-value is less than 50%, the minimum amount of policyholders position shall be 25% of the amount calculated under subd. 1.

(d) If a policy of mortgage guaranty insurance provides coverage on a group of loans subject to an aggregate loss limit, the policyholders position shall be:

If the equity is not more than 50% and is at least 20%, or equity plus prior insurance or a deductible is at least 25% and not more than 55%, the minimum amount of policyholders position shall be calculated as follows:
If the equity is less than 20%, or the equity plus prior insurance or a deductible is less than 25%, the minimum amount of policyholders position shall be 200% of the amount required by subd. 1.
If the equity is more than 50%, or the equity plus prior insurance or a deductible is more than 55%, the minimum amount of policyholders position shall be 50% of the amount required by subd. 1.

(e) If a policy of mortgage guaranty insurance provides for layers of coverage, deductibles or excess reinsurance, the minimum amount of policyholders position shall be computed by subtraction of the minimum position for the lower percentage coverage limit from the minimum position for the upper or greater coverage limit.

(f) If a policy of mortgage guaranty insurance provides for coverage on loans secured by junior liens, the policyholders position shall be:

If the policy provides coverage on individual loans, the minimum amount of policyholders position shall be calculated as in par. (c) as follows:

a. The loan-to-value percent is the entire loan indebtedness on the property divided by the value of the property;

b. The percent coverage is the insured portion of the junior loan divided by the entire loan indebtedness on the collateral property; and

c. The face amount of the insured mortgage is the entire loan indebtedness on the property.

If the policy provides coverage on a group of loans subject to an aggregate loss limit, the policyholders position shall be calculated according to par. (d) as follows:

a. The equity is the complement of the loan-to-value percent calculated as in subd. 1.;

b. The percent coverage is calculated as in subd. 1.; and

c. The face amount of the insured mortgage is the entire loan indebtedness on the property.

(g) If a policy of mortgage guaranty insurance provides for coverage on leases, the policyholders position shall be $4 for each $100 of the insured amount of the lease.

(h) If a policy of mortgage guaranty insurance insures loans with a percentage loss settlement option coverage between any of the entries in the schedules in this subsection, then the factor for policyholders position per $100 of the face amount of the mortgage shall be prorated between the factors for the nearest Percent Coverage listed.

(6) Limitation on investment. A mortgage guaranty insurer shall not invest in notes or other evidences of indebtedness secured by mortgage or other lien upon real property. This section shall not apply to obligations secured by real property, or contracts for the sale of real property, which obligations or contracts of sale are acquired in the course of the good faith settlement of claims under policies of insurance issued by the mortgage guaranty insurer, or in the good faith disposition of real property so acquired.

(7) Limitation on assumption of risks.

(a) A mortgage guaranty insurer shall not insure loans secured by properties in a single or contiguous housing or commercial tract in excess of 10% of the insurer’s admitted assets. A mortgage guaranty insurer shall not insure a loan secured by a single risk in excess of 10% of the insurer’s admitted assets. In determining the amount of such risk or risks, the insurer’s liability shall be computed on the basis of its election to limit coverage and net of reinsurance ceded to an insurer authorized to transact such reinsurance in this state. “Contiguous” for the purpose of this subsection means not separated by more than one-half mile.

(b) A mortgage guaranty insurer shall not insure loans with balloon payment provisions unless the policy provides:

That liability for the balloon payment is specifically excluded; or
That at the time the lender calls the loan, the lender will offer new or extended financing at the then market rates; or
The scheduled maturity date of the balloon payment.

(7m) Segregated trust requirements. A segregated trust established under this section shall be established by a reinsurer for the benefit of a mortgage guaranty insurer and shall satisfy all of the following requirements:

(a) Has a trustee domiciled in the mortgage guaranty insurer’s state of domicile, domiciled in Wisconsin or approved by the commissioner.

(b) Meets the criteria in sub. (12) (g) and (h).

(c) Invests in the type of assets permitted by s. Ins 6.20 (5), or, for the reserves required by subs. (13) and (15), in funds as defined by ch. Ins 52.

(d) Makes quarterly and annual reports as required by the commissioner.

(e) Is subject to withdrawals only by and under the control of the ceding mortgage guaranty insurer.

(f) Permits examinations by the commissioner.

(g) Designates a Wisconsin agent for service of process.

(h) Provides to the commissioner an opinion of counsel stating that the segregated trust and its governing agreements comply with the applicable sections of this section and that the reinsured will have a valid and perfected security interest or an equitable interest in the assets transferred under the trust agreements, or both, and will be entitled to use those assets for the purpose of satisfying a reinsurer’s obligations under the trust agreement in the event of the bankruptcy of the reinsurer.

(i) Is governed by an agreement which, together with all amendments, has been approved by the commissioner.

(8) Reinsurance.

(a) A mortgage guaranty insurer may, by contract, reinsure any insurance it transacts, except that no mortgage guaranty insurer may enter into reinsurance arrangements designed to circumvent the compensation control provisions of sub. (16) or the contingency reserve requirement of sub. (14). The unearned premium reserve required by sub. (13), the contingency reserve required by sub. (14) and the loss reserve required by sub. (15) shall be established and maintained by the original insurer or by the assuming reinsurer so that the aggregate reserves shall be equal to or greater than the reserves required by subs. (13), (14) and (15).

(b) If reinsurance is assumed by an insurer which insures or reinsures other lines of insurance in addition to mortgage guaranty insurance, then in order for a mortgage guaranty insurer to receive credit for reinsurance ceded in its financial statements and in the calculation of minimum policyholders position, all of the following shall occur:

The reinsurance agreement and the segregated account or segregated trust arrangements shall be submitted to the commissioner for approval.
The reinsurer shall establish and maintain in a segregated account or segregated trust the reserves required by subs. (13), (14) and (15).
If the reinsurer establishes a segregated trust, the reinsurance agreement shall provide that:

a. The segregated trust shall be in a form approved by the commissioner;

b. The commissioner shall approve any amendments to the reinsurance agreement before the amendments become effective;

c. The ceding mortgage guaranty insurer has a right to terminate the ceding of additional insurance under the reinsurance agreement if so ordered by the commissioner;

d. The commissioner has the right to request from the assuming reinsurer information concerning its financial condition; and

e. The assuming reinsurer shall notify the commissioner of any material change in its financial condition.

(c) In reviewing a reinsurance arrangement with an insurer which writes other lines of insurance in addition to mortgage guaranty, the commissioner may consider any or all of the following:

The financial condition of the reinsurer and the trustee.
The reinsurance agreement and its compliance with this section.
The trust agreement and its compliance with this section. After review of the reinsurance and trust agreements, the commissioner may deny credit for the reinsurance on the ceding mortgage guaranty insurer’s financial statements, if deemed necessary for the protection of the mortgage guaranty insurer or its Wisconsin insureds.

(9) Advertising. No mortgage guaranty insurer or any agent or representative of a mortgage guaranty insurer shall prepare or distribute or assist in preparing or distributing any brochure, pamphlet, report or any form of advertising to the effect that the real estate investments of any financial institution are “insured investments,” unless the brochure, pamphlet, report or advertising clearly states that the loans are insured by insurers possessing a certificate of authority to transact mortgage guaranty insurance in this state or are insured by an agency of the federal government, as the case may be.

(10) Policy forms. All policy forms and endorsements shall be filed with and be subject to approval of the commissioner. With respect to owner-occupied, single-family dwellings, the mortgage guaranty insurance policy shall provide that the borrower shall not be liable to the insurance company for any deficiency arising from a foreclosure sale.

(11) Premium.

(a) The total consideration charged for mortgage guaranty insurance policies, including policy and other fees or similar charges, shall be considered premium and must be stated in the policy and shall be subject to the reserve requirements of subs. (13) and (14).

(b) The rate making formula for mortgage guaranty insurance shall contain a factor or loading sufficient to produce the amount required for the contingency reserve prescribed by sub. (14).

(12) Reporting.

(a) The financial condition and operations of a mortgage guaranty insurer shall be reported annually on the annual statement.

(b) The unearned premium reserve required by sub. (13) shall be reported in the underwriting and investment exhibit—recapitulation of all premiums schedule of the annual statement.

(c) The contingency reserve required by sub. (14) shall be reported as a liability in the annual statement. This liability may be reported as unpaid losses, mortgage guaranty account or other appropriately labeled write-in item. Appropriate entries shall be made in the underwriting and investment exhibit—statement of income of the annual statement. The change in contingency reserve for the year shall be reported in the annual statement as a reduction of or a deduction from underwriting income. If the contingency reserve is recorded as a loss liability, the change in the reserve shall be excluded from loss development similar to fidelity and surety losses incurred but not reported. The development of the contingency reserve and policyholders position shall be shown in an appropriate supplemental schedule to the annual statement as prescribed by the commissioner.

(d) The loss reserves required by sub. (15) shall be reported in the underwriting and investment exhibit—unpaid losses and loss adjustment schedule of the annual statement.

(e) Any property acquired pursuant to the exercise of the claim settlement option shall be valued net of encumbrances; and an aggregate amount of such property may be held as is permitted for nonlife insurer investments pursuant to s. 620.22 (5), Stats.

(f) Expenses shall be recorded and reported in accordance with ss. Ins 6.30 and 6.31.

(g) An insurer which writes mortgage guaranty insurance and any other class of insurance business shall establish a segregated account for mortgage guaranty insurance. An insurer which writes more than one class of mortgage guaranty insurance shall establish a segregated account for each class of mortgage guaranty insurance. An insurer which reinsures mortgage guaranty insurance and which writes or reinsures any other class of insurance business shall establish a segregated account or segregated trust for mortgage guaranty reinsurance. The classes of mortgage guaranty insurance are those types of insurance defined in:

Section Ins 6.75 (2) (i) 1. a. and c.; or
Section Ins 6.75 (2) (i) 1. b. and 2.; or
Section Ins 6.75 (2) (i) 1. d. and (j).

(h) Each segregated account or segregated trust established to comply with par. (g) shall contain all of the following applicable reserves:

The loss reserves required by sub. (15).
The unearned premium reserve required by sub. (13) or (18).
The contingency reserve required by sub. (14) or (18) or any surplus required by the commissioner.

(13) Unearned premium reserve. Subject to sub. (8), a mortgage guaranty insurer shall compute and maintain an unearned premium reserve on policies in force as follows:

(a) For premium plans on which the premium is paid annually, the unearned premium reserve shall be calculated on either an annual or monthly pro rata basis except that the portion of the first-year premium, excluding policy and other fees or similar charges, which exceeds twice the subsequent renewal premium rate, shall be considered a deferred risk premium. The deferred risk premium shall be contributed to and maintained in the unearned premium reserve until released as earned. The deferred risk premium shall be earned in accordance with the factors for a 10-year premium period in par. (b) or any other formula approved by the commissioner.

(b) For premium plans on which the premium is paid in advance for periods of time greater than one year but less than 16 years, the unearned premium reserve shall be calculated by multiplying the premiums collected by the appropriate unearned premium factor from the table set forth below:

Note: For purposes of this calculation, premiums collected means either 90% of the premiums collected or the premium collected less a dollar amount or percentage amount approved by the commissioner to represent initial expenses of selling and issuing a new policy.

(c) For premium plans on which the premium is paid in advance for periods of 16 years or more, the unearned premium reserve shall be calculated either by a method approved by the commissioner or by dividing the premium collected, as defined above in par. (b), into 2 parts. The first part shall be the amount which is equal to the premium collected for a 15-year premium and which shall be earned in the same manner as a 15-year premium. The second part is the remaining amount of premium in excess of the 15-year premium, which shall be earned pro rata over the remaining term of the premium.

(14) Contingency reserve.

(a) Subject to sub. (8), a mortgage guaranty insurer shall make an annual contribution to the contingency reserve which in the aggregate shall be the greater of:

50% of the net earned premium reported in the annual statement; or
The sum of:

a. The policyholders position established under sub. (5) on residential buildings designed for occupancy by not more than four families divided by 7;

b. The policyholders position established under sub. (5) on residential buildings designed for occupancy by 5 or more families divided by 5;

c. The policyholders position established under sub. (5) on buildings occupied for industrial or commercial purposes divided by 3; and

d. The policyholders position established under sub. (5) for leases divided by 10.

(b) If the mortgage guaranty coverage is not expressly provided for in this section, the commissioner may establish a rate formula factor that will produce a contingency reserve adequate for the risk assumed.

(c) The contingency reserve established by this subsection shall be maintained for 120 months. That portion of the contingency reserve established and maintained for more than 120 months shall be released and shall no longer constitute part of the contingency reserve.

(d)

With the approval of the commissioner, withdrawals may be made from the contingency reserve when incurred losses and incurred loss expenses exceed the greater of either 35% of the net earned premium or 70% of the amount which par. (a) requires to be contributed to the contingency reserve in such year.
On a quarterly basis, provisional withdrawals may be made from the contingency reserve in an amount not to exceed 75% of the withdrawal calculated in accordance with subd. 1.

(e) With the approval of the commissioner, a mortgage guaranty insurer may withdraw from the contingency reserve any amounts which are in excess of the minimum policyholders position. In reviewing a request for withdrawal pursuant to this paragraph, the commissioner may consider loss development and trends. If any portion of the contingency reserve for which withdrawal is requested pursuant to this paragraph is maintained by a reinsurer, the commissioner may also consider the financial condition of the reinsurer. If any portion of the contingency reserve for which withdrawal is requested pursuant to this paragraph is maintained in a segregated account or segregated trust and such withdrawal would result in funds being removed from the segregated account or segregated trust, the commissioner may also consider the financial condition of the reinsurer.

(f) Releases and withdrawals from the contingency reserve shall be accounted for on a first-in-first-out basis as provided in sub. (12) (g).

(g) The calculations to develop the contingency reserve shall be made in the following sequence:

The additions required by pars. (a) and (b);
The releases permitted by par. (c);
The withdrawals permitted by par. (d); and
The withdrawals permitted by par. (e).

(15) Loss reserves.

(a) Subject to sub. (8), a mortgage guaranty insurer shall compute and maintain adequate loss reserves. The methodology used for computing the loss reserves shall accurately reflect loss frequency and loss severity and shall include components for claims reported and unpaid and for claims incurred but not reported.

(b) A mortgage guaranty insurer shall compute and maintain adequate case basis loss reserves which are based on an estimate of the liability for claims on individual insured loans in various stages of default as listed below. Case basis loss reserves may be calculated on either an individual case basis or a formula basis. Case basis loss reserves shall be established for individual insured loans or leases which:

Are in default and have resulted in the collateral real estate being acquired by the insured, the insurer, or the agent of either, and remaining unsold; or
Are in the process of foreclosure; or
Are in default and the insurer has received notification.

(c) In computing the potential liability for which case basis reserves are required by par. (b), the following factors shall be considered together with the prospective adjustments reflecting historic data relative to prior claim settlements:

Prior to the exercise of the claim settlement option, the potential liability shall be either the amount at risk calculated using the coverage settlement option or the potential claim amount minus the value of the real estate.
If the claim settlement option exercised results in recording the claim amount as the cost of acquisition of the property, the potential liability is the claim amount minus the lesser of the market value of the real estate or the acquisition cost of the real estate.
If the claim settlement option exercised results in the payment of amounts equal to the monthly loan payments or lease rents, the potential liability is the present value, utilizing the insurer’s National Association of Insurance Commissioners’ (NAIC) financial ratio-investment yield, of the claim amounts minus the present value of either the real estate or the rental income stream.

(d) A mortgage guaranty insurer shall compute and maintain a loss adjustment expense reserve which is based on an estimate of the cost of adjusting and settling claims on insured loans in default.

(e) A mortgage guaranty insurer shall compute and maintain an incurred but not reported reserve which is based on an estimate of the liability for future claims on insured loans that are in default but of which the insurer has not been notified.

(16) Charges, commissions and rebates.

(a) Every mortgage guaranty insurer shall adopt, print and make available a schedule of premium charges for mortgage guaranty insurance coverages. The schedule shall show the entire amount of premium charge for each type of mortgage guaranty insurance coverage issued by the insurer.

(b) A mortgage guaranty insurer shall not knowingly pay, either directly or indirectly to an owner, purchaser, mortgagee of the real property or any interest therein or to any person who is acting as agent, representative, attorney or employee of such owner, purchaser, or mortgagee any commission, remuneration, dividend or any part of its premium charges or any other consideration as an inducement for or as compensation on any mortgage guaranty insurance business.

(c) In connection with the placement of any insurance, a mortgage guaranty insurer shall not cause or permit any commission, fee, remuneration, or other compensation to be paid to, or received by: any insured lender; any subsidiary or affiliate of any insured; any officer, director or employee of any insured; any member of their immediate family; any corporation, partnership, trust, trade association in which any insured is a member, or other entity in which any insured or any such officer, director, or employee or any member of their immediate family has a financial interest; or any designee, trustee, nominee, or other agent or representative of any of the foregoing.

(d) A mortgage guaranty insurer shall not make any rebate of any portion of the premium charge shown by the schedule required by par. (a). A mortgage guaranty insurer shall not quote any premium charge to any person which is different than that currently available to others for the same type of mortgage guaranty insurance coverage sold by the mortgage guaranty insurer. The amount by which any premium charge is less than that called for by the current schedule of premium charge is a rebate.

(e) A mortgage guaranty insurer shall not use compensating balances, special deposit accounts or engage in any practice which unduly delays its receipt of monies due or which involves the use of its financial resources for the benefit of any owner, mortgagee of the real property or any interest therein or any person who is acting as agent, representative, attorney or employee of such owner, purchaser or mortgagee as a means of circumventing any part of this rule. Except for commercial checking accounts and normal deposits in support of an active bank line of credit, any deposit account bearing interest at rates less than is currently being paid other depositors on similar deposits or any deposit in excess of amounts insured by an agency of the federal government shall be presumed to be an account in violation of this paragraph.

(f) A mortgage guaranty insurer shall make provision for prompt refund of any unearned premium in the event of termination of the insurance prior to its scheduled termination date. If the borrower paid or was charged for the premium, the refund shall be made to the borrower, or to the insured for the borrower’s benefit, otherwise refund may be paid to the insured.

(g) This subsection is not intended to prohibit payment of appropriate policy dividends to borrowers.

(17) Minimum capital or permanent surplus. The minimum amount of capital or permanent surplus of a mortgage guaranty insurer shall be $2 million for an insurer first authorized to do business in Wisconsin on or after January 1, 1982, or the amount required by statute or administrative order before that date or other insurers.

(18) Transition. Policyholders position, unearned premium reserves and contingency loss reserves shall be computed and maintained on risks insured after the effective date of this section as required by subs. (5), (13) and (14). Unearned premium reserves and contingency loss reserves on risks insured before the effective date of this rule may be computed and maintained either as required by subs. (13) and (14) or as required by this section as previously in effect.

(19) Conflict of interest.

(a) Except as described in par. (c), if a member of a holding company system as defined in s. Ins 40.01 (6), a mortgage guaranty insurer licensed to transact insurance in this state shall not, as a condition of its certificate of authority, knowingly underwrite mortgage guaranty insurance on mortgages originated by the holding company system or an affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly by the holding company system or affiliate.

(b) A mortgage guaranty insurer, the holding company system of which it is a part or any affiliate shall not as a condition of the mortgage guaranty insurer’s certificate of authority, pay any commissions, remuneration, rebates or engage in activities proscribed in sub. (15).

(c)

A mortgage guaranty insurer may underwrite mortgage guaranty insurance on mortgages originated by the holding company system or affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly by the holding company system or affiliate only if the insurance is underwritten on the same basis, for the same consideration and subject to the same insurability requirements as insurance provided to nonaffiliated lenders. Mortgage guaranty insurance underwritten on mortgages originated by the holding company system or affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly by the holding company system or affiliate shall be limited to 50% of the insurer’s direct premium written in any calendar year, or such higher percentage established in writing for the insurer in the commissioner’s discretion, based on the commissioner’s determination that a higher percentage is not likely to adversely affect the financial condition of the insurer.
A domestic mortgage guaranty insurer that offers coverage under subd. 1., shall annually file by March 1 a certification executed by a senior, responsible officer that the insurer has complied with subd. 1. in the previous calendar year. The commissioner may grant an extension to an insurer if the commissioner determines an extension is not likely to materially impede the office’s monitoring of the insurer’s compliance with this subsection.

(20) Laws or regulations of other jurisdictions. Whenever the laws or regulations of another jurisdiction in which a mortgage guaranty insurer subject to the requirements of this rule is licensed, require a larger unearned premium reserve or a larger contingency reserve in the aggregate than that set forth in this rule, the establishment and maintenance of the larger unearned premium reserve or contingency reserve shall be deemed to be compliance with this rule.

(21) This section may be enforced under ss. 601.41, 601.64, 601.65, Stats., or ch. 645, Stats., or any other enforcement provision of chs. 600 to 646, Stats.

History

Cr. Register, March, 1957, No. 15, eff. 4-1-57; am. (2), (3), (4) and (5), Register, January, 1959, No. 37, eff. 2-1-59; am. (4) (c), Register, August, 1959, No. 44, eff. 9-1-59; cr. (4) (e), Register, January, 1961, No. 61, eff. 2-1-61; am. (2), Register, January, 1967, No. 133, eff. 2-1-67; am. (2), (3) (a) and (b), and (4) (a) and (b); r. and recr. (5), Register, December, 1970, No. 180, eff. 1-1-71. r. and recr. Register, March, 1975, No. 231, eff. 4-1-75; emerg. am. (1), (2) and (3) (a), eff. 6-22-76; am. (1), (2) and (3) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), (2) and (3) (a), Register, March, 1979, No. 279, eff. 4-1-79; r. and recr. (1), (3), (5), (12) and (14), am. (2), (4), (8), (13) (a) and (16), renum. (7) to be (7) (a) and cr. (7) (b) and (7m), Register, October, 1982, No. 322, eff. 11-1-82; correction in (14) (d) made under s. 13.93 (2m) (b) 7., Stats., Register, December, 1984, No. 348; am. (3) (m), Register, October, 1985, No. 358, eff. 11-1-85; am. (1) and (5) (a), renum. (7m), (15) to (18) to be (17), (16) and (18) to (20); cr. (7m) and (15), r. and recr. (8), (12) to (14), Register, November, 1989, No. 407, eff. 12-1-89; correction in (7m) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; corrections in (3) (b), (j) and (19) made under s. 13.93 (2m) (b) 7., Stats., Register, July, 1999, No. 523; am. (19) (a), cr. (19) (c), Register, July, 2000, No. 535, eff. 8-1-00; CR 05-023: am. (19) (c) and cr. (21) Register December 2005 No. 600, eff. 1-1-06.

Wis. Admin. Code § Ins 3.11 Multiple peril insurance contracts {#sec-ins-3.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.11}

(1) Purpose and scope.

(a) This rule implements and interprets s. Ins 6.70 and chs. 625 and 631, Stats., by enumerating the minimum requirements for the writing of multiple peril insurance contracts. Nothing herein contained is intended to prohibit insurers or groups of insurers from justifying rates or premiums in the manner provided for by the rating laws.

(b) This rule shall apply to multiple peril insurance contracts permitted by s. Ins 6.70, and which include a type or types of coverage or a kind or kinds of insurance subject to ch. 625, Stats.

(c) Types of coverage or kinds of insurance which are not subject to ch. 625, Stats., or to the filing requirement provisions thereof, may not be included in multiple peril insurance contracts otherwise subject to said sections unless such entire multiple peril insurance contract is filed as being subject to this rule and said sections and the filing requirements thereof.

(2) Definition. Multiple peril insurance contracts are contracts combining 2 or more types of coverage or kinds of insurance included in any one or more than one paragraph of s. Ins 6.75. Such contracts may be on the divisible or single (indivisible) rate or premium basis.

(3) Rate making.

(a) When underwriting experience is not available to support a filing, the information set forth in s. 625.12, Stats., may be furnished as supporting information.

(b) Premiums or rates may be modified for demonstrated, measurable, or anticipated variation from normal of the loss or expense experience resulting from the combination or types of coverage or kinds of insurance or other factors of the multiple peril insurance contract. Multiple peril contracts may be filed or revised on the basis of sufficient underwriting experience developed by the contract or such experience may be used in support of such filing.

(c) In the event that more than one rating organization cooperates in a single (indivisible) rate or premium multiple peril insurance filing, one of such cooperating rating organizations shall be designated as the sponsoring organization for such filing by each of the other cooperating rating organizations and evidence of such designation included with the filing.

(4) Standard policy. The requirements of s. Ins 6.76 shall apply to any multiple peril insurance contract which includes insurance against loss or damage by fire.

History

Cr. Register, July, 1958, No. 31, eff. 8-1-58; am. (3) (a), Register, November, 1960, No. 59, eff. 12-1-60; emerg. am. (1), (2), (3) (a) and (4), eff. 6-22-76; am. (1), (2), (3) (a) and (4), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) (a) and (b), (2) and (4), Register, March, 1979, No. 279, eff. 4-1-79.

Wis. Admin. Code § Ins 3.13 Individual accident and sickness insurance {#sec-ins-3.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.13}

(1) Purpose. This section implements and interprets applicable statutes for the purpose of establishing procedures and requirements to expedite the review and approval of individual accident and sickness policies permitted by s. Ins 6.75 (1) (c) or (2) (c), and franchise type accident and sickness policies permitted by s. 600.03 (22), Stats., and s. Ins 6.75 (1) (c) and (2) (c). The requirements in subs. (2), (3), (4) and (6) are to be followed in substance, and wording other than that described may be used provided it is not less favorable to the insured or beneficiary.

(2) Policy provisions.

(a) If a policy is not to insure against sickness losses resulting from conditions in existence prior to the effective date of coverage, or in existence prior to a specified period after such effective date, the policy by its terms shall indicate that it covers sickness contracted and commencing (or beginning, or originating, or first manifested or words of similar import) after such effective date or after such specified period. Wording shall not be used that requires the cause of the condition or sickness, as distinguished from the condition or sickness itself, to originate after such effective date or such specified period.

Note: It is understood that “sickness” as used herein means the condition or disease from which the disability or loss results. Paragraph (a) shall not apply to nor prohibit the exclusion from coverage of a disease or physical condition by name or specific description.

(b) Where any “specified period” referred to in par. (a) exceeds 30 days, it shall apply to the occurrence of loss and not to the contracting or commencement of sickness after such period.

(c) A policy, other than a non-cancellable policy or a non-cancellable and guaranteed renewable policy or a guaranteed renewable policy, shall set forth the conditions under which the policy may be renewed, either by: A brief description of the policy’s renewal conditions, or a separate statement referring to the policy’s renewal conditions, or a separate appropriately captioned renewal provision appearing on or commencing on the first page.

The brief description, if used to meet the foregoing requirement, shall be printed, in type more prominent than that used in the policy’s text, at the top or bottom of the policy’s first page and on its filing back, if any, and shall describe its renewal conditions in one of the following ways: “Renewal Subject to Consent of Company,” “Renewal Subject to Company Consent,” “Renewal at Option of Company,” “Renewal at Option of Company as Stated in _________” (refer to appropriate policy provision), or “Renewal May be Refused as Stated in _________” (refer to appropriate policy provision). A company may submit other wording, subject to approval by the commissioner, which it believes is equally clear or more definite as to subject matter.
The separate statement, if used to meet the foregoing requirement, shall be printed, in type more prominent than that used in the policy’s text, at the top or bottom of the policy’s first page and on its filing back, if any, and shall describe its renewal conditions in one of the following ways: “Renewal Subject to Consent of Company,” “Renewal Subject to Company Consent,” “Renewal at Option of Company,” “Renewal at Option of Company as Stated in _________” (refer to appropriate policy provision), or “Renewal May be Refused as Stated in _________” (refer to appropriate policy provision). A company may submit other wording, subject to approval by the commissioner, which it believes is equally clear or more definite as to subject matter.
The renewal provision appearing on or commencing on the policy’s first page, if used to meet the foregoing requirement, shall be preceded by a caption which describes the policy’s renewal conditions in one of the following ways: “Renewal Subject to Consent of Company,” “Renewal Subject to Company Consent,” “Renewal at Option of Company,” “Renewal at Option of Company as Stated Below,” or “Renewal May be Refused as Stated Herein.” A company may submit other wording, subject to approval by the commissioner, which it believes is equally clear or more definite as to subject matter. The caption shall be in type more prominent than that used in the policy’s text.

(d) If the policy is not renewable, it shall be so described in the brief description or in a separate statement at the top or bottom of the first page and on the filing back, if any, or it shall be so described in a separate appropriately captioned provision on the first page. The brief description, or the separate statement, or the caption shall be printed in type more prominent than that used in the policy’s text.

(e)

The terms “non-cancellable” or “non-cancellable and guaranteed renewable” may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy:

a. Until at least age 50, or

b. In the case of a policy issued after age 44, for at least 5 years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force.

A non-cancellable or non-cancellable and guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the terms “non-cancellable” or “non-cancellable and guaranteed renewable:”

a. The age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable, if other than lifetime,

b. The age or time at which the form’s benefits are reduced, if applicable, (The age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable.) and

c. That benefit payments are subject to an aggregate limit, if applicable.

Except as provided above, the term “guaranteed renewable” may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums:

a. Until at least age 50, or

A guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the term “guaranteed renewable:”

a. The age to or term for which the form is guaranteed renewable, if other than lifetime,

b. The age or time at which the form’s benefits are reduced, if applicable, (The age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or term for which the form is guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is guaranteed renewable.)

c. That benefit payments are subject to an aggregate limit, if applicable, and

d. That the applicable premium rates may be changed.

Note: “Prominent use” as referred to in subds. 2. and 4. is considered to include, but is not necessarily limited to, use in titles, brief descriptions, captions, bold-face type, or type larger than that used in the text of the form.

The foregoing limitation on the use of the term “non-cancellable” shall also apply to any synonymous term such as “not cancellable” and the limitation on use of the term “guaranteed renewable” shall apply to any synonymous term such as “guaranteed continuable.”
Nothing herein contained is intended to restrict the development of policies having other guarantees of renewability, or to prevent the accurate description of their terms of renewability or the classification of such policies as guaranteed renewable or non-cancellable for any period during which they may actually be such, provided the terms used to describe them in policy contracts and advertising are not such as may readily be confused with the above terms.
The provisions of ss. 632.76 (1), 632.74 and 632.77 (3), Stats., are applicable to non-cancellable or non-cancellable and guaranteed renewable or guaranteed renewable policy forms as herein defined.

(f) Policies issued on a family basis shall clearly set forth the conditions relating to termination of coverage of any family member.

(g) Surgical benefit provisions or schedules shall provide that the benefit for any covered surgical procedure not specifically listed in the schedule and not excluded by the provisions of the policy shall be determined by the company on a basis consistent with the benefit provided for a comparable listed procedure.

(h) A limited policy is one that contains unusual exclusions, limitations, reductions, or conditions of such a restrictive nature that the payments of benefits under such policy are limited in frequency or in amounts. All limited policies shall be so identified by having the words “THIS IS A LIMITED POLICY—READ IT CAREFULLY” imprinted or stamped diagonally across the face of the policy and the filing back, if any, in contrasting color from the text of the policy and in outline type not smaller than 18-point. When appropriate, these words may be varied by the insurer in a manner to indicate the type of policy; as for example, “THIS POLICY IS LIMITED TO AUTOMOBILE ACCIDENTS—READ IT CAREFULLY.” Without limiting the general definition above, policies of the following types shall be defined as “limited:” 1. School Accident, 2. Aviation Accident, 3. Polio, 4. Specified Disease, 5. Automobile Accident.

(i) If the policy excepts coverage while the insured is in military or naval service, the policy must provide for a refund of pro rata unearned premium upon request of the insured for any period the insured is not covered. However, if coverage is excluded only for loss resulting from military or naval service or war, the refund provision will not be required. This section shall not apply to non-cancellable policies or non-cancellable and guaranteed renewable policies or guaranteed renewable policies.

(j) Except as provided in s. Ins 3.39 (7) (d), (dm), and (dt), the provision or notice regarding the right to return the policy required by s. 632.73, Stats., shall comply with all of the following:

Be printed on or attached to the first page of the policy,
Have a caption or title which refers at least to the right to examine or to return the policy such as: “Right to Return Policy Within 10 Days of Receipt,” “Notice: Right to Return Policy,” “Right of Policy Examination,” “Right to Examine Policy,” “Right to Examine Policy for 10 Days,” “10 Day Right to Examine Policy,” “10 Day Right to Return Policy,” or “Notice of 10 Day Right to Return Policy,” or other wording, subject to approval by the commissioner, which is believed to be equally clear or more definite as to subject matter, and
Provide an unrestricted right to return the policy, within 10 days from the date it is received by the policyholder, to the issuer at its home or branch office, if any, or to the agent through whom it was purchased; except it shall provide an unrestricted right to return the policy within 30 days of the date it is received by the policyholder in the case of a Medicare supplement policy subject to s. Ins 3.39 (4), (4m), (4t), (5), (5m), (5t), and (6), issued pursuant to a direct response solicitation. Provision shall not be made to require the policyholder to set out in writing the reasons for returning the policy, to require the policyholder to first consult with an agent of the issuer regarding the policy, or to limit the reasons for return.

Note: Paragraph (j) was adopted to assist in the application of s. 204.31 (2) (a), Stats., to the review of accident and sickness policy and other contract forms. Those statutory requirements are presently included in s. 632.73, Stats. The original statute required that the provision of notice regarding the right to return the policy must be appropriately captioned or titled. Since the important rights given the insured are to examine the policy and to return the policy, the rule requires that the caption or title must refer to at least one of these rights—examine or return. Without such reference, the caption or title is not considered appropriate.

The original statute permitted the insured to return the policy for refund to the home office or branch office of the insurer or to the agency with whom it was purchased. In order to assure the refund is made promptly, some insurers prefer to instruct the insured to return the policy to a particular office or agent for a refund. Notices or provisions with such requirements will be approved on the basis that the insurer must recognize an insured’s right to receive a full refund if the policy is returned to any other office or agent mentioned in the statute.

Also, the statute permits the insured to return a policy for refund within 10 days from the date of receipt. Some insurers’ notices or provisions regarding such right, however, refer to delivery to the insured instead of receipt by the insured or do not specifically provide for the running of the 10 days from the date the insured receives the policy. Notices or provisions containing such wording will be approved on the basis that the insurer will not refuse refund if the insured returns the policy within 10 days from the date of receipt of the policy.

Sections 632.73 (2m) and 600.03 (35) (e), as created by Chapter 82, Laws of 1981, provide for the right of return provisions in certain certificates of group Medicare supplement policies. Therefore, for purposes of this subparagraph, the word policy includes a Medicare supplement certificate subject to s. Ins 3.39 (4), (4m), (4t), (5), (5m), (5t), and (6).

(k) A policy which contains any provision under which the claimant may elect one benefit in lieu of another shall not limit to a specified period the time within which election may be made.

(3) Riders and endorsements.

(a) A rider is an instrument signed by one or more officers of the insurer issuing the same to be attached to and form a part of a policy. All riders shall comply with the requirements of s. 204.31 (2) (a) 4., 1973 Stats.

(b) If the rider reduces or eliminates coverage of the policy, signed acceptance of the rider by the insured is necessary. However, signed acceptance of the rider is not necessary when the rider is attached at the time of the original issuance of the policy if notice of the attachment of the rider is affixed on the face and filing back, if any, in contrasting color, in not less than 12-point type. Such notice shall be worded in one of the following ways:

(c) An endorsement differs from a rider only in that it is applied to a policy by means of printing or stamping on the body of the policy. All endorsements shall comply with the requirements of s. 204.31 (2) (a) 4., 1973 Stats.

(d) If the endorsement reduces or eliminates coverage of the policy, signed acceptance of the endorsement by the insured is necessary. However, signed acceptance of the endorsement is not necessary when the endorsement is affixed at the time of the original issuance of the policy if notice of the endorsement is affixed on the face and filing back, if any, in contrasting color, in not less than 12-point type. Such notice shall be worded in one of the following ways:

(4) Applications.

(a) Application forms shall meet the requirements of s. Ins 3.28 (3).

(b) It shall not be necessary for the applicant to sign a proxy provision as a condition for obtaining insurance. The applicant’s signature to the application must be separate and apart from any signature to a proxy provision.

(c) The application form, or the copy of it, attached to a policy shall be plainly printed or reproduced in light-faced type of a style in general use, the size of which shall be uniform and not less than 10-point.

(6) Rate filings.

(a) The following must be accompanied by a rate schedule:

Policy forms.
Rider or endorsement forms which affect the premium rate.

(b) The rate schedule shall bear the insurer’s name and shall contain or be accompanied by the following information:

The form number or identification symbol of each policy, rider or endorsement to which the rates apply.
A schedule of rates including policy fees or rate changes at renewal, if any, variations, if any, based upon age, sex, occupation, or other classification.
An indication of the anticipated loss ratio on an earned-incurred basis.
Any revision of a rate filing shall be accompanied by a statement of the experience on the form and the anticipated loss ratio on an earned-incurred basis under the revised rate filing.
Subdivisions 3. and 4. shall not apply to non-cancellable policies or riders or non-cancellable and guaranteed renewable policies or riders or guaranteed renewable policies or riders.

History

Cr. Register, March, 1958, No. 27; subsections (1), (5), (6) eff. 4-1-58; subsections (2), (3), (4) eff. 5-15-58; am. (2) (c) and cr. (4) (c), Register, March, 1959, No. 39, eff. 4-1-59; am. (2) (e), (6) (b) 3. and 4., Register, November, 1959, No. 47, eff. 12-1-59; am. and renum. (2) (c), (d), (e), (f), (g) and (h); am. (3) and (6) (b) 5., Register, June, 1960, No. 54, eff. 7-1-60; am. (2) (e) 4., Register, November, 1960, No. 59, eff. 12-1-60; r. (2) (j), Register, April, 1963, No. 88, eff. 5-1-63; cr. (2) (j), Register, March, 1964, No. 99, eff. 4-1-64; am. (2) (e) 2. and 4., Register, April, 1964, No. 100, eff. 5-1-64; am. (2) (j) 2.; am. NOTE in (2) (j) 3; Register, March, 1969, No. 159; eff. 4-1-69; cr. (2) (k), Register, June, 1971, No. 186, eff. 7-1-71; am. (4) (a), Register, February, 1974, No. 218, eff. 3-1-74; emerg. am. (1), (2) (e) 7., (2) (j), (3) (a) and (c), eff. 6-22-76; am. (1), (2) (e) 7., (2) (j), (3) (a) and (c), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2) (e) 7, Register, March, 1979, No. 279, eff. 4-1-79; r. (5), Register, January, 1980, No. 289, eff. 2-1-80; am. (2) (j) 3., Register, June, 1982, No. 318, eff. 7-1-82; emerg. am. (2) (j) and cr. (2) (jm), eff. 11-19-85; am. (2) (j) (intro.) and cr. (2) (jm), Register, March, 1986, No. 363, eff. 4-1-86; am. (1), Register, September, 1986, No. 369, eff. 10-1-86; emerg. am. (2) (j) (intro.), renum. (2) (jm) to be Ins 3.39 (7) (d), eff. 1-1-92; am. (2) (j) (intro.), renum. (2) (jm) to be Ins 3.39 (7) (d), Register, July, 1992, No. 439, eff. 8-1-92; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; CR 08-112: am. (2) (j) 3. Register June 2009 No. 642, eff. 7-1-09; CR 19-036: am. (2) (j) (intro.), 3. Register December 2019 No. 768, eff. 1-1-20.

Wis. Admin. Code § Ins 3.14 Group accident and sickness insurance {#sec-ins-3.14 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.14}

(1) Purpose. This rule implements and interprets applicable statutes for the purpose of establishing procedures and requirements to expedite the review and approval of group accident and sickness policies permitted by s. 600.03 (23), Stats., and s. Ins 6.75 (1) (c) or (2) (c).

(3) Rate filings. Schedules of premium rates shall be filed in accordance with the requirements of ch. 601, Stats., and s. 631.20, Stats. The schedules of premium rates shall bear the insurer’s name and shall identify the coverages to which such rates are applicable.

(4) Certificates.

(a) Each certificate issued to an employee or member of an insured group in connection with a group insurance policy shall include a statement in summary form of the provisions of the group policy relative to:

The essential features of the insurance coverage,
To whom benefits are payable,
Notice or proof of loss,
The time for paying benefits, and
The time within which suit may be brought.

(5) Coverage requirements.

(a) Policies issued in accordance with s. 600.03 (23), Stats., shall offer to insure all eligible members of the group or association except any as to whom evidence of insurability is not satisfactory to the insurer. Cancellation of coverage of individual members of the group or association who have not withdrawn participation nor received maximum benefits is not permitted, except that the insurer may terminate or refuse renewal of an individual member who attains a specified age, retires or who ceases to actively engage in the duties of a profession or occupation on a full-time basis or ceases to be an active member of the association or labor union or an employee of the employer, or otherwise ceases to be an eligible member.

(b) Surgical benefit provisions or schedules shall provide that the benefit for any covered surgical procedure not specifically listed in the schedule and not excluded by the provisions of the policy shall be determined by the company on a basis consistent with the benefit provided for a comparable listed procedure.

(c) A policy which contains any provision under which the claimant may elect one benefit in lieu of another shall not limit to a specified period the time within which election may be made.

(6) Eligible groups. In accordance with s. 600.03 (23), Stats.:

(a) The members of the board of directors of a corporation are eligible to be covered under a group accident and sickness policy issued to such corporation,

(b) The individual members of member organizations of an association, as defined in s. 600.03 (23), Stats., are eligible to be covered under a group accident and sickness policy issued to such association insuring employees of such association and employees of member organizations of such association, and

(c) The individuals supplying raw materials to a single processing plant and the employees of such processing plant are eligible to be covered under a group accident and sickness policy issued to such processing plant.

History

Cr. Register, March, 1958, No. 27; subsections (1), (2), (3), eff. 4-1-58; subsections (4), (5), eff. 5-1-58; renum. (5) to be (5) (a); cr. (5) (b), Register, November, 1959, No. 47, eff. 12-1-59; am. (1) (3), (5) (a) and cr. (6), Register, October, 1961, No. 70, eff. 11-1-61; am. (6), Register, February, 1962, No. 74, eff. 3-1-62; cr. (5) (c), Register, June, 1971, No. 186, eff. 7-1-71; emerg. am. (1), (3), (5) (a), (6) (intro.) and (6) (b), eff. 6-22-76; am. (1), (3), (5) (a), (6) (intro.) and (6) (b), Register, September, 1976, No. 249, eff. 10-1-76; r. (2), Register, January, 1980, No. 289, eff. 2-1-80; am. (1), (5) (a), (6) (intro.) and (b), Register, September, 1986, No. 369, eff. 10-1-86; correction in (5) (a) made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 3.15 Blanket accident and sickness insurance {#sec-ins-3.15 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.15}

(1) Purpose. This rule implements and interprets applicable statutes for the purpose of establishing procedures and requirements to expedite the review and approval of blanket accident and sickness policies permitted by s. 600.03 (4), Stats., and s. Ins 6.75 (1) (c) or (2) (c).

(4) Eligible risks.

(a) In accordance with the provisions of s. 600.03 (4), Stats., the following are eligible for blanket accident and health insurance:

Volunteer fire departments.
National guard units.
Newspaper delivery carriers.
Dependents of students.
Volunteer civil defense organizations.
Volunteer auxiliary police organizations.
Law enforcement agencies.
Cooperatives organized under ch. 185, Stats., on a membership basis without capital stock.
Registered guests in a motel, hotel, or resort.
Members or members and advisors of fraternal organizations including women’s auxiliaries of such organizations and fraternal youth organizations.
Associations of sports officials.
Purchasers of protective athletic equipment.
Migrant workers.
Participants in racing meets.
Patrons or guests of a recreational facility or resort.
Veterans.

(b) A company may submit any other risk or class of risks, subject to approval by the commissioner, which it believes is properly eligible for blanket accident and health insurance.

(5) Coverage requirements.

(a) Surgical benefit provisions or schedules shall provide that the benefit for any covered surgical procedure not specifically listed in the schedule and not excluded by the provisions of the policy shall be determined by the company on a basis consistent with the benefit provided for a comparable listed procedure.

(b) A policy which contains any provision under which the claimant may elect one benefit in lieu of another shall not limit to a specified period the time within which election may be made.

History

Cr. Register, March, 1958, no. 27, eff. 4-1-58; am. (4) (a), cr. (5), Register, November, 1959, No. 47, eff. 12-1-59; am. (1), (3) and (4) (a), Register, October, 1961, No. 70, eff. 11-1-61; am. (4) (a), Register, April, 1963, No. 88, eff. 5-1-63; am. (4) (a), Register, June, 1963, No. 90, eff. 7-1-63; am. (4) (a), Register, October, 1963, No. 94, eff. 11-1-63; am. (4) (a), Register, August, 1964, No. 104, eff. 9-1-64; am. (4) (a), Register, August, 1968, No. 152, eff. 9-1-68; am. (4) (a), Register, March, 1969, No. 159, eff. 4-1-69; am. (4) (a), Register, August, 1970, No. 176, eff. 9-1-70; am. (4) (a), renum. (5) to be (5) (a), and cr. (b), Register, June, 1971, No. 186, eff. 7-1-71; emerg. am. (1), (3) and (4) (a), eff. 6-22-76; am. (1), (3) and (4) (a), Register, September, 1976, No. 249, eff. 10-1-76; r. (2), Register, January, 1980, No. 289, eff. 2-1-80; am. (1), Register, September, 1986, No. 369, eff. 10-1-86; corrections to (4) made under s. 13.93 (2m) (b) 5. and 7., Stats., Register, April, 1992, No. 436; CR 23-059: am. (4) (a) 15., cr. (4) (a) 16. Register June 2024 No. 822, eff. 7-1-24; correction in (4) (a) 1. to 15. made under s. 35.17, Stats., Register June 2024 No. 822.

Wis. Admin. Code § Ins 3.17 Reserves for accident and sickness insurance policies {#sec-ins-3.17 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.17}

(1) Purpose. This section establishes required minimum standards under ch. 623, Stats., for claim, premium and contract reserves of insurers writing accident and sickness insurance policies.

(2) Scope. This section applies to any insurer, including a fraternal benefit society, issuing a policy providing individual or group accident and sickness insurance coverages as classified under s. Ins 6.75 (1) (c) or (2) (c). This section does not apply to credit insurance as classified under s. Ins 6.75 (1) (c) 1. or (2) (c) 1.

(3) Definitions. In this section:

(a) “Annual claim cost” means the net annual cost per unit of benefit before the addition of expenses, including claim settlement expenses, and a margin for profit or contingencies.

Note: For example, the annual claim cost for a $100 monthly disability benefit, for a maximum disability benefit period of one year, with an elimination period of one week, with respect to a male at age 35, in a certain occupation might be $12, while the gross premium for this benefit might be $18. The additional $6 would cover expenses and profit or contingencies.

(b) “Claims accrued” means that portion of claims incurred on or prior to the valuation date which result in liability of the insurer for the payment of benefits for medical services which have been rendered on or prior to the valuation date, and for the payment of benefits for days of hospitalization and days of disability which have occurred on or prior to the valuation date, which the insurer has not paid as of the valuation date, but for which it is liable, and will have to pay after the valuation date.

Note: This liability is sometimes referred to as a liability for accrued benefits. A claim reserve, which represents an estimate of this accrued claim liability, must be established.

(c) “Claims incurred” means a claim for which the insurer has become obligated to make payment, on or prior to the valuation date.

(d) “Claims reported” means those claims that have been incurred on or prior to the valuation date of which the insurer has been informed, on or prior to the valuation date.

Note: These claims are considered as reported claims for annual statement purposes.

(e) “Claims unaccrued” means that portion of claims incurred on or prior to the valuation date which result in liability of the insurer for the payment of benefits for medical services expected to be rendered after the valuation date, and for benefits expected to be payable for days of hospitalization and days of disability occurring after the valuation date.

Note: This liability is sometimes referred to as a liability for unaccrued benefits. A claim reserve, which represents an estimate of the unaccrued claim payments expected to be made (which may or may not be discounted with interest), must be established.

(f) “Claims unreported” means those claims that have been incurred on or prior to the valuation date of which the insurer has not been informed, on or prior to the valuation date.

Note: These claims are considered as unreported claims for annual statement purposes.

(g) “Date of disablement” means the earliest date on which the insured is considered as being disabled under the definition of disability in the contract, based on a physician’s evaluation or other evidence.

(h) “Elimination period” means a specified number of days, weeks, or months starting at the beginning of each period of loss, during which no benefits are payable.

(i) “Gross premium” means the amount of premium charged by the insurer. It includes the net premium, based on claim cost, for the risk together with any loading for expenses, profit or contingencies.

(j) “Group insurance” includes blanket insurance.

(k) “Individual insurance” includes franchise insurance.

(L) “Level premium” means a premium calculated to remain unchanged throughout either the lifetime of the policy, or for some shorter projected period of years.

Note: The level premium need not be guaranteed; in which case, although it is calculated to remain level, it may be changed if any of the assumptions on which it was based are revised at a later time.

Generally, the annual claim costs are expected to increase each year and the insurer, instead of charging premiums that correspondingly increase each year, charges a premium calculated to remain level for a period of years or for the lifetime of the contract. In this case the benefit portion of the premium is more than needed to provide for the cost of benefits during the earlier years of the policy and less than the actual cost in the later years. The building of a prospective contract reserve is a natural result of level premiums.

(m) “Modal premium” means the premium paid on a contract based on a premium term which could be annual, semiannual, quarterly, monthly, or weekly.

Note: Thus if the annual premium is $100 and if, instead, monthly premiums of $9 are paid then the modal premium is $9.

(n) “Negative reserve” means a negative terminal reserve value due to the values of the benefits decreasing with advancing age or duration.

(o) “Preliminary term reserve method” means the method of valuation under which the valuation net premium for each year falling within the preliminary term period is exactly sufficient to cover the expected incurred claims of that year, so that the terminal reserve will be zero at the end of the year. As of the end of the preliminary term period, a new constant valuation net premium, or stream of changing valuation premiums, becomes applicable such that the present value of all such premiums is equal to the present value of all claims expected to be incurred following the end of the preliminary term period.

(p) “Present value of amounts not yet due on claims” means the reserve for claims unaccrued which may be discounted at interest.

(q) “Reserve” includes all items of benefit liability, whether in the nature of incurred claim liability or in the nature of contract liability relating to future periods of coverage, and whether the liability is accrued or unaccrued.

Note: An insurer under its contracts promises benefits which result in:

On claims incurred, payments expected to be made after the valuation date for accrued and unaccrued benefits are liabilities of the insurer which should be provided for by establishing claim reserves; or

Claims which are expected to be incurred after the valuation date. Any present liability of the insurer for these future claims should be provided for by the establishment of contract reserves and unearned premium reserves.

(r) “Terminal reserve” means the reserve at the end of the contract year which is the present value of benefits expected to be incurred after that contract year minus the present value of future valuation net premiums.

(s) “Unearned premium reserve” means that portion of the premium paid or due to the insurer which is applicable to the period of coverage extending beyond the valuation date.

Note: Thus if an annual premium of $120 was paid on November 1, $20 would be earned as of December 31 and the remaining $100 would be unearned. The unearned premium reserve could be on a gross basis as in this example, or on a valuation net premium basis.

(t) “Valuation net modal premium” means the modal fraction of the valuation net annual premium that corresponds to the gross modal premium in effect on any contract to which contract reserves apply. Thus if the mode of payment in effect is quarterly, the valuation net modal premium is the quarterly equivalent of the valuation net annual premium.

(4) Reserves in excess of minimum reserve standards. An insurer subject to this section may determine that the adequacy of its accident and sickness reserves requires reserves in excess of the minimum standards specified in this section. The insurer shall hold and consider the excess reserves as its minimum reserves.

(5) Prospective gross premium valuation.

(a) With respect to any block of contracts, or with respect to an insurer’s accident and sickness business as a whole, a prospective gross premium valuation is the ultimate test of reserve adequacy as of a given valuation date. The gross premium valuation shall take into account, for contracts in force, in a claims status, or in a continuation of benefits status on the valuation date, the present value as of the valuation date adjusted for future premium increases reasonably expected to be put into effect, of:

All expected benefits unpaid.
All expected expenses unpaid.
All unearned or expected premiums.

(b) The insurer shall perform a gross premium valuation whenever a significant doubt exists as to reserve adequacy with respect to any major block of contracts, or with respect to the insurer’s accident and sickness business as a whole. In the event inadequacy is found to exist, the insurer shall make immediate loss recognition and restore the reserves to adequacy. The insurer shall hold adequate reserves, inclusive of claim, premium and contract reserves, if any, with respect to all contracts, regardless of whether contract reserves are required for the contracts under these standards.

(c) Whenever minimum reserves, as defined in these standards, exceed reserve requirements as determined by a prospective gross premium valuation, the minimum reserves remain the minimum requirement under these standards.

(6) Claim reserves.

(a) General claim reserve requirements are:

Claim reserves are required for all incurred but unpaid claims on all accident and sickness insurance policies;
Appropriate claim expense reserves are required with respect to the estimated expense of settlement of all incurred but unpaid claims; and
The insurer shall test reserves for prior valuation years for adequacy and reasonableness along the lines of claim run-off schedules in accordance with the statutory financial statement including consideration of any residual unpaid liability.

(b) Except as provided in par. (bm), minimum standards for claim reserves are as follows:

For disability income:

a. The maximum interest rate for claim reserves is specified in Appendix A;

b. Minimum standards with respect to morbidity are those specified in Appendix A; except that, at the option of the insurer, for claims with a duration from date of disablement of less than two years, the insurer may base the reserves on the insurer’s experience, if the experience is considered credible, or upon other assumptions designed to place a sound value on the liabilities;

c. For contracts with an elimination period, the insurer shall measure the duration of disablement as dating from the time that benefits would have begun to accrue had there been no elimination period.

For all other benefits:

a. The maximum interest rate for claim reserves is specified in Appendix A;

b. The insurer shall base the reserve on the insurer’s experience, if this experience is considered credible, or upon other assumptions designed to place a sound value on the liabilities;

(bm)

The minimum claim reserve standards for contracts issued prior to January 1, 2017, at the option of the insurer, shall be either the reserving requirements as set forth in par. (b), or the reserving requirements set forth in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, Appendix A-010.
The minimum claim reserve standards for contracts issued on or after January 1, 2017, shall be the standards set forth in the National Association of Insurance Commissioners Valuation Manual as defined in s. 623.06 (1) (j), Stats.

The insurer may use any generally accepted or reasonable actuarial method or combination of methods to estimate all claim liabilities.
The methods used for estimating liabilities generally may be aggregate methods, or various reserve items may be separately valued. The insurer may also employ approximations based on groupings and averages. The insurer shall, however, determine adequacy of the claim reserves in the aggregate.

(7) Premium reserves.

(a) General premium reserve requirements are:

Unearned premium reserves are required for all contracts with respect to the period of coverage for which premiums, other than premiums paid in advance, have been paid beyond the date of valuation;
If premiums due and unpaid are carried as an asset, the insurer shall treat the premiums as premiums in force, subject to unearned premium reserve determination. The insurer shall carry as an offsetting liability the value of unpaid commissions, premium taxes, and the cost of collection associated with due and unpaid premiums; and
Insurers may appropriately discount to the valuation date the gross premiums paid in advance for a period of coverage commencing after the next premium due date which follows the date of valuation. The insurer shall hold this discounted premium either as a separate liability or as an addition to the unearned premium reserve which would otherwise be required as a minimum.

(b) Minimum standards for unearned premium reserves are as follows:

The minimum unearned premium reserve with respect to any contract is the pro rata unearned modal premium that applies to the premium period beyond the valuation date, with the premium determined on the basis of:

a. The valuation net modal premium on the contract reserve basis applying to the contract; or

b. The gross modal premium for the contract if no contract reserve applies.

However, the sum of the unearned premium and contract reserves for all contracts of the insurer subject to contract reserve requirements may not be less than the gross modal unearned premium reserve on all of the contracts, as of the date of valuation. To the extent not provided for elsewhere in this section, this reserve may not be less than the expected claims for the period beyond the valuation date represented by the unearned premium reserve.

In computing premium reserves, the insurer may employ suitable approximations and estimates; including, but not limited to, groupings, averages and aggregate estimation.
The insurer shall periodically test the approximations or estimates to determine their continuing adequacy and reliability.

(8) Contract reserves.

(a) General contract reserve requirements are:

Contract reserves are required, unless otherwise specified in subd. 2. for:

a. All individual and group contracts with which level premiums are used; or

b. All individual and group contracts with respect to which, due to the gross premium pricing structure at issue, the value of the future benefits at any time exceeds the value of any appropriate future valuation net premiums at that time. The insurer shall determine the values specified in this subparagraph on the basis specified in par. (b);

Contracts not requiring a contract reserve are:

a. Contracts which cannot be continued after one year from issue; or

b. Contracts already in force on the effective date of these standards for which no contract reserve was required under the immediately preceding standards;

The contract reserve is in addition to claim reserves and premium reserves; and
The insurer shall use methods and procedures for contract reserves that are consistent with those for claim reserves for any contract, or else shall make appropriate adjustment when necessary to assure provision for the aggregate liability. The insurer shall use the same definition of the date of incurral in both determinations.

(b) Except as provided in par. (bm), the basis for determining minimum standards for contract reserves are as follows:

Minimum standards with respect to morbidity are those set forth in Appendix A. Valuation net premiums used under each contract shall have a structure consistent with the gross premium structure at issue of the contract as this relates to advancing age of insured, contract duration and period for which gross premiums have been calculated. The insurer shall value contracts for which tabular morbidity standards are not specified in Appendix A using tables established for reserve purposes by a qualified actuary meeting the requirements of s. Ins 6.12 and acceptable to the commissioner;

Note: The consistency between the gross premium structure and the valuation net premium is required only at issue, because the impact on the consistency after issue of regulatory restrictions on premium rate increases is still under study.

The maximum interest rate is specified in Appendix A;
The insurer shall use termination rates in the computation of reserves on the basis of a mortality table as specified in Appendix A except as noted in the following paragraph.

3m. Under contracts for which premium rates are not guaranteed, and where the effects of insurer underwriting are specifically used by policy duration in the valuation morbidity standard, the insurer may use total termination rates at ages and durations where these exceed specified mortality table rates, but not in excess of the lesser of:

a. Eighty percent of the total termination rate used in the calculation of the gross premiums, or

b. Eight percent.

3s. Where a morbidity standard specified in Appendix A is on an aggregate basis, the insurer may adjust the morbidity standard to reflect the effect of insurer underwriting by policy duration. The adjustments shall be appropriate to the underwriting and acceptable to the commissioner;

The minimum reserve is the reserve calculated on the two-year full preliminary term method; that is, under which the terminal reserve is zero at the first and also the second contract anniversary. The insurer may apply the two-year preliminary term method only in relation to the date of issue of a contract. The insurer shall apply reserve adjustments introduced later, as a result of rate increases, revisions in assumptions or for other reasons, immediately as of the effective date of adoption of the adjusted basis;
The insurer may offset negative reserves on any benefit against positive reserves for other benefits in the same contract, but the total contract reserve with respect to all benefits combined may not be less than zero.

(bm)

The minimum contract reserve standards for accident and sickness contracts issued prior to January 1, 2017, at the option of the insurer, shall be either the reserving requirements as set forth in par. (b), or the reserving requirements set forth in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, Appendix A-010.
The minimum contract reserve standards for contracts issued on or after January 1, 2017, shall be the standards set forth in the National Association of Insurance Commissioners Valuation Manual as defined in s. 623.06 (1) (j), Stats.

(c) Provided the contract reserve on all contracts to which an alternative method or basis is applied is not less in the aggregate than the amount determined according to the applicable standards specified in this section; an insurer may use any reasonable assumptions as to interest rates, termination or mortality rates or both, and rates of morbidity or other contingency. Also, subject to the preceding sentence, the insurer may employ methods other than the methods stated in this section in determining a sound value of its liabilities under the contracts, including, but not limited to the following:

The net level premium method;
The one-year full preliminary term method;
Prospective valuation on the basis of actual gross premiums with reasonable allowance for future expenses;
The use of approximations such as those involving age groupings, groupings of several years of issue, average amounts of indemnity, grouping of similar contract forms;
The computation of the reserve for one contract benefit as a percentage of, or by other relation to, the aggregate contract reserves exclusive of the benefit or benefits so valued; and
The use of a composite annual claim cost for all or any combination of the benefits included in the contracts valued.

(d)

Annually, the insurer shall make an appropriate review of the insurer’s prospective contract liabilities on contracts valued by tabular reserves, to determine the continuing adequacy and reasonableness of the tabular reserves giving consideration to future gross premiums. The insurer shall make appropriate increments to the tabular reserves if the tests indicate that the basis of the reserves is no longer adequate. Any appropriate increments to tabular reserves made by the insurer under this paragraph shall comply with the minimum standards of par. (b).
If an insurer has a contract or a group of related similar contracts, for which future gross premiums will be restricted by the commissioner, the contract, or some other reason, such that the future gross premiums reduced by expenses for administration, commissions, and taxes will be insufficient to cover future claims, the insurer shall establish contract reserves for the shortfall in the aggregate.

(9) Determination of adequacy. The insurer shall determine the adequacy of its accident and health insurance reserves on the basis of the claim reserves, premium reserves, and contract reserves combined. However, the standards established in this section emphasize the importance of determining appropriate reserves for each of these three reserve categories separately.

(10) Reinsurance. The insurer shall determine, in a manner consistent with these minimum reserve standards and with all applicable provisions of the reinsurance contracts which affect the insurer’s liabilities, increases to, or credits against reserves carried, arising because of reinsurance assumed or reinsurance ceded.

Note: The tables referenced in this Appendix may be found as follows:

The 1964 Commissioners Disability Table, 1965 Proceedings of the National Association of Insurance Commissioners, Vol. I, pgs. 78-80.

The 1985 Commissioners Individual Disability Tables A, 1986 Proceedings of the National Association of Insurance Commissioners, Vol. I, pgs. 574-589.

The 1985 Commissioners Individual Disability Tables B, 1985 Proceedings of the National Association of Insurance Commissioners, Vol. I, pgs. 486-540.

The 1956 Intercompany Hospital-Surgical Tables, 1957 Proceedings of the National Association of Insurance Commissioners, Vol. I, pgs. 83-85.

The 1985 NAIC Cancer Claim Cost Tables, 1986 Proceedings of the National Association of Insurance Commissioners, Vol. I, pgs. 609-623.

The 1959 Accidental Death Benefits Table, Transactions of the Society of Actuaries, Vol. XI, pg. 754.

The 1987 Commissioners Group Disability Income Table, 1987 Proceedings of the National Association of Insurance Commissioners, Vol. II, pgs. 557-619.

Note: Reserves for waiver of premium. Waiver of premium reserves involve several special considerations. First, the disability valuation tables promulgated by the NAIC are based on exposures that include contracts on premium waiver as in-force contracts. Therefore, contract reserves based on these tables are not reserves on “active lives,” but rather reserves on contracts “in force.” This is true for the 1964 CDT and for both the 1985 CIDA and CIDB tables.

Accordingly, tabular reserves using any of these tables should value reserves on the following basis:

Claim reserves should include reserves for premiums expected to be waived, valuing as a minimum the valuation net premium being waived.

Premium reserves should include contracts on premium waiver as in-force contracts, valuing as a minimum the unearned modal valuation net premium being waived.

Contract reserves should include recognition of the waiver of premium benefit in addition to other contract benefits provided for, valuing as a minimum the valuation net premium to be waived.

If an insurer is, instead, valuing reserves on what is truly an active life table, or if a specific valuation table is not being used but the insurer’s gross premiums are calculated on a basis that includes in the projected exposure only those contracts for which premiums are being paid, then it may not be necessary to provide specifically for waiver of premium reserves. Any insurer using the true “active life” basis should carefully consider, however, whether or not additional liability should be recognized on account of premiums waived during periods of disability or during claim continuation.

History

Cr. Register, April, 1959, No. 40, eff. 5-1-59; am. (2) (a) and (b), Register, June, 1960, No. 54, eff. 7-1-60; am. (3) (a) and Table 1, Register, October, 1960, No. 58, eff. 11-1-60; r. and recr., Register, January, 1967, No. 133, eff. 2-1-67; emerg. am. to (1) to (6), eff. 6-22-76; am. (1), (2), (3) (intro.), (3) (a), 4. and 5., (3) (e), (4) (intro.), (4) (a), (5) and (6), Register, September, 1976, No. 249, eff. 10-1-76; am. (2), (3) and (5), Register, March, 1979, No. 279, eff. 4-1-79; am. (3) (intro.), (a) 4. and 5. (4) (intro.), (5) (intro.) and (6) (intro.), Register, September, 1986, No. 369, eff. 10-1-86; r. and recr. Register, November, 1989, No. 407, eff. 12-1-89.; correction in (8) (b) made under s. 13.93 (2m) (b) 1., Stats., Register, April, 1992, No. 436; CR 19-142: am. (6) (b) (intro.), cr. (6) (bm), am. (8) (b) (intro.), cr. (8) (bm) Register July 2020 No. 775, eff. 8-1-20.

Wis. Admin. Code § Ins 3.18 Total consideration for accident and sickness insurance policies {#sec-ins-3.18 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.18}

The total consideration charged for accident and sickness insurance policies must include policy and other fees. Such total consideration charged must be stated in the policy, and shall be subject to the reserve requirements of ch. 623, Stats., and s. Ins 3.17, and must be the basis for computing the amount to be refunded in the event of cancellation of the policy.

History

Cr. Register, May, 1959, No. 41, eff. 6-1-59; emerg. am. eff. 6-22-76; am. Register, September, 1976, No. 249, eff. 10-1-76.

Wis. Admin. Code § Ins 3.19 Group accident and sickness insurance insuring debtors of a creditor {#sec-ins-3.19 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.19}

(1) This rule implements and interprets ss. 204.321 (1) (d) and 206.60 (2), 1973 Stats., with regard to issuance of a group policy of accident and sickness insurance issued to a creditor to insure debtors of a creditor.

(2) A group accident and sickness insurance policy may be issued to a creditor to insure debtors of the creditor if the class or classes of insured debtors meet the requirements of s. 206.60 (2) (a) and (c), 1973 Stats., and such a policy shall be subject to the requirements of such paragraphs in addition to other requirements applicable to group accident and sickness insurance policies.

History

Cr. Register, November, 1959, No. 47, eff. 12-1-59; am. Register, September, 1963, No. 93, eff. 10-1-63; r. (3), Register, February, 1973, No. 206, eff. 3-1-73; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76.

Wis. Admin. Code § Ins 3.20 Substandard risk automobile physical damage insurance for financed vehicles {#sec-ins-3.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.20}

(1) Purpose. In accordance with s. 625.34, Stats., this rule is to accomplish the purpose and enforce the provisions of ch. 625, Stats., in relation to automobile physical damage insurance for substandard risks.

(2) Scope. This rule applies to any automobile physical damage insurance policy procured or delivered by a finance company.

(3) Definitions.

(a) “Substandard risk” means an applicant for insurance who presents a greater exposure to loss than that contemplated by commonly used rate classifications as evidenced by one or more of the following conditions:

Record of traffic accidents.
Record of traffic law violations.
Undesirable occupational circumstances.
Undesirable moral characteristics.

(b) “Substandard risk rate” means a rate or premium charge that reflects the greater than normal exposure to loss which is assumed by an insurer writing insurance for a substandard risk.

(4) Rates for substandard risks.

(a) Any increased rate charged for substandard risks shall not be excessive, inadequate, or unfairly discriminatory.

(b) It shall be unfairly discriminatory to charge a rate or premium that does not reasonably measure the variation between risks and each risk’s exposure to loss.

(c) Classification rates filed for substandard risks may not exceed 150% of the rate level generally in use for normal risks unless the filing also provides for the modification of classification rates in accordance with a schedule which establishes standards for measuring variation in hazards or expense provisions or both.

(5) Insurance coverage.

(a) The automobile physical damage insurance afforded shall be substantially that customarily in use for normal business.

(b) The applicant shall not be required to purchase more coverage than is customarily necessary to protect the interests of the mortgagee. The issuance of a policy shall not be made contingent on the acceptance by the applicant of unwanted or excessively broad coverages.

(c) Single interest coverage may be issued only when double interest coverage is not obtainable. The applicant must be given the opportunity to procure insurance, and if he or she can procure same within 25 days there shall be no charge for the single interest coverage.

(6) Policy forms. The purchaser must be furnished with a complete policy form clearly setting forth the nature and extent of all coverages and premiums charged therefor.

(7) Rating statement. No policy written on the basis of a sub-standard risk rate schedule shall be issued unless it contains a statement printed in bold-faced type, preferably in a contrasting color, reading substantially as follows: This policy has been rated in accordance with a special rating schedule filed with the commissioner of insurance providing for higher premium charges than those generally applicable for average risks. If the coverage or premium is not satisfactory, you may secure your own insurance.

History

Cr. Register, March, 1960, No. 51, eff. 4-1-60; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76; correction in (1) and (5) (c) made under s. 13.93 (2m) (b) 5. and 7., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 3.23 Franchise accident and sickness insurance {#sec-ins-3.23 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.23}

(1) Franchise group headquarters. A franchise group described in s. 600.03 (22), Stats., need not have its headquarters or other executive offices domiciled in Wisconsin.

(2) Accounting. All premiums paid in connection with franchise accident and sickness insurance on Wisconsin residents shall be reported for annual statement purposes as Wisconsin business and shall be subject to the applicable Wisconsin premium tax.

History

Cr. Register, May, 1964, No. 101, eff. 6-1-64; emerg. am. (1) eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 3.25 Credit life insurance and credit accident and sickness insurance {#sec-ins-3.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.25}

(1) Purpose. The purpose of this section is to assist in the maintenance of a fair and equitable credit insurance market and to ensure that policyholders, claimants and insurers are treated fairly and equitably by providing a system of rate, policy form and operating standards for the transaction of credit life insurance and credit accident and sickness insurance. This section interprets and implements ss. 601.01, 601.415 (9), 601.42, 623.06, 625.11, 625.12, 625.34, 631.20, 632.44 (3) and 632.60, Stats., and chs. 421, 422 and 424, Stats.

(2) Scope.

(a) This section shall apply to the transaction of credit life insurance as defined in s. Ins 6.75 (1) (a) 1. and s. 632.44, Stats., and subject to ch. 424, Stats., and to the transaction of credit accident and sickness insurance as defined in s. Ins 6.75 (1) (c) 1. and (2) (c) 1. and subject to ch. 424, Stats.

(b) This rule shall be the basis for review of all policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders and the schedules of premium rates to be used in Wisconsin on or after the effective date of the rule for credit life and credit accident and sickness insurance.

(3) Definitions. In this section:

(a) “Case” means, for credit life insurance, all the credit life insurance of a creditor and, for credit accident and sickness insurance, all of each category of credit accident and sickness insurance of a creditor, as specified in Appendix B, unless some reasonable combination of these categories is approved by the commissioner.

(b) “Case rate” means the maximum premium rate or schedule of premium rates permitted to be charged with respect to the coverage of a creditor. Unless a higher premium rate or schedule of premium rates is approved by the commissioner, the case rate is the prima facie premium rate or schedule of premium rates.

(d) “Experience period” means a time period of consecutive calendar years ending with the most recent full calendar year prior to the date of determination of a case rate based on such experience period. The number of years shall be not less than one nor more than three; provided, however, that if the number of years is less than three, the life years exposure in the experience period shall be not less than ten thousand for life insurance and not less than one thousand for accident and sickness insurance.

(e) “Incurred claims” means claims paid during the experience period plus claim reserve at the end of the experience period minus claim reserve at the beginning of the experience period.

(f) “Life years exposure” means the average number of group certificates or individual policies in force during an experience period, without regard to multiple coverage, times the number of years in the experience period.

(g) “Prima facie earned premium” means the premium which would have been earned during the experience period if the prima facie premium rate in effect at the end of the experience period had always been charged. The method of calculation shall be that specified in sub. (13).

(h) “Prima facie loss ratio” means incurred claims divided by prima facie earned premium.

(4) Types of credit life insurance or credit accident and sickness insurance. No credit life insurance or credit accident and sickness insurance policies shall be issued except:

(a) Individual policies of life insurance issued to debtors on a nonrenewable, nonconvertible term plan;

(b) Individual policies of accident and sickness insurance issued to debtors on a term plan or disability benefit provisions in individual policies of credit life insurance;

(d) Group policies of accident and sickness insurance issued to creditors on a term plan insuring debtors or disability benefit provisions in group credit life insurance policies.

(5) Amount of credit life and credit accident and sickness insurance. The amount of credit life insurance and credit accident and sickness insurance shall not exceed the amounts specified in s. 424.208, Stats.

(6) Term of credit life insurance and credit accident and sickness insurance.

(a) The term of any credit life insurance or credit accident and sickness insurance shall, subject to acceptance by the insurer, commence on the date when the debtor becomes obligated to the creditor, except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to such indebtedness shall commence on the effective date of the policy.

(b) Where evidence of insurability is required and such evidence is furnished more than 30 days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for insurance. The term of this insurance shall not extend more than 15 days beyond the scheduled maturity date of indebtedness unless it is extended without additional cost to the debtor or as an incident to a deferral, refinancing or consolidation agreement.

(c) If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance is issued in connection with the renewed or refinanced indebtedness. In any renewal or refinancing of the indebtedness, the effective date of the coverage of any policy provision shall be deemed to be the first date on which the debtor became insured under the policy covering the indebtedness which was renewed or refinanced. However, this does not apply to an amount or term of indebtedness, exclusive of refinancing charges, in excess of the original indebtedness outstanding at the time of refinancing.

(d) In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in sub. (9).

(7) Provisions of policies and certificates of insurance; disclosure to debtors.

(a) All credit life insurance and credit accident and sickness insurance shall be evidenced by an individual policy, or in the case of group insurance, by a certificate of insurance. The individual policy or group certificate of insurance shall be delivered to the debtor.

(b) Each individual policy or group certificate of credit life insurance or credit accident and sickness insurance shall, in addition to other requirements of the law, set forth:

The name and home office address of the insurer;
The name or names of the debtor or, in the case of a certificate under a group policy, the identity of the debtor;
The premium or charge, if any, to be paid by the debtor. Premiums for credit life insurance and for credit accident and sickness insurance shall be shown separately;
A description of the coverage including the amount and term of coverage, and any exceptions, limitations and restrictions;
A provision that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and that whenever the amount of insurance exceeds the unpaid indebtedness, any excess shall be payable to a beneficiary, other than the creditor named by the debtor, or to the debtor’s estate, and
A provision that the insurance on any debtor will be cancelled and a refund made if the indebtedness is terminated through prepayment or otherwise, in accordance with sub. (9).

(c) The individual policy or group certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred except as provided in par. (d);

(d) If the individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for the policy or a notice of proposed insurance shall:

Be delivered to the debtor at the time the indebtedness is incurred;
Be signed by the debtor;
Set forth the name and home office address of the insurer;
Set forth the name or names of the debtor;
Set forth the premium or amount of payment by the debtor, if any, separately for credit life insurance and credit accident and sickness insurance; and
Set forth the amount, term and a brief description of the coverage provided including all exclusions and exceptions.

(e) The copy of the application or notice of proposed insurance shall also refer exclusively to insurance coverage, and the copy or notice shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, unless the information required by par. (d) is prominently set forth in the loan, sale or other credit statement of account, instrument or agreement. Upon acceptance of the insurance by the insurer and within 30 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. The application or notice of proposed insurance shall state that upon acceptance by the insurer, the insurance shall become effective as provided in sub. (6).

(f) If the named insurer does not accept the risk, the debtor shall receive a policy or certificate of insurance from the substituted insurer, if any, including the information required by par. (b). If the amount of premium is less than that set forth in the notice of proposed insurance an appropriate refund shall be made.

(g) If a contract of insurance provides for a limitation in the amount of coverage related to insurance provided by other contracts in force on the debtor, such limitation shall be explained to the debtor at the time the indebtedness is incurred and shall be acknowledged in writing by the debtor in an instrument separate from the individual policy or group certificate. Alternatively, the individual policy or group certificate shall include a brief description or separate statement referring to the limitation in the amount of coverage. The brief description or separate statement, shall be printed on the first page of the individual policy or group certificate in type more prominent than that used in the text of the policy or certificate and shall indicate the limitation clearly.

(h) If a contract of insurance provides for a limitation of coverage related to the age of the debtor, such limitation shall be explained to the debtor at the time the indebtedness is incurred and shall be acknowledged in writing in an instrument separate from the individual policy or group certificate. Alternatively, the individual policy or group certificate shall include a brief description or separate statement referring to the age limitation. The brief description or separate statement, shall be printed on the first page of the individual policy or group certificate in type more prominent than that used in the text of the policy or certificate and shall indicate the limitation clearly.

(i) Conspicuous notice of the debtor’s right to return the policy, certificate of insurance or notice of proposed insurance within 10 days of incurring the indebtedness and to receive a refund of any premium paid if the debtor is not satisfied with the insurance for any reason, as required by s. 424.203 (4), Stats., shall be given with the policy, certificate or notice of proposed insurance.

(j) Charges or premiums for credit life insurance or credit accident and sickness insurance may only be collected from debtors if the disclosure and authorization requirements of s. 422.202 (2s), Stats., are met. If 2 debtors are to be insured for credit life insurance each must receive the disclosure information and each one must request credit life insurance coverage. However, the individual policy or group certificate may be delivered to only one debtor.

(8) Filing of policy forms.

(a) All policy forms, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders to be delivered or issued for delivery in this state and the schedules of premium rates pertaining to them shall be filed with the commissioner. In the case of credit transactions covered under a group policy issued in another state or jurisdiction, the insurer shall file for approval only the group certificate, notice of proposed insurance and the premium rates to be used in this state.

(b) The commissioner shall, within 30 days after the filing of any policy, certificate of insurance, notice of proposed insurance, application for insurance, endorsement or rider, disapprove any form if the benefits provided in the form are not reasonable in relation to the premium charged, or if the form contains provisions which are unjust, unfair, inequitable, misleading, deceptive or which encourage misrepresentation of the coverage or are contrary to any law or administrative rule.

(c) If the commissioner notifies the insurer that the form is disapproved, the insurer shall not issue or use the form. The notice shall specify the reason for the disapproval and state that a hearing will be granted not less than 10 nor more than 30 days after a request in writing by the insurer.

(cm) No policy, certificate of insurance, notice of proposed insurance, nor any application, endorsement or rider, shall be issued or used until 30 days after it has been filed, unless the commissioner gives prior written approval.

(d) The commissioner may, at any time after a hearing held not less than 20 days after written notice to the insurer, withdraw approval of any form on any ground set forth in par. (b). The written notice of the hearing shall state the reason for the proposed withdrawal of approval. The insurer shall not issue or use any form after the effective date of the withdrawal of the approval.

(9) Premiums and refunds.

(a) Any insurer may revise its schedules of premium rates from time to time, and shall file such revised schedules with the commissioner. No insurer shall issue any credit life insurance policy or credit accident and sickness insurance policy if the premium rate exceeds that established by the filed rate schedules of the insurer.

(b) The amount charged to a debtor for any credit life or credit accident and sickness insurance shall not exceed the premiums charged by the insurer, as computed at the time the charge to the debtor is determined.

(c) If a creditor requires a debtor to make any payment for credit life insurance or credit accident and sickness insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to the debtor that coverage will not be issued and shall promptly make an appropriate credit to the account of the debtor.

(d) A creditor may not remit and an insurer may not collect on a monthly outstanding balance basis if the insurance charge or premium is included as part of the outstanding indebtedness. If the creditor adds identifiable insurance charges or premiums for credit insurance to the total amount of indebtedness and a direct or indirect finance, carrying, credit or service charge is made to the debtor in connection with the insurance charge, the creditor shall remit and the insurer shall collect on a single premium basis only.

(e) Dividends on participating individual policies of credit insurance shall be payable to the individual insureds. Payment of these dividends may be deferred until the policy is terminated.

(f) Each individual policy or group certificate shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled to the refund. The policy certificate may prescribe a minimum refund of $1 and no refund of a lesser amount need be made. The sum of the refunds due on all credit life insurance or credit accident and sickness insurance being terminated in connection with the indebtedness and all other credits due to the customer under chs. 421 to 427, Stats., shall be used to determine if a refund is due.

(g) Schedules for computing refunds in the event of cancellation of credit life or credit accident and sickness insurance prior to the scheduled maturity date of coverage shall meet the following minimum requirements:

For the following coverages paid for on a single premium or single charge basis, the refund shall be equal to or greater than the unearned gross premium or charge amount computed by the “sum of the digits” methods, commonly referred to as the “Rule of 78:”

a. Credit life insurance that decreases by a uniform amount each month until the amount becomes zero;

b. Credit life insurance providing coverage for the full term of an indebtedness that is repayable in substantially equal installments with coverage amounts that equal or approximate the actual or net scheduled amount necessary to liquidate the indebtedness; and

c. Credit accident and sickness insurance with substantially equal monthly benefit amounts and with insurance coverage and maximum benefit periods that are coterminous.

For credit life insurance or credit accident and sickness insurance paid for on a monthly outstanding balance basis, the refund shall be equal to or greater than the pro rata unearned gross premium or charge.
For all coverages not described in subds. 1. and 2., the refund shall be equal to or greater than that based on the actuarial method, which is the prepaid premium or charge for scheduled benefits subsequent to the actual date of coverage termination computed at the schedule of premium rates or charges applicable to the coverage when it was effected.

Note: Examples of these coverages include truncated credit life insurance and floating critical period credit disability insurance.

Refunds shall be based on the number of full months prepaid from the actual date of coverage termination to the scheduled maturity date of coverage, counting a fractional month of 16 days or more as a full month.
Upon termination of indebtedness repayable in a single sum prior to scheduled maturity date, the refund shall be computed from the date of termination to the maturity date. If less than 16 days of a loan month has been earned, no charge may be made for that loan month, but if 16 days or more has been earned, a full month may be charged.

(h) If an insured’s indebtedness is transferred to another creditor, any group credit life insurance or group credit accident and sickness insurance issued on that indebtedness may be continued, but the creditor policyholder shall advise the insurer of each transfer within 30 days of its effective date.

(i) Voluntary prepayment of indebtedness. If a debtor prepays the indebtedness other than as a result of death or through a lump sum disability payment:

Any credit life insurance covering this indebtedness shall be terminated and an appropriate refund of the credit life insurance premium shall be paid to the debtor; and
Any credit accident and sickness insurance covering this indebtedness shall be terminated and an appropriate refund of the credit accident and sickness insurance premium shall be paid to the debtor. If a claim under such coverage is in progress at the time of prepayment, the amount of refund may be determined as if the prepayment did not occur until the payment of benefits terminates. No refund need be paid during any period of disability for which credit accident and sickness benefits are payable. A refund shall be computed as if prepayment occurred at the end of the disability period.

(j) Involuntary prepayment of indebtedness. If an indebtedness is prepaid by the proceeds of a credit life insurance policy covering the debtor or by a lump sum payment of a disability claim under a credit insurance policy covering the debtor, then it shall be the responsibility of the insurer to see that the following are paid to the insured debtor, if living, or the beneficiary, other than the creditor named by the debtor, or to the debtor’s estate:

In the case of prepayment by the proceeds of a credit life insurance policy, or by the proceeds of a lump sum total and permanent disability benefit under credit life coverage, an appropriate refund of the credit accident and sickness insurance premium;
In the case of prepayment by a lump sum disability payment under credit accident and sickness coverage, an appropriate refund of the credit life insurance premium;
In either case, the amount of the benefits in excess of the amount required to repay the indebtedness after crediting any unearned interest or finance charges.

(10) Claims and examination procedures.

(a) All claims shall be reported to the insurer or its designated claim representative promptly, and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract.

(b) All claims shall be paid either by a draft drawn upon the insurer or by a check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of such claimant to another specified person.

(c) No plan or arrangement shall be used in which any person, firm or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims but a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer. This paragraph shall not be construed to relieve the insurer of the responsibility for proper settlement, adjustment and payment of all claims in accordance with the terms of the insurance contract and this section.

(d) The insurer shall make a good faith examination of each credit life and credit accident and sickness insurance account in the first year of the account and annually thereafter. The examination shall be made to assure that the creditor is conducting the insurance program in compliance with the policy provisions, the insurer’s administrative instructions furnished the creditor to implement the insurance program, and with the applicable credit insurance law and regulation of Wisconsin. The examination must include verification of the accuracy of the computation of premium payments, insurance charges made to debtors, and claim payments reported to the insurer by the creditor. The insurer shall maintain records of examinations for 2 years.

(11) Choice of insurer. When credit life insurance or credit accident or sickness insurance is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by the debtor or of procuring and furnishing the required coverage through any insurer authorized to transact insurance business within this state.

(12) Credit insurance premium rate filings.

(a) Every credit insurer shall file with the commissioner every maximum premium rate schedule applicable to credit life or credit accident and sickness insurance in this state at least 30 days before the proposed effective date.

(b) The benefits provided under a credit life or credit accident and sickness insurance form shall be presumed to be reasonable in relation to the premium rate charged if the premium rates filed do not exceed the prima facie premium rate standards set forth in subs. (14) and (15) and if the forms provide benefits which are no more restrictive than the coverage standards enumerated in subs. (14) and (15).

(c) Nothing in this subsection shall preclude an insurer from requesting approval of the commissioner for premium rates higher or lower than the prima facie rate standards on the basis of the credible mortality or morbidity actually experienced or reasonably anticipated.

(13) Use of prima facie premium rates generally.

(a) An insurer that files rates or has rates on file that are not in excess of the prima facie rates may use those rates without further proof of their reasonableness.

(b) The initial prima facie premium rates are as shown in subs. (14) and (15) for the plans and benefits described in these subsections and shall remain in effect through December 31, 1990.

(bm)

The initial basic loss ratio for credit life insurance, as shown in par. (d), shall remain in effect through December 31, 1995. Effective January 1, 1996, the commissioner shall adopt a basic loss ratio for credit life insurance that reflects a specific allowance for expenses. The expense factor adopted effective January 1, 1996, shall remain effective for a period of ten (10) years. At the end of ten (10) years the factor will be reviewed for possible adjustment.
This new loss ratio and the resultant new prima facie credit life premium rates shall remain effective until December 31, 1999. Effective January 1, 2000, the credit life premium rates shall be subject to adjustment every three years as outlined in par. (c). These periodic adjustments of the credit life premium rates shall only be based on differences in claim costs. Any new basic loss ratio resulting from a change in claim costs will be provided with the written notice of the prima facie premium rates to be used for the next three-year period.

(c) On or before October 1, 1990, and each 3 years after that, except that the initial prima facie credit life rates adopted under par. (bm) shall remain effective until December 31, 1999, the commissioner shall give written notice to all authorized insurers specifying the prima facie premium rates to be effective for the three-year period beginning on the next January 1. Such rates shall be determined based on experience data submitted by all insurers pursuant to sub. (19) for the immediately preceding 3 calendar years and shall be calculated as follows:

For each category of coverage specified in par. (d) or (e), total prima facie earned premium and total incurred claims shall be calculated for each year for all insurers.
If, for any category of coverage, the prima facie premium rate in effect at any time during the three-year period differs from that in effect at the end of the three-year period, prima facie premiums for that category of coverage shall be adjusted to reflect what the prima facie premium would have been if the prima facie premium rate in effect at the end of the three-year period had been in effect throughout the full three-year period;
For each category of coverage, the resulting data are summed separately for the total 3 years for prima facie earned premium and for incurred claims;
The credit life insurance adjustment factor is determined as follows:

a. Total credit life insurance data are computed by summing the data for single life coverage and joint life coverage separately for prima facie earned premium and for incurred claims;

b. Total credit life insurance incurred claims are divided by total credit life insurance prima facie earned premiums to determine the credit life insurance loss ratio at prima facie rates, rounded to 3 decimal places; and

c. Prior to January 1, 1996, the credit life insurance loss ratio at prima facie rates is divided by the basic loss ratio for credit life insurance. The quotient, rounded to 2 decimal places, is the credit life insurance adjustment factor; and

d. Effective January 1, 1996, and thereafter, the single premium uniformly decreasing single life credit life insurance prima facie rate is the quotient of the following formula rounded to 2 decimal places:

The credit accident and sickness insurance adjustment factor is determined using the same procedure specified in subd. 4., except that:

a. Data for the specifically described categories of credit accident and sickness insurance are summed separately for prima facie earned premium and for incurred claims;

b. A composite credit accident and sickness insurance basic loss ratio is computed as the average of the basic loss ratio for each category of coverage weighted by the corresponding proportionate amount of prima facie earned premium for that category of coverage; and

c. If the quotient of the credit accident and sickness loss ratio at prima facie rates divided by the composite credit accident and sickness basic loss ratio is greater than .95 and less than 1.05, the credit accident and sickness adjustment factor shall be 1.00.

Prior to January 1, 1996, for single premium uniformly decreasing single life credit life insurance coverage, the new prima facie premium rate per $100 of initial indebtedness per year equals the prima facie premium rate then in effect multiplied by the credit life insurance adjustment factor, rounded to the nearest cent. Effective January 1, 1996, this rate will be the rate calculated under subd. 4. d. This new prima facie premium rate is then multiplied by the following factors to derive the new prima facie premium rate for the indicated plan:

a. 1.85 for the single premium rate per $100 per year for level coverage on a single life, rounded to the nearest cent; or

b. 1.54 for the monthly premium rate per $1,000 outstanding balance coverage, rounded to the nearest one-tenth cent.

For credit accident and sickness coverage, the new prima facie premium rate per $100 initial coverage for each category of coverage and for each duration equals the then currently effective prima facie premium rate per $100 for the same category of coverage and duration multiplied by the credit accident and sickness insurance adjustment factor, rounded to the nearest cent.

(d) The initial basic loss ratio for credit life insurance shall be .50. The basic loss ratio for credit accident and sickness insurance shall vary by plan as follows:

14 days retroactive waiting period—.60
14 days nonretroactive elimination period—.59
30 days retroactive waiting period—.57
30 days nonretroactive elimination period—.52

(e) If a form provides for plans or benefits that differ from those described in subs. (14) and (15), the insurer shall demonstrate to the satisfaction of the commissioner that the premium rate or schedule of premium rates applicable to the form will or may reasonably be expected to achieve the applicable basic loss ratio or such other loss ratio as may be determined by the commissioner to be consistent with s. 424.209, Stats., or that the rate or rates are actuarially consistent with the prima facie premium rates.

(14) Prima facie credit life insurance premium rates.

(a) If premiums are payable monthly on the outstanding insured balance basis for term insurance on a single insured debtor, the initial prima facie premium rate shall be $0.616 per month per $1,000 of outstanding insured indebtedness.

(b) If premiums are payable on a single premium basis for straight-line decreasing term insurance on a single insured debtor, the initial prima facie premium rate shall be $0.40 per annum per $100 of initial insured indebtedness.

(c) If premiums are payable on a single premium basis for level term insurance on a single insured debtor, the initial prima facie premium rate shall be $0.74 per annum per $100 of initial insured indebtedness.

(d) The prima facie premium rate for credit life insurance providing coverage on 2 lives with respect to a single indebtedness shall be 150% of the corresponding single life prima facie premium rate until December 31, 1990, and shall be 167% of the corresponding single life prima facie premium rate on and after January 1, 1991.

(e) The prima facie rates shall apply to all policies providing credit life insurance which are offered to all debtors.

For initial amounts of credit life insurance in excess of $15,000, if evidence of individual insurability is not required, the policy shall contain no exclusion for pre-existing conditions except for those conditions which manifested themselves to the insured debtor by requiring medical advice, diagnosis, consultation or treatment, or would have caused a reasonably prudent person to have sought medical advice, diagnosis, consultation or treatment, within 6 months preceding the effective date of coverage and which causes loss within 6 months following the effective date of coverage. Under open-end credit plans, the effective date of coverage applies separately with respect to each purchase or loan to which the coverage relates.
Whether or not evidence of insurability is required the policy shall contain:

a. No suicide exclusions other than suicide within one year of the effective date of coverage. Under open-end credit plans, the effective date of coverage applies separately with respect to each purchase or loan to which the coverage relates;

b. Either no age restrictions, or age restrictions making ineligible for coverage debtors not less than age 65 or over at the time the indebtedness is incurred, or debtors who will have attained at least age 66 on the maturity date of the indebtedness. Insurance written in connection with an open-end credit plan may exclude from the classes eligible for insurance, classes of debtors determined by age, and may provide for the cessation of the insurance or a reduction in the amount of insurance upon attainment of not less than age 65.

c. At the option of the insurer and in lieu of a pre-existing condition exclusion, for monthly outstanding balance premium coverage on open-end credit transactions, a provision limiting the amount of insurance payable on death due to natural causes to the balance of the loan as it existed 6 months prior to the date of death if there have been one or more increases in the outstanding insured balance of the loan during such 6 months period and if evidence of individual insurability is not required at the time of the increase in the amount of insurance.

Credit life insurance provided on debts where the initial amount of credit life insurance would be $15,000, or less, shall be provided on a guaranteed issue basis, provided that the debtor is not ineligible for coverage due to age. The insurer may also use the preexisting conditions and suicide exclusions appearing in subds. 1. and 2. a., respectively.

(f) Evidence of insurability may be based either on questions relating to specific health history or based on an objective test such as active full-time work.

(15) Prima facie credit accident and sickness premium rates.

(a) The initial credit accident and sickness prima facie premium rates for the insured portion of an indebtedness repayable in equal monthly installments, where the insured portion of the indebtedness decreases uniformly by the amount of the monthly installment paid, shall be as set forth in subds. 1. and 2.

As set forth in Appendix A, if premiums are payable on a single premium basis for the duration of the coverage; or
If premiums are paid on the basis of a premium rate per month per $1,000 of outstanding insured indebtedness, these premiums shall be computed according to a formula approved by the commissioner as producing a rate or rates actuarially consistent with the single premium prima facie premium rates.

(b) The prima facie rates shall apply to policies providing credit accident and sickness insurance which are issued with or without evidence of insurability, and which are offered to all debtors.

If evidence of individual insurability is not required there shall be no exclusion for pre-existing conditions, except for those conditions which manifested themselves to the insured debtor by requiring medical advice, diagnosis, consultation or treatment, or would have caused a reasonably prudent person to have sought medical advice, diagnosis, consultation or treatment, within 6 months preceding the effective date of coverage and which causes loss within 6 months following the effective date of coverage. Under open-end credit plans, the effective date of coverage applies separately with respect to each purchase or loan to which the coverage relates;
Whether or not evidence of insurability is required the policy shall contain:

a. No provision which excludes or restricts liability in the event of disability caused in a certain specified manner except that the policies may contain provisions excluding or restricting coverage in the event of normal pregnancy, intentionally self-inflicted injuries, flight in nonscheduled aircraft, war, military service or foreign travel or residence.

b. Either no age restrictions, or age restrictions making ineligible for coverage debtors not less than age 65 or over at the time the indebtedness is incurred, or debtors who will have attained at least age 66 on the maturity date of the indebtedness. Insurance written in connection with an open-end credit plan may exclude from the classes eligible for insurance classes of debtors determined by age, and may provide for the cessation of the insurance or a reduction in the amount of insurance upon attainment of not less than age 65.

c. A provision which defines disability as the inability to perform any occupation for which the debtor is reasonably fitted by education, training or experience after the period of disability has lasted for 12 consecutive months. During the first 12 consecutive months of disability, the definition must relate the disability to the occupation of the debtor at the time the disability occurred.

(c) No individual or group policy of credit accident and sickness insurance shall be delivered or issued for delivery if the benefits are payable after a waiting period of less than 14 days regardless of whether the payment of benefits is retroactive to the first day of disability.

(16) Use of rates higher than prima facie rates.

(a) An insurer may file for approval and use rates that are higher than the prima facie rates if it can be reasonably expected that the use of these higher rates will result in a ratio of claims incurred to premiums earned that is not less than the applicable basic loss ratio.

(b) These higher rates may be:

Applied uniformly to all applicable credit insurance of the insurer; or
Applied according to a case-rating procedure on file with and approved by the commissioner.

(c) An insurer electing to file a case rating procedure may either file its own plan for approval by the commissioner or may use the standard case rating procedure specified in sub. (17).

(17) Standard case rating procedure.

(a) An insurer, by written notice to the commissioner of its election to do so, may file and use rates determined by the standard case rating procedure. If elected, the procedure shall be used by the insurer to rate all of its credit insurance in this state.

(b) The case rate shall be the prima facie premium rate if the life years exposure is less than the minimum life years exposure shown below:

(c) If the life years exposure is not less than the minimum life years exposure, the case rate for a plan of benefits shall be calculated as the product of the deviation factor determined in par. (d) and the prima facie premium rate in effect at the end of the experience period. The case rates shall be rounded to the nearest cent per $1000 indebtedness for single premiums payable on the basis of monthly outstanding balances.

(d) Deviation factor determination. The deviation factor shall be determined using the following worksheet:

(e) The period of time for which a case rate may be used by an insurer may not exceed the length of the experience period on which the rate is based. However, the period may not be less than one year nor more than 3 years.

(18) Change of insurers.

(a) If a creditor changes insurers, the case rate applicable to that creditor’s coverage may be used by the replacing insurer under the same terms and conditions that apply to the replaced insurer;

(b) If the case rate is higher than the prima facie premium rate on the date of change, the replacing insurer shall furnish notice of the change of insurers to the commissioner within 30 days following the date of change. The notice shall include the identity of the creditor and of the replaced insurer, the approved case rate applicable to the creditor’s coverage and the rate to be charged by the replacing insurer, and shall request that the commissioner inform the replacing insurer of the termination date of the case rate applicable to the creditor’s coverage. In no event shall the replacing insurer charge a rate higher than that approved for use by the replaced insurer for the remainder of the case rate period or, if sooner, until a new case rate for that creditor’s coverage is approved by the commissioner.

(19) Filing of experience information. Every insurer having credit life insurance or credit accident and sickness insurance in force in this state shall report Wisconsin experience data annually on the annual statement Credit Insurance Experience Exhibit form (available at no charge from the Commissioner.) The experience data for each calendar year shall be submitted as specified in the instructions to the annual statement and according to the requirements of sub. (20).

(20) Financial statement minimum reserves.

(a) Each insurer shall show, as a liability in any financial statement or report required under s. 601.42, Stats., except for the report required to be filed under sub. (19), its policy or unearned premium reserve in an amount not less than as computed in pars. (b) through (e). If a credit insurance policy provides any combination of life insurance benefits, disability benefits and accident and sickness insurance benefits, a reserve must be established separately for the life insurance benefits, for the disability benefits and for the accident and sickness insurance benefits.

(b) The minimum mortality and interest standards for active life reserves for individual credit life insurance policies shall be not less than 100% of the commissioners 1958 standard ordinary mortality table at 41⁄2% annual interest.

(c) The minimum mortality and interest standards for active life reserves for group credit life insurance policies shall be not less than 100% of the commissioners 1960 standard group mortality table at 41⁄2% annual interest.

(d) The minimum morbidity and interest standards for active life reserves for credit accident and sickness insurance policies and for disability benefits in credit life insurance policies shall be not less than the greater of 130% of the commissioners 1964 disability table at 41⁄2% annual interest, or the unearned premium reserve.

(e) With the approval of the commissioner, a company may, for valuation purposes, use any appropriate mortality or morbidity table, in lieu of those specified in pars. (b), (c) and (d), that is based on credible credit life or disability experience and either explicitly or implicitly has adequate margins for the present value of all future unaccrued liabilities.

(f) Unearned premium reserves shall be computed as follows:

Unearned premiums shall be reported consistently as of the beginning and the end of each year, and shall be based on the premium that would be charged for the remaining amount and term of coverage using the premium rate or schedule of premium rates in effect at the time the coverage became effective. The following calculation bases shall be deemed to comply with this requirement in lieu of a precise calculation:

a. For single premium uniformly decreasing credit life insurance coverage, the “sum of the digits” method, commonly known as the “Rule of 78;”

b. For single premium credit accident and sickness coverage with substantially equal monthly benefits and with conterminous coverage and benefit periods, the arithmetic mean of the unearned premium calculated according to the “sum of the digits” method and the pro rata unearned premium calculated as the original premium multiplied by the ratio of the remaining coverage term to the original coverage term;

c. For premiums payable on a monthly outstanding balance basis, single premium level life coverage or any other coverage where the benefit amount remains constant throughout the remaining coverage period, the pro rata unearned premium calculated as the original premium multiplied by the ratio of the remaining coverage term to the original coverage term;

d. For decreasing credit life insurance coverage provided for the full term of the indebtedness where the benefit is equal to the actual or scheduled net amount necessary to liquidate the indebtedness, the unearned premium calculated as the original premiums multiplied by the ratio of the scheduled remaining dollar-months of coverage to the scheduled initial dollar-months of coverage. Dollar-months of coverage may be approximated using an assumed interest rate that is reasonably representative of the interest rates applicable to all indebtedness with respect to which coverage is provided on this basis;

e. For credit life insurance coverage providing a combination of level and decreasing benefits, or providing a truncated coverage period or providing full-term coverage of an indebtedness that requires a balloon payment, an appropriate combination of methods described in this paragraph; or

f. Any other reasonable approximation method approved by the commissioner.

g. In this paragraph, a “dollar-month of coverage” means one dollar of coverage for one month.

Unearned premium for partial months may be calculated on an exact daily basis, on a basis assuming that the valuation date occurs in the middle of each installment period or using the method commonly known as the “15 day 16 day rule” in which the value at the beginning of the month is used if less than 16 days have elapsed in the current month and the value at the end of the month is used if more than 15 days have elapsed in the current month. For the purpose of the “15 day-16 day rule,” the current month shall be deemed to begin on the day following the most recent payment due date of the indebtedness and end on the next succeeding payment due date. The valuation date shall be counted as a full day.
Claim reserves and liabilities shall be reported on a consistent basis from year to year. Any change in the basis of calculation shall be disclosed, together with a recalculation of all items as of the end of the preceding calendar year according to the revised basis.

(22) Penalty. Violations of this section shall subject the violator to ss. 601.64 and 601.65, Stats.

History

Cr. Register, August, 1972, No. 200, eff. 9-1-72; cr. (2) (c), (6) (h) and (8) (h); am. (4) (b), (5), (8) (f), (12), (13) (a), (14) (e), and r. (17) (a), Register, February, 1973, No. 206, eff. 3-1-73; am. (4), (5), (6) (a) 6., (6) (h), (8) (f), (12) (g) 2., (13) (c) 3., (14) (c) and (d) and cr. (6) (i) and (13) (c) 5., Register, April, 1975, No. 232, eff. 5-1-75; am. (13) (b), Register, June, 1975, No. 234, eff. 7-1-75; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (4) and (11) (d), cr. (12) (h) and (13) (d), Register, March, 1977, No. 255, eff. 4-1-77; am. (1), (2) and (14) (c), Register, March, 1979, No. 279, eff. 4-1-79; am. (12) (b) to (e), Register, September, 1981, No. 309, eff. 10-1-81; r. (19) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; reprinted to correct printing errors in (13) (b), (14) (c) and (f), Register, June, 1986, No. 366; r. and recr. Register, November, 1987, No. 383, eff. 1-1-88; am. (8) (c) and (17) (d), Register, November, 1988, No. 395, eff. 12-1-88; r. and recr. (9) (g), am. (13) (b) and (c) (intro.), (14) (d), (19) (intro.), (20) (a) and Appendix B, r. (20) (d), renum. (20) (e) to (g) to be (20) (d) to (f) and am. (20) (e) and (f), Register, November, 1989, No. 407, eff. 12-1-89, except (9) (g) eff. 4-1-90; emerg. cr. (13) (bm), (c) 4. d., (e) 3., am. (13) (c) (intro.), 1., 4. c., 6. (intro.), (d) (intro.), (14) (e) 1., 2. b., (15) (b) 2. b., (17) (d) and (19) (intro.), r. (19) (a) and (b), (21), Appendix B, r. and recr. (20) (f), eff. 1-1-96; cr. (13) (bm), (c) 4. d., (e) 3., am. (13) (c) (intro.), 1., 4. c., 6. (intro.), (d) (intro.), (14) (e) 1., 2. b., (15) (b) 2. b., (17) (d) and (19) (intro.), r. (19) (a) and (b), (21), Appendix B, r. and recr. (20) (f), Register, March, 1996, No. 483, eff. 4-1-96; correction in (13) (c) 2. made under s. 35.17, Stats., Register December 2024 No. 828.

Wis. Admin. Code § Ins 3.26 Unfair trade practices in credit life insurance and credit accident and sickness insurance {#sec-ins-3.26 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.26}

(1) Purpose. The purpose of this rule is to assist in the maintenance of a fair and equitable credit life insurance and credit accident and sickness insurance market. This rule interprets, including but not limited to, the following ss. 601.04, 601.01 (1), (2), (3), (7) and (8), 601.41 (1), (2) and (3), Stats., and ch. 628, Stats.

(2) Scope. This rule shall apply to the transaction of credit life insurance as defined in s. Ins 6.75 (1) (a) 1. and s. 632.44 (3), Stats., and the transaction of credit accident and sickness insurance as defined in s. Ins 6.75 (1) (c) 1. or (2) (c) 1.

(3) Unfair trade practices defined. The following acts, whether done directly or indirectly, in consideration of or in connection with a policy issued or proposed to be issued are defined to be prohibited unfair trade practices in the transaction of insurance described in sub. (2):

(a) The offer or grant by an insurer of any special favor or advantage, or any valuable consideration or inducement not set out in the insurance contract. The payment of agents’ commissions, reported annually in Schedule 24S, shall not be a violation of this paragraph but the acts cited in pars. (b), (c), (d), (e) and (f) may not in any way be construed as agents’ commissions.

(b) The offer to deposit or the deposit with a bank or other financial institution, money or securities of the insurer or of any affiliate of the insurer with the design or intent that the deposit offset or take the place of a deposit of money or securities which otherwise would be required of the creditor by such bank or financial institution as a compensating balance or offsetting deposit for a loan or other advancement.

(c) The deposit with a bank or other financial institution of money or securities without interest or at a lessor rate of interest than is currently being paid other depositors on similar deposits with such bank or other financial institution. This shall not be construed to prohibit the maintenance by an insurer of such demand deposits as are reasonably necessary for use in the ordinary course of business of the insurer.

(d) The offer to sell or the sale of any capital stock or other security or certificate of indebtedness of the insurer or affiliated person.

(e) The offer to pay or the payment of any part of the premium for any insurance on the life, health or property of any creditor or any employee or other person affiliated with the creditor.

(f) The extension to the creditor of credit for the remittance of premium beyond the grace period of a group policy or for more than 45 days from the effective date of an individual policy.

(4) Penalty. Violations of this rule shall subject the insurer or agent to s. 601.64, Stats.

History

Cr. Register, October, 1972, No. 202, eff. 11-1-72; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 3.27 Advertisements of and deceptive practices in accident and sickness insurance {#sec-ins-3.27 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.27}

(1) Purpose. The interest of prospective purchasers of accident and sickness insurance must be safeguarded by providing such persons with clear and unambiguous statements, explanations, advertisements and written proposals concerning the policies offered to them. This purpose can best be achieved by the establishment of and adherence to certain minimum standards of and guidelines for conduct in the advertising and sale of such insurance which prevent unfair competition among insurers and are conducive to the accurate presentation and description to the insurance buying public of policies of such insurance. This rule interprets and implements, including but not limited to, the following Wisconsin Statutes: ss. 628.34 and 601.01 (3), Stats.

(2) Scope. This rule shall apply to any solicitation, representation or advertisement in this state of any insurance specified in s. Ins 6.75 (1) (c) or (2) (c), made directly or indirectly by or on behalf of any insurer, fraternal benefit society, nonprofit service plan subject to ch. 613, Stats., voluntary nonprofit sickness care plan organized under s. 185.981, Stats., interscholastic benefit plan organized under s. 616.08, Stats., or agent as defined in ch. 628, Stats.

(3) Interpretation of requirements applicable to advertisements.

(a) The proper promotion, sale and expansion of accident and sickness insurance are in the public interest. This rule is to be construed in a manner which does not unduly restrict, inhibit or retard such promotion, sale and expansion.

(b) In applying this rule, it shall be recognized that advertising is essential in promoting a broader distribution of accident and sickness insurance. Advertising necessarily seeks to serve this purpose in various ways. Some advertisements are the direct or principal sales inducement and are designed to invite offers to contract. In other advertisements the function is to describe coverage broadly for the purpose of inviting inquiry for further information. Other advertisements are for the purpose of summarizing or explaining coverage after the sale has been made. Still other advertisements are solely for the purpose of promoting the interest of the reader in the concept of accident and sickness insurance or of promoting the insurer sponsoring the advertisement. These differences shall be considered in interpreting this rule.

(c) When applying this rule to a specific advertisement, the type of policy to which the advertisement refers and the detail, character, purpose, use and entire content of the advertisement shall be taken into consideration.

(d) This rule applies to individual, franchise, group and blanket accident and sickness insurance. Because these types of coverage differ in some respects, one interpretation will not always suffice; a specific interpretation for individual, franchise, group or blanket coverage may be indicated.

(e) The extent to which policy provisions need be disclosed in an advertisement will depend on the content, detail, character, purpose and use of the advertisement and the nature of the exceptions, reductions, limitations and other qualifications involved. The principal criterion is whether the advertisement has the capacity and tendency to mislead or deceive if such a provision is not disclosed.

(f) Whether an advertisement has the capacity and tendency to mislead or deceive shall be determined by the commissioner from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.

(4) Coverage types.

(a) An advertisement which is an invitation to apply shall clearly and prominently designate and at least briefly describe the type or types of coverage provided by the policy advertised. The level and extent of benefits provided by or available under the coverage shall also be clearly indicated.

(b) The following are the standard types of coverage designations and the minimum adequate form of description that must be used. Any type of coverage authorized by Wisconsin Statutes which is not reasonably included within one or more of the standard coverage types listed shall be similarly and appropriately named and described so as to clearly disclose the benefits provided.

‘Basic hospital expense benefits.’ This coverage provides benefits for hospital room and board and miscellaneous hospital charges, based upon actual expenses incurred, up to stated maximum amounts.
‘Basic medical expense benefits.’ This coverage provides benefits for medical benefits based upon actual expenses incurred, up to stated maximum amounts.
‘Basic surgical expense benefits.’ This coverage provides benefits for surgical benefits based upon actual expenses incurred up to stated maximum amounts.
‘Major medical or comprehensive expense benefits.’ These coverages provide high maximum benefit amounts covering almost all types of medical care and contain deductible and co-insurance features.
‘Disability income benefits.’ This coverage provides periodic benefit payments to help replace income when the insured is unable to work as a result of illness or injury.
‘Hospital confinement indemnity benefits.’ This coverage provides benefits in a stated amount for confinement in a hospital, regardless of the hospital expenses actually incurred by the insured, due to such confinement.
‘Accident only benefits.’ This coverage provides benefits for losses for accidental bodily injury.
‘Specified disease or treatment benefits.’ This coverage provides benefits for treatment of a specific disease or diseases named in the policy or for specified treatment.

(5) General definitions.

(a) An advertisement relating to accident and sickness insurance for the purpose of this rule includes the following:

Printed and published material, audio visual material and descriptive literature of an insurer used in newspapers, magazines, other periodicals, radio and TV scripts, the internet, web pages, electronic or computer presentations, billboards and similar displays, excluding advertisements prepared for the sole purpose of obtaining employees, agents or agencies.
Descriptive literature and sales aids of all kinds issued by an insurer or agent for presentation to members of the public, including but not limited to circulars, leaflets, booklets, depictions, illustrations and form letters.

a. Including material used in the solicitation of renewals and reinstatements except for communications or notices which mention the cost of the insurance but do not describe benefits,

b. Excluding material in house organs of insurers, communications within an insurer’s own organization not intended for dissemination to the public, individual communications of a personal nature, and correspondence between a prospective group or blanket policyholder and an insurer in the course of negotiating a group or blanket policy,

c. Including group and blanket booklets, summaries of coverage and other explanatory material issued to insured persons, and

d. Excluding general announcements from group or blanket policyholders to eligible individuals that a contract has been written.

Prepared sales talks, presentations of material for use by agents and representations made by agents in accordance therewith, excluding materials to be used solely by an insurer for the training and education of its employees or agents, and
Envelopes used in connection with the above.

(b) A policy for the purpose of this rule includes any policy, plan, certificate, contract, agreement, statement of coverage, rider or endorsement which provides accident or sickness benefits whether on a cash indemnity, reimbursement or service basis,

Except such benefits contained in a policy providing another kind of insurance other than life, and
Except disability and double indemnity benefits included in life insurance, endowment or annuity contracts or contracts supplemental thereto which contain only such provisions relating to accident and sickness insurance as

a. Provide additional benefits in case of death or dismemberment or loss of sight by accident or

b. Operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity if the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract.

(c) An insurer for the purpose of this rule includes any person, individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds, fraternal benefit society, nonprofit service plan subject to ch. 613, Stats., voluntary nonprofit sickness care plan organized under s. 185.981, Stats., interscholastic benefit plan organized under s. 616.08, Stats., and any other legal entity engaged in advertising a policy as herein defined.

(d) An exception for the purpose of this rule means any provision in a policy whereby coverage for a specified hazard is entirely eliminated. It is a statement of a risk not assumed under the policy.

(e) A reduction for the purpose of this rule means any provision in a policy which reduces the amount of the benefits. A risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period less than would be otherwise payable had such reduction clause not been used.

(f) A limitation for the purpose of this rule means any provision in a policy which restricts coverage under the policy other than an exception or a reduction.

(g) An invitation to apply means an advertisement which is the direct or principal sales inducement and is designed to invite an offer to contract. Such an advertisement, which usually describes benefits in considerable detail, attempts to persuade the reader or listener to make application for the policy advertised. Such an advertisement would indicate what coverage the purchaser would receive and what such coverage would cost.

(h) An invitation to inquire means an advertisement which is designed to attract the reader’s or listener’s interest in the policy so that he or she will inquire for further information or details. Such an advertisement describes the policy broadly and withholds some information regarding the policy without which the reader or listener would not reasonably decide to apply for the policy.

(i) An institutional advertisement means one which is prepared solely to promote the reader’s or listener’s interest in the concept of accident and sickness insurance or of promoting the insurer sponsoring the advertisement.

(j) A testimonial means any statement made by a policyholder, certificate holder or other person covered by the insurer which promotes the insurer and its policy by describing such person’s benefits, favorable treatment or other experience under the policy.

(k) An endorsement for the purposes of sub. (13) means any statement promoting the insurer and its policy made by an individual, group of individuals, society, association or other organization which makes no reference to the endorser’s experience under the policy.

(L) An outline of coverage means an appropriately and prominently captioned portion of a printed advertisement which is clearly set off from the rest of the advertisement by means such as placing it within a prominent border or box or printing it in contrasting color, or a separate appropriately captioned or titled printed statement, which advertisement portion or printed statement contains only a summary of the benefits provided, a designation of the applicable type or types of coverage as defined in sub. (4) and, under appropriate captions, the information required by subs. (10) and (11).

(m) An individual policy issued on a group basis means an individual policy or contract issued where:

Coverage is provided to employees or members or classes thereof defined in terms of conditions pertaining to employment or membership in an association or other group which is eligible for franchise or group insurance as provided in s. 600.03 (22) and (23), Stats.,
The coverage is not available to the general public and can be obtained and maintained only because of the covered person’s membership in or connection with the group,
Premiums or subscription charges are paid to the insurer by the employer, association or some designated person acting on behalf of the employer, association or covered persons, and
The insurance plan is sponsored by the employer or association.

(6) Advertisements and representations in general.

(a) Advertisements and representations shall be truthful and not misleading in fact or in implication and shall accurately describe the policy to which they apply. Words or phrases the meaning of which is clear only by implication or by familiarity with insurance terminology shall not be used.

(b) Oral representations shall conform to the requirements of this rule.

(7) Suitability of policies. No agent or insurer shall recommend to a prospective buyer the purchase of any individual policy without reasonable grounds to believe that the recommendation is not unsuitable to the applicant. The agent or insurer shall make such inquiry as may be necessary under the circumstances to determine that the purchase of such insurance is not unsuitable for the prospective buyer. This requirement shall not apply to an individual policy issued on a group basis.

(8) Outline of coverage.

(a) Every advertisement of a specific individual policy or policies which constitutes an invitation to apply shall include an outline of coverage as defined in sub. (5) (L).

(b) Every agent at the time of taking an application for an individual policy shall furnish the applicant an outline of coverage as defined in sub. (5) (L).

(c) The requirement for an outline of coverage shall not apply to an advertisement or the taking of an application for an individual policy issued on a group basis or an individual conversion policy issued under a group or franchise insurance plan.

(9) Deceptive words, phrases or illustrations.

(a) An advertisement shall not exaggerate a benefit or minimize cost by overstatement, understatement or incompleteness. Information shall not be omitted or words, phrases, statements, references or illustrations shall not be used if such omission or use has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered or premium payable. An advertisement referring to any policy benefit payable, loss covered or premium payable shall be sufficiently complete and clear as to avoid deception or the capacity and tendency to mislead or deceive.

(b) The words and phrases “all,” “full,” “complete,” “comprehensive,” “unlimited,” “up to,” “as high as,” “this policy will pay your hospital and surgical bills,” “this policy will fill the gaps under Medicare and your present insurance” or “this policy will replace your income,” or similar words and phrases shall not be used so as to exaggerate any benefit beyond the terms of the policy, but may be used only in such manner as fairly to describe such benefit.

(c) A policy covering only one disease or a list of specified diseases shall not be advertised so as to imply coverage beyond the terms of the policy. A particular disease shall not be referred to by more than one term so as to imply broader coverage than is the fact.

(d) The benefits of a policy which pays varying amounts for the same loss occurring under different conditions, or which pays benefits only when a loss occurs under certain conditions, shall not be advertised without disclosing the limited conditions under which the benefits referred to are provided by the policy.

(e) The maximum benefit available under a policy shall not be emphasized in a manner which exaggerates its relationship to any internal limits or other conditions of the policy.

(f) The aggregate amounts or the monthly or weekly benefits payable under coverages such as hospital or similar facility confinement indemnity or private duty nursing shall not be emphasized unless the actual amounts payable per day are disclosed with substantially equal prominence and in close conjunction with such statement. Any limit in the policy on the number of days of coverage provided shall be disclosed.

(g) Phrases such as “this policy pays $1800 for hospital room and board expenses” are incomplete without indicating the maximum daily benefit and the maximum time limit for hospital room and board expenses.

(h) An advertisement shall not state or imply that each member under a family policy is covered as to the maximum benefits advertised when such is not the fact.

(i) The importance of diseases rarely or never found in the class of persons to whom the policy is offered shall not be exaggerated in an advertisement.

(j) Examples of what benefits may be paid under a policy shall be shown only for losses from common illnesses or injuries rather than exceptional or rare illnesses or injuries.

(k) When a range of hospital room expense benefits is set forth in an advertisement, it shall be made clear that the insured will receive only the benefit indicated in the policy purchased. It shall not be implied that the insured may select his or her room expense benefit at the time of hospitalization.

(L) An advertisement shall not imply that the amount of benefits payable under a loss of time policy may be increased at time of disability according to the needs of the insured.

(m) The term “confining sickness” is an abbreviated expression and shall be explained if used in an advertisement.

(n) An advertisement shall not state that the insurer “pays hospital, surgical, medical bills,” “pays dollars to offset the cost of medical care,” “safeguards your standard of living,” “pays full coverage,” “pays complete coverage,” “pays for financial needs,” “provides for replacement of your lost paycheck,” “guarantees your paycheck,” “guarantees your income,” “continues your income,” “provides a guaranteed paycheck,” “provides a guaranteed income” or “fills the gaps in Medicare” or use similar words or phrases unless the statement is literally true. Where appropriate, such or similar words or phrases may properly be used if preceded by the words “help,” “aid,” “assist,” or similar words.

(o) An advertisement shall not state that the premiums will not be changed in the future unless such is the fact.

(p) An invitation to apply advertisement shall clearly indicate the provisions of any deductible under a policy.

(q) An advertisement shall not refer to a policy as a doctors policy or use words of similar import unless:

The advertisement includes a statement that the plan of benefits is not endorsed by or associated with any national, state or local medical society, or
The policy has been so endorsed by such a society and the advertisement meets the requirements of sub. (13).

(r) If a policy contains any of the following or similar provisions, an advertisement referring to such policy shall not state that benefits are payable in addition to other insurance unless the statement contains an appropriate reference to the coverage excepted:

An other insurance exception, reduction, limitation or deductible;
A coordination of benefits or non-duplication provision;
An other insurance in this company provision;
An insurance in other insurers provision;
A relation of earnings to insurance provision;
A workers’ compensation or employers’ liability or occupational disease law exception, reduction, or limitation;
A reduction based on social security benefits or other disability benefits; or
A Medicare exception, reduction, or limitation.

(s) An advertisement shall not state a policy’s benefits are tax free unless an explanation of the rules applicable to the taxation of such types of accident and sickness benefits is clearly shown with equal prominence and in close conjunction with such statement. An advertisement of a benefit for which payment is conditioned upon confinement in a hospital or similar facility shall not state that such benefit is tax free.

(t) An advertisement shall not use the expressions “extra cash,” “cash income,” “income,” “cash,” or similar words or phrases in such a way as to imply that the insured will receive benefits in excess of the expenses incurred while being sick, injured or hospitalized.

(u) The description in advertisements of government insurance programs, including Medicare, and of changes in such program shall be accurate and not give an incorrect impression as to the need for supplementary coverage. If gaps in such programs are referred to, they shall be described fairly so that the reader or listener can determine how the policy being advertised covers such gaps.

(v) An invitation to apply advertisement which refers to a policy as being a Medicare supplement shall:

Contain a prominent statement indicating which Medicare benefits the policy is intended to supplement (for example, hospital benefits) and which Medicare benefits the policy will not supplement (for example, medical-surgical benefits) and shall clearly disclose any gaps in Medicare coverage for which the policy does not provide benefits; and
Clearly indicate the extent of the benefits if the policy bases benefits on expenses incurred beyond what Medicare covers and thus provides somewhat limited benefits for short term hospital confinements.

(w) An advertisement may refer to immediate coverage or guaranteed issuance of a policy only if suitable administrative procedures exist so that the policy is issued within a reasonable time after the application is received.

(x) If an advertisement indicates an initial premium which differs from the renewal premium on the same mode, the renewal premium shall be disclosed with equal prominence and in close conjunction with any statement of the initial premium. Any increase in premium or reduction in coverage because of age shall be clearly disclosed.

(y) An advertisement shall not state that the policy contains no waiting period unless pre-existing conditions are covered immediately or unless the status of pre-existing conditions is disclosed with equal prominence and in close conjunction with such statement.

(z) An advertisement shall not state that no age limit applies to a policy unless applications from applicants of any age are considered in good faith and such statement clearly indicates the date or age to which the policy may be renewed or that the company may refuse renewal.

(za) An advertisement shall not state that no medical, doctor’s or physical examination is required or that no health, medical or doctor’s statements or questions are required or that such examination, statements or questions are waived or otherwise state or imply that the applicant’s physical condition or medical history will not affect the policy unless:

The statement indicates with equal prominence that it applies only to the issuance of the policy or to both the issuance of the policy and the payment of claims, and
Pre-existing conditions are covered immediately under the policy or the period of time following the effective date of the policy during which pre-existing conditions are not covered is disclosed with equal prominence and in close conjunction with such statement.

(zb) An advertisement of a limited policy as defined in s. Ins 3.13 (2) (h) shall prominently indicate that the policy provided limited coverage with an appropriate statement such as “THIS IS A CANCER ONLY POLICY” or “THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY,” and shall clearly disclose what injuries or sicknesses and what losses are covered.

(zc) An advertisement of a policy which provides benefits for injuries only or for sickness only shall prominently indicate that the policy covers injuries only or sickness only.

(zd) An advertisement shall not refer to a policy or coverage as being “special” unless it can be shown that there is a reasonable basis for the use of such a term.

(ze) An advertisement shall not set out exceptions, reductions or limitations from a policy worded in a positive manner to imply that they are beneficial features such as describing a waiting period as a benefit builder. Words and phrases used to disclose exceptions, reductions or limitations shall fairly and accurately describe their negative features. The words “only” or “minimum” or similar words or phrases shall not be used to refer to exceptions, reductions or limitations.

(zf) An advertisement shall not state or imply, or use similar words or phrases to the effect, that because no insurance agent will call and no commissions will be paid to agents the policy is a low cost plan.

(zg) Devices such as a safe drivers’ award and other such awards shall not be used in connection with an advertisement.

(zh) An advertisement which describes or offers to provide information concerning the federal Medicare program or any related government program or changes in such programs shall:

Include no reference to such program on the envelope, the reply envelope or to the address side of the reply postal card, if any,
Include on any page containing a reference to such program an equally prominent statement to the effect that in providing supplemental coverage the insurer and agent involved in the solicitation is not in any manner connected with such program,
Contain a statement that it is an advertisement for insurance or is intended to obtain insurance prospects,
Prominently identify the insurer or insurers which issues the coverage, and
Prominently state that any material or information offered will be delivered in person by a representative of the insurer, if such is the case.

(10) Exceptions, reductions and limitations.

(a) When an advertisement refers to any dollar amount of benefits payable, period of time for which any benefit is payable, cost of policy, specific policy benefit or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations (including waiting, elimination, probationary or similar periods and pre-existing condition exceptions) affecting the basic provisions of the policy without which the advertisement would have the capacity and tendency to mislead or deceive subject to the following.

(b) An invitation to apply shall be subject to the disclosure requirements of this subsection.

Such an advertisement mentions benefits, benefit periods or premiums for the purpose of doing more than identifying the policy or
Such an advertisement makes any reference to the policy’s exceptions, reductions and limitations.

(d) A booklet, summary or explanation of coverage issued to insured persons shall be subject to the disclosure requirements of this subsection.

(e) An institutional advertisement shall not be subject to the disclosure requirements of this subsection.

(f) If the policy advertised does not provide immediate coverage for pre-existing conditions, an application or enrollment form contained in or included with an advertisement to be completed by the applicant and returned to the insurer shall contain a question or statement immediately preceding the applicant’s signature line which summarizes the pre-existing condition provisions of the policy. The following are a suggested question and statement; however, an insurer shall use wording which is appropriate to the actual pre-existing condition provisions of the policy advertised: “Do you understand that the policy applied for will not pay benefits during the first - - - - - year(s) after the issue date for a disease or physical condition which you now have or have had in the past? Yes - - - - - -” or “I understand that the policy applied for will not pay benefits during the first - - - - - year(s) after the issue date for a disease or physical condition which I now have or have had in the past.”

(g) An advertisement which is subject to the disclosure requirements of this subsection shall in negative terms disclose the extent to which any loss is not covered if the cause of the loss is a condition which exists prior to the effective date of the policy. The expression “pre-existing conditions” shall not be used unless appropriately defined.

(h) If a medical examination is required for a policy, an invitation to apply advertisement of such policy shall disclose such requirement.

(i) The exceptions, reductions and limitations referred to in this subsection shall include:

Those which are set out in the policy under captions referring to exceptions, reductions, limitations or exclusions or are otherwise designated as such, and
Those which are not so captioned or designated contained in other portions of the policy such as a benefit provision, definition or uniform provision.

(j) The following are examples of exceptions, reductions and limitations which generally do affect the basic policy provisions to such an extent that their absence would cause the advertisement to have the capacity and tendency to mislead or deceive.

War or act of war.
While in armed services.
Territorial restriction or coverage within United States and Canada.
Complete aviation exclusion.
Self-inflicted injury.
Injury inflicted by another person.
Time limitation on death, dismemberment or commencement of disability or medical treatment following an accident.
Pre-existing sickness or disease or other bodily infirmity.
Exclusion or reduction for loss due to specific diseases, classes of diseases or types of injuries.
Confinement restrictions in disability policies such as house confinement, bed confinement and confinement to the premises.
Waiting, elimination, probationary or similar periods.
Reduction in benefits because of age.
Any reduction in benefit during a period of disability.
Workers’ compensation or employers’ liability law exclusion.
Occupational exclusion.
Violation of law.
Automatic benefit in lieu of another benefit.
Confinement in government hospital.
Pregnancy.
Miscarriage in sickness or accident and sickness policy.
Restrictions relating to organs not common to both sexes.
Restrictions on number of hospital hours before benefit accrues.
Insanity, mental diseases or disorders or nervous disorder.
Dental treatment, surgery or procedures.
Cosmetic surgery.
While intoxicated or under the influence of narcotics, or other language not substantially the same as the uniform individual policy provision regarding the use of intoxicants and narcotics.
Unemployed persons.
Retired persons.
While handling explosives or chemical compounds.
While or as a result of participating in speed contests.
While or as a result of riding a motorcycle or motorcycle attachment.
While or as a result of participating in professional athletics.
While or as a result of participating in certain specified sports.
While or as a result of serving as a volunteer firefighter or in other hazardous occupations.
Riot or while participating in a riot.
Ptomaine poisoning.
Gas or poisonous vapor.
Sunstroke or heat prostration.
Freezing.
Poison ivy or fungus infection.
Requirement of permanent disability.
Reduction because of other insurance.
Limitations on the choice of providers or geographical area served.

(k) The following are examples of exceptions, reductions and limitations which generally do not affect the basic policy provisions to such an extent that their absence would cause the advertisement to have the capacity and tendency to mislead or deceive.

Suicide or attempted suicide, while sane or insane.
Intentional self-inflicted injury.
Territorial restriction with no limitation of coverage while in United States and Canada.
Aviation exclusion under which passage on commercial airlines is covered.
Felony or illegal occupation.
All uniform individual policy provisions, both required and optional, other than those relating to other insurance.
Requirement for regular care by a physician.
Definition of total disability.
Definition of partial disability.
Definition of hospital.
Definition of specific total loss.
Definition of injury.
Definition of physician or surgeon.
Definition of nurse.
Definition of recurrent disability.
Definition of commercial air travel.
Provision that hernia will be considered a sickness.
Rest cure.
Diagnosis.
Prosthetics.
Cosmetic surgery exclusion under which such surgery which results from injury is covered.
Dental treatment, surgery or procedures exclusion under which such treatment which results from injury to sound natural teeth is covered.
Bacterial infection exclusion under which pyogenic infection which results from injury is covered.
Eye examination for fitting of glasses.
Hearing aid.
Exclusion of sickness or disease in a policy providing only accident coverage.
Exclusion for miscarriage in policy providing only accident coverage.

(11) Renewability, cancelability and termination. An advertisement shall disclose, as required below, the provisions relating to renewability, cancelability and termination and any modification of benefits, losses covered or premiums because of age or for other reasons, in a manner which shall not minimize or render obscure the qualifying conditions.

(a) Any advertisement which refers to renewability, cancelability or termination of a policy shall be subject to the disclosure requirements of this subsection.

(b) An advertisement which refers to a policy benefit and which is an invitation to apply shall be subject to the disclosure requirements of this subsection.

(c) An advertisement which refers to a policy benefit and which is an invitation to inquire shall not be subject to the disclosure requirements of this subsection unless:

Paragraph (a) or (f) applies or
Such an advertisement mentions benefits, benefit periods or premiums for the purpose of doing more than identifying the policy.

(d) A booklet, summary or explanation of coverage issued to insured persons shall be subject to the disclosure requirements of this subsection.

(e) An advertisement which refers to a policy benefit and which is an institutional advertisement shall not be subject to the disclosure requirements of this subsection unless par. (a) or (f) applies.

(f) An advertisement which states or illustrates time or age in connection with eligibility of applicants or continuation of the policy and which implies permanency shall be subject to the disclosure requirements of this subsection.

(g) The actual policy language concerning renewability, cancelability or termination need not be used in an advertisement subject to the disclosure requirements of this subsection. However, all pertinent information shall be disclosed.

(h) The qualifying conditions applicable to a non-cancellable policy and to a guaranteed renewable policy shall include age limits, aggregate benefit limits and modifications of benefits because of age, other than such modifications occurring at or about the time the policy terminates. A qualifying condition applicable to a guaranteed renewable policy shall be the insurer’s reservation of the right to change premiums.

(i) The qualifying conditions shall be set forth with the language describing renewability.

(j) An advertisement of a group or blanket policy which would otherwise be subject to the disclosure requirements of this subsection need not disclose the policy’s provisions relating to renewability, cancelability and termination. Such advertisement shall provide, however, as a minimum, that an insured person’s coverage is contingent upon continued membership in the group and the continuation of the plan.

(k) An advertisement of a non-cancellable policy or of a guaranteed renewable policy shall also be subject to sub. (25).

(L) An advertisement of a franchise, wholesale, collectively renewable, or non-renewable for stated reasons only policy, or any other policy under which the insurer has by policy provision limited its right to terminate to one or more reasons, shall accurately set forth the policy’s renewal provisions if disclosure of such renewal provisions is required by par. (a), (b), (c), (d) or (e). Such advertisement shall not state or imply renewal terms which are more favorable than those actually contained in the policy. Such advertisement shall not state or imply that the policy is guaranteed renewable or warranted renewable or that renewal is guaranteed or warranted or use other variations of such expressions.

(12) Identity of insurer.

(a) The identity of the insurer shall be made clear in all of its advertisements.

(b) An advertisement shall not use a trade name, an insurance group designation, the name of the parent company of the insurer, the name of a government agency or program, the name of a department or division of an insurer, the name of an agency, the name of any other organization, a service mark, a slogan, a symbol or any other device which has the capacity and tendency to mislead or deceive as to the identity of the insurer.

(c) An advertisement shall not use any combination of words, symbols or materials which, by its content, phraseology, shape, color, nature or other characteristics, is so similar to combinations of words, symbols or materials used by federal, state or local government agencies that it tends to confuse or mislead prospective buyers into believing that the solicitation is in some manner connected with such a government agency.

(d) An advertisement shall not refer to an affiliate of the insurer without disclosing that the 2 organizations are separate legal entities.

(e) An advertisement shall not indicate an address for an insurer in such a way as to mislead or deceive as to its identity or licensing status. An advertisement which indicates an address for an insurer other than that of its home office shall clearly identify such address and clearly disclose the actual city and state of domicile of the insurer.

(13) Testimonials, endorsements or commendations by third parties.

(a) An advertisement shall not contain a testimonial, endorsement or other commendatory statement concerning the insurer, its policies or activities by any person who receives any pay or remuneration, directly or indirectly, from the insurer in connection with such testimonial, endorsement or statement. Any advertisement containing a testimonial, endorsement or statement not prohibited by the foregoing, shall include a full and prominent disclosure therein of the relationship, direct or indirect, including but not limited to financial interest and remuneration, between the insurer and the person making such testimonial, endorsement or statement. The provisions of this paragraph do not apply to any person holding a Wisconsin insurance agent’s license nor to any radio or television announcer or other person employed or compensated on a salaried or union wage scale basis.

(b) A testimonial or endorsement used in an advertisement shall be genuine, represent the current opinion of the author, be applicable to the policy advertised and be accurately reproduced.

Which is fictional,
Where the insurer has information indicating a substantial change of view on the part of the author,
Where it is reasonable to conclude that the views expressed do not correctly reflect the current opinion of the author,
For more than 2 years after the date on which it was originally given or 2 years after the date of a prior confirmation without obtaining a confirmation that the statement represents the author’s current opinion,
Which does not accurately reflect the present practices of the insurer,
To advertise a policy other than the one for which such statement was given, unless the statement clearly has some reasonable application to the second policy,
In which a change or omission has been effected which alters or distorts its meaning or intent as originally written, or
If it contains a description of benefit payments which does not disclose the true nature of the insurance coverage under which the benefits were paid.

(d) An advertisement shall not state or imply that an insurer or a policy has been approved or endorsed by an individual, group of individuals, society, association or other organization, unless such is the fact. Any proprietary relationship between such society, association or other organization and the insurer shall be disclosed. If such society, association or other organization has been formed by the insurer or is owned or controlled by the insurer or the person or persons who own or control the insurer, the advertisement shall clearly disclose such a fact.

(e) When a testimonial refers to benefits received under a policy, a summary of the pertinent claim information including claim number and date of loss shall be retained by the insurer with the advertisement in the advertising file required by sub. (28).

(f) An advertisement shall not state or imply that a government publication has commended or recommended the insurer or its policy.

(14) Jurisdictional licensing; approval by governmental agency.

(a) An advertisement which may be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond those limits.

(b) An advertisement shall not state or imply, or otherwise create the impression directly or indirectly, that the insurer, its financial condition or status, the payment of its claims, its policy forms or the merits or desirability of its policy forms or kinds or plans of insurance are approved, endorsed or accredited by any agency of this state or the federal government.

(c) In any advertisement any reference to licensing shall contain an appropriate disclaimer that such reference is not to be construed as an endorsement or implied endorsement of the insurer or its products by any agency of this state or the commissioner of insurance.

(d) An advertisement shall not contain a reproduction of a portion of a state insurance department report of examination.

(15) Introductory, initial or special offers and limited enrollment periods.

(a) An advertisement shall not state or imply that a policy or combination of policies is an introductory, initial or special offer and that the applicant will receive advantages not available at a later date by accepting the offer, that only a limited number of policies will be sold, that a time is fixed for the discontinuance of the sale of the policy advertised because of special advantages available in the policy, or that an individual will receive special advantages by enrolling within an open enrollment period or by a deadline date, unless such is the fact.

(b) An advertisement shall not state or imply that enrollment under a policy is limited to a specific period unless the period of time permitted to enroll, which shall be not less than 10 days and not more than 40 days from the date of the advertisement, is disclosed.

(d) An insurer shall not establish for residents of this state a limited enrollment period within which an individual policy may be purchased less than 6 months after the close of an earlier limited enrollment period for the same or similar policy. Such restriction shall apply to all advertisements in newspapers, magazines and other periodicals circulated in this state, all mail advertisements sent to residents of this state and all radio and TV advertisements broadcast in this state. Such restriction shall not apply to the solicitation of enrollments under individual policies issued on a group basis.

(f) Similar policies for the purposes of this subsection include policies which provide similar benefits even though there may be differences in benefit amounts, elimination periods, renewal terms or ancillary benefits.

(16) Mail order refusal form. An insurer shall not use a mail order advertisement which requires the recipient, in order to refuse a policy, to sign a refusal form and return it to the insurer.

(17) Group, quasi-group or special class implications. An advertisement shall not state or imply that prospective policyholders or members of a particular class of individuals become group or quasi-group members or are uniquely eligible for a special policy or coverage and as such will be subject to special rates or underwriting privileges or that a particular coverage or policy is exclusively for preferred risks, a particular segment of people, or a particular age group or groups, unless such is the fact.

(18) Inspection of policy.

(a) An offer in an advertisement of free inspection of a policy or an offer of a premium refund shall not be a cure for misleading or deceptive statements contained in such advertisement.

(b) An advertisement which refers to the provision in the policy advertised regarding the right to return the policy shall disclose the time limitation applicable to such right.

(19) Identification of plan or number of policies.

(b) When an advertisement refers to various benefits which may be contained in 2 or more policies, other than group policies, it shall disclose that such benefits are provided only through a combination of such policies.

(20) Use of statistics.

(a) An advertisement which sets out the dollar amounts of claims paid, the number of persons insured or other statistical information shall identify the source of such statistical information and shall not be used unless it accurately reflects all of the relevant facts. Irrelevant statistical data shall not be used.

(b) An advertisement shall not imply that the statistical information given is derived from the insurer’s experience under the policy advertised unless such is the fact. The advertisement shall specifically so state if such information applies to other policies or plans.

(c) If a loss ratio is to be shown in an advertisement, it shall be derived from either premiums received and benefits paid or premiums earned and losses incurred.

(d) If loss ratios are to be compared between insurers in an advertisement, comparison shall be limited to policies or plans of the same type issued to similar classes of risks.

(e) An advertisement which sets out the dollar amounts of claims paid shall also indicate the period during which such claims have been paid.

(21) Service facilities. An advertisement shall not:

(a) Contain untrue statements with respect to the time within which claims are paid.

(b) State or imply that claim settlements will be liberal or generous or use words of similar import.

(d) Contain a description of a claim which involves unique or highly unusual circumstances.

(22) Statements about an insurer. An advertisement shall not contain statements which are untrue in fact or are by implication misleading with respect to the insurer’s assets, corporate structure, financial standing, age, experience or relative position in the insurance business.

(23) Disparaging comparisons and statements. An advertisement shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits and shall not falsely or unfairly disparage, discredit or criticize competitors, their policies, services or business methods or competing marketing methods.

(24) Method of disclosure of required information.

(a) All information required to be disclosed by this rule shall be set out clearly, conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall be readily noticed and not minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisements so as to be confusing or misleading.

(b) An advertisement or representation of a specific individual policy or policies which constitutes an invitation to apply shall include an outline of coverage as required by sub. (8).

(c) Information required by this rule shall not be set out under inappropriate captions or headings or under inappropriate questions where a question and answer format is used.

(d) An advertisement of a hospital confinement indemnity policy shall disclose in close conjunction with any description of the benefits the existence in the policy of a provision which eliminates benefits for sickness and/or injury conditions for a stated number of days at the beginning of a hospital confinement.

(e) An advertisement of a non-cancellable policy or of a guaranteed renewable policy shall also be subject to sub. (25).

(25) Non-cancellable and guaranteed renewable policies.

(a) No person, in the presentation, solicitation, effectuation, or sale of a policy, and no advertisement, relating to or used in connection with a policy, shall use the terms “non-cancellable” or “non-cancellable and guaranteed renewable” or “guaranteed renewable,” except in connection with policies conforming to s. Ins 3.13 (2) (e).

(b) An advertisement describing a non-cancellable and guaranteed renewable or guaranteed renewable policy form shall be subject to sub. (11).

(c) A printed advertisement describing a non-cancellable or non-cancellable and guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the terms “non-cancellable” or “non-cancellable and guaranteed renewable:”

The age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable, if other than lifetime,
The age or time at which the form’s benefits are reduced, if applicable, (the age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable), and
That benefit payments are subject to an aggregate limit, if applicable.

(d) A printed advertisement describing a guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the term “guaranteed renewable:”

The age to or term for which the form is guaranteed renewable, if other than lifetime;
The age or time at which the form’s benefits are reduced, if applicable, (the age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or form for which the form is guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is guaranteed renewable);
That benefit payments are subject to an aggregate limit, if applicable; and
That the applicable premium rates may be changed.

(e) The foregoing limitations on the use of the term “non-cancellable” shall also apply to any synonymous term such as “not cancellable;” and the foregoing limitations on use of the term “guaranteed renewable” shall apply to any synonymous term such as “guaranteed continuable.”

(26) Form number. An advertisement which is an invitation to apply or an invitation to inquire and which is mass-produced shall be identified by a form number. The form number shall be sufficient to distinguish it from any other advertising form or any policy, application or other form used by the insurer.

(27) Insurer’s responsibility for advertisements.

(a) The content, form and method of dissemination of all advertisements, regardless of by whom designed, created, written, printed or used, shall be the responsibility of the insurer whose policy is advertised.

(b) An insurer shall require its agents and any other person or agency acting on its behalf in preparing advertisements to submit proposed advertisements to it for approval prior to use.

(28) Insurer’s advertising file. Each insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of its policies hereafter disseminated in this or any other state, whether or not licensed in such other state. With respect to group, blanket and franchise policies, all proposals prepared on the same printed form need not be included in the file; only typical examples of such proposals need be included. A notation shall be attached to each such advertisement in the file indicating the manner and extent of distribution and the form number of any policy, amendment, rider, or endorsement form advertised. A copy of the policy advertised, together with any amendment, rider or endorsement applicable thereto, shall be included in the file with each such advertisement. Such file shall be subject to regular and periodic inspection by the office of the commissioner of insurance. All such advertisements shall be maintained in such file for a period of 4 years or until the filing of the next regular examination report on the insurer, whichever is the longer period.

(29) Penalty. Violations of this rule shall subject the violator to s. 601.64, Stats.

(31) Effective date. This rule shall apply to all advertisements used in this state after June 1, 1973.

History

Cr. Register, April, 1973, No. 208, eff. 6-1-73; am. (zb), (11) (c) 1. and (11) (e), Register, August, 1973, No.212, eff. 9-1-73; am. (5) (b) 1., Register, April, 1975, No. 232, eff. 5-1-75; emerg. am. (1), (2), (5) (c) and (m) 1., eff. 6-22-76; am. (1), (2), (5) (c) and (m) 1., Register, September, 1976, No. 249, eff. 10-1-76; cr. (9) (zh), Register, November, 1976, No. 251, eff. 12-1-76; am. (2), Register, March, 1979, No. 279, eff. 4-1-79; r. (29), Register, March, 1981, No. 303, eff. 4-1-81; cr. (10) (j) 43., Register, October, 1984, No. 346, eff. 11-1-84; r. (30) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; am. (4) (a), (9) (p) and (v) (intro.) and (10) (h), Register, March, 1985, No. 351, eff. 4-1-85; correction in (2) (and (5) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; am. (5) (a) 1., Register, January, 1999, No. 517, eff. 2-1-99.

Wis. Admin. Code § Ins 3.28 Solicitation, underwriting and claims practices in individual and franchise accident and sickness insurance {#sec-ins-3.28 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.28}

(1) Purpose. The purpose of this rule is to promote the fair and equitable treatment of Wisconsin residents in the solicitation, underwriting and administration of accident and sickness insurance and of contracts issued by a plan subject to ch. 613, Stats. Sections of statutes interpreted or implemented by this rule include but are not limited to ss. 601.04 (3), 601.01 (2), 611.20, 618.12 (1), and 632.76, Stats.

(2) Scope. This rule applies to the solicitation, underwriting and administration of any insurance issued by any insurer or fraternal benefit society under s. Ins 6.75 (1) (c) or (2) (c) and ss. 600.03 (22) and 632.93, Stats., except credit accident and sickness insurance under s. Ins 6.75 (1) (c) 1. or (2) (c) 1., and to any contract, other than one issued on a group or group type basis as defined in s. Ins 6.51 (3), issued by a plan subject to ch. 613, Stats. For the purpose of this rule, references to insurer, policy, and insurance agent or representative, also apply to organizations or associations operating non-profit plans, contracts, and persons within the scope of the rule, respectively.

(3) Application form. An application form which becomes part of the insurance contract shall provide to the effect that statements made by the applicant in the application form regarding the general medical history or general health of a proposed insured person which require an opinion or the exercise of judgment are representations or are to the best of the applicant’s knowledge and/or belief. Such form need not so provide with respect to statements regarding specifically named diseases, physical conditions, or types of medical consultation or treatment. Such form shall not require the applicant to state that he or she has not withheld any information or concealed any facts in completing the application; however, the applicant may be required to state that his or her answers are true and complete to the best of his or her knowledge and/or belief.

(4) Solicitation. An insurance agent or representative shall review carefully with the applicant all questions contained in each application which he or she prepares and shall set down in each such form all material information disclosed to him or her by the applicant in response to the questions in such form.

(5) Underwriting.

(a) An insurer shall make provision for adequate underwriting personnel and procedures so as to process without undue delay each application for insurance received by it.

(b) An insurer shall give due consideration to all statements in each application for insurance submitted to it and shall duly evaluate the proposed insured person before issuing coverage for such person.

(c) An insurer which issues coverage for a person shall not use the statements, information or material set out in subds. 1., 2. and 3. to void the coverage on the basis of misrepresentation in the application, or deny a claim on the basis of a pre-existing condition defense, unless the insurer has:

Resolved patently conflicting or incomplete statements in the application for the coverage;
Duly considered information furnished to it:

a. In connection with the processing of such application, or

b. In connection with individual coverage on the person previously issued by it and currently in force, or

Duly considered the material which it would have obtained through reasonable inquiry following due consideration of the statements or information.

(d) An insurer shall at the issuance or amendment of a policy, contract or subscriber certificate, furnish notice concerning statements in the application to the policyholder, contracting party or certificate holder, where the application for the coverage or amended coverage contains questions relating to the medical history or other matters concerning the insurability of the person or persons being insured and the application is part of the insurance contract.

The notice shall be printed prominently in contrasting color on the first page of the policy, contract, or subscriber certificate or in the form of a sticker, letter or other form attached to the first page of the policy, contract or certificate, or a letter or other form to be mailed within 10 days after the issuance or amendment of coverage.
The notice shall contain substantially the following as to text and caption or title:

(e) An insurer shall file with the commissioner a description of the procedure it will follow and the form or forms it will use to meet the requirements of par. (d).

(f) An insurer which, after coverage for a person has been issued, receives information regarding such person which would reasonably be considered a sufficient basis to void or reform such person’s coverage shall effect such voiding or reformation as provided in s. 631.11 (4), Stats., or the insurer shall be held to have waived its rights to such action.

(g) An insurer may use statements in an application form as a defense to a claim or to avoid or reform coverage only if it has complied with par. (d).

(6) Claims administration.

(a) If the existence of a disease or physical condition is duly disclosed in the application for coverage in response to the questions therein, the insurer shall not use the pre-existence defense, under coverage providing such a defense, to deny benefits for such disease or condition unless such disease or condition is excluded from coverage by name or specific description effective on the date of loss. This paragraph does not apply to a preexisting condition exclusion permitted under s. 632.746 (1), Stats.

(b) If an application contains no question concerning the proposed insured person’s health history or medical treatment history and regardless of whether it contains a question concerning the proposed insured person’s general health at the time of the application, the insurer may use the pre-existence defense, under coverage providing such a defense, only with respect to losses incurred or disability commencing within 12 months from the effective date of coverage, unless the disease or physical condition causing the loss or disability is excluded from coverage by name or specific description effective on the date of loss or the date the disability commenced. If, after 12 months from the effective date of coverage, there is a reoccurrence of the disease or condition causing the loss or disability, then the pre-existence defense may not be used. Under a disability income policy a disease or condition shall be deemed to have not reoccurred if the insured performs all important duties of the insured’s or a comparable occupation on the same basis as before the disability, for at least 6 months. Under a policy other than disability income a disease or condition shall be deemed to have not reoccurred if a period of 6 months elapses during which no expenses are incurred for the same or related disease or condition.

(c) An insurer shall not void coverage or deny a claim on the ground that the application for such coverage did not disclose certain information considered material to the risk if the application did not clearly require the disclosure of such information.

(d) A claim shall not be reduced or denied on the grounds that the disease or physical condition resulting in the loss or disability had existed prior to the effective date of coverage, under coverage providing such a defense, unless the insurer has evidence that such disease or physical condition, as distinguished from the cause of such disease or physical condition, had manifested itself prior to such date. Such manifestation may be established by evidence of:

Medical diagnosis or treatment of such disease or physical condition prior to the effective date, or
The existence of symptoms of such disease or physical condition prior to the effective date which would cause an ordinarily prudent person to seek diagnosis, care or treatment and for which such diagnosis, care or treatment was not sought prior to such date.

(e) Coverage which contains wording which requires the cause of the disease or physical condition, as distinguished from the disease or physical condition itself, to originate after the effective date of coverage shall be administered in accordance with par. (d).

(f) An insurer shall not exclude or limit benefits for a particular condition where the claimant’s medical records indicate a reasonable basis for, and the policy language permits, distinguishing between the eligible condition or conditions which necessitated the hospital confinement or medical or surgical treatment for which claim is made, or which resulted in the disability for which the claim is made, and a concurrently non-eligible existing condition or conditions which did not contribute to the need for the confinement or treatment, or contribute to the disability. The exclusion or limitation of benefits includes the use of:

A pre-existence defense;
A waiting period, such as for pregnancy, surgery or other stated condition or procedure;
A benefit maximum; or
Other policy limitation.

(7) Effective date.

(a) Subsections (4), (5) (a), (b), (c), and (f) and (6) shall apply to all solicitation, underwriting, and claims activities, except under franchise insurance, relating to Wisconsin residents after March 1, 1974, except that sub. (6) (a) and (b) shall apply to policies issued after that date.

(b) Subsections (3) and (5) (d) and (e) shall apply to all solicitation, underwriting, and claims activities, except under franchise insurance, relating to Wisconsin residents after May 1, 1974.

(c) This rule shall apply to all solicitation, underwriting and claims activities under franchise insurance relating to Wisconsin residents after December 1, 1974, except that sub. (6) (a) and (b) shall apply to policies issued after that date and sub. (5) (d) and (e) shall apply to such activities after February 1, 1975.

History

Cr. Register, February, 1974, No. 218, eff. 3-1-74; am. (5) (d) (intro. par.), Register, July, 1974, No. 223, eff. 8-1-74; am. (2) and (7), Register, November, 1974, No. 227, eff. 12-1-74; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; am. (1), (2), (5) (f) and (6) (b), cr. (5) (g), r. and recr. (5) (c) and (d) and (6) (d) and (f), Register, April, 1982, No. 316, eff. 5-1-82; correction in (1) and (2) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; am. (6) (a), Register, November, 1993, No. 455, eff. 2-1-94; correction in (6) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, July, 1999, No. 523.

Wis. Admin. Code § Ins 3.29 Replacement of accident and sickness insurance {#sec-ins-3.29 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.29}

(1) Purpose. The purpose of this section is to safeguard the interests of persons covered under accident and sickness insurance who consider the replacement of their insurance by making available to them information regarding replacement and thereby reducing the opportunity for misrepresentation and other unfair practices and methods of competition in the business of insurance. This section implements and interprets ss. 601.01 (2) and 628.34, Stats.

(2) Scope. This rule shall apply to the solicitation of accident and sickness insurance covering residents of this state and issued by insurance corporations, fraternal benefit societies or nonprofit service plans in accordance with s. Ins 6.75 (1) (c) or (2) (c), s. 614.01, Stats., and ch. 613, Stats.

(3) Exempt insurance. This rule shall not apply to the solicitation of the following accident and sickness insurance:

(a) Group, blanket or group type, except Medicare supplement and Medicare cost insurance policies subject to s. Ins 3.39 (4), (4m), (4t), (5), (5m), (5t), and (7).

(b) Accident only.

(d) Nonprofit dental care.

(e) Nonprofit prepaid optometric service.

(f) A limited policy conforming to s. Ins 3.13 (2) (h).

(g) Under which dental expenses only, prescription expenses only, vision care expenses only or blood service expenses only are covered.

(h) Conversion to another individual or family policy in the same insurer with continuous coverage.

(i) Conversion to an individual or family policy to replace group, blanket or group type coverage in the same insurer.

(4) Definitions. For the purposes of this rule:

(a) “Replacement” is any transaction wherein new accident and sickness insurance is to be purchased, and it is known to the agent or company at the time of application that as part of the transaction, existing accident and sickness insurance has been or is to be lapsed or the benefits thereof substantially reduced.

(b) “Continuous coverage” means that the benefits are not less than the benefits under the previous policy, and the policy also covers loss resulting from injury sustained or sickness contracted while coverage was in force under the previous policy to the extent such loss is not covered under any extended benefit or similar provision of the previous policy.

(d) “Direct response insurance” is insurance issued to an applicant who has completed the application and forwarded it directly to the insurer in response to a solicitation coming into his or her possession by any means of mass communication.

(5) Replacement question in application forms. An application form for insurance subject to this rule shall contain a question to elicit information as to whether the insurance to be issued is to replace any insurance presently in force. A supplementary application or other form to be signed by the applicant containing such a question may be used.

(6) Notice to be furnished.

(a) An agent soliciting the sale of insurance shall, upon determining that the sale would involve replacement, furnish to the applicant, at the time of taking the application, the notice described in sub. (7) to be signed by the applicant.

(b) An insurer soliciting direct response insurance shall, upon determining that the sale would involve replacement, furnish to the applicant, before the policy is issued, the notice described in sub. (7) to be signed by the applicant.

(c) A copy of such notice shall be left with or retained by the applicant and a signed copy shall be retained by the insurer.

(7) Notice to applicant.

(a) The notice required by sub. (6) shall provide, in substantially the following form:

Health conditions which you may presently have may not be covered under the new policy. This could result in a claim for benefits being denied which may have been payable under your present policy. (This language may be modified if pre-existing conditions are covered under the new policy.)
Even though some of your present health conditions may be covered under the new policy, these conditions may be subject to certain waiting periods under the new policy before coverage is effective. (This language may be modified if pre-existing conditions are covered under the new policy.)
Questions in the application for the new policy must be answered truthfully and completely; otherwise, the validity of the policy and the payment of any benefits thereunder may be voided.
The new policy will be issued at a higher age than that used for issuance of your present policy; therefore, the cost of the new policy, depending upon the benefits, may be higher than you are paying for your present policy.
The renewal provisions of the new policy should be reviewed so as to make sure of your rights to periodically renew the policy.
It may be to your advantage to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. You should be certain that you understand all the relevant factors involved in replacing your present coverage. The above “Notice to Applicant” was delivered to me on

(b) The notice required by sub. (6) for a Medicare supplement policy subject to s. Ins 3.39 (4), (4m), (4t), (5), (5m), (5t), and (7), shall include an introductory statement in substantially the following form: Your new policy provides _______ days within which you may decide without cost whether you desire to keep the policy.

(8) Violation. A violation of this rule shall be considered to be a misrepresentation for the purpose of inducing a person to purchase insurance. A person guilty of such violation shall be subject to s. 601.64, Stats.

(10) Effective date. This rule shall become effective September 1, 1974.

History

Cr. Register, June, 1974, No. 222, eff. 9-1-74; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (2), Register, March, 1979, No. 279, eff. 4-1-79; am. (3) (a) and (i), r. (3) (j), renum. (7) to be (7) (a) and am., cr. (7) (b), Register, June, 1982, No. 318, eff. 7-1-82; r. (9) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; corrections in (1), (3) (a) and (4) (d) made under s. 13.93 (2m) (b) 5. and 7., Stats., Register, April, 1992, No. 436; CR 08-112: am. (3) (a) and (7) (b) Register June 2009 No. 642, eff. 7-1-09; CR 19-036: am. (3) (a), (7) (b) Register December 2019 No. 768, eff. 1-1-20.

(1) Purpose. The purpose of this rule is to establish guidelines for wording change of beneficiary provisions and related provisions in accident and sickness insurance policies.

(2) Scope. This rule shall apply to policy forms subject to s. Ins 6.75 (1) (c) or (2) (c) and s. 600.03 (4), (22) and (23), Stats.

(3) Guidelines. A change of beneficiary provisions and any related provision:

(a) Shall comply with s. 632.71, Stats., except as provided in ss. 631.81 and 632.77 (4), Stats., where applicable, and

(b) May include requirements or limitations which would be consistent with an orderly method of handling beneficiary designations and changes such as:

A requirement that a beneficiary designation or change be recorded by the insurer;
A provision that a claim payment made before a change in beneficiary designation is recorded is not subject to such change;
A requirement that a beneficiary designation or change be written as opposed to oral; or
A requirement that a beneficiary designation or change be given to a particular agent, representative or office.

History

Cr. Register, May, 1974, No. 221, eff. 6-1-74; emerg. am. (2) and (3) (a), eff. 6-22-76; am. (2) and (3) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) and (3) (a), Register, March, 1979, No. 279, eff. 4-1-79; correction in (2) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 3.31 Eligibility for and solicitation, underwriting and claims practices in group, blanket and group type accident and sickness insurance {#sec-ins-3.31 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.31}

(1) Purpose. The purpose of this rule is to promote the fair and equitable treatment of Wisconsin residents in the solicitation, underwriting and administration of accident and sickness insurance and coverage issued by a plan subject to s. 185.981, Stats., or ch. 613, Stats. Sections of Statutes interpreted or implemented by this rule include but are not limited to ss. 601.04 (3), 601.01 (2), 611.20, 618.12 (1) and 632.76, Stats.

(2) Scope. This rule applies to the solicitation, underwriting and administration of insurance issued by an insurer under s. 600.03 (4) or (23), Stats., except credit accident and sickness insurance under s. Ins 6.75 (1) (c) 1. or (2) (c) 1., and coverage issued on a group basis or group type basis as defined in s. Ins 6.51 (3) by a plan subject to s. 185.981, Stats., or ch. 613, Stats. For the purposes of this rule, references to insurer, certificate, insurance agent or representative, enrollment form and enrollee also apply to organizations or associations operating non-profit plans, contracts, summaries of coverage, persons within the scope of the rule, individual applications and applicants, respectively.

(3) Group and group type insurance. An insurer issuing insurance under s. 600.03 (23), Stats., or group or group type coverage under s. 185.981 or ch. 613, Stats., shall,

(a) Where the enrollment form contains questions relating to the medical history of the person or persons to be covered, be subject to the following:

‘Enrollment form.’ An enrollment form shall provide to the effect that statements made by the enrollee in the enrollment form regarding the general medical history or general health of the proposed insured person which require an opinion or the exercise of judgment are representations or are to the best of the enrollee’s knowledge and/or belief. Such form need not so provide with respect to statements regarding specifically named diseases, physical conditions, or types of medical consultation or treatment. Such forms shall not require the enrollee to state that he or she has not withheld any information or concealed any facts in completing the enrollment form; however, the enrollee may be required to state that his or her answers are true and complete.
‘Solicitation.’ An insurance agent or representative shall review carefully with the enrollee all questions contained in each enrollment form which he or she prepares and shall set down in each such form all material information disclosed to him or her by the enrollee in response to the questions in such form. This does not require that an insurance agent or representative prepare or assist in the preparation of each enrollment form.
‘Underwriting.’

a. An insurer shall make provision for adequate underwriting personnel and procedures so as to process without undue delay each enrollment form for insurance received by it.

b. An insurer shall give due consideration to all statements in each enrollment form for insurance submitted to it and shall duly evaluate the proposed insured person before issuing evidence of coverage for such person.

c. An insurer which issues evidence of coverage for a person shall not use the statements, information or material set out in subds. 1., 2. and 3. to void the coverage on the basis of misrepresentation in the enrollment form, or deny a claim on the basis of a pre-existing condition defense, unless the insurer has resolved patently conflicting or incomplete statements in the enrollment form for the coverage, duly considered information furnished to it in connection with the processing of such enrollment form, or duly considered the material which it would have obtained through reasonable inquiry following due consideration of such statements or information.

d. An insurer shall furnish to the certificate holder or subscriber a notice printed prominently in contrasting color on the first page of the certificate or amendment, or in the form of a sticker or other form to be attached to the first page of the certificate or amendment, or furnish to the group policyholder or other such entity within 10 days after the issuance or amendment of coverage for delivery to the certificate holder or subscriber, a notice in the form of a letter or other form, such notice to contain substantially the following:

e. An insurer shall file with the commissioner a description of the procedure it will follow and the form or forms it will use to meet the requirements of subd. 3. d.

f. An insurer which, after evidence of coverage for a person has been issued, receives information regarding such person which would reasonably be considered a sufficient basis to void or reform such person’s coverage, shall effect such voiding or reformation, as provided in s. 631.11 (4), Stats., or the insurer shall be held to have waived its rights to such action.

g. An insurer may use statements in an enrollment form as a defense to the claim or to void or reform coverage only if it has complied with the requirements of subd. 3. d.

‘Claims administration.’

a. If the existence of a disease or physical condition was duly disclosed in the enrollment form for coverage in response to the questions therein, the insurer shall not use the pre-existence defense, under coverage providing such a defense, to deny benefits for such disease or condition unless such disease or condition is excluded from coverage by name or specific description effective on the date of loss. This paragraph does not apply to a preexisting condition exclusion permitted under s. 632.746 (1), Stats.

b. If an enrollment form contains no question concerning the proposed insured person’s health history or medical treatment history and regardless of whether it contains a question concerning the proposed insured person’s general health at the time of enrollment, the insurer may use the pre-existence defense, under coverage providing such a defense, only with respect to losses incurred or disability commencing within 12 months from the effective date of the person’s coverage, unless the disease or physical condition causing the loss or disability is excluded from coverage by name or specific description effective on the date of loss or the date the disability commenced. If after 12 months from the effective date of coverage, there is a reoccurrence of the disease or condition causing the loss or disability, then the pre-existence defense may not be used. Under a disability income policy a disease or condition shall be deemed to have not reoccurred if the insured performs all important duties of a comparable occupation on the same basis as before the disability, for at least 6 months. Under a policy other than disability income a disease or condition shall be deemed to have not reoccurred if a period of 6 months elapses during which no expenses are incurred for the same or a related disease or condition.

c. An insurer shall not void coverage or deny a claim on the ground that the enrollment form for such coverage did not disclose certain information considered material to the risk if the form did not clearly require the disclosure of such information.

(b) Be subject to the following:

A claim shall not be reduced or denied on the grounds that the disease or physical condition resulting in the loss or disability had existed prior to the effective date of coverage, under coverage providing such a defense, unless the insurer has evidence that such disease or physical condition, as distinguished from the cause of such disease or physical condition, had manifested itself prior to such date. Such manifestation may be established by evidence of:

a. Medical diagnosis or treatment of such disease or physical condition prior to the effective date, or

b. The existence of symptoms of such disease or physical condition prior to the effective date which would cause an ordinarily prudent person to seek diagnosis, care, or treatment and for which such diagnosis, care or treatment was not sought prior to such date.

Coverage which contains wording which requires the cause of the disease or physical condition, as distinguished from the disease or physical condition itself, to originate after the effective date of coverage shall be administered in accordance with subd. 1.
An insurer shall not exclude or limit benefits for a particular condition where the claimant’s medical records indicate a reasonable basis for, and the policy language permits, distinguishing between the eligible condition or conditions which necessitated the hospital confinement or medical or surgical treatment for which claim is made, or which resulted in the disability for which the claim is made, and a concurrently non-eligible existing condition or conditions which did not contribute to the need for the confinement or treatment, or contribute to the disability. The exclusion or limitation of benefits includes the use of:

a. A pre-existence defense;

b. A waiting period, such as for pregnancy, surgery or other stated condition or procedure;

c. A benefit maximum; or

d. Other policy limitation.

(c) Where the group or group type plan is issued to trustees of a fund, use the plan’s provisions regarding individual eligibility for coverage and individual termination of coverage to deny liability for or to defend against a claim only if the certificate issued pursuant to the plan, under an appropriate caption or captions, includes the applicable requirements regarding an individual’s eligibility for coverage and the conditions under which an individual’s coverage terminates under the plan.

(4) Blanket insurance. An insurer issuing insurance under s. 600.03 (4), Stats., shall

(a) Include in an enrollment form used in connection with such insurance no question relating to the medical history or other matter concerning the insurability of the person or persons to be insured and

(b) Be subject to the following:

A claim shall not be reduced or denied on the grounds that the disease or physical condition resulting in the loss or disability had existed prior to the effective date of coverage, under coverage providing such a defense, unless the insurer has evidence that such disease or physical condition had manifested itself prior to such date. Such manifestation may be established by evidence of:

a. Medical diagnosis or treatment of such disease or physical condition prior to the effective date, or

b. The existence of symptoms of such disease or physical condition prior to the effective date which would cause an ordinarily prudent person to seek diagnosis, care or treatment and for which such diagnosis, care or treatment was not sought prior to such date.

Coverage which contains wording which requires the cause of the disease or physical condition, as distinguished from the disease or physical condition itself, to originate after the effective date of coverage shall be administered in accordance with subd. 1. b.
An insurer shall not exclude or limit benefits for a particular condition where the claimant’s medical records indicate a reasonable basis for, and the policy language permits, distinguishing between the eligible condition or conditions which necessitated the hospital confinement or medical or surgical treatment for which claim is made, or which resulted in the disability for which the claim is made, and a concurrently non-eligible existing condition or conditions which did not contribute to the need for the confinement or treatment, or contribute to the disability. The exclusion or limitation of benefits includes the use of:

a. A pre-existence defense;

b. A waiting period, such as for pregnancy, surgery or other stated condition or procedure;

c. A benefit maximum; or

d. Other policy limitation.

(5) Effective date. This rule shall apply to all solicitation, underwriting, and claims activities relating to Wisconsin residents after December 1, 1974, except that sub. (3) (a) 4. a. and b. shall apply to coverage issued after said date and sub. (3) (a) 3. d., e. and g. shall apply to such activities after February 1, 1975.

History

Cr. Register, November, 1974, No. 227, eff. 12-1-74; emerg. am. (1), (2), (3) (intro.) and (c) and (4), eff. 6-22-76; am. (1), (2), (3) (intro.) and (c) and (4), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; am. (1), (2), (3) (intro.), (3) (a) 3. d., f. and 4. b., (3) (c) and (4), r. and recr. (3) (a) 3. c., (3) (b) 1. and 3., (4) (b) 1. and 3., Register, April, 1982, No. 316, eff. 5-1-82; correction in (2) and (3) (intro.) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; am. (3) (a) 4. a., Register, November, 1993, No. 455, eff. 2-1-94; correction in (3) (a) 4. a. and (4) (intro.) made under s. 13.93 (2m) (b) 7., Stats., Register, July, 1999, No. 523.

Wis. Admin. Code § Ins 3.32 Title insurance; prohibited practices {#sec-ins-3.32 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.32}

(1) Purpose. This rule implements and interprets s. 601.01 (3), Stats., and ch. 628, Stats., for the purpose of prohibiting unfair practices in the transaction of the business of title insurance.

(2) Scope. This section applies to all title insurers and title insurance agents.

(3) Definitions. In this section:

(a) “Affiliate” has the meaning provided under s. 600.03 (1), Stats.

(am) “Agent” has the meaning provided under s. 600.03 (1r), Stats.

(b) “Affiliate producer” means an affiliate of a producer of title insurance, but only for the 12-month period commencing after June 30, 1987, and after the end of any quarter calendar year in which the affiliate’s gross revenue from operation in this state from title insurance directly or indirectly referred by affiliated producers of title insurance exceeds 40% of the affiliate’s gross revenue from operations in this state for title insurance in the previous quarter calendar year. However, if the previous quarter calendar year commences prior to July 1, 1988, the percentage is 80%; and if it commences prior to July 1, 1989, the percentage is 60%. “Affiliate producer” does not include a person who is affiliated with producers of title insurance who are all attorneys if the affiliate examines the title for each title insurance policy it issues.

(bm) “Control” has the meaning provided under s. 600.03 (13), Stats.

(c) “Producer of title insurance” means any of the following, other than a title insurer, who order or influence, directly or indirectly, the ordering of title insurance and related services:

Any owner or prospective owner of real or personal property or any interest therein;
Any lender or prospective lender in a transaction involving an obligation secured or to be secured either in whole or in part by real or personal property or any interest therein; and
Any agent, representative, attorney or employee of any owner or prospective owner or of any lender or prospective lender.
An affiliate producer.

(cm) “Supplementary rate information” has the meaning provided under s. 625.02 (3), Stats.

(d) “Title insurance rates” means all charges made by a title insurer in connection with the issuance of a title insurance policy or a commitment to issue a title insurance policy and includes, but is not limited to, search and examination charges.

(e) “Title insurer” means all insurance companies authorized to write title insurance as defined by s. Ins 6.75 (2) (h) and their affiliates, and includes all officers, employees and representatives of the insurance companies or their affiliates.

(4) Prohibited practices. No title insurer or agent of a title insurer may engage in any of the following practices:

(a) Charging an amount for a title insurance policy or commitment for a title insurance policy other than the amount developed by application of the appropriate title insurance rate developed from the rates and supplementary rate information on file with the commissioner for use by the title insurer.

(b) Waiving, or offering to waive, all or any part of the applicable title insurance rate or premium developed by proper application of the appropriate title insurance rate developed from the rates and supplementary rate information on file with the commissioner.

(c) Charging a reduced title insurance rate under a so-called “take-off” or subdivision policy when the property involved is ineligible for such reduced rate.

(d) Charging a reduced title insurance rate under a so-called “take-off” or subdivision policy when such rate is not applicable in the particular transaction because the volume required to qualify for such reduced rate includes ineligible property.

(e) Paying or offering to pay the cancellation fee, the fee for a preliminary title report or other fee on behalf of any producer of title insurance after inducing the person to cancel an order with another title insurer.

(f) Making or guaranteeing, or offering to make or guarantee, directly or indirectly, any loan to any producer of title insurance regardless of the terms of the note or guarantee. This prohibition is not applicable to customary business collection procedures, claims settlement and salvage activities and other business activities totally unrelated to the solicitation of business for which a charge is made.

(g) Providing or offering to provide, directly or indirectly, a “compensating balance” or deposit in a lending institution either for the express or implied purpose of influencing the extension of credit by the lending institution to any producer of title insurance, or for the express or implied purpose of influencing the placement or channeling of title insurance business by the lending institution. This paragraph does not prohibit the maintenance by a title insurer or agent of demand deposits or escrow deposits which are reasonably necessary for use in the ordinary course of the business of the title insurer or agent.

(h) Paying or offering to pay the fees or charges of an outside professional, including but not limited to, an attorney, engineer, appraiser, or surveyor, whose services are required by any producer of title insurance to structure or complete a particular transaction.

(i) Paying or offering to pay all or part of the salary of an employee of a producer of title insurance.

(j) Paying or offering to pay a fee to a producer of title insurance for services unless the fee bears a reasonable relation to the services performed. The determination of whether a fee bears a reasonable relation to the services performed means a recognition of time and effort spent, risk and expenses incurred, and an allowance for a reasonable level of profit. After June 30, 1987, for purposes of this paragraph, a payment determined by applying a percentage amount or formula to the premium paid for title insurance is presumed, unless rebutted, not to bear a reasonable relation to services performed. The presumption may be rebutted in a particular case by satisfying the commissioner that the service to be performed and the compensation to be received, with recognition of time and effort spent and risk and expenses incurred, are substantially comparable to the services performed and compensation received by agents, or to the services performed by underwriters, in this state who are not producers of title insurance.

(k) Paying or offering to pay for services by a producer of title insurance if the services are required to be performed by the person in his or her capacity as a real estate or mortgage broker or salesperson or agent.

(L) Furnishing or offering to furnish, or paying or offering to pay for, furniture, office supplies, telephones, equipment or automobiles to a producer of title insurance, or paying for, or offering to pay for, any portion of the cost of renting, leasing, operating or maintaining any of these items. Marketing and title insurance promotional items clearly of an advertising nature of token or nominal value, or supplies such as title insurance application blanks and related forms are prohibited under this paragraph if they are made available to all producers of title insurance on the same terms and conditions.

(m) Paying for, furnishing, or waiving, or offering to pay for, furnish, or waive, all or any part of the rent for space occupied by a producer of title insurance.

(n) Renting or offering to rent space from a producer of title insurance, at a rent which is excessive when compared with rents for comparable space in the geographic area, or paying or offering to pay, rent based in whole or in part on the volume of business generated by a producer of title insurance except for a bona fide percentage lease based on the total volume of receipts of the title insurer when the services of that title insurer are offered from that location to the public generally.

(o) Paying or offering to pay for gifts, vacations, business trips, convention expenses, travel expenses, membership fees, registration fees, lodging or meals on behalf of a producer of title insurance, directly or indirectly, or supplying letters of credit, credit cards or any such benefits. This paragraph does not preclude reasonable, moderate and customary business entertainment and trade association activities and expense incurred and recorded by the title insurer or agent in the course of marketing its products and services.

(p) Paying or offering to pay money, prizes or other things of value to, or on behalf of, a producer of title insurance in a contest or promotional endeavor. This paragraph does not apply to offers or payments to trade associations or charitable or other functions where the thing of value is a contribution or donation rather than a business solicitation.

(q) Paying or offering to pay for advertising concerning the title insurer or agent in material distributed or promoted by a producer of title insurance, unless the payment is reasonable compensation for the advertising, is not greater than the amount charged for comparable advertising and any title insurer is permitted to advertise in the material on the same terms and conditions.

(r) Paying for or furnishing, or offering to pay for or furnish any brochures, billboards, or advertisements of a producer of title insurance, products or services appearing in newspapers, on the radio, or on television, or other advertising or promotional material published or distributed by, or on behalf of, a producer of title insurance.

(5) Referral of title insurance applications. For the purpose of sub. (3) (b), an application or order for title insurance is presumed to be referred to an agent by an affiliate producer of title insurance if the affiliated producer of title insurance acts as a broker, agent, lender, representative or attorney in the transaction which results in the application or order and the application was not referred to the affiliate producer by an unaffiliated producer of title insurance.

History

Cr. Register, December, 1975, No. 240, eff. 1-1-76; emerg. am. (1), (2) and (3) (a), eff. 6-22-76; am. (1) (2), (3) (a) and (4) (o), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) and (3) (a), Register, March, 1979, No. 279, eff. 4-1-79; am. (2), (3) (c) (intro.), (d), (4) (intro.), (e) to (p) and (r), renum. (3) (a) and (e) to be (3) (e) and (cm) and am., cr. (3) (intro.), (a), (am), (bm) and (c) 4., r. and recr. (3) (b), (4) (q) and (5), Register, November, 1986, No. 371, eff. 12-1-86; emerg. am. (4) (j), eff. 7-5-88; am. (4) (j), Register, October, 1988, No. 396, eff. 1-1-89; correction in (5) made under s. 13.93 (2m) (b) 7., Stats., Register December 2002 No. 564.

Wis. Admin. Code § Ins 3.33 Individual uniform application for health insurance {#sec-ins-3.33 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.33}

(1) Definitions. For purposes of this section:

(a) “Individual major medical health insurance policy” means a comprehensive health care plan offered by an insurer authorized to write individual health or disability insurance for an individual or family. Individual major medical health insurance policies excludes limited-scope dental and vision policies, specified disease policies, short-term medical, hospital indemnity, and other limited-benefit individual insurance products and policies issued by an association plan under a group policy that may be underwritten on an individual basis.

(b) “Individual uniform application” means the uniform questions and format for applications that are to be used by insurers offering individual major medical health insurance policies or certificates, including an individual major medical health insurance coverage provided through an association as individual coverage and underwritten on an individual basis and issued to individuals or families, as it appears as form OCI 26-503 in Appendix 1.

(2) Application format and requirements.

(a) In accordance with s. 601.41 (10), Stats., insurers offering individual major medical health insurance policies or certificates must use the questions in the same format as in form OCI 26-503 contained in Appendix 1 as the individual uniform application. The contents of the individual uniform application must not vary, except as permitted in sub. (3) (b), from the text or format including bold character, line spacing, the use of boxes around text and must use a type size of at least 10 points.

Note: A copy of the individual uniform application form OCI 26-503 (c. 06/2010), required in par. (a), may be obtained at no cost from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison, WI 53707-7873, or at the Office’s web address: oci.wi.gov.

(b) Insurers offering individual major medical health insurance policies or certificates must implement procedures and policies necessary to implement and utilize the individual uniform application.

(c) Insurers offering individual major medical health insurance policies or certificates must treat and accept a paper copy of the individual major medical health insurance application as an original provided the application is received by the insurer within 45 days from the date the application form was originally signed.

(3) Web-based applications.

(a) Insurers offering individual major medical health insurance policies or certificates that permit applicants to complete the application through the insurer’s web site may not automatically populate or fill in answers to health questions on the application. An applicant shall answer each question. Insurers may change the order of questions but may not alter the content of any question from the individual uniform application. Insurers must separately request that the applicant respond to questions or information identified in sub. (5). Insurers must send a paper copy of the completed application to the applicant. The paper copy of the completed application must be in the same format as appears in form OCI 26-503 as contained in Appendix 1 and comply with sub. (6).

(b) If the insurer requires additional or clarifying information related to a response provided on the individual uniform application, an insurer may ask those questions as part of gathering the information contained in sub. (5) or during a separate contact. Insurers must not gather information unrelated to responses requested on the individual uniform application. If an applicant discloses information that is not requested on the individual uniform application, an insurer must not use that information for purposes of underwriting or making a rescission or reformation decision.

(4) Telephonic applications.

(a) Insurers offering individual major medical health insurance policies or certificates may permit applicants to complete the application verbally with an authorized, licensed intermediary or with an employee of the insurer asking the applicant the questions. The intermediary or employee must ask the applicant each question on the uniform individual applicant including each health question. Insurers may change the order of questions but may not alter the content of any question from the individual uniform application. Insurers must separately request that the applicant respond to questions or information identified in sub. (5). Insurers must send a paper copy of the completed application to the applicant. The paper copy of the completed application must be in the same format as appears in form OCI 26-503 as contained in Appendix 1 and comply with sub. (6).

(5) Additional requirements.

(a) Insurers offering individual major medical health insurance policies or certificates must include a statement on the first page of the policy that the policy is guaranteed renewable except for the reasons stated s. 632.7495 (2), Stats.

(b) Insurers must include authorizations, releases, and notices compliant with state and federal law filed with the office as separate forms that will be presented with the individual uniform application but not considered a part of the application.

(c) Insurers may file a separate form information or election options for the applicant to select deductible, copayment, and coinsurance levels and elect, if applicable, provider networks. Additionally, insurers may include in the form premium payment options for the applicant to select.

(6) Underwriting. Insurers shall comply with the provisions of s. Ins 3.28, including the requirement to return an accepted application as described in s. Ins 3.28 (5) (d), when underwriting a submitted individual uniform application.

Note: This section first applies to policies issued after July 1, 2010.

History

CR 10-068: cr. Register December 2010 No. 660, eff. 1-1-11.

Wis. Admin. Code § Ins 3.34 Coverage of dependent {#sec-ins-3.34 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.34}

(1) Purpose. This section implements s. 632.885, Stats.

(2) Applicability.

(a) This section applies to disability insurance policies as defined at s. 632.895 (1) (a), Stats., that are issued or renewed on or after January 1, 2010, including individual health and group health benefit plans. It applies to limited–scope plans including vision and dental plans but does not include hospital indemnity, income continuation, accident-only benefits, long-term care and Medigap policies. This section also applies to self-insured health plans as defined at s. 632.745 (24), Stats.

(b) For a disability insurance policy covering employees who are affected by a collective bargaining agreement this coverage under this section first applies as follows:

If the collective bargaining agreement contains provisions consistent with this law or that are silent on dependent eligibility, coverage under this section first applies the earliest of any of the following; the date the disability insurance policy is issued or renewed on or after January 1, 2010, or the date the self-insured health plan is established, modified, extended or renewed on or after January 1, 2010.
If the collective bargaining agreement contains provisions inconsistent with this law, the coverage under this section first applies on the date the health policy is first issued or renewed or a self-insured health plan is first established, modified, extended, or renewed on or after the earlier of the date the collectively bargained agreement expires, or the date the collectively bargained agreement it is modified, extended or renewed.

(3) Definitions. In this section and for purposes of applying s. 632.885, Stats.:

(a) “Adult child” means a child of the applicant, enrollee or insured who meets the eligibility requirements of s. 632.885 (2), Stats., as applicable.

(b) “Premium contribution” means the amount the adult child is required to pay for coverage under the adult child’s employer-sponsored group health benefit plan or self-insured health plan.

(c) “Premium amount” means the additional amount the applicant or insured is required to pay for inclusion of the adult child under the applicant’s or insured’s health insurance policy or self-insured plan.

(4) Premium Determination. To determine whether an adult child meets the eligibility standard in s. 632.885 (2) (a) 3., Stats., the insurer or self-insured health plan must use only the following:

Note: 2011 Wis. Act 32 repealed s. 632.885 (2) (a) 1. to 3., Stats. See s. 632.885 (2) (a), Stats.

(a) The amount of the adult child’s premium contribution.

(b) The amount of the applicant’s or insured’s premium amount.

(5) Offer of coverage.

(a) On or after January 1, 2010, an insurer and self-insured health plan shall offer coverage to an adult child of an applicant or insured as a new entrant when the applicant or insured requests enrollment of the adult child no later than 30 days after the date the adult child first becomes eligible according to this section. It is solely the applicant’s or insured’s decision whether or not to add eligible adult children to the plan to the extent permitted by law.

(b) Insurers and self-insured health plans may not limit or otherwise restrict the offer of coverage to an eligible adult child by requiring any of the following:

The eligible adult child to have been previously covered as a dependent.
The eligible adult child to reside in this state.
The eligible adult child to demonstrate that he or she had previous creditable coverage.
The insured or applicant to have requested coverage for an eligible adult child the first time the child was eligible for coverage.

(c) Insurers offering individual disability insurance may individually rate the eligible adult child and apply preexisting condition waiting periods consistent with s. 632.76 (2) (ac) 2., Stats., and may apply elimination riders to the eligible adult child, but may not do either of the following:

Deny coverage to an eligible adult child when the applicant or insured requests coverage.
Otherwise limit coverage if such limitation results in coverage that is illusory.

(d) Insurers offering group disability insurance policies and self-insured health plans shall comply with all of the following:

May not deny coverage of an eligible adult child when coverage is requested by the applicant or insured.
Shall apply portability rights to an eligible adult child so long as the adult child has not had a break in creditable coverage longer than 62 days.
Shall comply with s. 632.746, Stats., as applicable.
May request documentation of the adult child’s creditable coverage for determining portability. The pre-existing condition waiting period applicable to the eligible adult child shall be applied to the adult child in the same manner as applied to any other applicant or eligible dependent.

(6) Eligible adult child.

(a) For purposes of this section and implementation of s. 632.885 (2), Stats., an adult child is eligible for coverage as a dependent if either of the following is met:

For an adult child who has not been called to federal active duty in the national guard or in a reserve component of the U.S. armed forces, either of the following:

a. An adult child who meets s. 632.885 (2) (a) 1., 2., and 3., Stats.

Note: 2011 Wis. Act 32 repealed s. 632.885 (2) (a) 1. to 3., Stats. See s. 632.885 (2) (a), Stats.

b. An adult child who meets s. 632.885 (2) (a) 1. and 2., Stats., and who is not eligible for his or her employer sponsored coverage or whose employer does not offer health insurance to its employees is an eligible adult child.

Note: 2011 Wis. Act 32 repealed s. 632.885 (2) (a) 1. to 3., Stats. See s. 632.885 (2) (a), Stats.

For an adult child who has been called to federal active duty in the national guard or in a reserve component of the U.S. armed forces and who meet s. 632.885 (2) (b) 1., 3., and 4., Stats., all of the following:

a. The adult child must apply to an institution of higher education as a full-time student within 12 months from the date the adult child has fulfilled his or her active duty obligation.

b. When an adult child is called to active duty more than once within a four-year period of time, the insurer and self-insured health plan must use the adult child’s age when first called to active duty for determining eligibility under this section.

History

EmR0930: emerg. cr. eff. 10-31-09; CR 09-076: cr. Register May 2010 No. 653, eff. 6-1-10; corrections in (title) and (6) (a) 1. b. made under s. 13.92 (4) (b) 2. and 7., Stats., Register May 2010 No. 653; correction in (6) (a) 2. made under s. 13.92 (4) (b) 7., Stats., Register March 2017 No. 735.

Wis. Admin. Code § Ins 3.35 Colorectal cancer screening coverage {#sec-ins-3.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.35}

(1) Applicability.

(a) This section applies to disability insurance policies as defined at s. 632.895 (1) (a), Stats., unless otherwise excepted in s. 632.895 (16m) (c), Stats., that are issued or renewed on or after December 1, 2010. This section applies to Medicare supplement and cost plans but does not include limited –scope plans including vision and dental, hospital indemnity, income continuation, accident-only benefits, and long-term care policies. This section also applies to self-insured health plans as defined at s. 632.745 (24), Stats.

(b) For a disability insurance policy and a self-insured health plan covering employees who are affected by a collective bargaining agreement the coverage under this section first applies as follows:

If the collective bargaining agreement contains provisions consistent with s. 632.895 (16m), Stats., coverage under this section first applies the earliest of any of the following: the date the disability insurance policy is issued or renewed on or after December 1, 2010, or the date the self-insured health plan is established, modified, extended or renewed on or after December 1, 2010.
If the collective bargaining agreement contains provisions inconsistent with s. 632.895 (16m), Stats., the coverage under this section first applies on the date the health benefit plan is first issued or renewed or a self-insured health plan is first established, modified, extended, or renewed on or after the earlier of the date the collectively bargained agreement expires, or the date the collectively bargained agreement is modified, extended, or renewed on or after December 1, 2010.

(2) Definitions. In addition to the definitions contained in s. 632.895 (1), Stats., for purposes of this section all the following apply:

(a) “Designated guideline” means the recommendations of the U.S. Preventive Services Task Force, the National Cancer Institute, or the American Cancer Society regarding colorectal cancer screening guidelines identified by the insurer or self-insured health plan for compliance.

(b) “Enrollee” means an insured or enrollee of a health plan subject to s. 632.895 (16m), Stats.

(c) “Self-insured health plan” means a self-insured governmental health plan offered by the state, county, city, village, town, or school district that provides coverage of any diagnostic or surgical procedure.

(3) Colorectal cancer screening guidelines and updates.

(a) Insurers may utilize one or more of the most current colorectal cancer screening guidelines issued by the U.S. Preventive Services Task Force, the National Cancer Institute, or the American Cancer Society as the basis for the coverage offered for preventive colorectal cancer screening tests and procedures. If an insurer or self-insured health plan elects to designate more than one guideline, the insurer or self-insured health plan shall specify the guideline that will be primary in the event of a conflict between the designated guidelines. Insurers shall provide notice of the selected guideline or guidelines and which guideline is primary in a prominent location within the plan summary and in the notice provided to insureds when a benefit is denied based upon the primary guideline.

(b) Insurers and self-insured health plans shall at least annually review the designated guidelines and incorporate modifications to be effective the first day of the subsequent plan year.

(4) Covered screening. Insurers offering disability insurance and self-insured health plans shall offer as a covered benefit the screening for colorectal cancer that may be subject to limitations, exclusions and cost-sharing provisions that generally apply under the plan and comply with all of the following:

(a) Insurers and self-insured health plans shall cover evidence-based, recommended preventive colorectal cancer screening tests or procedures contained in the most current version of the designated guideline.

(b) In accordance with the most current recommendations from the designated guideline for frequency of testing, insurers and self-insured health plans shall provide as a covered benefit, colorectal cancer screening tests or procedures for enrollees who are 50 years of age or older other than as provided for in sub. (5) (b). Medically appropriate or medically necessary covered screening tests or procedures shall at least include 3 of the following:

Fecal occult blood test.
Flexible sigmoidoscopy.
Colonoscopy.
Computerized tomographic colonography.

(c) Insurers and self-insured health plans may require the enrollee’s health care provider or the enrollee’s primary care provider to obtain prior authorization for screening tests or procedures when the screening test or procedure is not contained in the most current version of guideline recommendations designated by the insurer or self-insured health plan.

(d) Disputes regarding coverage of medically appropriate or medically necessary evidence-based screening tests or procedures are subject to internal grievance and independent review as provided by ch. Ins 18.

(5) Factors for high risk.

(a) In accordance with recommended factors for identifying persons at high risk for colorectal cancer developed by the American Cancer Society, insurers and self-insured health plans shall provide as a covered benefit evidence-based colorectal cancer screening tests and procedures at recommended ages and intervals for enrollees determined to be at high risk for developing colorectal cancer. Insurers and self-insured health plans that designated either the U.S. Preventive Services Task Force or the National Cancer Institute as the designated guideline may include additional high risk factors when the guidelines identify factors for persons at high risk for colorectal cancer. All insurers and self-insured health plans shall at a minimum consider all of the following factors, as appropriate, when determining whether an enrollee is at high risk for colorectal cancer:

Personal history of colorectal cancer, polyps or chronic inflammatory bowel disease.
Strong family history in a first-degree relative or two or more second-degree relatives of colorectal cancer or polyps.
Personal history or family history in a first or second-degree relative of hereditary colorectal cancer syndromes.
Other conditions, symptoms or diseases that are recognized as elevating one’s risk for colorectal cancer as determined by the U.S. Preventive Services Task Force, the National Cancer Institute or the American Cancer Society.

(b) Notwithstanding sub. (4) (b), insurers and self-insured health plans shall provide as a covered benefit evidence-based, recommended colorectal cancer screening tests or procedures for high risk enrollees no later than the earliest recommended age determined to be medically appropriate or medically necessary.

(c) Disputes regarding an enrollee’s status as being at high risk or factors to be considered as high risk for colon cancer are subject to internal grievance and independent review as provided by ch. Ins 18.

(6) Preventive services compliance. Notwithstanding s. 632.895 (16m), Stats., insurers and self-insured health plans shall comply with P.L. 111-148 and 45 CFR 147.130 relating to cost-sharing provisions of preventive services including colon cancer screening.

History

EmR1042: emerg. cr. eff. 11-29-10; CR 10-150: cr. Register June 2011 No. 666, eff. 7-1-11.

Wis. Admin. Code § Ins 3.36 Coverage of autism spectrum disorders {#sec-ins-3.36 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.36}

(1) Applicability.

(a) This section applies to disability insurance policies as defined in s. 632.895 (1) (a), Stats., except as provided in s. 632.895 (12m) (e), Stats., and self-insured health plans sponsored by the state, county, city, town, village, or school district.

(b) For a disability insurance policy covering employees who are affected by a collective bargaining agreement the coverage under this section first applies as follows:

If the collective bargaining agreement contains provisions consistent with s. 632.895 (12m), Stats., coverage under this section first applies the earliest of any of the following: the date the disability insurance policy is issued or renewed on or after November 1, 2009, or the date the self-insured health plan is established, modified, extended or renewed on or after November 1, 2009.
If the collective bargaining agreement contains provisions inconsistent with s. 632.895 (12m), Stats., the coverage under this section first applies on the date the health benefit plan is first issued or renewed or a self-insured health plan is first established, modified, extended, or renewed on or after the earlier of the date the collectively bargained agreement expires, or the date the collectively bargained agreement is modified, extended or renewed.

(2) Definitions. In addition to the definitions in s. 632.895 (12m) (a), Stats., in this section:

(a) “Behavior analyst” means a person certified by the Behavior Analyst Certification Board, Inc., or successor organization as a board-certified behavior analyst and has been granted a license under s. 440.312, Stats., to engage in the practice of behavior analysis.

(b) “Behavioral” means interactive therapies that target observable behaviors to build needed skills and to reduce problem behaviors using well-established principles of learning utilized to change socially important behaviors with the goal of building a range of communication, social and learning skills, as well as reducing challenging behaviors.

(d) “Efficacious treatment” or “efficacious strategy” means treatment or strategies designed to address cognitive, social or behavioral conditions associated with autism spectrum disorders; to sustain and maximize gains made during intensive-level services; or to improve an individual with autism spectrum disorder’s condition.

(e) “Evidence-based therapy” means therapy, service and treatment that is based upon medical and scientific evidence as described at s. 632.835 (3m) (b) 1., 2. (intro.) and a., Stats., and s. Ins 18.10 (4), is determined to be an efficacious treatment or strategy and is prescribed to improve the insured’s condition or to achieve social, cognitive, communicative, self-care or behavioral goals that are clearly defined within the insured’s treatment plan.

(f) “Intensive-level service” means evidence-based behavioral therapies that are directly based on, and related to, an insured’s therapeutic goals and skills as prescribed by a physician familiar with the insured. Intensive-level service may include evidence-based speech therapy and occupational therapy provided by a qualified therapist when such therapy is based on, or related to, an insured’s therapeutic goals and skills, and is concomitant with evidence-based behavioral therapy.

(g) “Qualified intensive-level professional” means an individual working under the supervision of an outpatient mental health clinic who is a licensed treatment professional as defined in s. DHS 35.03 (9g), and who has completed at least 2080 hours of training, education and experience including all of the following:

Fifteen hundred hours supervised training involving direct one-on-one work with individuals with autism spectrum disorders using evidence-based, efficacious therapy models.
Supervised experience with all of the following:

a. Working with families as part of a treatment team and ensuring treatment compliance.

b. Treating individuals with autism spectrum disorders who function at a variety of cognitive levels and exhibit a variety of skill deficits and strengths.

c. Treating individuals with autism spectrum disorders with a variety of behavioral challenges.

d. Treating individuals with autism spectrum disorders who have shown improvement to the average range in cognitive functioning, language ability, adaptive and social interaction skills.

e. Designing and implementing progressive treatment programs for individuals with autism spectrum disorders.

Academic coursework from a regionally-accredited higher education institution with demonstrated coursework in the application of evidence-based therapy models consistent with best practice and research on effectiveness for individuals with autism spectrum disorders.

(h) “Qualified intensive-level provider” means an individual identified in s. 632.895 (12m) (b) 1. to 4., Stats., acting within the scope of a currently valid state-issued license for psychiatry, psychology or behavior analyst, or a social worker acting within the scope of a currently valid state-issued certificate or license to practice psychotherapy, who provides evidence-based behavioral therapy in accordance with this section and s. 632.895 (12m) (a) 3., Stats., and who has completed at least 2080 hours of training, education and experience which includes all of the following:

Fifteen hundred hours supervised training involving direct one-on-one work with individuals with autism spectrum disorders using evidence-based, efficacious therapy models.
Supervised experience with all of the following:

a. Working with families as the primary provider and ensuring treatment compliance.

b. Treating individuals with autism spectrum disorders who function at a variety of cognitive levels and exhibit a variety of skill deficits and strengths.

c. Treating individuals with autism spectrum disorders with a variety of behavioral challenges.

d. Treating individuals with autism spectrum disorders who have shown improvement to the average range in cognitive functioning, language ability, adaptive and social interaction skills.

e. Designing and implementing progressive treatment programs for individuals with autism spectrum disorders.

Academic coursework from a regionally-accredited higher education institution with demonstrated coursework in the application of evidence-based therapy models consistent with best practice and research on effectiveness for individuals with autism spectrum disorders.

(i) “Qualified paraprofessional” means an individual working under the active supervision of a qualified supervising provider, qualified intensive-level provider or qualified provider and who complies with all of the following:

Is at least 18 years of age.
Obtains a high school diploma.
Completes a criminal background check.
Obtains at least 20 hours of training that includes subjects related to autism, evidence-based treatment methods, communication, teaching techniques, problem behavior issues, ethics, special topics, natural environment, and first aid.
Obtains at least ten hours of training in the use of behavioral evidence-based therapy including the direct application of training techniques with an individual who has autism spectrum disorder present.
Receives regular, scheduled oversight by a qualified supervising provider in implementing the treatment plan for the insured.

(j) “Qualified professional” means an individual identified in s. 632.895 (12m) (b) 5., Stats., acting under the supervision of an outpatient mental health clinic certified under s. 51.038, Stats., acting within the scope of a currently valid state-issued license and who provides evidence-based therapy in accordance with this section.

(k) “Qualified provider” means an individual identified in s. 632.895 (12m) (b) 1. to 4., Stats., respectively, acting within the scope of a currently valid state-issued license for psychiatry, psychology or behavior analyst, or a social worker acting within the scope of a currently valid state-issued certificate or license to practice psychotherapy and who provides evidence-based therapy in accordance with this section.

(L) “Qualified supervising provider” means an individual who is a qualified intensive-level provider and who has completed at least 4160 hours of experience as a supervisor of less experienced providers, professionals and paraprofessionals.

(m) “Qualified therapist” means an individual identified in s. 632.895 (12m) (b) 6. or 7., Stats., who is either a speech-language pathologist or occupational therapist acting within the scope of a currently valid state-issued license and who provides evidence-based therapy in accordance with this section, sub. (4) (e).

(n) “Supervision of an outpatient mental health clinic” for purposes of this section means an individual who meets the requirements of a qualified supervising provider and who periodically reviews all treatment plans developed by qualified professionals for insureds with autism spectrum disorders.

(o) “Waiver program” means services provided by the department through the Medicaid Home and Community-Based Services as granted by the Centers for Medicare & Medicaid Services.

(3) Verified diagnosis.

(a) Insurers and self-insured health plans shall provide coverage for services to an insured who has a primary verified diagnosis of autism spectrum disorder made by a diagnostician skilled in testing and in the use of empirically-validated tools specific for autism spectrum disorders.

(b) Insurers and self-insured health plans shall accept as valid and provide coverage for the diagnostic testing in addition to the benefit mandated by s. 632.895 (12m), Stats. For the diagnosis to be valid for autism spectrum disorder, the testing tools shall be appropriate to the presenting characteristics and age of the insured and be empirically validated for autism spectrum disorders to provide evidence that the insured meets the criteria for autism spectrum disorder in the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association. Insurers and self-insured health plans may require confirmation of a primary diagnosis through completion of empirically-validated tools or tests from each of the following categories: intelligence, parent report, language skills, adaptive behavior, and direct observation of the child.

(c) An insurer and a self-insured health plan may require an insured to obtain a second opinion from a diagnostician experienced in the use of empirically-validated tools specific for autism spectrum disorders who is mutually agreeable to the insured or the insured’s parent or authorized representative and to the insurer or self-insured health plan. An insurer and a self-insured health plan shall cover the cost of the second opinion and the cost of the second opinion shall be in addition to the benefit mandated by s. 632.895 (12m), Stats.

(d) Insurers and self-insured health plans may require that the assessment include both a standardized parent interview regarding current concerns and behavioral history as well as direct, structured observation of social and communicative behavior and play. The diagnostic evaluation shall also assess those factors that are not specific to autism spectrum disorders including degree of language impairment, cognitive functioning, and the presence of nonspecific behavioral disorders.

(4) Intensive-level services.

(a) Coverage for intensive-level services. Insurers and self-insured health plans shall provide coverage for evidence-based behavioral intensive-level therapy for an insured with a verified diagnosis of autism spectrum disorder, the majority of which shall be provided to the insured when the parent or legal guardian is present and engaged and all of the prescribed therapy is consistent with all of the following requirements:

Based upon a treatment plan developed by an individual who at least meets the requirements of a qualified intensive-level provider or a qualified intensive-level professional that includes at least 20 hours per week over a six-month period of time of evidence-based behavioral intensive therapy, treatment, and services with specific cognitive, social, communicative, self-care, or behavioral goals that are clearly defined, directly observed and continually measured and that address the characteristics of autism spectrum disorders. Treatment plans shall require that the insured be present and engaged in the intervention.
Implemented by qualified providers, qualified professionals or qualified therapists, or qualified paraprofessionals.
Provided in an environment most conducive to achieving the goals of the insured’s treatment plan.
Implemented identified therapeutic goals developed by the team including training and consultation, participation in team meetings and active involvement of the insured’s family.
Commenced after an insured is two years of age and before the insured is nine years of age.
Provided by a qualified intensive-level provider or qualified intensive-level professional who directly observes the insured at least once every two months.

(b) Forty-eight cumulative months. Insurers and self-insured health plans shall provide up to forty-eight months of intensive-level services. Insurers and self-insured health plans may credit against the required forty-eight months of intensive-level services any previous intensive-level services the insured received regardless of payor. Insurers and self-insured health plans may require documentation including medical records and treatment plans to verify any evidence-based behavioral therapy the insured received for autism spectrum disorders that was provided to the insured prior to the insured attaining nine years of age. Insurers and self-insured health plans may consider any evidence-based behavioral therapy that was provided to the insured for an average of 20 or more hours per week over a continuous six-month period to be intensive-level services.

(c) Travel. Insurers and self-insured health plans shall not include coverage of travel time for qualified providers, qualified supervising providers, qualified professionals, qualified therapists or qualified paraprofessionals when calculating the number of hours of care provided per week and are not required to separately reimburse for travel time.

(d) Progress assessment. Insurers and self-insured health plans shall require that progress be assessed and documented throughout the course of treatment. Insurers and self-insured health plans may request and review the insured’s treatment plan and the summary of progress on a periodic basis.

(e) Concomitant therapy. Insurers and self-insured health plans shall provide coverage pursuant to s. 632.895 (12m) (c), Stats., for a qualified therapist when services are rendered concomitant with intensive-level evidence-based behavioral therapy and all of the following:

The qualified therapist provides evidence-based therapy to an insured who has a primary diagnosis of an autism spectrum disorder.
The insured is actively receiving behavioral services from a qualified intensive-level provider or qualified intensive-level professional.
The qualified therapist develops and implements a treatment plan consistent with their license and this section.

(5) Nonintensive-level services.

(a) Coverage for nonintensive-level services. Insurers and self-insured health plans shall provide coverage for an insured with a verified diagnosis of autism spectrum disorder for nonintensive-level services that are evidence-based and that are provided to an insured by a person who is at least a qualified provider, a qualified professional, a qualified therapist or a qualified paraprofessional in either of the following conditions:

After the completion of intensive-level services and designed to sustain and maximize gains made during intensive-level services treatment.
To an insured who has not and will not receive intensive-level services but for whom nonintensive-level services will improve the insured’s condition.

(b) Requirements for coverage. Insurers and self-insured health plans shall provide coverage for evidence-based therapy that is consistent with all of the following requirements:

Based upon a treatment plan developed by an individual who minimally meets the requirements as a qualified provider, a qualified professional or a qualified therapist that includes specific evidence-based therapy goals that are clearly defined, directly observed and continually measured and that address the characteristics of autism spectrum disorders. Treatment plans shall require that the insured be present and engaged in the intervention.
Implemented by a person who is at least a qualified provider, qualified professional, qualified therapist, or a qualified paraprofessional.
Provided in an environment most conducive to achieving the goals of the insured’s treatment plan.
Implements identified therapeutic goals developed by the team including training and consultation, participation in team meetings and active involvement of the insured’s family.

(c) Services. Insurers and self-insured health plans shall provide coverage for nonintensive-level services that may include direct or consultative services when provided by qualified providers, qualified supervising providers, qualified professionals, qualified therapists, or qualified paraprofessionals.

(e) Travel. Insurers and self-insured health plans shall not include coverage of travel time by qualified providers, qualified supervising providers, qualified professionals, qualified therapists or qualified paraprofessionals when calculating the number of hours of care provided per week and are not required to separately reimburse for travel time.

(6) Transition to nonintensive-level services.

(a) Notice of transition by insurer. Insurers and self-insured plans shall provide notice to the insured or the insured’s authorized representative regarding change in an insured’s level of treatment. The notice shall indicate the reason for transition that may include any of the following:

The insured has received forty-eight cumulative months of intensive-level services.
The insured no longer requires intensive-level services as supported by documentation from a qualified supervising provider, qualified intensive-level provider, or a qualified intensive-level professional.
The insured no longer receives evidence-based behavioral therapy for at least 20 hours per week over a six-month period of time.

(b) Notice of break in service by insured. Insurers and self-insured plans may require an insured or an insured’s authorized representative to promptly notify the insurer or self-insured plan if the insured requires and qualifies for intensive-level services but the insured or the insured’s family or caregiver is unable to receive intensive-level services for an extended period of time. The insured or the insured’s authorized representative shall indicate the specific reason or reasons the insured or the insured’s family or caregiver is unable to comply with an intensive-level service treatment plan. Reasons for requesting intensive-level services be interrupted for an extended period of time may include a significant medical condition, surgical intervention and recovery, catastrophic event or any other reason the insurer or self-insured plan determines to be acceptable.

(c) Documentation. Insurers and self-insured plans may not deny intensive-level services to an insured for failing to maintain at least 20 hours per week of evidence-based behavioral therapy over a six-month period when the insured or the insured’s authorized representative complied with par. (b) or the insured or the insured’s authorized representative can document that the insured failed to maintain at least 20 hours per week of evidence-based behavioral therapy due to waiting for waiver program services.

(7) Notice to insureds. Insurers and self-insured plans shall provide written notice regarding claims submitted and processed for the treatment of autism spectrum disorders to the insured or insured’s parents or authorized representative and include the total amount expended to date for the current policy year. The notice may be included with the explanation of benefits form or in a separate communication provided on a periodic basis during the course of treatment.

(8) Research that is the basis for efficacious treatment or efficacious strategies. Research designs that are sufficient to demonstrate that a treatment or strategy when used solely or in combination with other treatments or strategies, is effective in addressing the cognitive, social, and behavioral challenges associated with autism spectrum disorders demonstrates significant improvement shall include at least one of the following:

(a) Two or more high quality experimental or quasi-experimental group design studies that meet all of the following criteria:

A clearly defined population for whom inclusion criteria have been delineated in a reliable, valid manner.
Outcome measures with established reliability and construct validity.
Independent evaluators who are not aware of the particular treatment utilized.

(b) Five or more single subject design studies that meet all of the following criteria:

Studies must have been published in a peer-reviewed scientific or medical journal.
Studies must have been conducted by three different researchers or research groups in three different geographical locations.
The body of studies must have included 20 or more participants.

(c) One high quality randomized or quasi-experimental group design study that meets all of the criteria in par. (a) and three high-quality single-subject design studies that meet all of the criteria in par. (b).

(9) Disputes. An insurer’s or a self-insured health plan’s determination regarding diagnosis and level of service may be considered an adverse determination if the insured disagrees with the determination. The insured or the insured’s authorized representative may file a grievance in accordance with s. Ins 18.03. The insured or the insured’s authorized representative may seek independent review of the coverage denial determination in accordance with s. Ins 18.11.

(10) Non-required coverage.

(a) Services. Insurers and self-insured health plans are not required to cover any of the following:

Acupuncture.
Animal-based therapy including hippotherapy.
Auditory integration training.
Chelation therapy.
Child care fees.
Cranial sacral therapy.
Custodial or respite care.
Hyperbaric oxygen therapy.
Special diets or supplements.

(b) Drugs and devices. Insurers and self-insured health plans shall not provide coverage for pharmaceuticals or durable medical equipment through s. 632.895 (12m), Stats. Coverage of pharmaceuticals and durable medical equipment shall be covered in compliance with the terms of the insured’s policy.

(c) Fraudulent claims. Insurers and self-insured health plans shall not be required to pay claims that have been determined to be fraudulent.

(d) Parents of children diagnosed with autism spectrum disorders. Insurers and self-insured health plans shall not be required to pay for treatment rendered by parents or legal guardians who are otherwise qualified providers, qualified supervising providers, qualified therapists, qualified professionals or qualified paraprofessionals for treatment rendered to their own children.

(e) Denial of coverage. If an insurer or self-funded health plan generally provides benefits for an illness or injury, the insurer or self-funded health plan may not deny benefits otherwise provided for treatment of that illness or injury solely because the illness or injury relates to the insured’s autism spectrum disorder.

(11) Locations for services.

(a) Insurers and self-insured health plans shall cover treatments, therapies and services to an insured diagnosed with autism spectrum disorders in locations including the provider’s office, clinic or in a setting conducive to the acquisition of the target skill. Treatments may be provided in schools when they are related to the goals of the treatment plan and do not duplicate services provided by a school.

(b) Insurers and self-insured health plans are not required to cover therapy, treatment or services when provided to an insured who is residing in a residential treatment center, inpatient treatment or day treatment facility.

(c) Insurers and self-insured health plans are not required to cover the cost for the facility or location or for the use of a facility or location when treatment, services or evidence-based therapy are provided outside an insured’s home.

(12) Annual publication CPI adjustment. The commissioner shall publish to the office of the commissioner of insurance website on or before December 1 of each year beginning December 1, 2011, the consumer price index for urban consumers as determined by the U.S. Department of Labor and publish the adjusted dollar amount in accordance with s. 632.895 (12m) (c) 1., Stats. The adjusted dollar amount published each December shall be used by insurers and self-insured health plans when complying with s. 632.895 (12m), Stats., effective the following January 1 for newly issued policies or on the first date of a modified, extended or renewed policy or certificate after January 1.

(14) Verification of service providers.

(a) Insurers and self-insured health plans are required to verify the licensure, certification and all training or other credentials of a qualified supervising or intensive-level provider, a qualified provider and a qualified therapist.

(b) Insurers and self-insured health plans shall require the following:

All service providers employing qualified paraprofessionals to verify the qualified paraprofessional’s credentials and to document that such employee or contractee has not been convicted of a felony or any crime involving maltreatment of a child in any jurisdiction and to periodically review and verify continuing compliance with this paragraph.
Certified outpatient mental health clinics employing or contracting for the services of qualified intensive-level professionals or qualified professionals to verify the credentials of a qualified intensive-level professional or qualified professional and to document that such employee or contractee has not been convicted of a felony or any crime involving maltreatment of a child in any jurisdiction and to periodically review and verify continuing compliance with this paragraph.

(c) A provider, therapist, or professional working under the supervision of a certified outpatient mental health clinic, who is approved by the department and who has a signed Medicaid provider agreement to provide services through the waiver program to individuals with autism spectrum disorders prior to November 1, 2009 shall be deemed to be a qualified intensive-level provider or qualified intensive-level professional through October 31, 2011. Beginning November 1, 2011 any provider, therapist or professional shall comply with the training and education requirements for a qualified supervising provider, qualified intensive-level provider, qualified provider, qualified intensive-level professional, qualified professional or qualified therapist.

(d) An insurer or self-insured health plans may elect to contract with certain providers, therapists and professionals who do not meet all of the requirements necessary to be considered qualified supervising providers, qualified intensive-level providers, qualified providers, qualified therapists, qualified intensive-level professionals or qualified professionals but who are approved by the department and who have a signed Medicaid provider agreement to provide services through the waiver program to individuals with autism spectrum disorders and who meet any criteria established by the insurer or self-insured health plan. The insurer or self-insured health plans shall have a verifiable and established process for rendering its determination for otherwise qualified supervising provider, qualified intensive-level provider, qualified provider, qualified intensive-level professional, qualified professional or qualified therapist.

History

EmR1005: emerg. cr. eff. 3-8-10; CR 10-043: cr. Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 3.37 Transitional treatment arrangements {#sec-ins-3.37 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.37}

(1) Purpose. This section implements s. 632.89 (4) (a), Stats.

(2) Applicability.

(a) This section applies to group and blanket disability insurance policies issued or renewed on and after November 1, 1992, and prior to December 1, 2010, and group health benefit plans and self-insured governmental plans that elect and are eligible to be exempt pursuant to s. 632.89 (3c), (3f) or (5), Stats., that provide coverage for inpatient hospital services or outpatient services, as defined in s. 632.89 (1) (d) or (e), Stats. Group and blanket disability insurance policies and exempted group health benefit plans and self-insured governmental plans shall cover transitional treatment services and comply with subs. (2m), (3), (4), and (5).

(b) Policies issued on or after December 1, 2010, by a group health benefit plan and a self-insured governmental health plan that are not otherwise exempt under s. 632.89 (3c), (3f) or (5), Stats., shall comply with subs. (2m), (3m), (4m), and (5m).

(2m) Definitions. In addition to the definitions in s. 632.89 (1), Stats., in this section:

(a) “Individual health benefit plan” means an insurance product offered on an individual basis that meets the criteria established for a health benefit plan in s. 632.745 (11), Stats.

(b) “Eligible employee” has the meaning provided in s. 632.745 (5), Stats.

(c) “Qualified actuary” means a member in good standing of the American Academy of Actuaries who meets any other requirements that the commissioner may by rule specify as defined in s. 623.06 (1) (h), Stats., and in accordance with s. 632.89 (3c) (b), Stats.

(d) “Self-insured governmental plan” has the meaning of a self-insured health plan as defined at s. 632.89 (1) (em), Stats.

(e) “Substance use disorder” has the same meaning as “alcoholism and other drug abuse problems” as the phrase appears throughout s. 632.89, Stats.

(f) “Substantially all” has the meaning as provided in 29 CFR 2590.712 (a).

(g) “Treatment limitations” means the limitations that insurers offering group or individual health benefit plans and self-insured governmental plans may impose on treatment of nervous and mental disorders and substance use disorders as described in s. 632.89 (3), Stats.

(3) Covered services. An insurer offering a policy subject to this subsection shall provide at least the amount of coverage required under s. 632.89 (2) (dm) 2., 2007 Stats., subject to the exclusions or limitations, including deductibles and copayments, that are generally applicable to coverage required under s. 632.89 (2), 2007 Stats., for all of the following:

(a) Mental health services for adults in a day treatment program compliant with the services identified at s. DHS 61.75 (2) and offered by a provider certified by the department of health services under s. DHS 61.75.

(b) Mental health services for children and adolescents in a day treatment program compliant with the services identified at s. DHS 40.11 and offered by a provider certified by the department of health services under s. DHS 40.04.

(c) Services for persons with chronic mental illness provided through a community support program compliant with the services identified at s. DHS 63.11 and certified by the department of health services under s. DHS 63.03.

(d) Residential treatment programs compliant with the services identified at s. DHS 75.14 (1), for alcohol or drug dependent persons, or both, certified by the department of health services under s. DHS 75.14 (2) and under supervision as required in s. DHS 75.14 (5).

(e) Services for substance use disorders provided in a day treatment program compliant with the services identified at s. DHS 75.12 (1), certified by the department of health services under s. DHS 75.12 (2) and under supervision as required in s. DHS 75.12 (5).

(f) Intensive outpatient programs for narcotic treatment services for opiate addiction compliant with the services under s. DHS 75.15 (1) and (9), certified by the department of health services under s. DHS 75.15 (2) and under supervision as required in s. DHS 75.15 (4).

(g) Coordinated emergency mental health services for persons who are experiencing a mental health crisis or who are in a situation likely to turn into a mental health crisis if support is not provided. Services are provided by a program compliant with s. DHS 34.22, certified by the department of health services under s. DHS 34.03, and provided in accordance with subch. III of ch. DHS 34 for the period of time the person is experiencing a mental health crisis until the person is stabilized or referred to other providers for stabilization. Certified emergency mental health service plans shall provide timely notice to third-party payors to facilitate coordination of services for persons who are experiencing or are in a situation likely to turn into a mental health crisis.

(3m) Covered Services. An insurer offering a group health benefit plan or a self-insured governmental plan subject to this subsection shall provide at least the amount of coverage for services included in s. 632.89 (2) (dm), Stats., subject to the exclusions or limitations, including deductibles and copayments, that are generally applicable to coverage required under s. 632.89 (3), Stats., for all of the following:

(f) Intensive outpatient programs for narcotic treatment service for opiate addiction compliant with the services under s. DHS 75.15 (1) and (9), certified by the department of health services under s. DHS 75.15 (2) and under supervision as required in s. DHS 75.15 (4).

(4) Out-of-state services and programs. An insurer offering a group and blanket disability plan or exempt group health benefit plans and self-insured governmental plans may comply with sub. (3) (a) to (g) by providing coverage for services and programs that are substantially similar to those specified in sub. (3) (a) to (g), if the provider is in compliance with similar requirements of the state in which the provider is located.

(4m) Out-of-state Services And Programs. An insurer offering a group health benefit plan and self-insured governmental health plan may comply with sub. (3m) (a) to (g) by providing coverage for services and programs that are substantially similar to those specified in sub. (3m) (a) to (g), if the provider complies with similar requirements of the state in which the provider is located.

(5) Policy form requirements. An insurer offering a group and blanket disability plan or exempt group health benefit plans and self-insured governmental plans shall specify in each policy form all of the following:

(a) The types of transitional treatment programs and services covered by the policy as specified in sub. (3).

(b) The method the insurer uses to evaluate a transitional treatment program or service to determine if it is medically necessary and covered under the terms of the policy.

(5m) Policy Form Requirements. An insurer offering a group health benefits plan and self-insured governmental health plan shall specify in each policy form all of the following:

(a) The types of transitional treatment programs and services covered by the policy as specified in sub. (3m).

(b) The method the insurer and the self-insured governmental health plan uses to evaluate a transitional treatment program or service to determine if it is medically necessary and covered under the terms of the policy.

History

Emerg. cr. eff. 9-29-92; cr. Register, February, 1993, No. 446, eff. 3-1-93; corrections made under s. 13.93 (2m) (b) 6. and 7., Stats., Register, June, 1997, No. 498; correction in (3) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, July, 2000, No. 535; CR 02-051: am. (3) (intro.), (b), (d) and (e), cr. (3) (g) Register December 2002 No. 564, eff. 1-1-03; corrections in (3) (a) to (e) and (g) made under s. 13.92 (4) (b) 6. and 7., Stats., Register October 2008 No. 634; EmR1043: emerg. am. (1) to (4) and (5) (intro.), cr. (2m), (3m), (4m) and (5m) eff. 11-29-10; CR 10-149: am. (1) to (4) and (5) (intro.), cr. (2m), (3m), (4m) and (5m) Register June 2011 No. 666, eff. 7-1-11; correction in (2m) (c) made under s. 13.92 (4) (b) 7., Stats., Register March 2017 No. 735.

Wis. Admin. Code § Ins 3.375 Coverage of nervous and mental disorders and substance use disorders {#sec-ins-3.375 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.375}

(1) Purpose. This section interprets and implements s. 632.89, Stats.

(2) Applicability.

(a) This section applies to group health benefit plans as defined in s. 632.745 (9), Stats., health benefit plans as defined in s. 632.745 (11), Stats., and self-insured governmental health plans unless otherwise excluded pursuant to s. 632.89 (5), Stats.

(b) For group health benefit plans and self-insured governmental plans covering employees who are affected by a collective bargaining agreement, the coverage under this section applies as follows:

If the collective bargaining agreement contains provisions consistent with s. 632.89, Stats., the coverage under this section first applies on the earliest of any of the following: the date the group health benefit plan is issued or renewed on or after December 1, 2010, or the date the self-insured governmental health plan is established, modified, extended or renewed on or after December 1, 2010.
If the collective bargaining agreement contains provisions inconsistent with s. 632.89, Stats., the coverage under this section applies on the earliest of any of the following: the date the collective bargaining agreement expires, or the date the collective bargaining agreement is extended, modified, or renewed.

(3) definitions. In addition to the definitions in s. 632.89 (1), Stats., the definitions in s. Ins 3.37 (2m), shall also apply to this section.

(4) Individual Health Benefit Plans.

(a) An insurer offering a health benefit plan on an individual basis that provides benefit coverage for the treatment of nervous and mental disorders or substance use disorders shall provide their criteria for determining medical necessity for coverage upon request and provide a detailed explanation of the reason for a benefit denial to the insured or the insured’s authorized representative. The detailed explanation shall be in addition to the explanation of benefits required pursuant to s. 632.857, Stats.

(b) Insurers offering individual health benefit plans that provide coverage of the treatment of nervous and mental disorders or substance use disorders may impose treatment limitations if the treatment limitations are no more restrictive than the most common or frequent type of treatment limitations applied to substantially all other coverage under the plan and in accordance with s. 632.89 (2), Stats., 29 CFR 2590.712, and s. 2707 (a) of Pub. L. 111-148, as applicable.

(c) Expenses incurred for the treatment of nervous and mental disorders or substance use disorders shall be included in any overall deductible amount, annual, lifetime, or out-of-pocket limits for the plan.

(5) Limitations.

(a) Insurers offering group health benefit plans and self-insured governmental health plans that provide coverage of the treatment of nervous and mental disorders, and substance use disorders may impose treatment limitations. If treatment limitations are utilized by an insurer or self-insured governmental plan than the treatment limitations shall be no more restrictive than the most common or frequent type of treatment limitations applied to substantially all other coverage under the plan, in accordance with this section, s. 632.89 (2), Stats., 29 CFR 2590.712, and s. 2707 (a) of Pub. L. 111-148, as applicable.

(b) Expenses incurred for the treatment of nervous and mental disorders and substance use disorders shall be included in any overall deductible amount, annual, lifetime, or out-of-pocket limits for the plan.

(6) Increased Cost Exemption.

(a) Solely claims-experience rated employer. At the request of an employer that is solely claims experience rated, an insurer offering a group health benefit plan shall have a qualified actuary determine whether the employer is eligible for a cost exemption based on the actual group claims experience in accordance with s. 632.89 (3c), Stats. Insurers may require employers to give at least 90-days advance notice to the insurer from the employer’s renewal date for obtaining the determination.

The insurer shall request that the qualified actuary prepare an actuarial determination, provide copies of the actuarial determination and all underlying documents that the actuary relied upon in making the determination to the insurer. The insurer shall provide the actuary’s determination to the employer within 45 days of the employer’s request.
The insurer shall be responsible for all expenses related to the actuarial cost increase determination and certification.
Both the insurer and the employer shall maintain the actuarial determination and underlying documentation for a period of not less than five years and in accordance with s. Ins 6.80.

(b) Combined pooled and claims experience rated employer. An insurer offering a group health benefit plan shall have a qualified actuary determine whether the employer is eligible for an exemption in accordance with either of the following:

For an employer that is predominantly rated based on both its own claims experience and has less than 51 percent of the claims experience pooled with other group health plans, the calculation is to be based on the proportionate share applied due to actual group claims experience and the share applied due to the pooled experience and in accordance with s. 632.89 (3c), Stats. Insurers may require employers to give at least 90-days advance notice to the insurer from the employer’s renewal date for obtaining the determination.

a. The insurer shall request that the qualified actuary prepare an actuarial determination, provide copies of the actuarial determination and all underlying documents that the actuary relied upon in making the determination to the insurer. The insurer shall provide the actuary’s determination to the employer within 45 days of the employer’s request.

b. The insurer shall be responsible for all expenses related to the actuarial cost increase determination and certification.

c. Both the insurer and the employer shall maintain the actuarial determination and underlying documentation for a period of not less than five years and in accordance with s. Ins 6.80.

For an employer that is predominantly rated based on claims experience pooled with other group health benefit plans that constitutes 51 percent or more of the claims experience, the insurer shall have a qualified actuary determine whether the pooled group is eligible for an exemption calculated based on the pool’s claims experience and in accordance with s. 632.89 (3c), Stats. Insurers may require employers give at least 30-days advance notice to the insurer from the employer’s renewal date for obtaining the determination.

a. The insurer shall have a qualified actuary calculate one time each year a determination of whether the employers participating within the pool are eligible for a cost exemption.

b. The insurer shall be responsible for all expenses related to the actuarial cost increase determination and certification.

c. The insurer shall provide a copy of the actuary’s determination to an employer within 15 days of the employer’s request. The insurer shall provide a date on which the actuarial determination will be available annually. The insurer shall maintain the actuarial determination and underlying documentation for a period of not less than five years and in accordance with s. Ins 6.80.

(c) Prior and succeeding insurers. During the first year after an employer changes insurers offering group health benefit plans, the succeeding insurer shall accept as accurate and may rely upon the prior insurer’s determination of eligibility for cost exemption. A succeeding insurer shall provide the prior insurer’s calculation to the employer following a timely request for purposes of calculating the employer’s eligibility for a cost exemption.

(d) Notice of election. An insurer offering a group health benefit plan or a self-insured governmental health plan shall provide the applicable notice to the employer who qualifies for and elects an increased cost exemption under s. 632.89 (3c), Stats. The insurer shall inform the employer to notify promptly all enrollees under the plan of the exemption not to exceed 30-days following the cost increase determination and exemption election.

The notice shall be in substantially the form outlined in Appendix 2, using a standard typeface with at least a 10-point font, indicating the exemption election and that the plan will comply with benefit coverage requirements contained in s. 632.89 (2), 2007 Stats.
The notice shall be provided to each plan enrollee in either electronic or paper form.
The notice shall also be posted in a prominent position in each workplace of the employer.

(7) Small Employer Exemption.

(a) Employer request. An employer having fewer than 10 eligible employees on the first day of the plan year may elect an exemption from compliance with s. 632.89, Stats. An insurer offering a group health benefit plan or self-funded government plan shall inform the employer that in lieu of those requirements, the plan may cover benefits for nervous and mental disorders and substance use disorders in accordance with the requirements contained in s. 632.89 (2), 2007 Stats.

(b) Notice of election. An insurer offering a group health benefit plan or a self-insured governmental health plan shall provide the applicable notice to the employer who qualifies for and elects the small employer exemption under s. 632.89 (3f), Stats. The insurer shall inform the employer to notify promptly all enrollees under the plan of the exemption not to exceed 30 days from the employer’s determination to elect exemption. The notice shall comply with all of the following:

The notice shall be in substantially the form outlined in Appendix 1, using a standard typeface with at least a 10-point font, indicating the exemption election and that the plan will cover benefits for nervous and mental disorders and substance use disorders in accordance with the requirements contained in s. 632.89 (2), 2007 Stats.
The notice shall be provided to each plan enrollee in either electronic or paper form.
The notice shall be posted in a prominent position in each workplace of the employer.

History

EmR1043: emerg. cr., eff. 11-29-10; CR 10-149: cr. Register June 2011 No. 666, eff. 7-1-11.

Wis. Admin. Code § Ins 3.38 Coverage of newborn infants {#sec-ins-3.38 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.38}

(1) Purpose. This section is intended to interpret and implement s. 632.895 (5), Stats.

(2) Interpretation and implementation.

(a) Coverage of each newborn infant is required under a disability insurance policy if:

The policy provides coverage for another family member, in addition to the insured person, such as the insured’s spouse or a child, and
The policy specifically indicates that children of the insured person are eligible for coverage under the policy.

(b) Coverage is required under any type of disability insurance policy as described in par. (a), including not only policies providing hospital, surgical or medical expense benefits, but also all other types of policies described in par. (a), including accident only and short term policies.

(c) The benefits to be provided are those provided by the policy and payable, under the stated conditions except for waiting periods, for children covered or eligible for coverage under the policy.

(d) Benefits are required from the moment of birth for covered occurrences, losses, services or expenses which result from an injury or sickness condition, including congenital defects and birth abnormalities of the newborn infant to the extent that such covered occurrences, losses, services or expenses would not have been necessary for the routine postnatal care of the newborn child in the absence of such injury or sickness. In addition, under a policy providing coverage for hospital confinement and/or in-hospital doctor’s charges, hospital confinement from birth continuing beyond what would otherwise be required for a healthy baby (e.g. 5 days) as certified by the attending physician to be medically necessary will be considered as resulting from a sickness condition.

(e) If a disability insurance policy provides coverage for routine examinations and immunizations, such coverage is required for covered children from the moment of birth.

(f) An insurer may underwrite a newborn, applying the underwriting standards normally used with the disability insurance policy form involved, and charge a substandard premium, if necessary, based upon such underwriting standards and the substandard rating plan applicable to such policy form. The insurer shall not refuse initial coverage for the newborn if the applicable premium, if any, is paid as required by s. 632.895 (4) (c), Stats. Renewal coverage for a newborn shall not be refused except under a policy which permits individual termination of coverage and only as such policy’s provisions permit.

(g) An insurer receiving an application, for a policy as described in par. (a) providing hospital and/or medical expense benefits, from a pregnant applicant or an applicant whose spouse is pregnant, may not issue such a policy to exclude or limit benefits for the expected child. Such a policy must be issued without such an exclusion or limitation, or the application must be declined or postponed.

(h) Coverage is not required for the child born, after termination of the mother’s coverage, to a female insured under family coverage who is provided extended coverage for pregnancy expenses incurred in connection with the birth of such child.

(i) A disability insurance policy described in par. (a) shall contain the substance of s. 632.895 (5), Stats.

(j) Policies issued or renewed on or after November 8, 1975, and before May 5, 1976, shall be administered to comply with s. 204.325, Stats., contained in chapter 98, Laws of 1975. Policies issued or renewed on or after May 5, 1976, and before June 1, 1976, shall be administered to comply with s. 632.895 (5), Stats., contained in chapter 224, Laws of 1975. Policies issued or renewed on or after June 1, 1976, shall be amended to comply with the requirements of s. 632.895 (5), Stats.

History

Cr. Register, February, 1977, No. 254, eff. 3-1-77; reprinted, Register, April, 1977, No. 256, to restore dropped text; corrections in (1) (intro.), (i) and (j), made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; correction in (1) (f) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1994, No. 462.

Wis. Admin. Code § Ins 3.39 Standards for disability insurance sold to the Medicare eligible {#sec-ins-3.39 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.39}

(1) Purpose.

(a) This section establishes requirements for health and other disability insurance policies primarily sold to Medicare eligible persons. Disclosure provisions are required for other disability policies sold to Medicare eligible person because such policies frequently are represented to, and purchased by, the Medicare eligible as supplements to Medicare products.

(b) This section seeks to reduce abuses and confusion associated with the sale of disability insurance to Medicare eligible persons by providing reasonable standards. The disclosure requirements and established benefit standards are intended to provide to Medicare eligible persons guidelines that they can use to compare disability insurance policies and certificates as described in s. Ins 6.75 (1) (c), and to aid them in the purchase of policies and certificates intended to supplement Medicare policies that are suitable for their needs. This section is designed not only to improve the ability of the Medicare eligible consumer to make an informed choice when purchasing disability insurance, but also to assure the Medicare eligible persons of this state that the commissioner will not approve a policy or certificate as “Medicare supplement” or as “Medicare cost” unless it meets the requirements of this section.

(d) Wisconsin statutes interpreted and implemented by this rule are ss. 185.983 (1m), 600.03, 601.01 (2), 601.42, 609.01 (1g) (b), 625.16, 628.34 (12), 628.38, 631.20 (2), 632.73 (2m), 632.76 (2) (b), 632.81, 632.895 (2), (3), (4) and (6), Stats.

(2) Scope. This section applies to individual and group disability policies sold, delivered or issued for delivery in Wisconsin to Medicare eligible persons as follows:

(a) Except as provided in pars. (d) and (e), this section applies to any group or individual Medicare supplement policy or certificate, or Medicare select policy or certificate as described in s. 600.03 (28r), Stats., or any Medicare cost policy as described in s. 600.03 (28p) (a) and (c), Stats., including all of the following:

Any Medicare supplement policy, Medicare select policy, or Medicare cost policy issued by a voluntary sickness care plan subject to ch. 185, Stats.
Any certificate issued under a group Medicare supplement policy or group Medicare select policy.
Any individual or group policy sold in Wisconsin predominantly to individuals or groups of individuals who are 65 years of age or older that offers hospital, medical, surgical, or other disability coverage, except for a policy that offers solely nursing home, hospital confinement indemnity, or specified disease coverage.
Any individual or group policy or certificate sold in Wisconsin to persons under 65 years of age and eligible for Medicare by reason of disability that offers hospital, medical, surgical or other disability coverage, except for a policy or certificate that offers solely nursing home, hospital confinement indemnity or specified disease coverage.

(b) Except as provided in pars. (d) and (e), subs. (9) and (11) apply to any individual disability policy sold to a person eligible for Medicare that is not a Medicare supplement, Medicare select, or a Medicare cost policy as described in par. (a).

(c) Except as provided in par. (e), sub. (10) applies to any individual or group hospital or medical policy that continues with changed benefits after the insured becomes eligible for Medicare.

(d) Except as provided in subs. (10) and (13), this section does not apply to any of the following:

A group policy issued to one or more employers or labor organizations, to the trustees of a fund established by one or more employers or labor organizations, or a combination of both, for employees or former employees or both, or for members or former members or both of the labor organizations;
Individual or group hospital, surgical, medical, major medical, or comprehensive medical expense coverage which continues after an insured becomes eligible for Medicare; or

(e) This section does not apply to either of the following:

A policy providing solely accident, dental, vision, disability income, or credit disability income coverage.
A single premium, non-renewable policy.

(f) This section may be enforced under ss. 601.41, 601.64, 601.65, Stats., or ch. 645, Stats., or any other enforcement provision of chs. 600 to 646, Stats., or Wisconsin Administrative Code Insurance chapters.

(3) Definitions. In this section and for use in policies or certificates:

(a) “Accident,” “Accidental Injury,” or “Accidental Means” shall be defined to employ “result” language and shall not include words that establish an accidental means test or use words such as “external, violent, visible wounds” or similar words of description or characterization.

The definition shall not be more restrictive than the following: “Injury or injuries for which benefits are provided” means accidental bodily injury sustained by the insured person that is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance coverage is in force.”
The definition may provide that injuries shall not include injuries for which benefits are provided or available under any workers’ compensation, employer’s liability or similar law or motor vehicle no-fault plan, unless prohibited by law.

(b) “Advertisement” has the meaning set forth in s. Ins 3.27 (5) (a).

In the case of an individual Medicare supplement, Medicare select, or Medicare cost policy, the person who seeks to contract for insurance benefits.
In the case of a group Medicare supplement policy, the proposed certificateholder.

(ce) “Balance bill” means seeking: to bill, charge, or collect a deposit, remuneration or compensation from; to file or threaten to file with a credit reporting agency; or to have any recourse against an insured or any person acting on the insured’s behalf for health care costs for which the insured is not liable. The prohibition on recovery does not affect the liability of an insured for any deductibles, coinsurance or copayments, or for premiums owed under the policy or certificate.

(cs) “Bankruptcy” means when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in the state.

(d) “Benefit period,” or “Medicare benefit period” shall not be defined more restrictively than as defined in the Medicare program.

(e) “CMS” means the Centers for Medicare & Medicaid Services within the U.S. department of health and human services.

(f) “Certificate” means a certificate delivered or issued for delivery in this state under a Medicare supplement policy or under a Medicare select policy that is issued on a group basis, i.e. employer retiree group.

(g) “Certificate form” means the form on which the certificate is delivered or issued for delivery by the issuer to a group that receives insurance coverage through a group Medicare supplement policy, or a group Medicare select policy.

(gg) “Certificateholder” means an individual member of a group that is receives a certificate that identifies the individual as a participant in the group Medicare supplement policy or the group Medicare select policy issued in this state.

(gr) “Complaint” means any dissatisfaction expressed by an individual concerning a Medicare select issuer or its network providers.

(h) “Continuous period of creditable coverage” means the period during which an individual was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than 63 days.

(i)

“Creditable coverage” means with respect to an individual, coverage of the individual provided under any of the following:

a. A group health plan;

b. Health insurance coverage;

c. Part A or Part B of Title XVIII of the social security act (Medicare);

d. Title XIX of the social security act (Medicaid), other than coverage consisting solely of benefits under section 1928;

e. Chapter 55 of Title 10 United States Code, commonly referred to as TRICARE (formerly known as CHAMPUS);

f. A medical care program of the Indian Health Service or of a tribal organization;

g. A state health benefits risk pool;

h. A health plan offered under chapter 89 of Title 5 United States Code commonly referred to as the Federal Employees Health Benefits Program;

i. A public health plan as defined in federal regulation; and

j. A health benefit plan under Section 5 (e) of the Peace Corps Act (22 United States Code 2504 (e)).

“Creditable coverage” does not include any of the following:

a. Coverage only for accident or disability income insurance, or any combination thereof;

b. Coverage issued as a supplement to liability insurance;

c. Liability insurance, including general liability insurance and automobile liability insurance;

d. Worker’s compensation or similar insurance;

e. Automobile medical payment insurance;

f. Credit-only insurance;

g. Coverage for on-site medical clinics; and

h. Other similar insurance coverage, specified in federal regulations, under which benefits for medical care are secondary or incidental to other insurance benefits.

“Creditable coverage” shall not include the following benefits if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the plan:

a. Limited scope dental or vision benefits;

b. Benefits for long-term care, nursing home care, home health care, community-based care, or any combination; and

c. Such other similar, limited benefits as are specified in federal regulations.

“Creditable coverage” shall not include the following benefits if offered as independent, non-coordinated benefits:

a. Coverage only for a specified disease or illness; and

b. Hospital indemnity or other fixed indemnity insurance.

“Creditable coverage” shall not include the following if it is offered as a separate policy, certificate or contract of insurance:

a. Medicare supplemental health insurance as defined under section 1882 (g) (1) of the social security act;

b. Coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code; and

c. Similar supplemental coverage provided to coverage under a group health plan.

(j) “Employee welfare benefit plan” means a plan, fund or program of employee benefits as defined in 29 USC 1002 (Employee Retirement Income Security Act).

(jm) “Grievance” means dissatisfaction with the administration, claims practices or provision of services concerning a Medicare select issuer or its network providers that is expressed in writing by a policyholder or certificateholder under a Medicare select policy or certificate.

(k) “Health care expense” means, for purposes of sub. (16), expense of health maintenance organizations associated with the delivery of health care services that are analogous to incurred losses of insurers.

(L) “Health maintenance organization (HMO)” means an insurer as defined in s. 609.01 (2), Stats.

(m) “Hospital” may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare program.

(n) “Hospital confinement indemnity coverage” means coverage as defined in s. Ins 3.27 (4) (b) 6.

(o) “Insolvency” is defined in s. 600.03 (24), Stats., and means when an issuer, licensed to transact the business of insurance in this state, has had a final order of liquidation entered against it by a court of competent jurisdiction in the issuer’s state of domicile.

(p) “Issuer” includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations and any other entity delivering or issuing for delivery in this state Medicare supplement policies or certificates.

(pm) “MACRA” means the Medicare Access and CHIP Reauthorization Act of 2015, PL 114-10, signed April 16, 2015.

(q) “Medicare” shall be defined in the policy or certificate. “Medicare” may be substantially defined as “The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as Then Constituted or Later Amended,” or “Title I, Part I of Public Law 89-97, as Enacted by the Eighty-Ninth congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted and any later amendments or substitutes thereof, or words of similar import.

(r) “Medicare Advantage plan” means a plan of coverage for health benefits under Medicare Part C as defined in 42 USC 1395w-28 (b) (1), as amended.

(rm) “Medicare cost policy” means a Medicare replacement policy that is offered by an issuer that has a contract with CMS to provide coverage when services are provided within the issuer’s geographic service area and through network medical providers selected by the issuer. A “Medicare cost policy” is issued to an individual who is the policyholder.

(s) “Medicare eligible expenses” means health care expenses that are covered by Medicare Parts A and B, recognized as medically necessary and reasonable by Medicare, and that may or may not be fully reimbursed by Medicare.

(t) “Medicare eligible person” mean a person who qualifies for Medicare.

(v) “Medicare replacement policy” or “Medicare replacement insurance policy” means a policy that is described in s. 600.03 (28p) (a) or (c), Stats., as interpreted by sub. (2) (a), and that provides coverage that conforms to subs. (4), (4m), (4t), and (7). “Medicare replacement policy” includes Medicare cost policies.

(ve) “Medicare select certificate” means a policy that is issued to a group that provides Medicare supplement coverage to the group’s members when services are obtained through network medical providers selected by the issuer. Individuals that receive coverage through the group Medicare select policy receive a Medicare select certificate that demonstrates participation in the group coverage.

(vm) “Medicare select policy” means a policy that is issued to an individual or policyholder that provides Medicare supplement coverage when services are obtained by the policyholder through a network of medical providers selected by the issuer.

(vs) “Medicare supplement certificate” means a policy that is issued to a group that provides Medicare supplement coverage to the group’s members. Individuals that receive coverage through the group Medicare supplement policy receive a Medicare supplement certificate that demonstrates participation in the group coverage.

(w) “Medicare supplement coverage” or “Medicare supplement insurance” means coverage that meets the definition in s. 600.03 (28r), Stats., as interpreted by sub. (2) (a), and that conforms to subs. (4), (4m), (4t), (5), (5m), (5t), (6), (30), (30m), and (30t). “Medicare supplement coverage” is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expense of persons eligible for Medicare. “Medicare supplement coverage” includes group and individual Medicare supplement and group and individual Medicare select policies and certificates but does not include coverage under Medicare Advantage plans established under Medicare Part C or Outpatient Prescription Drug plans established under Medicare Part D.

(we) “Medicare supplement policy” means a policy that is issued to an individual or policyholder that provides Medicare supplement coverage.

(wg) “MMA” means the Medicare Prescription Drugs, Improvement and Modernization Act of 2003, Public Law 108-173, signed into law on December 8, 2003.

(wm) “Network provider,” means a provider of health care, or a group of providers of health care, that have entered into a written agreement with the issuer to provide health care benefits to an insured under a Medicare select policy or Medicare select certificate.

(ws) “Newly eligible” means a person who meets one of the following criteria:

The person has attained age 65 on or after January 1, 2020.
The person is entitled to benefits under Medicare Part A pursuant to section 226 (b) or 226A of the social security act, or is deemed to be eligible for benefits under section 226 (a) of the social security act on or after January 1, 2020.

(x) “Nursing home coverage” means coverage for care that is convalescent or custodial care or care for a chronic condition or terminal illness and provided in an institutional or community-based setting.

(y) “Outline of coverage” means a printed statement as defined by s. Ins 3.27 (5) (L), that meets the requirements of sub. (4) (b), (4m) (b), or (4t) (b), as applicable.

(z) “Policy form” means the form on which the policy is delivered or issued for delivery by the issuer.

(za) “PACE” means Program of All–Inclusive Care for the Elderly (PACE) under section 1894 of the social security act 42 USC 1302 and 1395.

(zag) “Policyholder” has the meaning provided at s. 600.03 (37), Stat.

(zar) “Policy or certificate forms of the same type” means, for purposes of calculating loss ratios, rates, refunds or premium credits, each type of form filed with the commissioner including individual Medicare supplement policy forms, individual Medicare select policy forms, individual Medicare cost policy forms, group Medicare select certificate forms, and group Medicare supplement certificate forms.

(zb) “Replacement” means any transaction, other than when used to refer to an authorized Medicare Advantage policy, where new individual or group Medicare supplement or individual Medicare cost insurance is to be purchased, and it is known to the agent or issuer at the time of application that, as part of the transaction, existing accident and sickness insurance has been or is to be lapsed, cancelled or terminated or the benefits are substantially reduced. “Replacement” includes transactions replacing a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy within the same insurer or affiliates of the insurer.

(zbm) “Restricted network provision,” means any provision that conditions the payment of benefits, in whole or in part, on the use of network providers.

(zc) “Secretary” means the secretary of the United States department of health and human services.

(zcm) “Service area” means the geographic area approved by the commissioner within which an issuer is authorized to offer a Medicare select policy or certificate.

(zd)

“Sickness” shall not be defined to be more restrictive than illness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force.
The definition of “sickness” may be further modified to exclude any illness or disease for which benefits are provided under any workers’ compensation, occupational disease, employer’s liability or similar law.

(ze) “Specified disease coverage” means coverage that is limited to named or defined sickness conditions. The term does not include dental or vision care coverage.

(3g) Medicare eligible person.

(a) Generally, an individual who attains age 65 or older, an individual under the age of 65 with certain disabilities, or an individual with end-stage renal disease is eligible to enroll in Medicare. The date a person is first eligible for Medicare Part B or first elected Medicare Part A establishes the benefits available regardless of the date of election provided the benefit is offered in the market. In addition to the provisions that apply to all Medicare supplement and Medicare cost policies, the following identify the benefits and coverage subsections that have provisions tied to the date and year when a person is first eligible for Medicare Parts A and B:

For persons first eligible for Medicare Part A and B before June 1, 2010, subs. (4), (5), (7) (a), and (30) describe benefits and coverage available as contained in Appendix 1, and are applicable in addition to any provision in this section that generally pertains to Medicare eligible persons.
For persons first eligible for Medicare Part A and B on or after June 1, 2010, and prior to January 1, 2020, subs. (4m), (5m), (7) (dm), (14m), and (30m) describe benefits and coverage available as contained in Appendices 2m, 3m, 4m, 5m and 6m and are applicable in addition to any provision in this section that generally pertains to Medicare eligible persons.
For persons first eligible for Medicare Part A and B on or after January 1, 2020, MACRA designated Medicare eligible persons as “newly eligible” to distinguish them from a person eligible prior to January 1, 2020. For these newly eligible persons, subs. (4t), (5t), (7) (dt), (14t), and (30t) describe benefits and coverage available as contained in Appendices 2t, 3t, 4t, 5t, and 6t and are applicable in addition to any provision in this section that generally pertains to Medicare eligible persons.

(b) Medicare supplement policies and certificates and Medicare select policies and certificates are guaranteed renewable for life. Therefore, a Medicare eligible person can, at his or her choice, elect to receive benefits and coverage under a policy that may have fewer riders available. An insurer may not require the Medicare eligible person to replace existing coverage with coverage reflecting recent changes, including changes due to MACRA. This means insurers may no longer actively market the Medicare Part B medical deductible rider to persons who are newly eligible for Medicare on or after January 1, 2020. A Medicare eligible person who is first eligible for Medicare prior to January 1, 2020, may elect the Medicare Part B medical deductible rider coverage at any time, provided an insurer is offering that coverage. If an insured was eligible for Medicare prior to January 1, 2020 and elected the Medicare Part B medical deductible rider coverage, upon renewal of the policy or certificate that person shall be eligible to continue to receive benefits provided by the Medicare Part B medical deductible rider in accordance with the terms of the Medicare supplement policy or certificate or Medicare select policy or certificate.

(3r) Open enrollment.

(a) An issuer may not deny nor condition the issuance or effectiveness of, or discriminate in the pricing of, basic Medicare supplement policies or certificates, Medicare cost policy, or Medicare select policies or certificates permitted, as applicable, under subs. (5), (5m), (5t), (7), (30), (30m), and (30t), or riders permitted under sub. (5) (i), (5m) (e), or (5t) (e), for which an application is submitted prior to or during the 6-month period beginning with the first month that an individual first enrolled for benefits under Medicare Part B or the month that an individual turns age 65 for any individual who was first enrolled in Medicare Part B when under the age of 65 on any of the following grounds:

Health status.
Claims experience.
Receipt of health care.
Medical condition.

(b) Except as provided in pars. (c) and (d), and sub. (34), this section shall not prevent the application of any preexisting condition limitation that is in compliance with sub. (4) (a) 2.

(c) If an applicant qualifies under par. (a) and submits an application during the time period referenced in par. (a) and, as of the date of application, has had a continuous period of creditable coverage of at least 6 months, the issuer may not exclude benefits based on a preexisting condition.

(d) If the applicant qualifies under par. (a) and submits an application during the time period referenced in par. (a) and, as of the date of application, has had a continuous period of creditable coverage that is less than 6 months, the issuer shall reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. The secretary shall specify the manner of the reduction under this paragraph.

(4) Medicare supplement policy and certificate, Medicare select policy and certificate and Medicare cost policy requirements for policies and certificates offered to persons first eligible for Medicare prior to June 1, 2010.. Except as explicitly allowed by subs. (5), (7), and (30), no disability insurance policy or certificate shall relate its coverage to Medicare or be structured, advertised, solicited, delivered or issued for delivery in this state after December 31, 1990, for policies or certificates issued to persons who were first eligible for Medicare prior to June 1, 2010, as a Medicare supplement policy or certificate, as a Medicare select policy or certificate, or as a Medicare cost policy unless the policy or certificate complies, as applicable, with all of the following:

(a) The Medicare supplement policy and certificate, Medicare select policy or certificate, or the Medicare cost policy complies, as applicable, with all the following requirements:

Provides only the coverage set out in sub. (5), (7), or (30) and applicable statutes and contains no exclusions or limitations other than those permitted by sub. (8). No issuer may issue a Medicare cost policy, Medicare supplement policy or certificate, or Medicare select policy or certificate without prior approval from the commissioner and compliance with subs. (5), (7) and (30), respectively.
Discloses on the first page any applicable preexisting conditions limitation, contains no preexisting condition waiting period longer than 6 months and does not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.
Contains no definitions of terms such as “Medicare eligible expenses.” “accident,” “sickness,” “mental or nervous disorders,” “skilled nursing facility,” “hospital,” “nurse,” “physician,” “benefit period,” “convalescent nursing home,” or “outpatient prescription drugs” that are worded less favorably to the insured person than the corresponding Medicare definition or the definitions contained in sub. (3), and defines “Medicare” as in accordance with sub. (3) (q).
Does not indemnify against losses resulting from sickness on a different basis from losses resulting from accident.
Is “guaranteed renewable” and does not provide for termination of coverage of a spouse solely because of an event specified for termination of coverage of the insured, other than the nonpayment of premium. The Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall not be cancelled or nonrenewed by the insurer on the grounds of deterioration of health. The Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy may be cancelled only for nonpayment of premium or material misrepresentation. If the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy is issued by a health maintenance organization, as defined by s. 609.01 (2), Stats., the policy or certificate may, in addition to the above reasons, be cancelled or nonrenewed by the issuer if the insured moves out of the service area.
Provides that termination of a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall be without prejudice to a continuous loss that commenced while the policy or certificate was in force, although the extension of benefits may be predicated upon the continuous total disability of the policyholder, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits shall not be considered in determining a continuous loss.
Contains statements on the first page and elsewhere in the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy that satisfy the requirements of s. Ins 3.13 (2) (c), (d) or (e), and clearly states on the first page or schedule page the duration of the term of coverage for which the policy or certificate is issued and for which it may be renewed. The renewal period cannot be less than the greatest of the following: 3 months, the period the insured has paid the premium, or the period specified in the policy or certificate.
Changes benefits automatically to coincide with any changes in the applicable Medicare deductible amount, coinsurance, and copayment percentage factors, although there may be a corresponding modification of premiums in accordance with the policy or certificate provisions and ch. 625, Stats.
Prominently discloses any limitations on the choice of providers or geographical area of service.
Contains on the first page the designation, printed in 18-point type, and in close conjunction the caption printed in 12-point type, prescribed in sub. (5), (7), or (30).
Contains text that is plainly printed in black or blue ink and has a font size that is uniform and not less than 10-point with a lower-case unspaced alphabet length not less than 120-point.
Contains a provision describing any grievance rights as required by s. 632.83, Stats., applicable to Medicare supplement policy and certificate, Medicare select policy and certificate, and Medicare cost policies.
Is approved by the commissioner.
Contains no exclusion, limitation, or reduction of coverage for a specifically named or described condition after the policy effective date.
Provides for midterm cancellation at the request of the insured and that, if an insured cancels a policy midterm or the policy terminates midterm because of the insured’s death, the issuer shall issue a pro rata refund to the insured or the insured’s estate.
Except for permitted preexisting condition clauses as described in subd. 2., no Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy if such policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.
No Medicare supplement policy or certificate in force in this state shall contain benefits that duplicate benefits provided by Medicare.
A Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificateholder for the period not to exceed 24 months in which the policyholder or certificateholder has applied for and is determined to be entitled to medical assistance under Title XIX of the social security act, but only if the policyholder or certificateholder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to the assistance.

18m. If the suspension in subd. 18. occurs and if the policyholder or certificateholder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of the entitlement) as of the termination of the entitlement if the policyholder or certificateholder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period, effective as of the date of termination of the entitlement.

18p. Each Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy shall provide, and contain within the policy, that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation, at the request of the policyholder or certificateholder if the policyholder or certificateholder is entitled to benefits under section 226 (b) of the social security act and is covered under a group health plan, as defined in section 1862 (b) (1) (A) (v) of the social security act. If suspension occurs and if the policyholder or certificateholder loses coverage under the group health plan, the policy or certificate shall be automatically reinstituted, effective as of the date of loss of coverage, if the policyholder or certificateholder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

18s. No Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy may provide for any waiting period for resumption of coverage that was in effect before the date of suspension under subd. 18. with respect to treatment of preexisting conditions.

18u. Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide for resumption of coverage that was in effect before the date of suspension in subd. 18. If the suspended Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy provided coverage for outpatient prescription drugs, resumption of the policy shall be without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of suspension. If the suspended Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy provided coverage of Medicare Part B medical deductible coverage or if the insured was enrolled or Medicare eligible prior to January 1, 2020, and the insurer offers a plan with Medicare Part B medical deductible coverage, then the policyholder or certificateholder may elect or renew coverage with the Medicare Part B medical deductible coverage. If the insurer no longer offers a plan with the Medicare Part B medical deductible coverage, then the insurer shall provide the policyholder or certificateholder with substantially equivalent coverage to the coverage in effect prior to the date of suspension.

18x. Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide that, upon the resumption of coverage that was in effect before the date of suspension in subd. 18., classification of premiums shall be on terms at least as favorable to the policyholder or certificateholder as the premium classification terms that would have applied to the policyholder or certificateholder had the coverage not been suspended.

Shall not use an underwriting standard for under age 65 that is more restrictive than that used for age 65 and above.

a. A policy with benefits for outpatient prescription drugs in existence prior to January 1, 2006, shall be renewed for current policyholders who do not enroll in Medicare Part D at the option of the policyholder.

b. A policy with benefits for outpatient prescription drugs shall not be issued after December 31, 2005.

c. After December 31, 2005, a policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless the policy is modified to eliminate outpatient prescription drug coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual’s coverage under a Medicare Part D plan and the premiums are adjusted appropriately to reflect elimination of that coverage.

If a policy that provides Medicare supplement or Medicare cost coverage eliminates an outpatient prescription drug benefit as a result of requirements imposed by the MMA, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of subd. 5.

(b) The outline of coverage for the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate shall comply with all of the following:

Is provided to all applicants at the time application is made and, except in the case of direct response insurance, the issuer obtains written acknowledgement from the applicant that the outline was received.
Complies with s. Ins 3.27, including s. Ins 3.27 (5) (L) and (9).
Is substituted to properly describe the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate as issued, if the outline provided at the time of application did not properly describe the coverage which was issued. The substituted outline shall accompany the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate when it is delivered and shall contain the following statement in no less than 12-point type and immediately above the company name: “NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application, and the coverage originally applied for has not been issued.”
Contains in close conjunction on its first page the designation, printed in a distinctly contrasting color in 24-point type, and the caption, printed in a distinctly contrasting color in 18-point type prescribed in sub. (5), (7) or (30).
Is substantially in the format prescribed in Appendix 1 for the appropriate category and printed in no less than 12-point type.
Summarizes or refers to the coverage set out in applicable statutes.
Contains a listing of the required coverage as set out in sub. (5) (c) and the optional coverages as set out in sub. (5) (i), and the annual premiums for each selected coverage, substantially in the format of sub. (11) of Appendix 1.
Is approved by the commissioner along with the policy or certificate form.

(c) Any rider or endorsement added to the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate shall comply with all of the following:

Shall be contained in the policy or certificate and, if a separate, additional premium is charged in connection with the rider or endorsement, the premium charge shall be stated in the policy or certificate.
Shall be agreed to in writing signed by the insured if, after the date of the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy or certificate issue, the rider or endorsement increases benefits or coverage and there is an accompanying increase in premium during the term of the policy or certificate, unless the increase in benefits or coverage is required by law.
Shall only provide coverage as described in sub. (5) (i) or provide coverage to meet Wisconsin mandated provisions.

(d) The schedule of benefits page or the first page of the policy or certificate contains a listing giving the coverages and both the annual premium in the format shown in sub. (11) of Appendix 1 and modal premium selected by the applicant.

(e) The anticipated loss ratio for any new Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy form, or the expected percentage of the aggregate amount of premiums earned that will be returned to insureds in the form of aggregate benefits, not including anticipated refunds or credits, that is provided under the policy or certificate form:

Is computed on the basis of anticipated incurred claims or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums for the entire period for which the policy form provides coverage, in accordance with accepted actuarial principles and practices; and
Is submitted to the commissioner along with the policy or certificate form and is accompanied by rates and an actuarial demonstration that expected claims in relationship to premiums comply with the loss ratio standards under sub. (16) (d). The policy or certificate form will not be approved by the commissioner unless the anticipated loss ratio along with the rates and actuarial demonstration show compliance with sub. (16) (d).

(g) For subsequent rate changes to the policy or certificate form, the insurer shall do all of the following:

File the rate changes in a format specified by the commissioner.
Include in the filing under subd.1. an actuarially sound demonstration that the rate change will not result in a loss ratio over the life of the policy or certificate that would violate the requirements under sub. (16) (d).

(h)

Medicare supplement policies written prior to January 1, 1992, shall comply with the standards then in effect, except that the appropriate loss ratios specified in sub. (16) (d) shall be used to demonstrate compliance with minimum loss ratio requirements and refund calculations for policies and certificates renewed after December 31, 1995, and with sub. (14) (c).
For purposes of loss ratio and refund calculations, policies and certificates renewed after December 31, 1995, shall be treated as if they were issued in 1996.

(4m) Medicare supplement policy and certificate, Medicare select policy and certificate, and Medicare cost policy requirements for policies and certificates offered to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020. Except as explicitly allowed by subs. (5m) and (30m), no disability insurance policy or certificate shall relate its coverage to Medicare or be structured, advertised, marketed or issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020, as a Medicare supplement policy or certificate, as a Medicare select policy or certificate, or as a Medicare cost policy unless the policy or certificate complies with all of the following:

(a) The policy or certificate shall comply with all of the following requirements:

Provides only the coverage set out in sub. (5m), (7), or (30m) and applicable statutes and contains no exclusions or limitations other than those permitted by sub. (8). No issuer may issue a Medicare cost policy or Medicare select policy or certificate without prior approval from the commissioner and compliance with sub. (30m).
Discloses on the first page any applicable preexisting conditions limitation, contains no preexisting condition waiting period longer than 6 months and does not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.
Contains no definitions of terms such as “Medicare eligible expenses,” “accident,” “sickness,” “mental or nervous disorders,” skilled nursing facility,” “hospital,” “nurse,” “physician,” “benefit period,” “convalescent nursing home,” or “outpatient prescription drugs” that are worded less favorably to the insured person than the corresponding Medicare definition or the definitions contained in sub. (3), and defines “Medicare” as in accordance with sub. (3) (q).
Does not indemnify against losses resulting from sickness on a different basis from losses resulting from accident.
Is guaranteed renewable and does not provide for termination of coverage of a spouse solely because of an event specified for termination of coverage of the insured, other than the non-payment of premium. The policy or certificate may not be cancelled or nonrenewed by the issuer on the grounds of deterioration of health. The policy or certificate may be cancelled only for nonpayment of premium or material misrepresentation. If the policy or certificate is issued by a health maintenance organization, the policy or certificate may, in addition to the above reasons, be cancelled or nonrenewed by the issuer if the insured moves out of the service area.
Provides that termination of a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall be without prejudice to a continuous loss that commenced while the policy or certificate was in force, although the extension of benefits may be predicated upon the continuous total disability of the insured, limited to the duration of the policy or certificate benefit period, if any, or payment of the maximum benefits. Receipt of the Medicare Part D benefits may not be considered in determining a continuous loss.
Contains statements on the first page and elsewhere in the policy or certificate that satisfy the requirements of s. Ins 3.13 (2) (c), (d) and (e), and clearly states on the first page or schedule page the duration of the term of coverage for which the policy or certificate is issued and for which it may be renewed. The renewal period cannot be less than the greatest of the following: 3 months, the period for which the insured has paid the premium, or the period specified in the policy or certificate.
Changes benefits automatically to coincide with any changes in the applicable Medicare deductible amount, coinsurance and copayment percentage factors, although there may be a corresponding modification of premiums in accordance with the policy or certificate provisions and ch. 625, Stats.
Prominently discloses any limitations on the choice of providers or geographical area of service.
Contains on the first page the designation, printed in 18-point type, and in close conjunction the caption printed in 12-point type, prescribed in sub. (5m) or (30m).
Contains text that is plainly printed in black or blue ink and has a font size that is uniform and not less than 10-point type with a lower-case unspaced alphabet length not less than 120-point type.
Contains a provision describing any grievance rights as required by s. 632.83, Stats., applicable to Medicare supplement policies and certificates and Medicare cost policies.
Is approved by the commissioner.
Contains no exclusion, limitation, or reduction of coverage for a specifically named or described condition after the policy or certificate effective date.
Provides for midterm cancellation at the request of the insured and provides that, if an insured cancels a policy or certificate midterm or the policy or certificate terminates midterm because of the insured’s death, the issuer shall issue a pro rata refund to the insured or the insured’s estate.
Except for permitted preexisting condition clauses as described in subd. 2., no policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate if such policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.
No Medicare supplement policy or certificate in force in this state shall contain benefits that duplicate benefits provided by Medicare.
A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificateholder for the period not to exceed 24 months in which the policyholder or certificateholder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificateholder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to the assistance.
If the suspension in subd. 18. occurs and if the policyholder or certificateholder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of the entitlement, if the policyholder or certificateholder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period.
Each Medicare supplement policy or certificate shall provide, and contain within the policy or certificate, that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation, at the request of the policyholder or certificateholder if the policyholder or certificateholder is entitled to benefits under section 226 (b) of the Social Security Act and is covered under a group health plan, as defined in section 1862 (b) (1) (A)(v) of the Social Security Act. If suspension occurs and if the policyholder or certificateholder loses coverage under the group health plan, the policy or certificate shall be automatically reinstituted, effective as of the date of loss of coverage, if the policyholder or certificateholder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

21e. No Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy may provide for any waiting period for resumption of coverage that was in effect before the date of suspension under subd. 18. with respect to treatment of preexisting conditions.

21m. Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide for resumption of coverage that is substantially equivalent to coverage that was in effect before the date of suspension in subd. 18. If the suspended Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy provided coverage of Medicare Part B medical deductible coverage or if the insured was enrolled or Medicare eligible prior to January 1, 2020, and the insurer offers a plan with Medicare Part B medical deductible coverage, then resumption of the policy shall be with Medicare Part B medical deductible coverage. If the insurer no longer offers a plan with the Medicare Part B medical deductible coverage, then the insurer shall provide the insured with substantially equivalent coverage to the coverage in effect prior to the date of suspension.

21s. Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide that, upon the resumption of coverage that was in effect before the date of suspension in subd. 18., classification of premiums shall be on terms at least as favorable to the policyholder or certificateholder as the premium classification terms that would have applied to the policyholder or certificateholder had the coverage not been suspended.

May not use an underwriting standard during open enrollment for persons who are under age 65 that is more restrictive than the underwriting standards that are used for persons age 65 and older.

(b) The outline of coverage for the policy or certificate shall comply with all of the following:

Is provided to all applicants at the same time application is made, and except in the case of direct response insurance, the issuer obtains written acknowledgement from the applicant that the outline was received.
Complies with s. Ins 3.27.
Is substituted to describe properly the policy or certificate as issued, if the outline provided at the time of application did not properly describe the coverage that was issued. The substituted outline shall accompany the policy or certificate when it is delivered and shall contain the following statement in no less than 12-point type and immediately above the company name: “NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application, and the coverage originally applied for has not been issued.”
Contains in close conjunction on its first page the designation, printed in a distinctly contrasting color or bold print in 24-point type, and the caption, printed in a distinctly contrasting color or bold print in 18-point type prescribed in sub. (5m), (7) or (30m).
Is substantially in the format prescribed in Appendices 3m, 4m, 5m, and 6m for the appropriate category and printed in a font size that is not less than 12-point type.
Summarizes or refers to the coverage set out in applicable statutes.
Contains a listing of the required coverage as set out in sub. (5m) (d) and the optional coverage as set out in sub. (5m) (e), and the annual premiums for each selected coverage, substantially in the format of sub. (11) in Appendix 2m.
Is approved by the commissioner along with the policy or certificate form.

Shall be contained in the policy or certificate and if a separate, additional premium is charged in connection with the rider or endorsement, the premium charge shall be stated in the policy or certificate.
Shall be agreed to in writing signed by the insured if, after the date of the policy or certificate issue, the rider or endorsement increases benefits or coverage and there is an accompanying increase in premium during the term of the policy or certificate, unless the increase in benefits or coverage is required by law.
Shall only provide coverage as defined in sub. (5m) (e) or provide coverage to meet Wisconsin mandated benefits.

(e) The anticipated loss ratio for any new policy or certificate form, or the expected percentage of the aggregate amount of premiums earned that will be returned to insureds in the form of aggregate benefits, not including anticipated refunds or credits, that is provided under the policy or certificate form:

Is computed on the basis of anticipated incurred claims or incurred health care expenses where coverage is provided by a health maintenance organizations on a service rather than reimbursement basis and earned premiums for the entire period for which the policy form provides coverage, in accordance with accepted actuarial principles and practices; and
Is submitted to the commissioner along with the policy or certificate form and is accompanied by rates and an actuarial demonstration that expected claims in relationship to premiums comply with the loss ratio standards under sub. (16) (d). The policy or certificate form will not be approved by the commissioner unless the anticipated loss ratio along with the rates and actuarial demonstration show compliance with sub. (16) (d).

(f) For subsequent rate changes to the policy or certificate form, the insurer shall do all of the following:

File the rate changes on a rate change transmittal form in a format specified by the commissioner.
Include in the filing under subd.1. an actuarially sound demonstration that the rate change will not result in a loss ratio over the life of the policy or certificate that would violate the requirements under sub. (16) (d).

(4t) Medicare supplement policy and certificate, Medicare select policy and certificate, and Medicare cost policy requirements for policies and certificates offered to persons first eligible for Medicare on or after January 1, 2020.

(a) Except as explicitly allowed by subs. (5t), (7), and (30t), no disability insurance policy or certificate shall relate its coverage to Medicare or be structured, advertised, solicited, marketed or issued to persons newly eligible for Medicare on or after January 1, 2020, as a Medicare supplement policy or certificate, as a Medicare select policy or certificate, or as a Medicare cost policy unless the policy or certificate is in compliance with the following:

Provides only the coverage set out in sub. (5t), (7) or (30t), and applicable statutes, and contains no exclusions or limitations other than those permitted by sub. (8). No issuer may issue a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy without prior approval from the commissioner and compliance with sub. (30t).
Discloses on the first page any applicable preexisting conditions limitation, contains no preexisting condition waiting period longer than 6 months and does not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage.
Contains no definitions of terms such as “Medicare eligible expenses,” “accident,” “sickness,” “mental or nervous disorders,” skilled nursing facility,” “hospital,” “nurse,” “physician,” “benefit period,” “convalescent nursing home,” or “outpatient prescription drugs” that are worded less favorably to the insured person than the corresponding Medicare definition or the definitions contained in sub. (3), and defines “Medicare” as in accordance with sub. (3) (q).
Does not indemnify against losses resulting from sickness on a different basis from losses resulting from accident.
Is guaranteed renewable and does not provide for termination of coverage of a spouse solely because of an event specified for termination of coverage of the insured, other than the non-payment of premium. The policy or certificate may not be cancelled or nonrenewed by the issuer on the grounds of deterioration of health. The policy or certificate may be cancelled only for nonpayment of premium or material misrepresentation. If the policy or certificate is issued by a health maintenance organization, the policy or certificate may, in addition to the above reasons, be cancelled or nonrenewed by the issuer if the insured moves out of the service area.
Provides that termination of a Medicare supplement policy or certificate or Medicare cost policy shall be without prejudice to a continuous loss that commenced while the policy or certificate was in force, although the extension of benefits may be predicated upon the continuous total disability of the insured, limited to the duration of the policy or certificate benefit period, if any, or payment of the maximum benefits. Receipt of the Medicare Part D benefits may not be considered in determining a continuous loss.
Contains statements on the first page and elsewhere in the policy or certificate that satisfy the requirements of s. Ins 3.13 (2) (c), (d) and (e), and clearly states on the first page or schedule page the duration of the term of coverage for which the policy or certificate is issued and for which it may be renewed. The renewal period cannot be less than the greatest of the following: 3 months, the period the insured has paid the premium, or the period specified in the policy or certificate.
Changes benefits automatically to coincide with any changes in the applicable Medicare deductible amount, coinsurance, and copayment percentage factors, although there may be a corresponding modification of premiums in accordance with the policy or certificate provisions and ch. 625, Stats.
Prominently discloses any limitations on the choice of providers or geographical area of service.
Contains on the first page the designation, printed in 18-point type, and in close conjunction the caption printed in 12-point type, prescribed in sub. (5t) or (30t).
Contains text that is plainly printed in black or blue ink and has a font size that is uniform and not less than 10-point type with a lower-case unspaced alphabet length not less than 120-point type.
Contains a provision describing any grievance rights as required by s. 632.83, Stats., applicable to Medicare supplement policies and certificates and Medicare cost policies.
Is approved by the commissioner.
Contains no exclusion, limitation, or reduction of coverage for a specifically named or described condition after the policy or certificate effective date.
Provides for midterm cancellation at the request of the insured and provides that, if an insured cancels a policy or certificate midterm or the policy or certificate terminates midterm because of the insured’s death, the issuer shall issue a pro rata refund to the insured or the insured’s estate.
Except for permitted preexisting condition clauses as described in subd. 2., no policy or certificate may be advertised, solicited or issued for delivery in this state as a Medicare supplement policy or certificate if such policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.
No Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy in force in this state shall contain benefits that duplicate benefits provided by Medicare.
A Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificateholder for the period not to exceed 24 months in which the policyholder or certificateholder has applied for and is determined to be entitled to medical assistance under Title XIX of the social security act, but only if the policyholder or certificateholder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to the assistance.
If the suspension in subd. 18. occurs and if the policyholder or certificateholder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted, effective as of the date of termination of the entitlement, if the policyholder or certificateholder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period.
Each Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy shall provide, and contain within the policy or certificate, that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation, at the request of the policyholder or certificateholder if the policyholder or certificateholder is entitled to benefits under section 226 (b) of the social security act and is covered under a group health plan, as defined in section 1862 (b) (1) (A) (v) of the social security act. If suspension occurs and if the policyholder or certificateholder loses coverage under the group health plan, the policy or certificate shall be automatically reinstituted, effective as of the date of loss of coverage, if the policyholder or certificateholder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of enrollment in the group health plan.

May not use an underwriting standard during open enrollment for persons who are under age 65 that is more restrictive than the underwriting standards that are used for persons age 65 and older.

(b) The outline of coverage for the policy or certificate shall comply with all of the following:

Is provided to all applicants at the same time application is made and, except in the case of direct response insurance, the issuer obtains written acknowledgement from the applicant that the outline was received.
Complies with s. Ins 3.27.
Is substituted to describe properly the policy or certificate as issued, if the outline provided at the time of application did not properly describe the coverage that was issued. The substituted outline shall accompany the policy or certificate when it is delivered and shall contain the following statement in no less than 12-point type and immediately above the company name: “NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application, and the coverage originally applied for has not been issued.”
Contains in close conjunction on its first page the designation, printed in a distinctly contrasting color or bold print in 24-point type, and the caption, printed in a distinctly contrasting color or bold print in 18-point type, prescribed in sub. (5t), (7), or (30t).
Is substantially in the format prescribed in Appendices 3t, 4t, 5t, and 6t, for the appropriate category and printed in a font size that is not less than 12-point type.
Summarizes or refers to the coverage set out in applicable statutes.
Contains a listing of the required coverage as set out in sub. (5t) (d), and the optional coverage as set out in sub. (5t) (e), and the annual premiums for each selected coverage, substantially in the format of sub. (11) in Appendix 2t.
Is approved by the commissioner along with the policy or certificate form.

Shall be contained in the policy or certificate and, if a separate, additional premium is charged in connection with the rider or endorsement, the premium charge shall be stated in the policy or certificate.
Shall be agreed to in writing signed by the insured if, after the date of the policy or certificate issue, the rider or endorsement increases benefits or coverages and there is an accompanying increase in premium during the term of the policy or certificate, unless the increase in benefits or coverage is required by law.
Shall only provide coverage as described in sub. (5t) (e), or provide coverage to meet Wisconsin mandated benefits.

(d) The schedule of benefits page or the first page of the policy or certificate shall contain a listing giving the coverages and both the annual premium in the format shown in sub. (11) of Appendix 2t and modal premium selected by the applicant.

Is computed on the basis of anticipated incurred claims or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums for the entire period that the policy or certificate form provides coverage, in accordance with accepted actuarial principles and practices; and
Is submitted to the commissioner along with the policy or certificate form and is accompanied by rates and an actuarial demonstration that expected claims in relationship to premiums comply with the loss ratio standards under sub. (16) (d). The policy or certificate form will not be approved by the commissioner unless the anticipated loss ratio along with the rates and actuarial demonstration show compliance with sub. (16) (d).

(f) For subsequent rate changes to the policy or certificate form, the issuer shall do all of the following:

File the rate changes on a rate change transmittal form in a format specified by the commissioner.
Include in the filing under subd.1. an actuarially sound demonstration that the rate change will not result in a loss ratio over the life of the policy or certificate that would violate the requirements under sub. (16) (d).

(5) Authorized Medicare supplement policy and certificate designation, captions, required coverages, and permissible additional benefits for policies or certificates offered to persons first eligible for Medicare prior to June 1, 2010. This subsection applies only to a Medicare supplement policy or certificate that meets the requirements of sub. (4), that is issued or effective after December 31, 1990, and prior to June 1, 2010, and that shall contain the authorized designation, caption and required coverage. A health maintenance organization shall place the letters HMO in front of the required designation on any approved Medicare supplement policy or certificate. A Medicare supplement policy or certificate shall include all of the following:

(a) The designation: MEDICARE SUPPLEMENT INSURANCE.

(b) The caption, except that the word “certificate” may be used instead of “policy,” if appropriate: “The Wisconsin Insurance Commissioner has set standards for Medicare supplement insurance. This policy meets these standards. It, along with Medicare, may not cover all of your medical costs. You should review carefully all policy limitations. For an explanation of these standards and other important information, see ‘Wisconsin Guide to Health Insurance for People with Medicare,’ given to you when you applied for this policy. Do not buy this policy if you did not get this guide.”

(c) The following required coverages, to be referred to as “Basic Medicare Supplement coverage” for a policy issued to persons first eligible for Medicare after December 31, 1990 and prior to June 1, 2010, shall comply with all the following:

Upon exhaustion of Medicare hospital inpatient psychiatric coverage, at least 175 days per lifetime for inpatient psychiatric hospital care;
Medicare Part A eligible expenses in a skilled nursing facility for the copayments for the 21st through the 100th day;
All Medicare Part A eligible expenses for blood to the extent not covered by Medicare;
All Medicare Part B eligible expenses to the extent not paid by Medicare, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, including outpatient psychiatric care, subject to the Medicare Part B calendar year deductible;
Payment of the usual and customary home care expenses to a minimum of 40 visits per 12-month period as required under s. 632.895 (1) and (2), Stats., and s. Ins 3.54;
Skilled nursing care and kidney disease treatment as required under s. 632.895 (3) and (4), Stats. Coverage for skilled nursing care shall be in addition to the required coverage under subd. 2. and payment of the Medicare Part A copayment for Medicare eligible skilled nursing care shall not count as satisfying the coverage requirement of at least 30 days of non-Medicare eligible skilled nursing care under s. 632.895 (3), Stats.;
In group policies, nervous and mental disorder and alcoholism and other drug abuse coverage as required under s. 632.89, Stats.;
Payment in full for all usual and customary expenses for chiropractic services required by s. 632.87 (3), Stats. Issuers are not required to duplicate benefits paid by Medicare;
Coverage for the first 3 pints of blood payable under Part B;
Coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;
Coverage of Part A Medicare eligible expenses incurred as daily hospital charges during use of Medicare’s lifetime hospital inpatient reserve days;
Upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of all Medicare Part A expenses for hospitalization not covered by Medicare to the extent the hospital is permitted to charge by federal law and regulation and subject to the Medicare reimbursement rate;
Prior to January 1, 2006, payment in full for all usual and customary expenses for treatment of diabetes required by s. 632.895 (6), Stats. After December 31, 2005, payment in accordance with s. 632.895 (6), Stats., including non-prescription insulin or any other non-prescription equipment and supplies for the treatment of diabetes, but not including any other outpatient prescription medications. Issuers are not required to duplicate expenses paid by Medicare.
Coverage for preventive health care services not covered by Medicare and as determined to be medically appropriate by an attending physician. These benefits shall be included in the basic policy. Reimbursement shall be for the actual charges up to 100% of the Medicare approved amount for each service, as if Medicare were to cover the service, as identified in the American Medical Association Current Procedural Terminology (AMA CPT) codes, to a minimum of $120 annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare.
Coverage for at least 80% of the charges for outpatient prescription drugs after a drug deductible of no more than $6,250 per calendar year. Subject to sub. (4) (a) 20., this coverage may only be included in a Medicare supplement policy issued before January 1, 2006.
Payment in full for all usual and customary expenses of hospital and ambulatory surgery center charges and anesthetics for dental care required by s. 632.895 (12), Stats. Issuers are not required to duplicate benefits paid by Medicare.
Payment in full for all usual and customary expenses for breast reconstruction required by s. 632.895 (13), Stats. Issuers are not required to duplicate benefits paid by Medicare.

(i) Permissible additional coverage only added to the policy as separate riders. The issuer shall issue a separate rider for each coverage the issuer chooses to offer. Issuers shall ensure that the riders offered are compliant with MMA, that each rider is priced separately, available for purchase separately at any time, subject to underwriting and the pre-existing limitation allowed in sub. (4) (a) 2., and may consist of the following:

Coverage for the Medicare Part A hospital deductible. The rider shall be designated: MEDICARE PART A DEDUCTIBLE RIDER;
Coverage for home health care for an aggregate of 365 visits per policy year as required by s. 632.895 (1) and (2), Stats. The rider shall be designated as: ADDITIONAL HOME HEALTH CARE RIDER;
Coverage for the Medicare Part B medical deductible. The rider shall be designated as: MEDICARE PART B DEDUCTIBLE RIDER;
Coverage for the difference between Medicare’s Part B eligible charges and the amount charged by the provider which shall be no greater than the actual charge or the limiting charge allowed by Medicare. The rider shall be designated as: MEDICARE PART B EXCESS CHARGES RIDER;
Coverage for benefits obtained outside the United States. An issuer which offers this benefit shall not limit coverage to Medicare deductibles and copayments. Coverage may contain a deductible of up to $250. Coverage shall pay at least 80% of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during at least the first 60 consecutive days of each trip outside the United States and a lifetime maximum benefit of at least $50,000. For purposes of this benefit, “emergency hospital, physicians and medical care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. The rider shall be designated as: FOREIGN TRAVEL RIDER.
At least 50% of the charges for outpatient prescription drugs after a deductible of no greater than $250 per year to a maximum of at least $3,000 in benefits received by the insured per year. The rider shall be designated as: OUTPATIENT PRESCRIPTION DRUG RIDER. This rider may only be offered for issuance or sale until January 1, 2006 in accordance with MMA.

(j) For HMO Medicare select policies, only the benefits specified in sub. (30) (p), (r) and (s), in addition to Medicare benefits.

(k) For the Medicare supplement high deductible plan that may be issued only prior to December 31, 2005 or renewed thereafter in accordance with sub. (29) (b) 1., the following:

The designation: MEDICARE SUPPLEMENT INSURANCE - HIGH DEDUCTIBLE PLAN.
100% of the covered benefits described in pars. (c) and (i) 1., 2., 3., 4. and 5. following the payment of the annual high deductible.
The annual high deductible shall consist of out-of-pocket expenses, other than premiums, for services covered in subd. 2. and shall be in addition to any other specific benefit deductibles.
The annual high deductible shall be $1500 for 1999, and shall be based on the calendar year. It shall be adjusted annually thereafter by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(m) For the Medicare supplement high deductible drug plan that may be issued only prior to December 31, 2005 or renewed thereafter in accordance with sub. (4) (a) 20., the following:

The designation: MEDICARE SUPPLEMENT INSURANCE - HIGH DEDUCTIBLE DRUG PLAN.
100% of the covered benefits described in pars. (c) and (i) 1., 2., 3., 4., 5. and 7. following the payment of the annual high deductible.
The annual high deductible shall consist of out-of-pocket expenses, other than premiums, for services covered in subd. 2. and shall be in addition to any other specific benefit deductibles.
The annual high deductible shall be $1500 for 1999, and shall be based on the calendar year. It shall be adjusted annually thereafter by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(n) For the Medicare Supplement 50% Cost-Sharing plans, only the following:

The designation: MEDICARE SUPPLEMENT 50% COST-SHARING PLAN;
Coverage of 100% of the Medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
Coverage for 100% of the Medicare Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days;
Medicare Part A Deductible: Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.;
Skilled Nursing Facility Care: Coverage for 50% of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.;
Hospice Care: Coverage for 50% of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.;
Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.;
Except for coverage provided in subd. 11., coverage for 50% of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Medicare Part B deductible until the out-of-pocket limitation is met as described under subd. 12.;
Coverage of 100% of the cost sharing for the benefits described in pars. (c) 1., 5., 6., 8., 13., 16., and 17., and (i) 2., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder pays the Medicare Part A and Part B deductible and meets the out-of-pocket limitation described under subd. 12.;
Coverage of 100% of the cost sharing for Medicare Part B preventive services after the policyholder pays the Medicare B deductible; and
Coverage of 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary.

(o) For the Medicare Supplement 25% Cost-Sharing plans, only the following:

The designation: MEDICARE SUPPLEMENT 25% COST-SHARING PLAN;
Coverage of 100% of the Medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
Coverage for 100% of the Medicare Part A hospital co-insurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days;
Medicare Part A Deductible: Coverage for 75% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.;
Skilled Nursing Facility Care: Coverage for 75% of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.;
Hospice Care: Coverage for 75% of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.;
Coverage of 75%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.;
Except for coverage provided in subd. 11., coverage for 75% of the cost sharing otherwise applicable under Medicare Part B, after the policyholder pays the Medicare Part B deductible until the out-of-pocket limitation is met as described in subd. 12.;
Coverage of 100% of the cost sharing for the benefits described in pars. (c) 1., 5., 6., 8., 13., 16., and 17., and (i) 2., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder pays the Medicare Part A and Part B deductible and meets the out-of-pocket limitation described under subd. 12.;
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder pays the Medicare Part B deductible; and
Coverage of 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary.

(5m) Authorized Medicare supplement policy and certificate designation, captions, required coverages, and permissible additional benefits for policies or certificates offered to persons first eligible for Medicare on or after June 1, 2010 and prior to January 1, 2020.

(a) All of the following standards are applicable to a Medicare supplement policy or certificate that is delivered or issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020:

No policy or certificate may be advertised, solicited, delivered, or issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020, as a Medicare supplement policy or certificate unless it complies with the benefit standards. All of the following standards are applicable to Medicare supplement policies or certificates, delivered or issued in this state:

b. Benefit standards applicable to Medicare supplement policies and certificates, issued to a person first eligible for Medicare prior to June 1, 2010, remain subject to the applicable requirements contained in sub. (5).

For a policy or certificate to meet the requirements of sub. (4m), it shall contain the authorized designation, caption and required coverage. A Medicare supplement policy or certificate shall include all of the following:

a. The designation: MEDICARE SUPPLEMENT INSURANCE.

b. The following caption, except that the word “certificate” may be used instead of “policy,” if appropriate: “The Wisconsin Insurance Commissioner has set standards for Medicare supplement insurance. This policy meets these standards. It, along with Medicare, may not cover all of your medical costs. You should review carefully all policy limitations. For an explanation of these standards and other important information, see “Wisconsin Guide to Health Insurance for People with Medicare,” given to you when you applied for this policy. Do not buy this policy if you did not get this guide.”

(d) The following required coverages shall be referred to as “Basic Medicare Supplement Coverage:”

Coverage of at least 175 days per lifetime for inpatient psychiatric hospital care upon exhaustion of Medicare hospital inpatient psychiatric coverage.
Coverage of coinsurance or copayments for Medicare Part A eligible expenses in a skilled nursing facility from the 21st through the 100th day in a benefit period.
Coverage for all Medicare Part A eligible expenses for the first 3 pints of blood or equivalent quantities of packed red blood cells to the extent not covered by Medicare.
Coverage of coinsurance or copayments for all Medicare Part A eligible expenses for hospice and respite care.
Coverage of coinsurance or copayment for Medicare Part B eligible expenses to the extent not paid by Medicare, or in the case of hospital outpatient department services paid under a prospective payment system including outpatient psychiatric care, regardless of hospital confinement, subject to the Medicare Part B calendar year deductible.
Coverage for the usual and customary home care expenses to a minimum of 40 visits per 12-month period as required under s. 632.895 (1) and (2), Stats., and s. Ins 3.54.
Coverage for skilled nursing care and kidney disease treatment as required under s. 632.895 (3) and (4), Stats. Coverage for skilled nursing care shall be in addition to the required coverage under subd. 1., payment of coinsurance or copayment for Medicare Part A eligible skilled nursing care may not count as satisfying the coverage requirement of at least 30 days of non-Medicare eligible skilled nursing care under s. 632.895 (3), Stats.
In group policies, coverage for nervous and mental disorder and alcoholism and other drug abuse coverage as required under s. 632.89, Stats.
Coverage in full for all usual and customary expenses for chiropractic services required by s. 632.87 (3), Stats. Issuers are not required to duplicate benefits paid by Medicare.
Coverage of the first 3 pints of blood payable under Medicare Part B.
Coverage of Medicare Part A eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period.
Coverage of Medicare Part A eligible expenses incurred as daily hospital charges during use of Medicare’s lifetime hospital inpatient reserve days.
Upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of all Medicare Part A eligible expenses for hospitalization not covered by Medicare for an additional 365 days to the extent the hospital is permitted to charge Medicare by federal law and regulation and subject to the Medicare reimbursement rate and a lifetime maximum benefit. The provider shall accept the issuer’s payment as payment in full and may not balance bill the insured.
Coverage in accordance with s. 632.895 (6), Stats., for treatment of diabetes including non-prescription insulin or any other non-prescription equipment and supplies for the treatment of diabetes, but not including any other outpatient prescription medications. Issuers are not required to duplicate expenses paid by Medicare.
Coverage for preventive health care services not covered by Medicare and as determined to be medically appropriate by an attending physician. These benefits shall be included in the basic policy or certificate. Reimbursement shall be for the actual charges up to 100% of the Medicare approved amount for each service, as if Medicare were to cover the service, as identified in the American Medical Association Current Procedural Terminology codes, to a minimum of $120 annually under this benefit. This benefit may not include payment for any procedure covered by Medicare.
Coverage in full for all usual and customary expenses of hospital and ambulatory surgery center charges and anesthetics for dental care required by s. 632.895 (12), Stats. Issuers are not required to duplicate benefits paid by Medicare.
Coverage in full for all usual and customary expenses for breast reconstruction required by s. 632.895 (13), Stats. Issuers are not required to duplicate benefits paid by Medicare.

(e) Permissible coverage options may only be added to the policy or certificate as separate riders. The issuer shall issue a separate rider for each option offered. Issuers shall ensure that the riders offered are compliant with MMA, each rider is priced separately, available for purchase separately at any time, subject to underwriting and the preexisting limitation allowed in sub. (4m) (a) 2. The issuer shall not issue to the same insured for the same period of coverage both the Medicare Part A Deductible rider and the Medicare 50% Part A Deductible rider. The issuer shall not issue to the same insured for the same period of coverage both the Medicare Part B Deductible rider and the Medicare Part B Copayment or Coinsurance rider. Separate riders, if offered, shall consist of the following:

Coverage of 100% of the Medicare Part A hospital deductible. The rider shall be designated: MEDICARE PART A DEDUCTIBLE RIDER.
Coverage of 50% of the Medicare Part A hospital deductible per benefit period with no out-of-pocket maximum. The rider shall be designated: MEDICARE 50% PART A DEDUCTIBLE RIDER.
Coverage of home health care for an aggregate of 365 visits per policy or certificate year as required by s. 632.895 (1) and (2), Stats. The rider shall be designated as: ADDITIONAL HOME HEALTH CARE RIDER.
Coverage of 100% of the Medicare Part B medical deductible. The rider shall be designated as: MEDICARE PART B DEDUCTIBLE RIDER.
Medicare Part B Copayment or Coinsurance Rider. Under this option, the insured’s copayment or coinsurance will be the lesser of $20 per office visit or the Medicare Part B coinsurance and the lesser of $50 per emergency room visit or the Medicare Part B coinsurance that is in addition to the Medicare Part B medical deductible. The emergency room copayment or coinsurance fee shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense. The rider shall be designated as: MEDICARE PART B COPAYMENT OR COINSURANCE RIDER.
Coverage of the difference between Medicare Part B eligible charges and the amount charged by the provider that shall be no greater than the actual charge or the limiting charge allowed by Medicare. The rider shall be designated as: MEDICARE PART B EXCESS CHARGES RIDER.
Coverage for services obtained outside the United States. An issuer that offers this benefit may not limit coverage to Medicare deductibles, coinsurance and copayments. Coverage may contain a deductible of up to $250. Coverage shall pay at least 80% of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country; which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States for up to a lifetime maximum benefit of at least $50,000. For purposes of this benefit, “emergency hospital, physicians and medical care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. The rider shall be designated as: FOREIGN TRAVEL EMERGENCY RIDER.

(f) For HMO Medicare select policies, only the benefits specified in sub. (30m) (p), (r) and (s), may be offered in addition to Medicare benefits.

(g) For the Medicare supplement 50% Cost-Sharing plans, only the following:

The designation: MEDICARE SUPPLEMENT 50% COST-SHARING PLAN.
Coverage of coinsurance or copayment for Medicare Part A hospital amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage of coinsurance or copayment of Medicare Part A hospital amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 50% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 50% of coinsurance or copayments for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.
Except for coverage provided in subd. 11., coverage for 50% of the coinsurance or copayment otherwise applicable under Medicare Part B after the policyholder or certificateholder pays the Medicare Part B deductible until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 100% of the coinsurance or copayments for the benefits described in pars. (d) 1., 6., 7., 9., 14., 16., and 17., and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductibles and meets the out-of-pocket limitation described in subd. 12.
Coverage for 100% of the coinsurance or copayments for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of [$4,440], indexed each year by the appropriate inflation adjustment specified by the secretary.

(h) For the Medicare Supplement 25% Cost-Sharing plans, only the following:

The designation: MEDICARE SUPPLEMENT 25% COST-SHARING PLAN.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 75% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 75% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 75% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 75%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.
Except for coverage provided in subd. 11., coverage for 75% of the cost sharing otherwise applicable under Medicare Part B, after the policyholder or certificateholder pays the Medicare Part B deductible until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 100% of the cost sharing for the benefits described in pars. (d) 1., 6., 7., 9., 14., 16., and 17., and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductible and meets the out-of-pocket limitation described in subd. 12.
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of [$2,220], indexed each year by the appropriate inflation adjustment specified by the secretary.

(k) For the Medicare supplement high deductible plan, the following:

The designation: MEDICARE SUPPLEMENT INSURANCE-HIGH DEDUCTIBLE PLAN.
Coverage for 100% of benefits described in pars. (d) and (e) 1., 3., 4., 6., and 7., following the payment of the annual high deductible.
The annual high deductible shall consist of out-of-pocket expenses, other than premiums, for services covered in subd. 2 and shall be in addition to any other specific benefit deductibles.
The annual high deductible shall be $2000 and shall be adjusted annually by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(5t) Authorized Medicare supplement policy and certificate designation, captions, required coverages, and permissible additional benefits for policies or certificates offered to persons first eligible for Medicare on or after January 1, 2020.

(a) All of the following standards are applicable to all Medicare supplement policies or certificates delivered or issued for delivery in this state to individuals newly eligible for Medicare on or after January 1, 2020:

Policies or certificates issued to persons newly eligible for Medicare on or after January 1, 2020, shall not provide an option to elect coverage of the Medicare Part B medical deductible rider.
Insurers may continue to sell and renew policies and certificates that contain the Medicare Part B medical deductible benefit or rider to Medicare eligible persons who were first eligible for Medicare prior to January 1, 2020.

(b)

No Medicare supplement policy or certificate may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate unless it complies with these benefit standards. All of the following standards are applicable to Medicare supplement policies or certificates delivered or issued in this state:

a. Benefit standards applicable to Medicare supplement policies and certificates issued to persons first eligible for Medicare prior to June 1, 2010, remain subject to the applicable requirements contained in sub. (5).

b. Benefit standards applicable to Medicare supplement policies and certificates issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020, remain subject to the applicable requirements contained in sub. (5m).

Policies or certificates shall contain the authorized designation, caption and required coverage in order to meet the requirements of sub. (4t). A Medicare supplement policy or certificate shall include all of the following:

a. The designation: MEDICARE SUPPLEMENT INSURANCE.

(d) All of the following required coverages shall be referred to as “Basic Medicare Supplement Coverage:”

Coverage of at least 175 days per lifetime for inpatient psychiatric hospital care upon exhaustion of Medicare hospital inpatient psychiatric coverage.
Coverage of coinsurance or copayments for Medicare Part A eligible expenses in a skilled nursing facility from the 21st through the 100th day in a benefit period.
Coverage for all Medicare Part A eligible expenses for the first 3 pints of blood or equivalent quantities of packed red blood cells to the extent not covered by Medicare.
Coverage of coinsurance or copayments for all Medicare Part A eligible expenses for hospice and respite care.
Coverage of coinsurance or copayment for Medicare Part B eligible expenses to the extent not paid by Medicare or, in the case of hospital outpatient department services paid under a prospective payment system including outpatient psychiatric care, regardless of hospital confinement, subject to the Medicare Part B calendar year deductible.
Coverage for the usual and customary home care expenses to a minimum of 40 visits per 12-month period as required under s. 632.895 (2) (d), Stats., and s. Ins 3.54.
Coverage for skilled nursing care and kidney disease treatment as required under s. 632.895 (3) and (4), Stats. Coverage for skilled nursing care shall be in addition to the required coverage under subd. 1. Payment of coinsurance or copayment for Medicare Part A eligible skilled nursing care may not count as satisfying the coverage requirement of at least 30 days of non-Medicare eligible skilled nursing care under s. 632.895 (3), Stats.
In group policies, coverage for nervous and mental disorders and alcoholism and other drug abuse coverage as required under s. 632.89, Stats.
Coverage in full for all usual and customary expenses for chiropractic services consistent with s. 632.87 (3), Stats. Issuers are not required to duplicate benefits paid by Medicare.
Coverage of the first 3 pints of blood payable under Medicare Part B.
Coverage of Medicare Part A eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period.
Coverage of Medicare Part A eligible expenses incurred as daily hospital charges during use of Medicare’s lifetime hospital inpatient reserve days.
Upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of all Medicare Part A eligible expenses for hospitalization not covered by Medicare for an additional 365 days to the extent the hospital is permitted to charge Medicare by federal law and regulation and subject to the Medicare reimbursement rate and a lifetime maximum benefit. The provider shall accept the issuer’s payment as payment in full and may not balance bill the insured.
Coverage in accordance with s. 632.895 (6), Stats., for treatment of diabetes including non-prescription insulin or any other non-prescription equipment and supplies for the treatment of diabetes, but not including any other outpatient prescription medications. Issuers are not required to duplicate expenses paid by Medicare.
Coverage for preventive health care services not covered by Medicare and as determined to be medically appropriate by an attending physician. These benefits shall be included in the basic policy or certificate. Reimbursement shall be for the actual charges up to 100% of the Medicare approved amount for each service, as if Medicare were to cover the service, as identified in the American Medical Association Current Procedural Terminology codes, to a minimum of $120 annually under this benefit. This benefit may not include payment for any procedure covered by Medicare.
Coverage in full for all usual and customary expenses of hospital and ambulatory surgery center charges and anesthetics for dental care required by s. 632.895 (12), Stats. Issuers are not required to duplicate benefits paid by Medicare.
Coverage in full for all usual and customary expenses for breast reconstruction required by s. 632.895 (13), Stats. Issuers are not required to duplicate benefits paid by Medicare.

(e) Permissible coverage options may only be added to the policy or certificate as separate riders. The issuer shall issue a separate rider for each option offered. Issuers shall ensure that the riders offered are compliant with MACRA and each rider is priced separately, available for purchase separately at any time, subject to underwriting and the preexisting limitation allowed in sub. (4t) (a) 2. The issuer shall not issue to the same insured for the same period of coverage both the Medicare Part A deductible rider and the Medicare 50% Part A deductible rider. If separate riders are offered, the separate riders shall only consist of any of the following riders:

Coverage of 100% of the Medicare Part A hospital deductible. The rider shall be designated as: MEDICARE PART A DEDUCTIBLE RIDER.
Coverage of 50% of the Medicare Part A hospital deductible per benefit period with no out-of-pocket maximum. The rider shall be designated as: MEDICARE 50% PART A DEDUCTIBLE RIDER.
Coverage of home health care for an aggregate of 365 visits per policy or certificate year as required by s. 632.895 (2) (e), Stats. The rider shall be designated as: ADDITIONAL HOME HEALTH CARE RIDER.
Coverage of Medicare Part B Copayment or Coinsurance Rider. Under this rider, the insured’s copayment or coinsurance will be the lesser of $20 per office visit or the Medicare Part B coinsurance and the lesser of $50 per emergency room visit or the Medicare Part B coinsurance that is in addition to the Medicare Part B medical deductible. The emergency room copayment or coinsurance fee shall be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense. The rider shall be designated as: MEDICARE PART B COPAYMENT OR COINSURANCE RIDER.
Coverage of the difference between Medicare Part B eligible charges and the amount charged by the provider that shall be no greater than the actual charge or the limiting charge allowed by Medicare. The rider shall be designated as: MEDICARE PART B EXCESS CHARGES RIDER.
Coverage for services obtained outside the United States. An issuer that offers this rider may not limit coverage to Medicare deductibles, coinsurance and copayments. Coverage may contain a deductible of up to $250. Coverage shall pay at least 80% of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician and medical care received in a foreign country; care that would have been covered by Medicare if provided in the United States; and when the care began during the first 60 consecutive days of each trip outside the United States for up to a lifetime maximum benefit of at least $50,000. For purposes of this rider, “emergency hospital, physicians and medical care” shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset. The rider shall be designated as: FOREIGN TRAVEL EMERGENCY RIDER.

(f) For HMO Medicare select policies, only the benefits specified in sub. (30t) (p), (r) and (s) may be offered in addition to Medicare benefits.

(g) For Medicare supplement 50% Cost-Sharing plans, all of the following shall be included:

The designation: Medicare Supplement 50% cost-sharing plan.
Coverage of coinsurance or copayment for Medicare Part A hospital amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage of coinsurance or copayment of Medicare Part A hospital amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 50% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 50% of coinsurance or copayments for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation as described in subd. 12. is met.
Except for coverage provided in subd. 11., coverage for 50% of the coinsurance or copayment otherwise applicable under Medicare Part B after the policyholder or certificateholder pays the Medicare Part B deductible until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 100% of the coinsurance or copayments for the benefits described in pars. (d) 1., 6., 7., 9., 14., 16., and 17. and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductibles and the out-of-pocket limitation described in subd. 12. is met.
Coverage for 100% of the coinsurance or copayments for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B indexed each year by the appropriate inflation adjustment specified by the secretary.

(h) For Medicare Supplement 25% Cost-Sharing plans, all of the following shall be included:

The designation: Medicare Supplement 25% cost-sharing plan.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 75% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 75% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 75% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 75%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation as described in subd. 12. is met.
Except for coverage provided in subd. 11., coverage for 75% of the cost sharing otherwise applicable under Medicare Part B, after the policyholder or certificateholder pays the Medicare Part B deductible until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 100% of the cost sharing for the benefits described in pars. (d) 1., 6., 7., 9., 14., 16., and 17. and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductible and the out-of-pocket limitation described in subd. 12. is met.
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B indexed each year by the appropriate inflation adjustment specified by the secretary.

(k) For the Medicare supplement high deductible plan, all of the following shall be included:

The designation: MEDICARE SUPPLEMENT INSURANCE-HIGH DEDUCTIBLE PLAN.
Coverage for 100% of benefits described in pars. (d) and (e) 1., 3., 5., and 6., following the payment of the annual high deductible.
The annual high deductible shall consist of out-of-pocket expenses, other than premiums, for services covered in subd. 2 and shall be in addition to any other specific benefit deductibles.
The annual high deductible shall be $2,000 and shall be adjusted annually by the secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.

(L) Nothing in this section shall be construed to prohibit an insurer from discontinuing the marketing of policies offered under sub. (5m), (5t), (7), (30m), or (30t).

(6) Usual, customary and reasonable charges. An issuer can only include a policy or certificate provision limiting benefits to the usual, customary and reasonable charge as determined by the issuer for coverages described in sub. (5) (c) 5., 8. and 13., (5m) (d) 6., 9., and 14., or (5t) (d) 6., 9., and 14. If the issuer includes such a provision, the issuer shall:

(a) Define those terms in the policy or rider and disclose to the policyholder that the UCR charge may not equal the actual charge, if this is true.

(b) Have reasonable written standards based on similar services rendered in the locality of the provider to support benefit determination which shall be made available to the commissioner on request.

(7) Authorized Medicare cost policy designation, captions and required minimum coverages.

(a) A Medicare cost policy that is issued by an issuer that has a cost contract with CMS for Medicare benefits shall meet the standards and requirements of sub. (4) and shall contain all of the following required coverages, to be referred to as “Basic Medicare cost coverage” for a policy issued to persons first eligible for Medicare after January 1, 2005, and prior to June 1, 2010:

The designation: MEDICARE COST INSURANCE;
The caption, except that the word “certificate” may be used instead of “policy,” if appropriate: “The Wisconsin Insurance Commissioner has set minimum standards for Medicare cost insurance. This policy meets these standards. For an explanation of these standards and other important information, see ‘Wisconsin Guide to health Insurance for People with Medicare,’ given to you when you bought this policy. Do not buy this policy if you did not get this guide;”
Upon exhaustion of Medicare hospital inpatient psychiatric coverage, at least 175 days per lifetime for inpatient psychiatric hospital care;
Medicare Part A eligible expenses in a skilled nursing facility for the copayments for the 21st through the 100th day;
All Medicare Part A eligible expenses for blood to the extent not covered by Medicare;
All Medicare Part B eligible expenses to the extent not paid by Medicare, or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount, including outpatient psychiatric care, subject to Medicare Part B calendar year deductible;
Coverage for the first three pints of blood payable under Medicare Part B;
Coverage of Medicare Part A eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;
Coverage of Medicare Part A eligible expenses incurred as daily hospital charges during use of Medicare’s lifetime hospital inpatient reserve days;
Upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of all Medicare Part A expenses for hospitalization not covered by Medicare and to the extent the hospital is permitted to charge by federal law and regulation or at the Medicare reimbursement rate; and
Coverage for preventive health care services not covered by Medicare and as determined to be medically appropriate by an attending physician. If offered, these benefits shall be included in the basic policy. Reimbursement shall be for the actual charges up to 100% of the Medicare approved amount for each service, as if Medicare were to cover the service, as identified in the American Medical Association Current Procedural Terminology (AMA CPT) codes, to a minimum of $120 annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare.

(b) Medicare cost policies are exempt from the provisions of s. 632.73 (2m), Stats., and are subject to all of the following:

Medicare cost policies shall permit members to disenroll at any time for any reason. Premiums paid for any period of the policy beyond the date of disenrollment shall be refunded to the member on a pro rata basis. A Medicare cost policy shall include a written provision providing for the right to disenroll that shall contain all of the following:

a. Be printed on, or attached to, the first page of the policy.

b. Have the following caption or title: “RIGHT TO DISENROLL FROM PLAN.”

c. Include the following language or substantially similar language approved by the commissioner. “You may disenroll from the plan at any time for any reason. However, it may take up to 60 days to return you to the regular Medicare program. Your disenrollment will become effective on the day you return to regular Medicare. You will be notified by the plan of the date that your disenrollment becomes effective. The plan will return any unused premium to you on a pro rata basis.”

The Medicare cost policy may require requests for disenrollment to be in writing. Enrollees may not be required to give their reasons for disenrolling, or to consult with an agent or other representative of the issuer before disenrolling.

(c) For Medicare cost policies issued to persons first eligible for Medicare prior to June 1, 2010, each issuer offering Medicare cost policies may offer an enhanced Medicare cost policy that contains the coverage described in sub. (5) (c) 5., 6., 7., 8., 13., 15., 16., 17., and the riders described in sub. (5) (i).

(cm) For Medicare cost policies issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020, each issuer offering Medicare cost policies may offer an enhanced Medicare cost policy that contains the coverage described in sub. (5m) (d) 6., 7., 8., 10., 14., 16., 17., and the riders described in sub. (5m) (e).

(ct) For Medicare cost policies issued to individuals newly eligible for Medicare on or after January 1, 2020, each issuer offering Medicare cost policies may offer an enhanced Medicare cost policy that contains the coverage described in sub. (5t) (d) 6., 7., 8., 10., 14., 16. and 17., and the riders described in sub. (5t) (e).

(d) In addition to all other subsections that are applicable to Medicare cost policies, the marketing of Medicare cost policies shall comply with the requirements of Medicare supplement policies contained in subs. (15), (21), (24), and (25). The outline of coverage listed in Appendix 1 and the replacement form specified in Appendix 7 shall be modified to accurately reflect the benefit, exclusions and other requirements that differ from Medicare supplement policies approved under sub. (5).

(dm) For Medicare cost policies issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020, in addition to all other subsections that are applicable to Medicare cost policies, the marketing of Medicare cost policies shall comply with the requirements of Medicare supplement policies contained in subs. (15), (21), (24), and (25). The outline of coverage listed in Appendix 2m and the replacement form specified in Appendix 7 shall be modified to accurately reflect the benefits, exclusions and other requirements that differ from Medicare supplement policies approved under sub. (5m).

(dt) For Medicare cost policies issued to persons newly eligible for Medicare on or after January 1, 2020, in addition to all other subsections that are applicable to Medicare cost policies, the marketing of Medicare cost policies shall comply with the requirements of Medicare supplement policies contained in subs. (15), (21), (24), and (25). The outline of coverage listed in Appendix 2t and the replacement form specified in Appendix 7 shall be modified to accurately reflect the benefits, exclusions and other requirements that differ from Medicare supplement policies approved under sub. (5t).

(8) Permissible Medicare supplement policy and certificate, Medicare select policy and certificate, and Medicare cost policy exclusions and limitations.

(a) The coverage set out in subs. (5), (5m), (5t), (7), (30), (30m), and (30t), as applicable:

Shall exclude expenses for which the insured is compensated by Medicare;
May contain an appropriate provision relating to the effect of other insurance on claims;
May contain a pre-existing condition waiting period provision as provided in sub. (4) (a) 2., which shall appear as a separate paragraph on the first page of the policy and shall be captioned or titled “Pre-existing Condition Limitations;” and
May, if issued by a health maintenance organization as defined by s. 609.01 (2), Stats., include territorial limitations which are generally applicable to all coverage issued by the plan.
May exclude coverage for the treatment of service related conditions for members or ex-members of the armed forces by any military or veterans hospital or soldier home or any hospital contracted for or operated by any national government or agency.

(b) If the insured chooses not to enroll in Medicare Part B, the issuer may exclude from coverage the expenses which Medicare Part B would have covered if the insured were enrolled in Medicare Part B. An issuer may not exclude Medicare Part B eligible expenses incurred beyond what Medicare Part B would cover.

(c) The coverages set out in subs. (5), (5m), (5t), (7), (30), (30m), and (30t) may not exclude, limit, or reduce coverage for specifically named or described preexisting diseases or physical conditions, except as provided in par. (a) 3.

(e) A Medicare cost policy, Medicare supplement policy or certificate and Medicare select policy or certificate may include other exclusions and limitations that are not otherwise prohibited and are not more restrictive than exclusions and limitations contained in Medicare.

(9) Individual policies providing nursing home, hospital confinement indemnity, specified disease and other coverages.

(a) Caption requirements. Captions required by this subsection shall be:

Printed and conspicuously placed on the first page of the Outline of Coverage,
Printed on a separate form attached to the first page of the policy, and
Printed in 18-point bold letters.

(b) Disclosure statements. The appropriate disclosure statement from Appendix 10 shall be used on the application or together with the application for each coverage in pars. (c) to (e). The disclosure statement may not vary from the text or format including bold characters, line spacing, and the use of boxes around text contained in Appendix 10 and shall use a type size of at least 12 points. The issuer may use either (a) or (aL), (b) or (bL), (c) or (cL) or (g) or (gL) providing the issuer uses the same disclosure statement for all policies of the type covered by the disclosure.

(c) Hospital confinement indemnity coverage. An individual policy form providing hospital confinement indemnity coverage sold to a Medicare eligible person:

Shall not include benefits for nursing home confinement unless the nursing home coverage meets the standards set forth in s. Ins 3.46;
Shall bear the caption, if the policy provides no other types of coverage: “This policy is not designed to fill the gaps in Medicare. It will pay you only a fixed dollar amount per day when you are confined to a hospital. For more information, see “Wisconsin Guide to Health Insurance for People with Medicare’, given to you when you applied for this policy.”
Shall bear the caption set forth in par. (e), if the policy provides other types of coverage in addition to the hospital confinement indemnity coverage.

(d) Specified disease coverage. An individual policy form providing benefits only for one or more specified diseases sold to a Medicare eligible person shall bear:

The designation: SPECIFIED OR RARE DISEASE LIMITED POLICY, and
The caption: “This policy covers only one or more specified or rare illnesses. It is not a substitute for a broader policy which would generally cover any illness or injury. For more information, see ‘Wisconsin Guide to Health Insurance for People with Medicare’, given to you when you applied for this policy.”

(e) Other coverage. An individual disability policy sold to a Medicare eligible person, other than a form subject to sub. (5) or (7) or otherwise subject to the caption requirements in this subsection or exempted by sub. (2) (d) or (e), shall bear the caption: “This policy is not a Medicare supplement. For more information, see “Wisconsin Guide to Health Insurance for People with Medicare’, given to you when you applied for this policy.”

(10) Conversion or continuation of coverage.

(a) Conversion requirements. An insured under individual, family, or group hospital or medical coverage who will become eligible for Medicare and is offered a conversion policy which is not subject to subs. (4), (4m), (4t), (5), (5m), (5t) or (7) shall be furnished by the issuer, at the time the conversion application is furnished in the case of individual or family coverage or within 14 days of a request in the case of group coverage.

An outline of coverage as described in par. (d) and
A copy of the current edition of the pamphlet described in sub. (11).

(b) Continuation requirements. An insured under individual, family, or group hospital or medical coverage who will become eligible for Medicare and whose coverage will continue with changed benefits (e.g., “carve-out” or reduced benefits) shall be furnished by the issuer, within 14 days of a request:

A comprehensive written explanation of the coverage to be provided after Medicare eligibility, and
A copy of the current edition of the pamphlet described in sub. (11).

(c) Notice to group policyholder. An issuer which provides group hospital or medical coverage shall furnish to each group policyholder:

Annual written notice of the availability of the materials described in pars. (a) and (b), where applicable, and
Within 14 days of a request, sufficient copies of the same or a similar notice to be distributed to the group members affected.

(d) Outline of coverage. The outline of coverage:

For a conversion policy which relates its benefits to or complements Medicare, shall comply with sub. (4) (b) 2., 5., and 7., (4m) (b) 2., 5., 7., or (4t) (b) 2., 5., and 7. and shall be submitted to the commissioner; and
For a conversion policy not subject to subd. 1., shall comply with sub. (9), where applicable, and s. Ins 3.27 (5) (L).

(11) “Wisconsin Guide to Health Insurance for People with Medicare” pamphlet. Every prospective Medicare eligible purchaser of any policy or certificate subject to this section which provides hospital or medical coverage, other than incidentally, or of any coverage added to an existing Medicare supplement policy or certificate, except any policy subject to s. Ins 3.46, shall receive a copy of the current edition of the commissioner’s pamphlet “Wisconsin Guide to Health Insurance for People with Medicare” in a type size no smaller than 12 point type at the time the prospect is contacted by an intermediary or issuer with an invitation to apply as defined in s. Ins 3.27 (5) (g). Except in the case of direct response insurance, written acknowledgement of receipt of this pamphlet shall be obtained by the issuer. This pamphlet provides information on Medicare and advice to people on Medicare on the purchase of Medicare supplement insurance and other health insurance. Issuers may obtain information from the commissioner’s office on how to obtain copies or may reproduce this pamphlet themselves. This pamphlet may be periodically revised to reflect changes in Medicare and any other appropriate changes. No issuer shall be responsible for providing applicants the revised pamphlet until 30 days after the issuer has been given notice that the revised pamphlet is available.

(12) Approval not a recommendation. While the commissioner may authorize the use of a particular designation on a policy or certificate in accordance with this section, that authorization is not to be construed or advertised as a recommendation of any particular policy or certificate by the commissioner or the state of Wisconsin.

(13) Exemption of certain policies and certificates from certain statutory Medicare supplement requirements. Policies and certificates described in sub. (2) (d), even if they are Medicare supplement and Medicare select policies as described in s. 600.03 (28r), Stats., or Medicare cost policies as described in s. 600.03 (28p) (a) and (c), Stats., shall not be subject to either of the following:

(a) The special right of return provision for Medicare supplement, Medicare select, or Medicare cost policies set forth in s. 632.73 (2m), Stats., and s. Ins 3.13 (2) (j) 3.

(b) The special preexisting disease provisions for Medicare supplement, Medicare select, or Medicare cost policies set forth in s. 632.76 (2) (b), Stats.

(14) Other requirements for policies or certificates with effective dates prior to June 1, 2010.

(a) Each issuer issuing policies or certificates to persons first eligible for Medicare prior to June 1, 2010, may file and utilize only one individual Medicare supplement policy form, one individual Medicare select policy form, one individual Medicare cost policy form, one group Medicare select certificate form and one group Medicare supplement certificate form with any of the accompanying riders permitted in sub. (5) (i), unless the commissioner approves the use of additional forms and the issuer agrees to aggregate experience for the various forms in calculating rates and loss ratios.

(b) An issuer shall mail any refund or return of premium directly to the insured and may not require or permit delivery by an agent or other representative.

(c) An issuer shall comply with section 1882 (c) (3) of the social security act, as enacted by section 4081 (b) (2) (C) of the Omnibus Budget Reconciliation Act of 1987 (OBRA) 1987, Pub. L. No. 100-203, by complying with all of the following:

Accepting a notice from a Medicare issuer on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice.
Notifying the participating physician or supplier and the beneficiary of the payment determination.
Paying the participating physician or supplier directly.
Furnishing, at the time of enrollment, each insured with a card listing the policy name, number and a central mailing address to which notices from a Medicare issuer may be sent.
Paying user fees for claim notices that are transmitted electronically or otherwise.
Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare issuers.
Certifying compliance with the requirements set forth in this subsection on the Medicare supplement insurance experience reporting form.

(d) Except as provided in subd. 1., an issuer shall continue to make available for purchase any Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy form or certificate form issued after August 1, 1992, that has been approved by the commissioner. A policy form or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.

An issuer may discontinue the availability of a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy form or certificate form if the issuer provides to the commissioner in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the commissioner, the issuer shall no longer offer for sale the discontinued policy form or certificate for in this state.
An issuer that discontinues the availability of a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy form or certificate form pursuant to subd. 1., shall not file for approval a new policy form or certificate form for a period of 5 years after the issuer provides notice to the commissioner of the discontinuance. The period of discontinuance may be reduced if the commissioner determines that a shorter period is appropriate.
This subsection shall not apply to the riders permitted in sub. (5) (i).

(e) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.

(f) A change in the rating structure or methodology shall be considered a discontinuance under par. (d) 1. unless the issuer complies with the following requirements:

The issuer provides an actuarial memorandum, in a form and manner prescribed by the commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and resultant rates.
The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The commissioner may approve a change to the differential which is in the public interest.

(g) Except as provided in par. (h) the experience of all policy forms or certificate forms of the same type in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in sub. (31).

(h) Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.

(i) No issuer may issue a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy to an applicant 75 years of age or older, unless the applicant is subject to sub. (3r) or, prior to issuing coverage, the issuer either agrees not to rescind or void the policy or certificate except for intentional fraud in the application, or obtains one of the following:

A copy of a physical examination.
An assessment of functional capacity.
An attending physician’s statement.
Copies of medical records.

(j) Notwithstanding par. (a), an issuer may file and use only one individual Medicare select policy form and one group Medicare select policy form. These policy forms shall not be aggregated with non-Medicare select forms in calculating premium rates, loss ratios and premium refunds.

(k) If an issuer nonrenews an insured who has a nonguaranteed renewable Medicare supplement policy with the issuer, the issuer shall at the time any notice of nonrenewal is sent to the insured, offer a currently available individual replacement Medicare supplement policy and those currently available riders resulting in coverage substantially similar to coverage provided by the replaced policy without underwriting. This replacement shall comply with sub. (27).

(L) For policies issued to persons first eligible for Medicare between December 31, 1980, and January 1, 1992, issuers shall combine the Wisconsin experience of all policy forms of the same type, as defined at sub. (3) (zar), for the purpose of calculating the loss ratio under sub. (16) (c) and rates. The rates for all such policies or certificates of the same type shall be adjusted by the same percentage. Issuers may combine the Wisconsin experience of all policies issued prior to January 1, 1981, with those issued between December 31, 1980, and January 1, 1992, if the issuer uses the 60% loss ratio for individual policies and the 70% loss ratio for group policies renewed prior to January 1, 1996, and the appropriate loss ratios specified in sub. (16) (d) thereafter. For policies issued on or after January 1, 1992, and prior to June 1, 2010, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type, for the purpose of calculating the amount of refund or premium credit, if any, if the issuer uses the 65% loss ratio for individual policies and the 75% loss ratio for group certificates renewed on or after January 1, 1996, and prior to June 1, 2010, and the appropriate loss ratios specified in sub. (16) (d). If the Wisconsin experience is not credible, then national experience can be considered.

(m) If Medicare determines the eligibility of a covered service, then the issuer shall use Medicare’s determination in processing claims.

(14m) Other requirements for policies or certificates issued to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020.

(a) Each issuer issuing policies or certificates to persons first eligible for Medicare on or after June 1, 2010, and prior to January 1, 2020, may file and utilize only one individual Medicare supplement policy form, one individual Medicare select policy form, one individual Medicare cost policy form, one group Medicare select certificate form, and one group Medicare supplement certificate form with any of the accompanying riders permitted in sub. (5m) (e), unless the commissioner approves the use of additional forms and the issuer agrees to aggregate experience for the various forms in calculating rates and loss ratios.

(b) An issuer shall mail any refund or return of premium directly to the insured and may not require or permit delivery by an agent or other representative.

(c) An issuer shall comply with section 1882 (c) (3) of the Social Security Act, as enacted by section 4081 (b) (2) (C) of the Omnibus Budget Reconciliation Act of 1987 (OBRA) 1987, Pub. L. No. 100-203, by complying with all of the following:

Accepting a notice from a Medicare issuer on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice.
Notifying the participating physician or supplier and the beneficiary of the payment determination.
Paying the participating physician or supplier directly.
Furnishing, at the time of enrollment, each insured with a card listing the policy or certificate name, number and a central mailing address to which notices from a Medicare issuer may be sent.
Paying user fees for claim notices that are transmitted electronically or otherwise.
Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare issuers.
Certifying compliance with the requirements set forth in this subsection on the Medicare supplement insurance experience reporting form.

(d)

Except as provided in subd. 2., an issuer shall continue to make available for purchase any policy or certificate form issued to persons first eligible for Medicare after May 31, 2010, and prior to January 1, 2020, that has been approved by the commissioner. A policy or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.
An issuer may discontinue the availability of a policy form or certificate form if the issuer provides to the commissioner in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the commissioner, the issuer shall no longer offer for sale the policy form or certificate form in this state.
An issuer that discontinues the availability of a policy or certificate form pursuant to subd. 2., shall not file for approval a new policy form or certificate form of the same type, as defined at sub. (3) (zar), as the discontinued form for a period of 5 years after the issuer provides notice to the commissioner of the discontinuance. The period of discontinuance may be reduced if the commissioner determines that a shorter period is appropriate.
This subsection shall not apply to the riders permitted in sub. (5m) (e).

(e) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.

(f) A change in the rating structure or methodology shall be considered a discontinuance under par. (d) 1. unless the issuer complies with the following requirements:

The issuer provides an actuarial memorandum, in a form and manner prescribed by the commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and resultant rates.
The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The commissioner may approve a change to the differential that is in the public interest.

(h) Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.

(i) No issuer may issue a Medicare supplement policy or certificate, a Medicare select policy or certificate, or a Medicare cost policy to an applicant 75 years of age or older, unless the applicant is subject to sub. (3r) or, prior to issuing coverage, the issuer either agrees not to rescind or void the policy or certificate except for intentional fraud in the application, or obtains one of the following:

A copy of a physical examination.
An assessment of functional capacity.
An attending physician’s statement.
Copies of medical records.

(j) Notwithstanding par. (a), an issuer may file and use only one individual Medicare select policy or certificate form and one group Medicare select policy or certificate form. These policy or certificate forms shall not be aggregated with non-Medicare select forms in calculating premium rates, loss ratios and premium refunds.

(k) If an issuer nonrenews an insured who has a nonguaranteed renewable Medicare supplement policy or certificate with the issuer, the issuer shall, at the time any notice of nonrenewal is sent to the insured, offer a currently available individual replacement Medicare supplement policy or certificate and those currently available riders resulting in coverage substantially similar to coverage provided by the replaced policy or certificate without underwriting. This replacement shall comply with sub. (27).

(L) For policies or certificates issued with an effective date on or after June 1, 2010, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type (individual or group) for the purposes of calculating the loss ratio under sub. (16) (c) and rates. The rates for all such policies or certificates of the same type shall be adjusted by the same percentage. If the Wisconsin experience is not credible, then national experience can be considered.

(m) If Medicare determines the eligibility of a covered service, then the issuer shall use Medicare’s determination in processing claims.

(14t) Other requirements for Medicare supplement policies or certificates, Medicare select policies or certificates, or Medicare cost policies to persons newly eligible for Medicare on or after January 1, 2020.

(a) Each issuer issuing policies or certificates to persons newly eligible for Medicare on or after January 1, 2020, may file and utilize only one individual Medicare supplement policy form, one individual Medicare select policy form, one individual Medicare cost policy form, one group Medicare select certificate form, and one group Medicare supplement certificate form with any of the accompanying riders permitted in sub. (5t) (e), unless the commissioner approves the use of additional forms and the issuer agrees to aggregate experience for the various forms in calculating rates and loss ratios.

(b) An issuer shall mail any refund or return of premium directly to the insured and may not require or permit delivery by an agent or other representative.

(c) An issuer shall comply with section 1882 (c) (3) of the social security act, 42 USC 1395ss, by complying with all of the following:

Accepting a notice from a Medicare issuer on dually assigned claims submitted by participating physicians and suppliers as a claim for benefits in place of any other claim form otherwise required and making a payment determination on the basis of the information contained in that notice.
Notifying the participating physician or supplier and the beneficiary of the payment determination.
Paying the participating physician or supplier directly.
Furnishing, at the time of enrollment, each insured with a card listing the policy or certificate name, number and a central mailing address to which notices from a Medicare issuer may be sent.
Paying user fees for claim notices that are transmitted electronically or otherwise.
Providing to the secretary, at least annually, a central mailing address to which all claims may be sent by Medicare issuers.
Certifying compliance with the requirements set forth in this subsection on the Medicare supplement insurance experience reporting form.

(d)

Except as provided in subd. 2., an issuer shall continue to make available for purchase any policy or certificate form issued after December 31, 2019, that has been approved by the commissioner. A policy or certificate form shall not be considered to be available for purchase unless the issuer has actively offered it for sale in the previous 12 months.
An issuer may discontinue the availability of a policy or certificate form if the issuer provides to the commissioner in writing its decision at least 30 days prior to discontinuing the availability of the form of the policy or certificate. After receipt of the notice by the commissioner, the issuer shall no longer offer for sale the policy or certificate form in this state.
An issuer that discontinues the availability of a policy or certificate form pursuant to subd. 2., shall not file for approval a new policy or certificate form of the same type, as defined at sub. (3) (zar), as the discontinued form for a period of 5 years after the issuer provides notice to the commissioner of the discontinuance. The period of discontinuance may be reduced if the commissioner determines that a shorter period is appropriate.
This subsection shall not apply to the riders permitted in sub. (5t) (e).

(e) The sale or other transfer of Medicare supplement business to another issuer shall be considered a discontinuance for the purposes of this subsection.

(f) A change in the rating structure or methodology shall be considered a discontinuance under par. (d) 1., unless the issuer complies with the following requirements:

The issuer provides an actuarial memorandum, in a form and manner prescribed by the commissioner, describing the manner in which the revised rating methodology and resultant rates differ from the existing rating methodology and resultant rates.
The issuer does not subsequently put into effect a change of rates or rating factors that would cause the percentage differential between the discontinued and subsequent rates as described in the actuarial memorandum to change. The commissioner may approve a change to the differential that is in the public interest.

(g) Except as provided in par. (h), the experience of all policy or certificate forms of the same type, as defined in sub. (3) (zar), in a standard Medicare supplement benefit plan shall be combined for purposes of the refund or credit calculation prescribed in sub. (31).

(h) Forms assumed under an assumption reinsurance agreement shall not be combined with the experience of other forms for purposes of the refund or credit calculation.

A copy of a physical examination.
An assessment of functional capacity.
An attending physician’s statement.
Copies of medical records.

(j) Notwithstanding par. (a), an issuer may file and use only one individual Medicare select policy form and one group Medicare select certificate form. These policy or certificate forms shall not be aggregated with non-Medicare select forms in calculating premium rates, loss ratios and premium refunds.

(k) If an issuer nonrenews an insured who has a nonguaranteed renewable Medicare supplement policy or certificate with the issuer, the issuer shall at the time any notice of nonrenewal is sent to the insured, offer a currently available individual replacement Medicare supplement policy or certificate and those currently available riders resulting in coverage substantially similar to coverage provided by the replaced policy or certificate without underwriting. This replacement shall comply with sub. (27).

(L) For policies or certificates issued to persons newly eligible for Medicare on or after January 1, 2020, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type, as defined at sub. (3) (zar), for the purpose of calculating the loss ratio under sub. (16) (d), and rates. The rates for all policies or certificates of the same type shall be adjusted by the same percentage. If the Wisconsin experience is not credible, then national experience can be considered.

(m) If Medicare determines the eligibility of a covered service, then the issuer shall use Medicare’s determination in processing claims.

(15) Filing requirements for advertising. Prior to use in this state, every issuer shall file with the commissioner a copy of any advertisement used in connection with the sale of Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policies issued with an effective date after December 31, 1989. If the advertisement does not reference a particular issuer or Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy, each agent utilizing the advertisement shall file the advertisement with the commissioner in the manner compliant with the commissioner’s instructions. The advertisements shall comply with all applicable laws and rules of this state, including s. Ins 3.27 (9).

(16) Loss ratio requirements and rates for existing policies.

(a) Every issuer providing Medicare supplement or Medicare select coverage on a group or individual basis on policies or certificates in this state shall file annually its rates, rating schedule and supporting documentation including ratios of incurred losses or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis to earned premiums by policy duration for approval by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner. All filings of rates and rating schedules shall demonstrate that expected claims in relation to premiums comply with the requirements of par. (d) when combined with actual experience to date. Filings of rate revisions shall also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards.

(b) The supporting documentation shall also demonstrate in accordance with the actuarial standards of practice using reasonable assumptions that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. Such demonstration shall exclude active life reserves. An expected 3rd year loss ratio which is greater than or equal to the applicable percentage shall be demonstrated for policies or certificates in force less than 3 years.

(c) As soon as practicable, but prior to the effective date of enhancements in Medicare benefits, every issuer providing Medicare supplement or Medicare select policies or certificates in this state shall file with the commissioner in accordance with the applicable filing procedures of this state appropriate premium adjustments necessary to produce loss ratios as originally anticipated for the current premium for the applicable policies or certificates. Supporting documents as necessary to justify the adjustment shall accompany the filing.

Every issuer shall make such premium adjustments as are necessary to produce an expected loss ratio under such policy or certificate as will conform with minimum loss ratio standards for Medicare supplement or Medicare cost policies and which are expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premiums by the issuer for such Medicare supplement or Medicare cost insurance policies or certificates. No premium adjustment which would modify the loss ratio experience under the policy other than the adjustments described herein should be made with respect to a policy at any time other than upon its renewal date or anniversary date.
If an issuer fails to make premium adjustments acceptable to the commissioner, the commissioner may order premium adjustments, refunds or premium credits deemed necessary to achieve the loss ratio required by this subsection.
An issuer shall file any appropriate riders, endorsements or policy forms needed to accomplish the Medicare supplement or Medicare cost policy or certificate modifications necessary to eliminate benefit duplications with Medicare. Such riders, endorsements or policy forms shall provide a clear description of the Medicare supplement or Medicare cost benefits provided by the policy or certificate.

(d) For purposes of subs. (4) (e), (4m) (e), (4t) (e), (14) (L), (14m) (L), (14t) (L) and this subsection, the loss ratio standards shall be:

At least 65% in the case of individual policies;
At least 75% in the case of group policies, and
For existing policies subject to this subsection, the loss ratio shall be calculated on the basis of incurred claims experience or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis and earned premiums for such period and in accordance with accepted actuarial principles and practices. Incurred health care expenses when coverage is provided by a health maintenance organization may not include any of the following:

a. Home office and overhead costs.

b. Advertising costs.

c. Commissions and other acquisition costs.

d. Taxes.

e. Capital costs.

f. Administrative costs.

g. Claims processing costs.

(e) An issuer may not use or change any premium rates for an individual or group Medicare supplement policy or certificate unless the rates, rating schedule, and supporting documentation have been filed with and not disapproved by the commissioner in accordance with the filing requirements and procedures prescribed by the commissioner and in accordance with subs. (4) (g), (4m) (f), and (4t) (f) as applicable.

(17) New or Innovative Benefits. An issuer may offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards and is filed and approved by the commissioner. The new or innovative benefits may include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available and are cost-effective. New or innovative benefits may not include an outpatient prescription drug benefit. New or innovative benefits may not be used to change or reduce benefits, including a change of any cost-sharing provision. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification.

(18) Electronic enrollment.

(a) Any requirement that a signature of an insured be obtained by an agent or issuer offering any Medicare supplement or replacement plans shall be satisfied if all of the following are met:

The consent of the insured is obtained by telephonic or electronic enrollment by the issuer or group policyholder or certificateholder. A verification of the enrollment information shall be provided in writing to the applicant with the delivery of the policy or certificate.
The telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure the accuracy, retention and prompt retrieval of records as required pursuant to ch. 137, subch. II, Stats.
The telephonic or electronic enrollment provides necessary and reasonable safeguards to ensure that the confidentiality of personal financial and health information as defined in s. 610.70, Stats., and ch. Ins 25 is maintained.

(b) The issuer shall make available, upon request of the commissioner, records that demonstrate the issuer’s ability to confirm enrollment and coverage.

(21) Commission limitations.

(a) An issuer may provide and an agent or other representative may accept commission or other compensation for the sale of a Medicare supplement policy or certificate, or Medicare select policy or certificate only if the first year commission or other first year compensation is no more than 200% of the commission or other compensation paid for selling or servicing the policy or certificate in the 2nd year.

(b) The commission or other compensation provided in subsequent renewal years shall be the same as that provided in the 2nd year or period and shall be provided for at least 5 renewal years.

(c) If an existing policy or certificate is replaced, no entity may provide compensation to its producers and no agent or producer may receive compensation greater than the renewal compensation payable by the replacing issuer on the policy or certificate.

(d) For purposes of this section, “compensation” includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including but not limited to bonuses, gifts, prizes, awards, finder’s fees, and policy fees.

(e) No issuer may provide an agent or other representative commission or compensation for the sale of a Medicare supplement or Medicare cost policy or certificate to an individual who is under age 66 which is either calculated on a different basis or is less than the average of the commissions paid for the sale of a Medicare supplement or Medicare cost policy or certificate to an individual who is age 65 to age 69.

(f) No issuer may provide an agent or other representative commission or compensation for the sale of any other Medicare supplement policy or certificate, or Medicare select policy or certificate to an individual who is eligible for guaranteed issue under sub. (34), calculated on a different basis of the commissions paid for the sale of a Medicare supplement policy or certificate, or Medicare select policy or certificate to an individual who is eligible for open enrollment under sub. (3r).

(22) Required disclosure provisions.

(a) Medicare supplement and Medicare cost policies and certificates shall include a renewal or continuation provision. The language or specifications of such provision must be consistent with the type of contract issued. Such provision shall be appropriately captioned and shall appear on the first page of the policy and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder’s age.

(b) Except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement or Medicare cost policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits; all riders or endorsements added to a Medicare supplement or Medicare cost policy after date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require a signed acceptance by the insured. After the date of policy or certificate issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement or Medicare cost insurance policies, or if the increased benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the policy.

(d) If a Medicare supplement policy or certificate or Medicare select policy or certificate contains any limitations with respect to preexisting conditions, such limitations may appear on the first page or as a separate paragraph of the policy and be labeled as “Preexisting Condition Limitations.”

(e) Medicare supplement or Medicare cost policies and certificates shall have a notice prominently printed on the first page of the policy and certificate or attached thereto stating in substance that the policyholder or certificateholder shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason.

(f) As soon as practicable, but no later than 30 days prior to the annual effective date of any Medicare benefit changes, an issuer shall notify its policyholders and certificateholders of modifications it has made to Medicare supplement, Medicare select, or Medicare cost policies or certificates in the format similar to Appendix 4, Appendix 4m, or Appendix 4t. The notice shall satisfy all of the following:

Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy; and
Inform each policyholder or certificateholder as to when any premium adjustment is to be made due to changes in Medicare.

(g) The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension.

(h) Such notices shall not contain or be accompanied by any solicitation.

(i) Issuers shall comply with any notice requirements of the MMA.

(23) Requirements for application forms and replacement coverage.

(a) Application forms for a Medicare supplement policy or certificate, a Medicare select policy or certificate, and a Medicare cost policy shall comply with all relevant statutes and rules. The application form, or a supplementary form signed by the applicant and agent, shall include the following statements and questions:

You do not need more than one Medicare supplement, Medicare cost or Medicare select policy.
If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.
You may be eligible for benefits under Medicaid and may not need a Medicare supplement, Medicare cost or Medicare select policy.
If after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your Medicare supplement, Medicare cost or Medicare select policy can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended Medicare supplement, Medicare cost or Medicare select policy, or, if that is no longer available, a substantially equivalent policy, will be reinstituted if requested within 90 days of losing Medicaid eligibility. If the Medicare supplement, Medicare cost or Medicare select policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of suspension.
If you are eligible for and have enrolled in a Medicare supplement or Medicare cost policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement or Medicare cost policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement or Medicare cost policy under these circumstances, and later lose your employer or union-based group health plan, your suspended Medicare supplement or Medicare cost policy or, if that is no longer available, a substantially equivalent policy will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. If the Medicare supplement or Medicare cost policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of suspension.
Counseling services may be available in your state or provide advice concerning your purchase of Medicare supplement or Medicare cost insurance and concerning medical assistance through the state Medicaid program, including benefits as a Qualified Medicare Beneficiary (QMB) and a Specified Low-Income Medicare Beneficiary (SLMB). See the booklet “Wisconsin Guide to Health Insurance for People with Medicare” which you received at the time you were solicited to purchase this policy.

(b) Agents shall list, in a supplementary form signed by the agent and submitted to the issuer with each application for Medicare supplement coverage, any other health insurance policies they have sold to the applicant as follows:

Any policy sold which is still in force.
Any policy sold in the past 5 years which is no longer in force.

(bL) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the issuer, shall be returned to the applicant by the issuer upon delivery of the policy.

(c) Upon determining that a sale will involve replacement, an issuer, other than a direct response issuer, or its agent, shall furnish the applicant, prior to issuance or delivery of the Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy, a notice regarding the replacement of Medicare supplement coverage in no less than 12 point type. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the solicitation of the policy the notice regarding replacement of Medicare supplement coverage.

(d) The notice required by par. (c) for an issuer shall be provided in substantially the form as shown in Appendix 7.

(e) If the application contains questions regarding health and tobacco usage, include a statement that health questions should not be answered if the applicant is in the open-enrollment period described in sub. (3r), or during a guaranteed issue period under sub. (34).

(24) Standards for marketing.

(a) Every issuer marketing Medicare supplement insurance coverage in this state, directly or through its producers, shall do all of the following:

Establish marketing procedures to assure that any comparison of policies by its agents or other producers will be fair and accurate.
Establish marketing procedures to assure excessive insurance is not sold or issued.
Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or insured for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance.
Display prominently by type-size, stamp or other appropriate means, on the first page of the policy the following: “Notice to buyer: This policy may not cover all of your medical expenses.”

(b) Every issuer marketing Medicare supplement insurance shall establish auditable procedures for verifying compliance with par. (a).

‘Twisting.’ Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or issuers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another issuer.
‘High pressure tactics.’ Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.
‘Cold lead advertising.’ Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose is solicitation of the purchase of insurance and that contact will be made by an agent or issuer.

(e) In regards to any transaction involving a Medicare supplement policy, no person subject to regulation under chs. 600 to 655, Stats., may knowingly prevent or dissuade or attempt to prevent or dissuade, any person from:

Filing a complaint with the office of the commissioner of insurance; or
Cooperating with the office of the commissioner of insurance in any investigation; or
Attending or giving testimony at any proceeding authorized by law.

(f) If an insured exercises the right to return a policy during the free-look period, the issuer shall mail the entire premium refund directly to the person who paid the premium.

(g) The terms “Medicare Supplement,” “Medigap,” “Medicare Wrap Around,” and “Medicare Advantage Supplement” and words of similar import may not be used in any materials including advertisements as defined in s. Ins 3.27 (5) (a), unless the policy or certificate is issued in compliance with this section.

(25) Appropriateness of recommended purchase and excessive insurance.

(a) In recommending the purchase or replacement of any Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

(b) Any sale of Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy that will provide an individual more than one Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy is prohibited.

(c) An agent shall forward each application taken for a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy to the issuer within 7 calendar days after taking the application. An agent shall mail the portion of any premium collected due the issuer to the issuer within 7 days after receiving the premium.

(d) An agent may not take and an issuer may not accept an application from an insured more than 3 months prior to the insured becoming eligible.

(26) Reporting of multiple policies.

(a) On or before March 1 of each year, every issuer providing Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy in this state shall report the following information for every individual resident of this state for which the insurer has in force more than one Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy:

Policy and certificate number.
Date of issuance.
Type of policy.
Company name and national association of insurance commissioners number.
Name and contact information of person completing the form.
Other information as requested by the commissioner.

(b) The items in par. (a) must be grouped by individual policyholder or certificateholder and listed on a form made available by the commissioner. Issuers shall submit the information in the manner compliant with the commissioner’s instructions on or before March 1 of each year.

(27) Waiting periods in replacement policies or certificates. If a Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy replaces another Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy that has been in effect for at least 6 months, the replacing issuer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new Medicare supplement, Medicare select, or new Medicare cost policy for similar benefits to the extent such periods were satisfied under the original policy or certificate.

(28) Group certificate continuation and conversion requirements.

(a) If a group Medicare supplement insurance policy is terminated by the group policyholder and not replaced as provided in par. (c), the issuer shall offer certificateholders at least the following choices:

An individual Medicare supplement policy which provides for continuation of the benefits contained in the group policy; and
At the option of the group issued a certificate, offer the certificateholder continuations of coverage under the group certificate for the time specified in s. 632.897, Stats.

(b) If membership in a group is terminated, the issuer shall:

Offer the certificateholder such conversion opportunities as are described in par. (a); or
At the option of the group policyholder, offer the certificateholder continuation of coverage under the group policy for the time specified in s. 632.897, Stats.

(c) If a group Medicare supplement certificate is replaced by another group Medicare supplement certificate, the issuer of the replacement certificate shall offer coverage to all persons covered under the old group certificate on its date of termination. Coverage under the new group certificate shall not result in any exclusion for preexisting conditions that would have been covered under the group certificate being replaced.

(29) Filing and approval requirements.

(a) An issuer shall not deliver or issue for delivery a Medicare supplement policy or certificate, Medicare select policy or certificate or Medicare cost policy to a resident of this state unless the policy form or certificate form has been filed with and approved by the commissioner in accordance with filing requirements and procedures prescribed by the commissioner.

(b) An issuer shall file with the commissioner any new riders or amendments to policy or certificate forms to delete coverage for outpatient prescription drugs as required by MMA.

Beginning January 1, 2007, issuers shall replace existing amended policies and riders for current and renewing insureds with filed and approved policy or certificate forms that are compliant with the MMA. An issuer shall, beginning January 1, 2007, use filed and approved policy or certificate forms that are compliant with the MMA for all new business.

(30) Medicare select policies and certificates.

(a)

This subsection shall apply only to Medicare select policies and certificates issued to persons first eligible for Medicare prior to June 1, 2010. This subsection does not apply to Medicare supplement policies and certificates or Medicare cost policies.
No Medicare select policy or certificate may be advertised as a Medicare select policy or certificate unless it meets the requires of this subsection.

(c) The commissioner may authorize an issuer to offer a Medicare select policy or certificate, pursuant to this subsection and section 4358 of the Omnibus Budget Reconciliation Act of 1990, if the commissioner finds that the issuer has satisfied all of the requirements of this subsection.

(d) A Medicare select issuer shall not issue a Medicare select policy or certificate in this state until its plan of operation has been approved by the commissioner.

(e) A Medicare select issuer shall file a proposed plan of operation with the commissioner in a format prescribed by the commissioner. The plan of operation shall contain at least the following information:

Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration that:

a. Such services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation and after-hour care. The hours of operation and availability of after-hour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual medical travel times within the community.

b. The number of network providers in the service area is sufficient, with respect to current and expected policyholders, either to deliver adequately all services that are subject to a restricted network provision or to make appropriate referrals.

c. There are written agreements with network providers describing specific responsibilities.

d. Emergency care is available 24 hours per day and 7 days per week.

e. In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting such providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare select policy or certificate. This paragraph shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare select policy or certificate.

A statement or map providing a clear description of the service area.
A description of the grievance procedure to be utilized.
A description of the quality assurance program, including:

a. The formal organizational structure;

b. The written criteria for selection, retention and removal of network providers; and

c. The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted.

A list and description, by specialty, of the network providers.
Copies of the written information proposed to be used by the issuer to comply with par. (i).
Any other information requested by the commissioner.

(f)

A Medicare select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the commissioner prior to implementing such changes. Such changes shall be considered approved by the commissioner after 30 days unless specifically disapproved.
An updated list of network providers shall be filed with the commissioner at least quarterly.

(g) A Medicare select policy or certificate shall not restrict payment for covered services provided by non-network providers if:

The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition; and
It is not reasonable to obtain such services through a network provider.

(h) A Medicare select policy or certificate shall provide payment for full coverage under the policy for covered services that are not available through network providers.

(i) A Medicare select issuer shall make full and fair disclosure in writing of the provisions, restrictions and limitations of the Medicare select policy or certificate to each applicant. This disclosure shall include at least the following:

An outline of coverage in substantially the same format as Appendix 1 sufficient to permit the applicant to compare the coverage and premiums of the Medicare select policy or certificate with:

a. Other Medicare supplement policies or certificates offered by the issuer; and

b. Other Medicare select policies or certificates.

A description, including address, phone number and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals and other providers.
A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. Except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in the Medicare Select 50% and 25% Coverage Cost-Sharing plans offered by the Medicare select issuer pursuant to pars. (q) and (r).
A description of coverage for emergency and urgently needed care and other out of service area coverage.
A description of limitations on referrals to restricted network providers and to other providers.
A description of the policyholder’s or certificateholder’s rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer.
A description of the Medicare select issuer’s quality assurance program and grievance procedure.
A designation: MEDICARE SELECT POLICY. This designation shall be immediately below and in the same type size as the designation required in sub. (5) (a) or (7) (b) 1.
The caption, except that the word “certificate” may be used instead of “policy,” if appropriate: “The Wisconsin Insurance Commissioner has set standards for Medicare select policies. This policy meets these standards. It, along with Medicare, may not cover all of your medical costs. You should review carefully all policy limitations. For an explanation of these standards and other important information, see ‘Wisconsin Guide to Health Insurance for People with Medicare,’ given to you when you applied for this policy. Do not buy this policy if you did not get this guide.”

(j) Prior to the sale of a Medicare select policy or certificate, a Medicare select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to par. (i) and that the applicant understands the restrictions of the Medicare select policy or certificate.

(k) A Medicare select issuer shall have and use procedures for hearing complaints and resolving written grievances from its subscribers for Wisconsin mandated benefits. The grievance procedures shall be aimed at mutual agreement for settlement, may include arbitration procedures, and may include all of the following:

The grievance procedure shall be described in the policy and certificate and in the outline of coverage.
At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder describing how a grievance may be registered with the issuer.
Grievances shall be considered in a timely manner and shall be transmitted to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.
If a grievance is found to be valid, corrective action shall be taken promptly.
All concerned parties shall be notified about the results of a grievance.
The issuer shall report no later than each March 31st to the commissioner regarding its grievance procedure. The report shall be in a format prescribed by the commissioner and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.

(L) At the time of initial purchase, a Medicare select issuer shall make available to each applicant for a Medicare select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer.

(m)

At the request of an individual insured under a Medicare select policy or certificate, a Medicare select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer, which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make such policies or certificates available without requiring evidence of insurability after the Medicare select policy or certificate has been in force for 6 months.
For the purposes of subd. 1., a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Medicare Part B excess charges.

(n) Medicare select policies and certificates shall provide for continuation of coverage in the event the secretary determines that Medicare select policies and certificates issued pursuant to this section should be discontinued due to either the failure of the Medicare select federal program to be reauthorized under law or its substantial amendment.

Each Medicare select issuer shall make available to each individual insured under a Medicare select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer, which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make such policies and certificates available without requiring evidence of insurability.
For the purposes of subd. 1., a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at–home recovery services or coverage for Medicare Part B excess charges.

(o) A Medicare select issuer shall comply with reasonable requests for data made by state or federal agencies, including the CMS, for the purpose of evaluating the Medicare select program.

(p) Except as provided in par. (q) or (r), a Medicare select policy shall contain the following benefits:

The “basic Medicare supplement coverage” as described in sub. (5) (c).
Coverage for the Medicare Part A hospital deductible as described in sub. (5) (i) 1.
Coverage for home health care for an aggregate of 365 visits per policy year as described in sub. (5) (i) 2.
Coverage for the Medicare Part B medical deductible as described in sub. (5) (i) 3.
Coverage for the difference between Medicare Part B eligible charges and the actual charges for authorized referral services. This coverage shall not be described with words or terms that would lead insureds to believe the coverage is for Medicare part B Excess Charges as described in sub. (5) (i) 4.
Coverage for benefits obtained outside of the United States as described in sub. (5) (i) 5.
Coverage for preventive health care services as described in sub. (5) (c) 14.
Coverage for at least 80% of the charges for outpatient prescription drugs after a drug deductible of no more than $6,250 per calendar year. This coverage may only be included in a Medicare select policy issued before January 1, 2006.

(q) The Medicare Select 50% Cost-Sharing plans shall only contain the following:

The designation: MEDICARE SELECT 50% COST-SHARING PLAN;
Coverage of 100% of the Medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
Coverage for 100% of the Medicare Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days;
Medicare Part A Deductible: Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.;
Skilled Nursing Facility Care: Coverage for 50% of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.;
Hospice Care: Coverage for 50% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.;
Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.;
Except for coverage provided in subd. 11., coverage for 50% of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Medicare Part B deductible until the out-of-pocket limitation is met as described under subd. 12.;
Coverage of 100% of the cost sharing for the benefits described in sub. (5) (c) 1., 5., 6., 8., 13., 16., and 17., and (i) 2., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder pays the Medicare Part A and Part B deductible and meets the out-of-pocket limitation described under subd. 12.;
Coverage of 100% of the cost sharing for Medicare Part B preventive services after the policyholder pays the Medicare Part B deductible; and
Coverage of 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary.

(r) The Medicare Select 25% Coverage Cost-Sharing plans shall only contain the following:

The designation: MEDICARE SELECT 25% COST-SHARING PLAN;
Coverage of 100% of the Medicare Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;
Coverage for 100% of the Medicare Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days;
Medicare Part A Deductible: Coverage for 75% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.;
Skilled Nursing Facility Care: Coverage for 75% of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.;
Hospice Care: Coverage for 75% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.;
Coverage for 75%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.;
Except for coverage provided in subd. 11., coverage for 75% of the cost sharing otherwise applicable under Medicare Part B, except there shall be no coverage for the Medicare Part B deductible until the out-of-pocket limitation is met as described in subd. 12.;
Coverage of 100% of the cost sharing for the benefits described in sub. (5) (c) 1., 5., 6., 8., 13., 16., and 17., and (i) 2., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder pays the Medicare Part A and Part B deductible and meets the out-of-pocket limitation described under subd. 12.;
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder pays the Medicare Part B deductible; and
Coverage for 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $2,000 in 2006, indexed each year by the appropriate inflation adjustment specified by the secretary.

(s) A Medicare select policy may include permissible additional coverage as described in sub. (5) (i) 7. This rider, if offered, shall be added to the policy as a separate rider or amendment, shall be priced separately and available for purchase separately. Subject to sub. (4) (a) 20., this rider may be offered by issuance or sale until January 1, 2006.

(t) Insurers writing Medicare select policies shall additionally comply with subchs. I and III of ch. Ins 9.

(30m) Medicare select policies and certificates.

(a)

This subsection shall only apply to Medicare select policies and certificates issued to persons first eligible for Medicare on or after June 1, 2010 and prior to January 1, 2020. This subsection does not apply to Medicare supplement policies or certificates.
No policy or certificate may be advertised as a Medicare select policy or certificate unless it meets the requirements of this subsection.

(d) A Medicare select issuer may not issue a Medicare select policy or certificate in this state until its plan of operation has been approved by the commissioner.

Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration that:

b. The number of network providers in the service area is sufficient, with respect to current and expected policyholders or certificateholders, either to deliver adequately all services that are subject to a restricted network provision or to make appropriate referrals.

c. There are written agreements with network providers describing specific responsibilities.

d. Emergency care is available 24 hours per day and 7 days per week.

e. In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting such providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare select policy or certificate. This subd. 1. e., may not apply to supplemental charges, copayment, or coinsurance amounts as stated in the Medicare select policy or certificate.

A statement or map providing a clear description of the service area.
A description of the grievance procedure to be utilized.
A description of the quality assurance program, including all of the following:

a. The formal organizational structure.

b. The written criteria for selection, retention and removal of network providers.

c. The procedures for evaluating quality of care provided by network providers.

d. The process to initiate corrective action when warranted.

A list and description, by specialty, of the network providers.
Copies of the written information proposed to be used by the issuer to comply with par. (i).
Any other information requested by the commissioner.

(f)

A Medicare select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the commissioner prior to implementing such changes. Such changes shall be considered approved by the commissioner after 30 days after filing unless specifically disapproved.
An updated list of network providers shall be filed with the commissioner at least quarterly.

(g) A Medicare select policy or certificate may not restrict payment for covered services provided by non-network providers if both of the following occur:

The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition.
It is not reasonable to obtain such services through a network provider.

(h) A Medicare select policy or certificate shall provide payment for full coverage under the policy or certificate for covered services that are not available through network providers.

(i) A Medicare select issuer shall make full and fair disclosure in writing of the provisions, coinsurance or copayments, restrictions and limitations of the Medicare select policy or certificate to each applicant. This disclosure shall include at least the following:

An outline of coverage in substantially the same format as Appendices 2m and 5m sufficient to permit the applicant to compare the coverage and premiums of the Medicare select policy or certificate to the following:

a. Other Medicare supplement policies or certificates offered by the issuer.

b. Other Medicare select policies or certificates.

A description, including address, phone number and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals and other providers.
A description of the restricted network provisions, including payments for copayments or coinsurance and deductibles when providers other than network providers are utilized. Except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in the Medicare Select 50% and 25% Coverage Cost-Sharing plans offered by the Medicare select issuer pursuant to pars. (r) and (s).
A description of coverage for emergency and urgently needed care and other out of service area coverage.
A description of limitations on referrals to restricted network providers and to other providers.
A description of the policyholder’s or certificateholder’s rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer.
A description of the Medicare select issuer’s quality assurance program and grievance procedure.
A designation: MEDICARE SELECT POLICY. This designation shall be immediately below and in the same type size as the designation required in sub. (4m) (a) 10.
The caption, except that the word “certificate” may be used instead of “policy,” if appropriate: “The Wisconsin Insurance Commissioner has set standards for Medicare select policies. This policy meets these standards. It, along with Medicare, may not cover all of your medical costs. You should review carefully all policy limitations. For an explanation of these standards and other important information, see ‘Wisconsin Guide to Health Insurance for People with Medicare,’ given to you when you applied for this policy. Do not buy this policy if you did not get this guide.”

The grievance procedure shall be described in the policy and certificate and in the outline of coverage.
At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder or certificateholder describing how a grievance may be registered with the issuer.
Grievances shall be considered in a timely manner and shall be transmitted to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.
If a grievance is found to be valid, corrective action shall be taken promptly.
All concerned parties shall be notified about the results of a grievance.
The issuer shall report to the commissioner no later than each March 31st regarding its grievance procedure. The report shall be in a format prescribed by the commissioner and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.

(m)

At the request of an individual insured under a Medicare select policy or certificate, a Medicare select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer, which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make such policies or certificates available without requiring evidence of insurability after the Medicare select policy or certificate has been in force for 6 months.
For the purposes of this paragraph, a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare select policy or certificate being replaced. In this subdivision, a “significant benefit” means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Medicare Part B excess charges.

Each Medicare select issuer shall make available to each individual insured under a Medicare select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer, which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make such policies and certificates available without requiring evidence of insurability.
For the purposes of this paragraph, a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare select policy or certificate being replaced. In this subdivision, a “significant benefit” means coverage for the Medicare Part A deductible, coverage for at–home recovery services or coverage for Medicare Part B excess charges.

(o) A Medicare select issuer shall comply with reasonable requests for data made by state or federal agencies, including the CMS, for the purpose of evaluating the Medicare select program.

(p) Except as provided in par. (r) or (s), a Medicare select policy or certificate shall contain the following coverages:

The “basic Medicare supplement coverage” as described in sub. (5m) (d).
Coverage for 100% of the Medicare Part A hospital deductible as described in sub. (5m) (e) 1.
Coverage for home health care for an aggregate of 365 visits per policy or certificate year as described in sub. (5m) (e) 3.
Coverage for 100% of the Medicare Part B medical deductible as described in sub. (5m) (e) 4.
Coverage for preventive health care services as described in sub. (5m) (d) 15.
Coverage for emergency care obtained outside of the United States as described in sub. (5m) (e) 7.

(q) Permissible additional coverage may only be added to the policy or certificate as separate riders. The issuer shall issue a separate rider for each additional coverage offered. Issuers shall ensure that the riders offered are compliant with MMA, each rider is priced separately, available for purchase separately at any time, subject to underwriting and the preexisting limitation allowed in sub. (4m) (a) 2., and may consist of the following:

Coverage for 50% of the Medicare Part A hospital deductible with no out-of-pocket maximum as described in sub. (5m) (e) 2.
Coverage for 100% of the Medicare Part B medical deductible subject to copayment or coinsurance as described in sub. (5m) (e) 5.

(r) The Medicare Select 50% Cost-Sharing plans issued with an effective date on or after June 1, 2010, shall only contain the following coverages:

The designation: MEDICARE SELECT 50% COST-SHARING PLAN.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 50% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 50% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.
Except for coverage provided in subd. 11., coverage for 50% of the cost sharing otherwise applicable under Medicare Part B after the policyholder or certificateholder pays the Medicare Part B deductible until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 100% of the cost sharing for the benefits described in sub. (5m) (d) 1., 6., 7., 9., 14., 16., and 17., and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductible and meets the out-of-pocket limitation described in subd. 12.
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of [$4,440] in 2010, indexed each year by the appropriate inflation adjustment specified by the secretary.

(s) The Medicare Select 25% Coverage Cost-Sharing plans issued with an effective date on or after June 1, 2010, shall only contain the following coverages:

The designation: MEDICARE SELECT 25% COST-SHARING PLAN.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 75% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 75% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 75% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 75%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in subd. 12.
Except for coverage provided in subd. 11., coverage for 75% of the cost sharing otherwise applicable under Medicare Part B, except there shall be no coverage for the Medicare Part B deductible until the out-of-pocket limitation is met as described in subd. 12.
Coverage for 100% of the cost sharing for the benefits described in sub. (5m) (d) 1., 6., 7., 9., 14., 16., and 17., and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductible and meets the out-of-pocket limitation described in subd. 12.
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of [$2,220] in 2010, indexed each year by the appropriate inflation adjustment specified by the secretary.

(t) A Medicare select policy or certificate may include permissible additional coverage as described in sub. (5m) (e) 2., 5., and 7. These riders, if offered, shall be added to the policy or certificate as separate riders or amendments and shall be priced separately and available for purchase separately.

(u) Issuers writing Medicare select policies or certificates shall additionally comply with subchs. I and III of ch. Ins 9.

(30t) Medicare select policies and certificates.

(a)

This subsection shall apply only to Medicare select policies and certificates issued to persons newly eligible for Medicare on or after January 1, 2020. This subsection does not apply to Medicare supplement policies or certificates or to Medicare cost policies.
No Medicare select policy or certificate may be advertised as a Medicare select policy or certificate unless it meets the requirements of this subsection.

(c) The commissioner may authorize an issuer to offer a Medicare select policy or certificate, pursuant to this subsection and OBRA, if the commissioner finds that the issuer has satisfied all of the requirements of this subsection.

(d) A Medicare select issuer may not issue a Medicare select policy or certificate in this state until its plan of operation has been approved by the commissioner.

Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration of all of the following:

a. That covered services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation and after-hour care. The hours of operation and availability of after-hour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual medical travel times within the community.

b. That the number of network providers in the service area is sufficient, with respect to current and expected policyholders or certificateholders, either to deliver adequately all services that are subject to a restricted network provision or to make appropriate referrals.

c. That there are written agreements with network providers describing specific responsibilities.

d. Emergency care is available 24 hours per day and 7 days per week.

e. In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, there are written agreements with network providers prohibiting such providers from billing or otherwise seeking reimbursement from or recourse against any individual insured under a Medicare select policy or certificate. This subd. 1. e. may not apply to supplemental charges, copayment, or coinsurance amounts as stated in the Medicare select policy or certificate.

A statement or map providing a clear description of the service area.
A description of the grievance procedure to be utilized.
A description of the quality assurance program, including all of the following:

a. The formal organizational structure.

b. The written criteria for selection, retention, and removal of network providers.

c. The procedures for evaluating quality of care provided by network providers.

d. The process to initiate corrective action when warranted.

A list and description, by specialty, of the network providers.
Copies of the written information proposed to be used by the issuer to comply with par. (i).
Any other information requested by the commissioner.

(f)

A Medicare select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the commissioner prior to implementing such changes. Such changes shall be considered approved by the commissioner after 30 days after filing unless specifically disapproved.
An updated list of network providers shall be filed with the commissioner at least quarterly.

(g) A Medicare select policy or certificate may not restrict payment for covered services provided by non-network providers if all of the following occur:

The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury or a condition.
It is not reasonable to obtain services described in subd. 1. through a network provider.

(h) A Medicare select policy or certificate shall provide payment for full coverage under the policy or certificate for covered services that are not available through network providers.

(i) A Medicare select issuer shall make full and fair disclosure in writing of the provisions, coinsurance, or copayments, restrictions, and limitations of the Medicare select policy or certificate to each applicant. This disclosure shall include at least the following:

An outline of coverage in substantially the same format as Appendices 2t and 5t sufficient to permit the applicant to compare the coverage and premiums of the Medicare select policy or certificate to the following:

a. Other Medicare supplement policies or certificates offered by the issuer.

b. Other Medicare select policies or certificates.

A description, including address, phone number and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals and other providers.
A description of the restricted network provisions, including payments for copayments or coinsurance and deductibles when providers other than network providers are utilized. Except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in the Medicare Select 50% and 25% Coverage Cost-Sharing plans offered by the Medicare select issuer under pars. (r) and (s).
A description of coverage for emergency and urgently needed care and other out of service area coverage.
A description of limitations on referrals to restricted network providers and to other providers.
A description of the policyholder’s or certificateholder’s rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer.
A description of the Medicare select issuer’s quality assurance program and grievance procedure.
A designation: MEDICARE SELECT POLICY. This designation shall be immediately below and in the same type size as the designation required in sub. (4t) (a) 10.
The caption, except that the word “certificate” may be used instead of “policy,” if appropriate: “The Wisconsin Insurance Commissioner has set standards for Medicare select policies. This policy meets these standards. It, along with Medicare, may not cover all of your medical costs. You should review carefully all policy limitations. For an explanation of these standards and other important information, see “Wisconsin Guide to Health Insurance for People with Medicare,” given to you when you applied for this policy. Do not buy this policy if you did not get this guide.”

(k) A Medicare select issuer shall have and use procedures for hearing complaints and resolving written grievances from its subscribers for Wisconsin mandated benefits. These grievance procedures shall be aimed at mutual agreement for settlement, shall include arbitration procedures, and may include all of the following:

The grievance procedure shall be described in the policy and certificate and in the outline of coverage.
At the time the policy or certificate is issued, the issuer shall provide detailed information to the policyholder or certificateholder describing how a grievance may be registered with the issuer.
Grievances shall be considered in a timely manner and shall be transmitted to appropriate decision-makers who have authority to fully investigate the issue and take corrective action.
If a grievance is found to be valid, corrective action shall be taken promptly.
All concerned parties shall be notified about the results of a grievance.
The issuer shall report to the commissioner no later than each March 31st regarding its grievance procedure. The report shall be in a format prescribed by the commissioner and shall contain the number of grievances filed in the past year and a summary of the subject, nature and resolution of such grievances.

(L) At the time of initial purchase of a Medicare select policy or certificate, a Medicare select issuer shall make available to each applicant for the policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer.

(m)

At the request of an individual insured under a Medicare select policy or certificate, a Medicare select issuer shall make available to the individual insured the opportunity to purchase a Medicare supplement policy or certificate offered by the issuer, that has comparable or lesser benefits and that does not contain a restricted network provision. The issuer shall make Medicare select policies or certificates available without requiring evidence of insurability after the Medicare select policy or certificate has been in force for 6 months.
For the purposes of this paragraph, a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare select policy or certificate being replaced. In this subdivision, “significant benefit” means coverage for the Medicare Part A deductible, coverage for at-home recovery services or coverage for Medicare Part B excess charges.

(n) Medicare select policies and certificates shall provide for continuation of coverage in the event the secretary determines that Medicare select policies and certificates issued under this section should be discontinued due to either the failure of the Medicare select program to be reauthorized under law or its substantial amendment, then all of the following apply:

Each Medicare select issuer shall make available to each individual insured under a Medicare select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer, which has comparable or lesser benefits and which does not contain a restricted network provision. The issuer shall make Medicare supplement policies and certificates available without requiring evidence of insurability.
For the purposes of this paragraph, a Medicare supplement policy or certificate shall be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare select policy or certificate being replaced. In this subdivision, a “significant benefit” means coverage for the Medicare Part A deductible, coverage for at–home recovery services, or coverage for Medicare Part B excess charges.

(o) A Medicare select issuer shall comply with reasonable requests for data made by state or federal agencies, including the CMS, for the purpose of evaluating the Medicare select program.

(p) Except as provided in par. (r) or (s), a Medicare select policy or certificate issued for delivery to individuals newly eligible for Medicare on or after January 1, 2020, shall contain the following coverages:

The “basic Medicare supplement coverage” as described in sub. (5t) (d).
Coverage for 100% of the Medicare Part A hospital deductible as described in sub. (5t) (e) 1.
Coverage for home health care for an aggregate of 365 visits per policy or certificate year as described in sub. (5t) (e) 3.
Coverage for preventive health care services as described in sub. (5t) (d) 15.
Coverage for emergency care obtained outside of the United States as described in sub. (5t) (e) 6.

(q) Permissible additional coverage may only be added to the policy or certificate as separate riders. The issuer shall issue a separate rider for each additional rider offered. Issuers shall ensure that the riders offered are compliant with MMA and that each rider is priced separately, available for purchase separately at any time, subject to underwriting and the preexisting limitation allowed in sub. (4t) (a) 2., and may consist of any of the following:

Coverage for 50% of the Medicare Part A hospital deductible with no out-of-pocket maximum as described in sub. (5t) (e) 2.
Coverage for Medicare Part B copayment or coinsurance as described in sub. (5t) (e) 4.

(r) The Medicare Select 50% Cost-Sharing plans issued to persons who first became eligible for Medicare on or after January 1, 2020, shall only contain the following coverages:

The designation: MEDICARE SELECT 50% COST-SHARING PLAN.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 50% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 50% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation as described in subd. 12. is met.
Except for coverage provided in subd. 11., coverage for 50% of the cost sharing otherwise applicable under Medicare Part B after the policyholder or certificateholder pays the Medicare Part B deductible until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 100% of the cost sharing for the benefits described in sub. (5t) (d) 1., 6., 7., 9., 14., 16., and 17. and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductible and the out-of-pocket limitation described in subd. 12. is met.
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Part A or B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B indexed each year by the appropriate inflation adjustment specified by the secretary.

(s) The Medicare Select 25% Coverage Cost-Sharing plans issued to persons who first became eligible for Medicare on or after January 1, 2020, shall only contain all of the following phrases and coverages:

The designation: MEDICARE SELECT 25% COST-SHARING PLAN.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each day used from the 61st through the 90th day in any Medicare benefit period.
Coverage for 100% of the Medicare Part A hospital coinsurance or copayment amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period.
Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage for 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime limitation benefit of an additional 365 days.
Coverage for 75% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 75% of the coinsurance or copayment amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 75% of cost sharing for all Medicare Part A eligible expenses and respite care until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 75%, under Medicare Part A or B, of the reasonable cost of the first 3 pints of blood, or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations until the out-of-pocket limitation as described in subd. 12. is met.
Except for coverage provided in subd. 11., coverage for 75% of the cost sharing otherwise applicable under Medicare Part B, except there shall be no coverage for the Medicare Part B deductible until the out-of-pocket limitation as described in subd. 12. is met.
Coverage for 100% of the cost sharing for the benefits described in sub. (5t) (d) 1., 6., 7., 9., 14., 16., and 17. and (e) 3., to the extent the benefits do not duplicate benefits paid by Medicare and after the policyholder or certificateholder pays the Medicare Part A and B deductible and the out-of-pocket limitation described in subd. 12. is met.
Coverage for 100% of the cost sharing for Medicare Part B preventive services after the policyholder or certificateholder pays the Medicare Part B deductible.
Coverage for 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B, indexed each year by the appropriate inflation adjustment specified by the secretary.

(t) A Medicare select policy or certificate may include permissible additional coverage as described in sub. (5t) (e) 2., 4., and 6. These riders, if offered, shall be added to the policy or certificate as separate riders or amendments and shall be priced separately and available for purchase separately.

(u) Issuers writing Medicare select policies or certificates shall additionally comply with subchs. I and III of ch. Ins 9.

(31) Refund or credit calculation.

(a) Every issuer providing individual or group Medicare supplement policies or certificates and every issuer providing individual or group Medicare select policies or certificates shall collect and file the following information with the commissioner. The data must be provided on a form made available by the commissioner. Issuers shall submit the following information in the manner compliant with the commissioner’s instructions on or before May 31 of each year:

The actual experience loss ratio of incurred claims to earned premium net of refunds.
A credibility adjustment based on a creditability factor.
A comparison to the benchmark loss ratio that is a cumulative incurred claims divided by the cumulative earned premiums to date.
A calculation of the amount of refund or premium credit, if any.
A certification that the refund calculation is accurate.

(b)

For policies or certificates issued between December 31, 1980, and January 1, 1992, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type, as defined at sub. (3) (zar), for purposes of calculating the amount of refund or premium credit, if any. Issuers may combine the Wisconsin experience of all policies issued prior to January 1, 1981, with those issued between December 31, 1980, and January 1, 1992, if the issuer uses the 60% loss ratio for individual policies and the 70% loss ratio for group certificates renewed prior to January 1, 1996, and the appropriate loss ratios specified in sub. (16) (d), thereafter.
For policies or certificates issued on or after January 1, 1992, and prior to June 1, 2010, issuers shall combine the Wisconsin experience of all policy or certificate forms of the same type, as defined at sub. (3) (zar), for the purposes of calculating the amount of the refund or premium credit, if any, if the issuer uses the 65% loss ratio for individual policies and the 75% loss ratio for group certificates renewed on or after January 1, 1996 and prior to June 1, 2010, and the appropriate loss ratios specified in sub. (16) (d).

(c) A refund or credit shall be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds $5.00. Such refund shall include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the secretary of health and human services, but in no event shall it be less than the average rate of interest for 13-week U.S. treasury notes. A refund or credit against premiums due shall be made by September 30 following the experience year upon which the refund or credit is based.

(32) Public hearings. The commissioner may conduct a public hearing to gather information concerning a request by an issuer for an increase in a rate for a policy form or certificate form issued before or after the effective date of this section if the experience of the form for the previous reporting period is not in compliance with the applicable loss ratio standard. The determination of compliance is made without consideration of any refund or credit for such reporting period. Public notice of such hearing shall be furnished in a manner deemed appropriate by the commissioner.

(34) Guaranteed issue for eligible persons.

(a) Guaranteed issue.

Persons eligible for guarantee issue are those individuals described in par. (b) who seek to enroll under the policy during the period specified in par. (c), and who submit evidence of the date of termination or disenrollment with the application for a Medicare supplement policy, Medicare select policy or Medicare cost policy, and where applicable, evidence of enrollment in Medicare Part D.
With respect to an eligible person, an issuer may not deny or condition the issuance or effectiveness of a Medicare supplement policy, Medicare select policy, or Medicare cost policy described in par. (e) that is offered and is available for issuance to new enrollees by the issuer, and shall not discriminate in the pricing of such a Medicare supplement, Medicare select, or Medicare cost policy because of health status, claims experience, receipt of health care, or medical condition and shall not impose an exclusion of benefits based on a preexisting condition under such a Medicare supplement policy, Medicare select policy, or Medicare cost policy.

(b) Eligible persons. An eligible person for guarantee issue is an individual described in any of the following subdivisions:

The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare and the plan does any of the following:

a. Terminates.

b. Ceases to provide some or all such supplemental health benefits to the individual.

c. The amount the individual pays for coverage under the plan increases from one 12-month period to the subsequent 12-month period by more than 25% and the new payment for the employer-sponsored coverage is greater than the premium charged under the Medicare supplement plan for which the individual is applying. An issuer may require reasonable documentation to substantiate the increase of the cost of coverage to the individual. Reasonable documentation that issuers may request includes premium billing statements and notices of premiums from employers for the most recent 12 month period.

1m. The individual is enrolled under an employee welfare benefit plan that is primary to Medicare and the plan terminates or the plan ceases to provide some or all health benefits to the individual because the individual leaves the plan.

1r. The individual is covered by an employee welfare benefit plan that is either primary to Medicare or provides health benefits that supplement the benefits of Medicare and the individual terminates coverage under the employee welfare benefit plan to enroll in a Medicare Advantage plan, but disenrolls from the Medicare Advantage plan by not later than 12 months after the effective date of enrollment.

1s. The individual is enrolled in a Medicare select policy and is notified by the issuer, as required in par. (f) 3. and s. Ins 9.35, as applicable, that a hospital is leaving the Medicare select policy network and that there is no other network provider hospital within a 30 minute or 30 mile radius of the policyholder.

The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under part C of Medicare, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a PACE provider, and there are circumstances similar to those described below that would permit discontinuance of the individual’s enrollment with the PACE provider if the individual were enrolled in a Medicare Advantage plan including any of the following:

a. The certification of the organization or plan under Medicare Part C has been terminated; or

b. The organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides.

c. The individual is no longer eligible to elect the plan because of a change in the individual’s place of residence or other change in circumstances specified by the secretary, but not including termination of the individual’s enrollment on the basis described in section 1851 (g) (3) (B) of the federal Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856), or the plan is terminated for all individuals within a residence area.

d. The individual demonstrates, in accordance with guidelines established by the secretary that, at least one of the following has occurred; the organization offering the plan substantially violated a material provision of the organization’s contract under this part in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards, or the organization, or agent or other entity acting on the organization’s behalf, materially misrepresented the plan’s provisions in marketing the plan to the individual.

e. The individual meets such other exceptional conditions as the secretary may provide.

The individual is enrolled with any of the following:

a. An eligible organization under a contract under Section 1876 of the Social Security Act (Medicare cost);

b. A similar organization operating under demonstration project authority, effective for periods before April 1, 1999;

c. An organization under an agreement under Section 1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or

d. An organization under a Medicare select policy; and

3m. The enrollment ceases under the same circumstances that would permit discontinuance of an individual’s election of coverage under subd. 2.

The individual is enrolled under a Medicare supplement policy and the enrollment ceases because:

a. Of the insolvency of the issuer or bankruptcy of the nonissuer organization or of other involuntary termination of coverage or enrollment under the policy;

b. The issuer of the policy substantially violated a material provision of the policy; or

c. The issuer, or an agent or other entity acting on the issuer’s behalf, materially misrepresented the policy’s provisions in marketing the policy to the individual;

a. The individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, any eligible organization under a contract under section 1876 of the Social Security Act, Medicare cost, any similar organization operating demonstration project authority, any PACE provider under section 1894 of the Social Security Act, or a Medicare select policy; and

b. The subsequent enrollment under subd. 5. a. is terminated by the enrollee during any period within the first 12 months of such subsequent enrollment (during which the enrollee is permitted to terminate such subsequent enrollment under section 1851(e) of the federal Social Security Act); or

The individual, upon first becoming eligible for benefits under Medicare Parts A and B at age 65, enrolls in a Medicare Advantage plan under Medicare Part C, or with a PACE provider under section 1894 of the Social Security Act, and disenrolls from the plan or program by not later than 12 months after the effective date of enrollment.
The individual enrolls in a Medicare Part D plan during the initial enrollment period and, at the time of enrollment in Medicare Part D, was enrolled under a Medicare supplement, Medicare replacement, Medicare cost or Medicare select policy that covered outpatient prescription drugs and the individual terminates enrollment in the Medicare supplement, Medicare replacement Medicare cost or Medicare select policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in par. (e) 4.
The individual is eligible for benefits under Medicare Parts A and B and is covered under the medical assistance program and subsequently loses eligibility in the medical assistance program.

In the case of an individual described in par. (b) 1., 1m., or 1s., the guaranteed issue period begins on the later of the following dates:

a. The date the individual receives a notice of termination or cessation of some or all supplemental health benefits, or, if a notice is not received, notice that a claim has been denied because of a termination or cessation, and ends 63 days after the date the applicable coverage is terminated.

b. The date the individual receives notice that a claim has been denied because of such a termination or cessation, if the individual did not receive notice of the plan’s termination or cessation, and ends 63 days after the date of notice of the claim denial.

In the case of an individual described in par. (b) 2., 3., 5., 6. or 8., whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends on the date that is 63 days after the date the applicable coverage is terminated.
In the case of an individual described in par. (b) 4. a., the guaranteed issue period begins on the earlier of either: the date that the individual receives a notice of termination, a notice of the issuer’s bankruptcy or insolvency, or other such similar notice, if any; or the date that the applicable coverage is terminated. The guaranteed issue period ends on the date that is 63 days after the date such coverage is terminated.
In the case of an individual described in par. (b) 1r., 2., 4. b. or c., 5., or 6. who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date.
In the case of an individual described in par. (b) 7., the guaranteed issue period begins on the date the individual receives notice pursuant to Section 1882 (v) (2) (B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Medicare Part D enrollment period and ends on the date that is 63 days after the effective date of the individual’s coverage under Medicare Part D.
In the case of an individual described in par. (b) but not described in the preceding provisions of this paragraph, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date.

(d) Extended Medigap access for interrupted trial periods.

In the case of an individual described in par. (b) 5., or deemed to be so described pursuant to this subdivision, whose enrollment with an organization or provider described in par. (b) 5. a. is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment shall be deemed to be an initial enrollment described in par. (b) 5.
In the case of an individual described in par. (b) 6., or deemed to be so described pursuant to this paragraph, whose enrollment with a plan or in a program described in par. (b) 6. is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment shall be deemed to be an initial enrollment described in par. (b) 6.
For purposes of par. (b) 5. and 6., no enrollment of an individual with an organization or provider described in par. (b) 5. a., or with a plan or in a program described in par. (b) 6., may be deemed to be an initial enrollment under this paragraph after the 2-year period beginning on the date on which the individual first enrolled with such an organization, provider, plan or program.

(e) Products to which eligible persons are entitled prior to June 1, 2010. The Medicare supplement or Medicare cost policy to which eligible persons are entitled under:

Paragraph (b) 1., 1m., 1r., 2., 3., and 4. is a Medicare supplement policy as defined in sub. (5) along with any riders available or a Medicare select policy as defined in sub. (30). except the Outpatient Prescription Drug Rider defined in sub. (5) (i) 7.
Paragraph (b) 5. is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, a policy as described in subd. 1.
Paragraph (b) 6. and 8. is a Medicare supplement policy as described in sub. (5) along with any riders available or a Medicare select policy as defined in sub. (30).
Paragraph (b) 7. is a Medicare supplement policy as described in sub. (5) with any riders available or a Medicare select policy as described in sub. (30), that is offered and is available for issuance to new enrollees by the same issuer that issued the individual’s Medicare supplement policy or Medicare select policy containing the outpatient prescription drug coverage.
Paragraph (b) 3. is a Medicare cost policy as described in sub. (7) with any enhancements and riders, that is offered and is available for issuance to new enrollees by the same issuer that issued the individual’s Medicare cost policy.
The Outpatient Prescription Drug Rider referenced in sub. (5) (i) 7. may only be issued through December 31, 2005.

(em) Products that persons eligible for guarantee issue on or after June 1, 2010, and prior to January 1, 2020, are entitled to enroll into. The Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy that the guarantee issue eligible persons are entitled to enroll include any of the following:

Paragraph (b) 1., 1m., 1r., 1s., 2., 3. and 4. is a Medicare supplement policy or certificate as described in sub. (5m) with any riders available or a Medicare select policy or certificate as described in sub. (30m).
Paragraph (b) 5. is the same Medicare supplement policy or certificate in which the individual was most recently enrolled, if available from the same issuer, or, if not so available, a policy or certificate as described in subd. 1.
Paragraph (b) 6. and 8. is a Medicare supplement policy or certificate as described in sub. (5m) with any riders available or a Medicare select policy or certificate as defined in sub. (30m).
Paragraph (b) 7. is a Medicare supplement policy or certificate as described in sub. (5m) with any riders available or a Medicare select policy or certificate as described in sub. (30m), that is offered and is available for issuance to new enrollees by the same issuer that issued the individual’s Medicare supplement policy or certificate.

(et) Products that persons eligible for guarantee issue are entitled to enroll into who first became eligible for Medicare on or after January 1, 2020. The Medicare supplement policy or certificate, Medicare select policy or certificate, or Medicare cost policy that persons are entitled to enroll on the basis of guarantee issue includes any of the following:

Paragraph (b) 1., 1m., 1r., 1s., 2., 3. and 4. is a Medicare supplement policy or certificate as described in sub. (5t) with any riders available or a Medicare select policy or certificate as described in sub. (30t).
Paragraph (b) 5. is the same Medicare supplement policy or certificate in which the individual was most recently enrolled, if available from the same issuer, or, if not so available, a policy or certificate as described in subd. 1.
Paragraph (b) 6. and 8. is a Medicare supplement policy or certificate as described in sub. (5t) with any riders available or a Medicare select policy or certificate as described in sub. (30t).
Paragraph (b) 7. is a Medicare supplement policy or certificate as described in sub. (5t) with any riders available or a Medicare select policy or certificate as described in sub. (30t), that is offered and is available for issuance to new enrollees by the same issuer that issued the individual’s Medicare supplement policy or certificate.

(f) Notification provisions.

At the time of an event described in par. (b) because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of his or her rights under this section, and of the obligations of issuers of Medicare supplement policies and certificates, Medicare select policies or certificates, or Medicare cost policies under par. (a). The notice shall be communicated within 10 working days of the issuer receiving notification of disenrollment.
At the time of an event described in par. (b) of this section because of which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the (30) (k) the policy, or the administrator of the plan, respectively, shall notify the individual of his or her rights under this section, and of the obligations of issuers of Medicare supplement policies or certificates, Medicare select policies or certificates or Medicare cost polices under par. (a). The notice shall be communicated within 10 working days of the issuer receiving notification of disenrollment.
At the time of an event described in par. (b) because of which a hospital in a Medicare select network leaves the network the issuer shall notify the insured of his or her rights under this section, and of the obligations of issuers of Medicare supplement or Medicare cost policies under par. (a). The notice to insureds shall be communicated within 10 business days of the issuer receiving notification of the hospital’s notice of leaving the network.

(35) Exchange of Medicare supplement policy. An issuer that submits and receives approval to offer a Medicare supplement policy or certificate that is effective or issued to persons first eligible for Medicare on or after June 1, 2010, and before June 1, 2011, may offer an exchange subject to the following requirements:

(a) By or before May 31, 2011, on a one-time basis in writing, an issuer may offer to all of its existing Medicare supplement policyholders or certificateholders covered by a policy with an effective prior to June 1, 2010, the option to exchange the existing policy to a different policy that complies with subs. (4m), (5m) and (30m), as applicable.

(b) The offer shall be made on a nondiscriminatory basis without regard to the age or health status of the insured unless such offer or issue would be in violation of state or federal law.

(d) In the event of an exchange, if the replaced policy is priced on an issue age rate schedule, the rate charged to the insured for the newly exchanged policy shall recognize the policy reserve buildup, due to the pre-funding inherent in the use of an issue age rate basis, for the benefit of the insured.

(e) The rating class of the new policy or certificate shall be the class closest to the insured’s class of the replaced coverage.

(f) The issuer may not apply new preexisting condition limitations or a new incontestability period to the newly issued policy for those benefits that were contained in the exchanged policy or certificate of the insured but may apply a preexisting condition limitation of no more than 6 months to any added benefits contained in the newly issued policy or certificate that were not present in the exchanged policy or certificate.

(36) Genetic information. In addition to compliance with ss. 631.89 and 632.748, Stats., beginning on May 21, 2009, an issuer of a Medicare supplement policy or certificate may not deny or condition the issuance or effectiveness of the policy or certificate, including the imposition of any exclusion of benefits under the policy based on a preexisting condition, on the basis of the genetic information with respect to such individual. The issuer may not discriminate in the pricing of the policy or certificate, including the adjustment of rates of an individual on the basis of the genetic information with respect to such individual.

(a) In this subsection and for use in policies or certificates:

“Family member” means, with respect to an individual, any other individual who is a first through fourth degree relative of the individual.
“Genetic information” means, with respect to any individual, information about such individual’s genetic tests, the genetic tests of family members of such individual, and the manifestation of a disease or disorder in family members of such individual. Such term includes, with respect to any individual, any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by such individual or any family member of such individual. Any reference to genetic information concerning an individual or family member of an individual who is a pregnant woman includes genetic information of any fetus carried by such pregnant woman, or with respect to an individual or family member utilizing reproductive technology, includes genetic information of any embryo legally held by an individual or family member. The term “genetic information” does not include information about the sex or age of any individual.
“Genetic services” means a genetic test, genetic counseling including, obtaining, interpreting, or assessing genetic information, or genetic education.
“Genetic test” means an analysis of human deoxyribonucleic acid, ribonucleic acid or chromosomes, proteins, or metabolites that detect genotypes, mutations, or chromosomal changes. The term “genetic test” does not mean an analysis of proteins or metabolites that does not detect genotypes, mutation, or chromosomal changes; or an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition that could reasonably be detected by a health care professional with appropriate training and expertise in the field of medicine involved.
“Issuer of a Medicare supplement policy or certificate” includes third-party administrators, or other person acting for or on behalf of such issuer.
“Underwriting purposes,” means all of the following:

a. Rules for, or determinations of, eligibility including enrollment and continued eligibility for benefits under the policy.

b. The computation of premium or contribution amounts under the policy.

c. The application of any preexisting condition exclusions under the policy.

d. Other activities related to the creation, renewal, or replacement of a contract of health insurance or health benefits.

(b) An issuer of a Medicare supplement policy or certificate may not request or require an individual or a family member of such individual to undergo a genetic test. An issuer may not request, require or purchase genetic information for use in underwriting. An issuer may not request, require or purchase genetic information with respect to any individual prior to such individual’s enrollment under the policy in connection with such enrollment.

(c) Nothing in par. (b) shall be construed to limit the ability of an issuer, to the extent otherwise permitted by law, from any of the following;

Denying or conditioning the issuance or effectiveness of a policy or certificate or increasing the premium for a group based on the manifestation of a disease or disorder of an insured or applicant.
Increasing the premium for any policy issued to an individual based on the manifestation of a disease or disorder of an individual who is covered under the policy.

(d) Notwithstanding par. (b), the manifestation of a disease or disorder in one individual cannot also be used as genetic information about other group members to further increase the premium for the group.

(e) An issuer of a Medicare supplement policy or certificate may not request or require an individual or a family member of such individual to undergo a genetic test. Nothing in this paragraph shall be construed to preclude an issuer of a Medicare supplement policy or certificate from obtaining and using the results of a genetic test in making a payment determination when consistent with the requirements of par. (b). If genetic information is obtained, the request may only include the minimum amount necessary to accomplish the intended purpose.

(f) If an issuer of a Medicare supplement policy or certificate obtains genetic information incidental to the requesting, requiring or purchasing of other information concerning any individual, such request, requirement or purchase may not be considered a violation of this section.

Note: This rule requires the use of a rate change transmittal form which may be obtained from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison, WI 53707-7873.

Note: The rule revisions published in June, 1994 first apply to any policy issued, renewed or solicited on or after September 1, 1994.

Note: For a complete history of s. Ins 3.39 from July 1977 to October 31, 2001, see the History note following s. Ins 3.39 as published in Register October 2001 No. 550.

History

CR 00-133: am (2) (a) (intro.), (3) (cm), (4) (intro.), (a), (b) 2., (34) (b) 5. a., 6., (c) 1. and Appendix 1, cr. (4) (a) 18p., (34) (b) 2. b., 2. f. and (c) 3., r. (7) (b),(c), (7) (g), (21) (f), r. and recr. (7) (d), (13) and (34) (b) 2.a., renum (7) (e) to be (7) (c) and am., renum. (7) (f) to be (7) (d), (34) (b) 2. b. to be 2. c., 2. c. to be 2. d and 2. d. to be 2. e.,Register October 2001 No. 550, eff. 11-1-01; corrections in (34) (b) 2. and 3., made under s. 13.93 (2m) (b) 1., Stats., Register October 2001 No. 550; emerg. am. eff. 12-16-02; corrections in (2) (a), (4), (7) (b) and (c), (13) and (33) made under s. 13.93 (2m) (b) 7., Stats., Register December 2002 No. 564; CR 02-118: am. (4) (a) 18p., (5) (c) 4., (34) (a) 1. and 2., (b) (intro.), 2. (intro.), a., b., 3. (intro.), a. and c., 4. (intro.), 5. a. and 6., r. (34) (b) 2. f. and fm., renum. (34) (c) and (d) to be (34) (e) and (f), cr. (34) (c) and (d) Register April 2003 No. 568, eff. 5-1-03; CR 04-121: am. (1) (c), (4) (intro.), (a) 1. to 3., 6., 12., 18m. and 18r. b., (4m) (a), (b) and (d), (5) (c) 6., 12. to 15., (i) (intro.) and 7., (j), (k) (intro.), (m) (intro.), (14) (a), (c) 6., (j), (m), (15), (16) (a), (c) (intro.), 1., 3. and (e), (21) (a) and (e), (22) (a), (b), (d), (e), (f) (intro.) and 1., (23) (a) (intro.), 1., 3., 4. and (c), (25) (a) to (c), (26) (a) (intro.), (27), (29), (30) (a), (b) 1. to 7., (c), (d), (e) (intro.) and 1. e., (f) 1., (g) (intro.), (h), (i) (intro.), 1. (intro.) and b., 3., 7., and 9., (j), (k) (intro.), (L) to (o), (p) (intro.) and 8., (34) (a), (b) 1., 1m., 2. (intro.) and a., 3. d., 4. (intro.), 5. a., 6., (c) 1. (intro.) and a., 2., 4., (e) and (f), and Appendices 5 and 8, cr. (2) (f), (4) (a) 20., 21., (5) (n), (o), (23) (a) 5., (30) (q), (r), (34) (b) 1r., 7., 8., and (c) 5., r. and recr. (3), (7), (22) (i) and Appendices 1, 3, 4, and 6, renum. (23) (a) 5., (30) (q) and (r) and (34) (c) 5. to be (23) (a) 6, (30) (s) and (t) and (34) (c) 6. and am. (23) (a) 6., (30) (s) and (t), r. (33) Register June 2005 No. 594, eff. 7-1-05; CR 08-112: am. (1) (a), (b), (3) (q), (v), (w), (4) (intro.), (a) 3., 8., 17., (5) (title), (intro.), (6) (intro.), (7) (a), (d), (8) (c), (9) (b), (14) (title), (a), (d) 3., (15), (23) (d), (24) (g), (26) (b), (30) (a) 1., 2., (b) (intro.), (31) (a) and (34) (e) (title), renum. (1) (c) to be (1) (d), cr. (1) (c), (3) (ce), (cs), (4s), (5m), (14m), (17), (18), (30m), (34) (ez), (35) and (36) Register June 2009 No. 642, eff. 7-1-09; CR 09-076: am. (5m) (e) (intro.), 5., (6) (intro.), (7) (a) (intro.), (8) (a) (intro.), (14m) (d) (intro.), (34) (b) 1., (c) 1., (ez) 1. and Appendix 3, cr. (5m) (k), (7) (cm), (dm), (30m) (p) 6., (34) (b) 1. c., 1s. and (f) 3., r. (30m) (q) 1., renum. (30m) (q) 2. and 3. to be (30m) (q) 1. and 2. Register May 2010 No. 653, eff. 6-1-10; correction in (7) (cm) made under s. 13.93 (2m) (b) 7., Stats., Register, May 2010 No. 653; CR 19-036: am. (1) (a), (b), r. (1) (c), am. (1) (d), (2) (a) (intro.), 1. to 3., r. (2) (a) 4., am. (2) (a) 5., (b), consol. (2) (c) (intro.) and 2. and renum. 3.39 (2) (c) and am., r. (2) (c) 1., am. (2) (d) (intro.), r. (2) (d) 4., am. (2) (e) (intro.), 1., (3) (c) (intro.), 1., (ce), (e), (f), cr. (3) (fm), am. (3) (g), cr. (3) (gm), am. (3) (i) 1. c., d., 5. a., cr. (3) (jm), (pm), renum. (3) (r) (intro.) to (3) (r) and am., r. (3) (r) 1. to 3., cr. (3) (um), am. (3) (v), cr. (3) (ve), (vm), (vs), am. (3) (w), cr. (3) (we), (wm), (ws), am. (3) (y), (za), cr. (3) (zag), (zar), am. (3) (zb), cr. (3) (zbm), (zcm), (3g), am. (4) (intro.), (a) (intro.), 1. to 7., 9. to 12., 16., 18., 18p., r. (4) (a) 18r. (intro.), renum. (4) (a) 18r. a. to c. to (4) (a) 18s., 18u., 18x. and am., am. (4) (b) (intro.), 1. to 7., (c), (e), (g), renum. (4m) to (3r) and as renum. am. (3r) (a) (intro.), (b), (d), renum. (4s) (intro., (a) (intro.), 1. to 20. to (4m) (intro.), (a) (intro.), 1. to 20. and as renum. am. (4m) (title), (intro.), (a) (intro.), 1., 3., 6., 11., 12., r. (4s) (a) 21. (intro.), renum. (4s) (a) 21. a., b., c. to (4m) (a) 21e., 21m., 21s. and am., renum. (4s) (a) 22., (b) to (f) to (4m) (a) 22., (b) to (f) and as renum. am. (4m) (a) 22., (b) 5., 7., (c) (intro.), 1., 2., (d) to (f), cr. (4t), am. (5) (intro.), (c) (intro.), (n) 12., (o) 12., (5m) (title), cr. (5m) (a) (intro.), renum. (5m) (a) 1. to (5m) (a) 1. (intro.) and am., cr. (5m) (a) 1. b., am. (5m) (a) 2. (intro.), renum. (5m) (b), (c) to (5m) (a) 2. a., b. and as. renum. am. (5m) (a) 2. b., am. (5m) (e) (intro.), (g) 12., (h) 12., (k) 4., cr. (5t), am. (6) (intro.), (7) (title), (a) (intro.), (b) (intro.), 1. (intro.), c., 2., (c), (cm), cr. (7) (ct), am. (7) (dm), cr. (7) (dt), am. (8) (title), (a) (intro.), (c), (e), (10) (a), (d) 1., (13), (14) (a), (c) (intro.), 1. to 6., (d) (intro.), 1., 2., (i) (intro.), (L), (14m) (title), (a), (c) 1. to 6., renum. (14m) (d) (intro.), 1. to 3. to (14m) (d) 1. to 4. and as renum. am. 1., 3., am. (14m) (i) (intro.), cr. (14t), am. (15), (16) (a), (c), (d) (intro.), 1., renum. (16) (d) 3. to. (16) (d) (3) (intro.) and am., cr. (16) (d) 3. a. to g., am. (16) (e), (17), (21) (a), cr. (21) (f), am. (22) (d), (f), (intro.), 1., (23) (a) (intro.), (c), (e), (24) (a) (intro.), 3., cr. (24) (a) 4., am. (25) (a) to (c), (26) (a) (intro.), 1., cr. (26) (a) 3. to 6., am. (26) (b), (27), (28) (title), (a) (intro.), (b) 2., (c), (29) (a), (b) 1., (30) (a), r. (30) (b), am. (30) (k) (intro.), (n) (intro.), (q) 12., (r) 12., (30m) (a) 1., r. (30m) (b), am. (30m) (i) 1. (intro.), 8., (k) (intro.), (n) (intro.), (q) (intro.), (r) 12., (s) 12., cr. (30t), r. and recr. (31) (a), (b), r. (31) (bm), am. (34) (a) 1., 2., (b) (intro.), 1s., 2. (intro.), (e) 4., 5., renum. (34) (ez) to (34) (em) and am., cr. (34) (et), am. (34) (f) 1., 2., (35) (intro.), (a), am. Appendix 1, renum. Appendix 2 to Appendix 2m and am., cr. Appendix 2t, renum. Appendix 3 to Appendix 3m and am., cr. Appendix 3t, renum. Appendix 4 to Appendix 4m and am., cr. Appendix 4t, renum. Appendix 5 to Appendix 5m and am., cr. Appendix 5t, am. appendix 6, cr. Appendices 6m, 6t, am. Appendix 7, r. Appendices 8, 9 Register December 2019 No. 768, eff. 1-1-20; renum. (3) (fm), (gm), (u), (um) to (3) (gg), (gr), (wg), (rm) under s. 13.92 (4) (b) 1., Stats., and correction in (3) (f), (g), (ws) 2., (y), (zar), (3r) (a) (intro.), (4) (a) 5., 18u., 18x., (e) 1., (4m) (intro.), (a) 21m., 21s., (b) 5., (4t) (a) (intro.), 21m., 21s., (b) 1., 4., (c) 1., (d), (5) (intro.), (5m) (a) (intro.), 1., (5t) (b) 1., (d) 5., (f), (g) 10., (h) 10., (L), (6) (intro.), (7) (a) (intro.), (10) (d) 1., (13) (intro.), (14) (c) 5., (d), (L), (14m) (d) 3., (14t) (d) 3., (k), (21) (f), (22) (d), (f), (23) (c), (30t) (c), (m) 2., (n) 2., (q) (intro.), (r) 10., (s) 10., (34) (e) 4., (et) 1., 3., 4. made under s. 35.17, Stats., and correction in (10) (d) 1. made under s. 13.92 (4) (b) 4., Stats., Register December 2019 No. 768.

Wis. Admin. Code § Ins 3.40 Coordination of benefits provisions in group and blanket disability insurance policies {#sec-ins-3.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.40}

(1) Purpose.

(a) This section establishes authorized coordination of benefits provisions for group and blanket disability insurance policies pursuant to s. 631.23, Stats. It has been found that these clauses are necessary to provide certainty of meaning. Regulation of contract forms will be more effective, and litigation will be substantially reduced if there is uniformity regarding coordination of benefits provisions in health insurance policies.

(b) A Coordination of benefits (COB) provision as defined in sub. (3) (e) avoids claim payment delays be establishing an order in which Plans pay their claims and by providing the authority for the orderly transfer of information needed to pay claims promptly. It avoids duplication of benefits by permitting a reduction of the benefits of a Plan when, by the rules established by this section, a Plan does not have to pay its benefits first.

(c) Coordinating health benefits has been found to be an effective tool in containing health care costs. However, minimum standards of protection and uniformity are needed to protect the insured’s and the public’s interest.

(2) Scope. This section applies to all group and blanket disability insurance policies subject to s. 631.01 (1), Stats., that provide 24-hour continuous coverage for medical or dental care, treatment or expenses due to either injury or sickness that contain a coordination of benefits provision, an “excess,”“anti-duplication,” “non-profit” or “other insurance” exclusion by whatever name designated under which benefits are reduced because of other insurance, other than an exclusion for expenses covered by worker’s compensation, employer’s liability insurance, or individual traditional automobile “fault” contracts. Except as permitted under s. 632.32 (4) (a) 2., Stats., this section applies to the medical benefits provisions in an automobile “no fault” type or group or group-type “fault” policy. A policy subject to this section may reduce benefits because of Medicare only to the extent permitted by federal law and shall comply with s. 632.755, Stats., when reducing benefits because of coverage by or eligibility for medical assistance.

(3) Definitions. In this section:

(a) “Allowable expense” means the necessary, reasonable, and customary item of expense for health care, when the item of expense is covered at least in part by one or more Plans covering the person for whom the claim is made, except as provided in sub. (4).

(b) “Claim” means a request that benefits of a Plan be provided or paid. The benefits claimed may be in the form of any of the following:

Services, including supplies.
Payment for all or a portion of the expenses incurred.
A combination of subds. 1. and 2.
Indemnification.

(c) “Claim determination period” means the period of time over which allowable expenses are compared with total benefits payable in the absence of COB to determine whether overinsurance exists and how much each Plan will pay or provide. However, it does not include any part of a year before the date this COB provision or a similar provision takes effect.

(d) “Complying Plan” means a Plan with order of benefit determination rules which comply with this section.

(e) A “Coordination of benefits (COB) provision” means an insurance contract provision intended to avoid claims payment delays and duplication of benefits when a person is covered by 2 or more plans providing benefits or services for medical, dental or other care or treatment.

(f) “Group-type contracts” means contracts which are not available to the general public and may be obtained and maintained only because of membership in or connection with a particular organization or group. Group-type contracts answering this description may be included in the definition of Plan at the option of the insurer issuing group-type plans or the service provider and its contract-client, whether or not uninsured arrangements or individual contract forms are used and regardless of how the group-type coverage is designated (for example, “franchise” or “blanket”). The use of payroll deductions by the employee, subscriber or member to pay for the coverage is not sufficient, of itself, to make an individual contract part of a group-type plan. Group-type contracts do not include individually underwritten and issued, guaranteed renewable policies that may be purchased through payroll deduction at a premium savings to the insured.

(g) “Hospital indemnity benefits” means benefits for hospital confinement which are not related to expenses incurred but does not include plans that reimburse a person for actual hospital expenses incurred even if the plans are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.

(h) “Noncomplying Plan” means a Plan that declares its benefits to be “excess” or “always secondary” or that uses order of benefit determination rules inconsistent with those contained in this section.

(i) “Plan” means a form of coverage providing benefits for medical or dental care, except as limited under sub. (6), with which coordination is allowed.

(j) “Primary Plan” means a health care plan, determined by the order of benefit determination rules, whose benefits shall be determined before those of the other Plan and without taking the existence of any other Plan into consideration.

(k) “Secondary Plan” means a plan which is not a Primary Plan according to the order of benefit determination rules and whose benefits are determined after those of another Plan and may be reduced because of the other plan’s benefits.

(L) “This Plan” means the part of the group contract that provides the health care benefits to which the COB provision applies and which may be reduced because of the benefits of other Plans. Any other part of the group contract providing health care benefits is separate from This Plan.

(4) Allowable expense uses and limitations.

(a) Items of expense under dental care, vision care, prescription drug or hearing aid programs may be excluded from the definition of allowable expense. A Plan which provides benefits only for these items may limit its definition of allowable expense to these items of expense.

(b) When a Plan provides benefits in the form of services, the reasonable cash value of each service rendered shall be considered as both an allowable expense and a benefit paid.

(c) The difference between the cost of a private hospital room and the cost of a semi-private hospital room is not considered an allowable expense under the above definition unless the patient’s stay in a private hospital room is medically necessary in terms of generally accepted medical practice or as specifically defined in the Plan.

(d) When COB is restricted in its use to a specific coverage in a contract, for example, major medical or dental, the definition of allowable expense shall include the corresponding expenses or services to which COB applies.

(5) Claim determination period uses and limitations.

(a) A claim determination period may not be less than 12 months and usually is a calendar year, but a Plan may use some other period of time that fits the coverage of the group contract. A person may be covered by a Plan during a portion of a claim determination period if that person’s coverage starts or ends during that claim determination period.

(b) As each claim is submitted, each Plan shall determine its liability and pay or provide benefits based upon allowable expenses incurred to that point in the claim determination period. However, that determination is subject to adjustment as later allowable expenses are incurred in the same claim determination period.

(6) Plan uses, limitations and variations.

(a) The definition of Plan in the group contract shall state the types of coverage which shall be considered in applying the COB provision of that contract. The right to include a type of coverage is limited by the rest of this subsection.

(b) The definition of Plan shown in the model COB provision in APPENDIX A is an example of what may be used. Any definition that satisfies sub. (3) (i) and this subsection may be used.

(c) Notwithstanding the fact that this section uses the term “Plan,” a group contract may instead use “Program” or some other term.

(d) “Plan” shall not include individual or family insurance or subscriber contracts or individual or family coverage through health maintenance organizations (HMOs), limited service health organizations (LSHOs), or any other prepayment, group practice or individual practice plan except as provided in pars. (e) and (f).

(e) “Plan” may include: group insurance and group subscriber contracts; uninsured arrangements of group or group-type coverage; group or group-type coverage through HMOs, LSHOs and other prepayment, group practice and individual practice plans; and group-type contracts.

(f) “Plan” may include the medical benefits coverage in group, group-type, and individual automobile “no-fault” contracts; but, as to the traditional automobile “fault” contracts, only the medical benefits written on a group or group-type basis may be included.

(g) If “Plan” includes Medicare or other governmental benefits, that part of the definition of “Plan” may be limited to the hospital, medical and surgical benefits of the governmental program. However, “Plan” shall not include a state plan under Medicaid (Title XIX, Grants to State for Medical Assistance Programs, of the United States Social Security Act as amended from time to time) and shall not include a law or plan whose benefits, by law, are excess to those of any private insurance plan or other non-government plan.

(h) “Plan” shall not include group or group-type hospital indemnity benefits of $100 per day or less but may include the amount by which group or group-type hospital indemnity benefits exceed $100 per day.

(i) “Plan” shall not include school accident-type coverages that cover grammar, high school, and college students for accidents only, including athletic injuries, either on a 24-hour basis or on a “to and from school” basis.

(j) Each contract or other arrangement for coverage is a separate Plan. If an arrangement has 2 parts and COB rules apply only to one of the 2, each of the parts is a separate Plan.

(7) Primary plan and secondary plan uses and limitations.

(a) The order of benefit determination rules state whether This Plan is a Primary Plan or Secondary Plan as to another plan covering the person.

(b) There may be more than one Primary Plan. A Plan is a Primary Plan if either subd. 1. or 2. is true:

The Plan either has no order of benefit determination rules, or it has rules that differ from sub. (11).
All plans that cover the person are complying plans and, under sub. (11), the Plan determines its benefits first.

(c) When there are more than 2 plans covering the person, This Plan may be a Primary Plan as to one or more other Plans and may be a Secondary Plan as to a different Plan or Plans.

(d) If a person is covered by more than one Secondary Plan, the order of benefit determination rules of this section decide the order in which the benefits are determined in relation to each other. The benefits of each Secondary Plan may take into consideration the benefits of the Primary Plan or Plans and the benefits of any other Plan which, under the rules of this section, has its benefits determined before those of that Secondary Plan.

(8) Applicability.

(a) This coordination of benefits (COB) provision applies to This Plan when an employee or the employee’s covered dependent has health care coverage under more than one Plan.

(b) If this COB provision applies, the order of benefit determination rules shall be looked at first. Those rules determine whether the benefits of This Plan are determined before or after those of another Plan.

(c) The benefits of This Plan shall not be reduced when, under the order of benefit determination rules, This Plan is primary and determines its benefits before another Plan.

(d) The benefits of This Plan may be reduced when, under the order of benefit determination rules, another Plan determines its benefits first.

(9) Flexibility and consistency with this section.

(a) APPENDIX A shall be considered authorized clauses pursuant to s. 631.23, Stats., for use in policy forms subject to this section and shall only be changed as provided in this section.

(b) This section permits but does not require the use of COB or “other insurance” provisions. However, if such provisions are used, they must conform with this section and substantially conform to the clauses contained in APPENDIX A. Liberalization of the prescribed language in APPENDIX A, including rearrangement of the order of the clauses, is permitted provided that the modified language is not less favorable to the insured person.

(c) Policy language which reduces benefits because of other insurance and which is inconsistent with this section violates the criteria of s. 631.20, Stats., and shall not be used.

(d) A Plan that includes a COB provision inconsistent with this section shall not take the benefits of another Plan into account when it determines its benefits. There is one exception: a contract holder’s coverage that is designed to supplement a part of a basic package of benefits may provide that the supplementary coverage shall be excess to any other parts of the Plan provided by the contract holder.

(e) A group contract’s COB provision does not have to use the words and format contained in APPENDIX A. Changes may be made to fit the language and style of the rest of the group contract or to reflect the differences among Plans which provide services, which pay benefits for expenses incurred, and which indemnify. Substantive changes are allowed only as set forth in this section.

(f) A term such as “usual and customary,” “usual and prevailing,” or “reasonable and customary” may be substituted for the term “necessary, reasonable and customary.” Terms such as “medical care” or “dental care” may be substituted for “health care” to describe the coverages to which the COB provisions apply.

(g) A group contract may apply one COB provision to certain of its benefits (such as dental benefits), coordinating only with like benefits, and may apply other separate COB provisions to coordinate other benefits.

(10) Prohibited coordination and benefit design.

(a) A group contract shall not reduce benefits on the basis that:

Another Plan exists;
Except with respect to Part B of Medicare, that a person is or could have been covered under another Plan; or
A person has elected an option under another Plan providing a lower level of benefits than another option which could have been elected.

(b) No contract shall contain a provision that its benefits are “excess” or “always secondary” to any Plan defined in sub. (3) (i), except as permitted under this section.

(11) Order of benefit determination rules.

(a)

The Primary Plan shall pay or provide its benefits as if the Secondary Plan or Plans did not exist.
A Secondary Plan may take the benefits of another Plan into account only when, under the rules in par. (b), it is secondary to that other Plan.

(b) When there is a basis for a claim under This Plan and another Plan, This Plan determines its order of benefits using the first of the following rules which applies:

‘No rule in another plan.’ If the other Plan does not have rules coordinating its benefits with those of This Plan, the benefits of the other Plan are determined first.
‘Non-dependent or dependent.’ The benefits of the Plan that covers the person as an employee, member or subscriber are determined before those of the Plan that covers the person as a dependent of an employee, member or subscriber.
‘Dependent child-parents not separated or divorced.’ Except as stated in subd. 3. c., when This Plan and another Plan cover the same child as a dependent of different persons, called “parents:”

a. The benefits of the Plan of the parent whose birthday falls earlier in a year are determined before those of the Plan of the parent whose birthday falls later in that year; but

b. If both parents have the same birthday, the benefits of the Plan which covered the parent longer are determined before those of the Plan which covered the other parent for a shorter period of time.

c. However, if the other Plan does not have the rule described in subd. 3. a., but instead has a rule based upon the gender of the parent, and if, as a result, the Plans do not agree on the order of benefits, the rule in the other Plan shall determine the order of benefits.

d. In this subdivision, the word “birthday” refers only to month and day in a calendar year, not the year in which the person was born.

‘Dependent child-separated or divorced parents.’ If 2 or more Plans cover a person as a dependent child of divorced or separated parents, benefits for the child are determined in this order:

a. First, the Plan of the parent with custody of the child;

b. Then, the plan of the spouse of the parent with custody of the child; and

c. Finally, the Plan of the parent not having custody of the child.

d. However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child and the entity obligated to pay or provide the benefits of the Plan of that parent has actual knowledge of those terms, the benefits of the Plan of the responsible parent are determined first. This subparagraph does not apply with respect to any Claim Determination Period or plan year during which any benefits are actually paid or provided before the entity has that actual knowledge.

e. If the specific terms of a court decree state that the parents have joint custody of the child and do not specify that one parent has responsibility for the child’s health care expenses or if the court decree states that both parents shall be responsible for the health care needs of the child but gives physical custody of the child to one parent, and the entities obligated to pay or provide the benefits of the respective parents’ Plans have actual knowledge of those terms, benefits for the dependent child shall be determined according to subd. 3.

‘Active or inactive employee.’ The benefits of a Plan which covers a person as an employee who is neither laid off or retired, or as that employee’s dependent, are determined before those of a Plan which covers that person as a laid off or retired employee, or as that employee’s dependent. If the other Plan does not have this rule and if, as a result, the Plans do not agree on the order of benefits, this rule is ignored.

5m. ‘Continuation coverage.’ If a person has continuation coverage under federal law or s. 632.897 (3) (a), Stats., and is also covered under another Plan, the following shall determine the order of benefits:

a. First, the benefits of a Plan covering the person as an employee, member or subscriber or as a dependent of an employee, member or subscriber.

b. Second, the benefits under the continuation coverage.

5s. If the other Plan does not have the rule described in subd. 5m. and if, as a result, the Plans do not agree on the order of benefits, this subdivision is ignored.

‘Longer or shorter length of coverage.’ If none of the above rules determines the order of benefits, the benefits of the Plan which covered an employee, member or subscriber longer are determined before those of the Plan which covered that person for the shorter time.

6m. To determine the length of time a person has been covered under a Plan, 2 Plans shall be treated as one if the claimant was eligible under the second within 24 hours after the first ended. Thus, the start of a new Plan does not include:

a. A change in the amount or scope of a Plan’s benefits;

b. A change in the entity which pays, provides or administers the Plan’s benefits; or

c. A change from one type of Plan to another, such as, from a single employer plan to that of a multiple employer plan.

6s. The claimant’s length of time covered under a Plan is measured from the claimant’s first date of coverage under that Plan. If that date is not readily available, the date the claimant first became a member of the group shall be used as the date from which to determine the length of time the claimant’s coverage under the present Plan has been in force.

(c) If a dependent is a Medicare beneficiary and if, under the Social Security Act of 1965 as amended, Medicare is secondary to the Plan covering the person as a dependent of an active employee, the federal Medicare regulations shall supersede this subsection.

(12) Payment as a secondary plan.

(a) In accordance with order of benefit determination rules under sub. (11), when This Plan is a secondary Plan as to one or more other Plans, the benefits of This Plan may be reduced as provided in par. (b). The other Plan or Plans are referred to as “the other Plans” in par. (b).

(b)

The benefits of This Plan shall be reduced when the sum of the following exceeds the allowable expenses in a claim determination period:

a. The benefits that would be payable for the allowable expenses under This Plan in the absence of this COB provision, and

b. The benefits that would be payable for the allowable expenses under the other Plans, in the absence of provisions with a purpose like that of this COB provision, whether or not claim is made.

If subd. 1. applies, the benefits of This Plan will be reduced so that they and the benefits payable under the other Plans do not equal more than the total allowable expenses. When the benefits of This Plan are reduced as described, each benefit is reduced in proportion and is then charged against any applicable benefit limit of This Plan.

(c) If the benefits of This Plan are reduced under par. (b), a Secondary Plan may reduce its benefits so that the total benefits paid or provided by all Plans during a claim determination period are not more than the total allowable expenses. The amount by which the Secondary Plan’s benefits are reduced shall be used by the Secondary Plan to pay allowable expenses not otherwise paid, which were incurred during the claim determination period by the person for whom the claim is made. As each claim is submitted, the Secondary Plan determines its obligation to pay for allowable expenses based on all claims which were submitted up to that point in time during the claim determination period.

(14) Right to receive and release needed information. An insurer has the right to decide the facts it needs to apply the COB rules. It may get needed facts from or give them to any other organization or person without the consent of the insured but only as needed to apply the provisions of this section. This subsection does not relieve the insurer of the requirements of s. 146.82, Stats. Each person claiming benefits under This Plan shall give the insurer any facts it needs to pay the claim.

(15) Facility of payment. A payment made under another Plan may include an amount which should have been paid under This Plan. If it does, the insurer responsible for payment may pay that amount to the organization which made that payment. That amount will then be treated as though it were a benefit paid under This Plan. The insurer will not have to pay that amount again. The term “payment made” includes providing benefits in the form of services, in which case “payment made” means reasonable cash value of the benefits provided in the form of services.

(16) Right of recovery. If the amount of the payments made by the insurer responsible for payment, including the reasonable cash value of any benefits provided in the form of services, is more than it should have paid under a COB provision, it may recover the excess from one or more of:

(a) The persons it has paid or for whom it has paid;

(b) Insurance companies; or

(17) Reasonable cash value of services. A Secondary Plan which provides benefits in the form of services may recover the reasonable cash value of providing the services from the Primary Plan, to the extent that benefits for the services are covered by the Primary Plan and have not already been paid or provided by the Primary Plan. Nothing in this provision shall be interpreted to require a Plan to reimburse a covered person in cash for the value of services provided by a Plan which provides benefits in the form of services.

(18) Coordination with noncomplying plans. Except for expenses covered by worker’s compensation, employer’s liability insurance, Medicare, medical assistance, or traditional automobile “fault” contracts, a Complying Plan may coordinate its benefits with a Noncomplying Plan that may not be subject to insurance regulation on the following basis:

(a) If the Complying Plan is the Primary Plan, it shall pay or provide its benefits on a primary basis.

(b) If the Complying Plan is the Secondary Plan, it shall pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the Complying Plan were the Secondary Plan. In such a situation, the payment shall be the limit of the Complying Plan’s liability.

(c) If the Noncomplying Plan does not provide the information needed by the Complying Plan to determine its benefits within a reasonable time after it is requested to do so, the Complying Plan shall assume that the benefits of the Noncomplying Plan are identical to its own and shall pay its benefits accordingly. However, the Complying Plan shall adjust any payments it makes based on such assumption whenever information becomes available as to the actual benefits of the Noncomplying Plan.

(d) The Complying Plan shall advance to or on behalf of the employee, subscriber, or member an amount equal to the difference if the Noncomplying Plan reduces its benefits so that the employee, subscriber, or member receives less in benefits than he or she would have received had the Complying Plan paid or provided its benefits as the Secondary Plan and the Noncomplying Plan paid or provided its benefits as the Primary Plan.

(e) In no event shall the Complying Plan advance more than the Complying Plan would have paid had it been the Primary Plan less any amount it previously paid. In consideration of such advance, the Complying Plan shall be subrogated to all rights of the employee, subscriber, or member against the Noncomplying Plan. Such advance by the Complying Plan shall also be without prejudice to any claim it may have against the Noncomplying Plan in the absence of such subrogation.

Note: In sub. (18) if the Noncomplying Plan is unwilling to provide the Complying Plan with the necessary information, the Complying Plan should assume the primary position in order to avoid undue claim delays and hardship to the insured. The Complying Plan may, through its subrogation rights, seek reimbursement for such payments. Undue delay in paying the claim may subject the Complying Plan to a violation of s. Ins 6.11.

(19) Subrogation. The COB concept differs from that of subrogation. Provision for one may be included in health care benefits contracts without compelling the inclusion or exclusion of the other.

Note: If a dependent is a Medicare beneficiary and if, under the Social Security Act of 1965 as amended, Medicare is secondary to the plan covering the person as a dependent of an active employee, the federal Medicare regulations shall supersede this paragraph (iv).

Note: The last paragraph may be omitted if the Plan provides only one benefit or may be altered to suit the coverage provided.

History

Cr. Register, July, 1980, No. 295, eff. 9-1-80; am. (2), Register, January, 1981, No. 301, eff. 2-1-81; r. and recr. (7) (d) and (e), r. (19) under s. 13.93 (2m) (b) 16., Stats., renum. (8) to (18) to be (9) to (19), am. (20), Register, July, 1985, No. 355, eff. 8-1-85; r. and recr. Register, December 1986, No. 372, eff. 1-1-87; am. (2), (6) (d) and (f), (18) (b) (intro.) and Appendix A, cr. (11) (b) 4. e., Register, August, 1989, No. 404, eff. 9-1-89; am. (2), (3) (b), (c) and (k), (6) (b) and (c), (7) (b), (11) (b) 2., (12) (a) and (b), (14) and Appendix A, r. (12) (b) (intro.), (c) and (d), (13) (b) to (f), (18) (a) and (20), cr. (11) (b) 5m., and (c), renum. (13) (a) and (18) (b) to be (12) (c) and (18) and am. (12) (c) and (18) (intro.), Register, October, 1991, No. 430, eff. 1-1-92; correction in (11) made under s. 13.93 (2m) (b) 1., Stats., Register, April, 1992, No. 436; reprinted to correct error in (3) (c), Register, September, 1992, No. 441; correction in (2) made under s. 13.92 (4) (b) 7., Stats., Register May 2010 No. 653; correction in (2) made under s. 13.92 (4) (b) 7., Stats., Register May 2014 No. 701.

Wis. Admin. Code § Ins 3.41 Individual conversion policies {#sec-ins-3.41 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.41}

(1) Reasonably similar coverage. An insurer provides reasonably similar coverage under s. 632.897 (4), Stats., to a terminated insured as defined in s. 632.897 (1) (f), Stats., if a person is offered individual coverage under the group policy or individual policy, or is offered his or her choice of the 3 plans described in s. Ins 3.42, or is offered a high limit comprehensive plan of benefits approved for the purpose of conversion by the commissioner as meeting the standards described in s. Ins 3.43. Individual conversion policies must include benefits required for individual disability insurance policies by subch. VI of ch. 632, Stats. This subsection does not apply to a long-term care policy as defined under s. Ins 3.46 (3) (m).

(2) Renewability.

(a) Except as provided in par. (b), individual conversion policies shall be renewable at the option of the insured unless the insured fails to make timely payment of a required premium amount, there is over-insurance as provided by s. 632.897 (4) (d), Stats., or there was fraud or material misrepresentation in applying for any benefit under the policy.

(b) Conversion policies issued to a former spouse under s. 632.897 (9) (b), Stats., must include renewal provisions at least as favorable to the insured as did the previous coverage.

(3) Premium rates.

(a) In determining the rates for the class of risks to be covered under individual conversion policies, the premium and loss experience of policies issued to meet the requirements of s. 632.897 (4), Stats., may be considered in determining the table of premium rates applicable to the age and class of risks of each person to be covered under the policy and to the type and amount of coverage provided.

(b) Except as provided in par. (c), conditions pertaining to health shall not be an acceptable basis for classification of risks.

(c) A conversion policy issued to a former spouse under s. 632.897 (9) (b), Stats., may be rated on the basis of a health condition if a similar rating had been previously applied to the prior individual coverage due to the same condition.

Note: CR 08-032 first applies to policies or certificates issued on or after January 1, 2009 or on the first renewal date on or after January 1, 2009, but no later than January 1, 2010 for collectively bargained policies or certificates.

History

Cr. Register, April, 1981, No. 304, eff. 5-1-81; am. (1), Register, April, 1991, No. 424, eff. 6-1-91; EmR0817: emerg. am. (1), eff. 6-3-08; CR 08-032: am. (1) Register October 2008 No. 634, eff. 11-1-08.

Wis. Admin. Code § Ins 3.42 Plans of conversion coverage {#sec-ins-3.42 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.42}

Pursuant to s. 632.897 (4) (b), Stats., the following plans of conversion coverage are established.

(1) Plan 1—basic coverage. Plan 1 basic coverage consists of the following:

(a) Hospital room and board daily expense benefits in a maximum dollar amount approximating the average semi-private rate charged in the major metropolitan area of this state, for a maximum duration of 70 days per calendar year;

(b) Miscellaneous in-hospital expenses, including anesthesia services, up to a maximum amount of 20 times the hospital room and board daily expense benefits per calendar year; and

(c) In-hospital and out-of-hospital surgical expenses payable on a usual, customary and reasonable basis up to a maximum benefit of $2,000 a calendar year.

(2) Plan 2—major medical expense coverage. Plan 2 major medical expense coverage shall consist of benefits for hospital, surgical and medical expenses incurred either in or out of a hospital of the following:

(a) A lifetime maximum benefit of $75,000.

(b) Payment of benefits at the rate of 80% of covered hospital, medical, and surgical expenses which are in excess of the deductible, until 20% of such expenses in a benefit period reaches $1,000, after which benefits shall be paid at 100% for the remainder of the benefit period; provided, however, benefits for outpatient treatment of mental illness, if covered by the policy, may be limited as provided in par. (g), and surgical expenses shall be covered at a usual, customary and reasonable level.

(c) A deductible for each benefit period of $500 except that the deductible shall be $1,000 for each benefit period for a policy insuring members of a family. All covered expenses of any insured family member may be applied to satisfy the deductible.

(d) A “benefit period” shall be defined as a calendar year.

(e) Payment for all services covered under the contract by any licensed health care professional qualified to provide the services; except payment for psychologists’ services may be conditioned upon referral or supervision by a physician.

(f) Payment of benefits for maternity, subject to the limitations in pars. (a), (b), and (c), if maternity was covered under the prior policy.

(g) Benefits for outpatient treatment of mental illness, if provided by the policy, may be limited to either of the following coverages at the option of the insurer:

At least 50% of usual, customary and reasonable expenses which are in excess of the policy deductible, subject to the policy lifetime maximum.
The minimum benefits for group policies described in s. 632.89 (2) (d), Stats.

(3) Plan 3—major medical expense coverage. Plan 3 major medical expense coverage shall consist of benefits for hospital, surgical and medical expenses incurred either in or out of a hospital of the following:

History

Cr. Register, April, 1981, No. 304, eff. 5-1-81; am. (2) (b) and (e), cr. (2) (f) and (g), Register, October, 1982, No. 322, eff. 11-1-82.

Wis. Admin. Code § Ins 3.43 High limit comprehensive plan of benefits {#sec-ins-3.43 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.43}

(1) A policy form providing a high limit comprehensive plan of benefits may be approved as an individual conversion policy as provided by s. 632.897 (4) (b), Stats., if it provides comprehensive coverage of expenses of hospital, surgical and medical services of not less than the following:

(a) A lifetime maximum benefit of $250,000.

(c) A deductible for each benefit period of at least $250 and not more than $500 except that the deductible shall be at least $250 and not more than $1,000 for each benefit period for a policy insuring members of a family. All covered expenses of any insured family member may be applied to satisfy the deductible.

(d) A “benefit period” shall be defined as a calendar year.

(f) Payment of benefits for maternity, subject to the limitations in pars. (a), (b), and (c), if maternity was covered under the prior policy.

(g) Benefits for outpatient treatment of mental illness, if provided by the policy, may be limited to either of the following coverages at the option of the insurer:

At least 50% of usual, customary and reasonable expenses which are in excess of the policy deductible, subject to the policy lifetime maximum.
The minimum benefits for group policies described in s. 632.89 (2) (d), Stats.

(2) The filing procedures of s. Ins 6.05, shall apply to policy forms filed as individual conversion policies.

History

Cr. Register, April, 1981, No. 304, eff. 5-1-81; am. (1) (b) and (e), cr. (1) (f) and (g), Register, October, 1982, No. 322, eff. 11-1-82; correction in (2) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517.

Wis. Admin. Code § Ins 3.44 Effective date of s. 632.897, Stats {#sec-ins-3.44 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.44}

(1) Section 632.897, Stats., applies to group policies issued or renewed on or after May 14, 1980, or if a policy is not renewed within 2 years after the effective date of the act, s. 632.897, Stats., is effective at the end of 2 years from May 14, 1980.

(2)

(a) A group policy as defined in s. 632.897 (1) (c) 1. or 3., Stats., shall be considered to have been renewed on any date specified in the policy as a renewal date or on any date on which the insurer or the insured changed the rate of premium for the group policy.

(b) A group policy as defined in s. 632.897 (1) (c) 2., Stats., shall be considered to have been renewed on any date on which an underlying collective bargaining agreement or other underlying contract is renewed, or on which a significant change is made in benefits.

(3) Section 632.897, Stats., applies to individual policies issued or renewed after May 14, 1980, except that it shall not apply to any individual policy in force on May 13, 1980, in which the insurer does not have the option of changing premiums.

History

Cr. Register, April, 1981, No. 304, eff. 5-1-81.

Wis. Admin. Code § Ins 3.45 Conversion policies by insurers offering group policies only {#sec-ins-3.45 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.45}

Section 632.897 (4) (d), Stats., (first sentence), establishes that an insurer offering group policies only is not required to offer individual coverage. Since the insurer has no individual conversion policies which it may offer, it may not require a terminated insured who elected to continue coverage under s. 632.897 (2), Stats., to convert to individual coverage under s. 632.897 (6), Stats., after 12 months. The terminated person may continue group coverage except as provided in s. 632.897 (3) (a), Stats.

History

Cr. Register, April, 1981, No. 304, eff. 5-1-81.

Wis. Admin. Code § Ins 3.455 Long-term care, nursing home and home health care policies; loss ratios; rating practices; continuation and conversion, reserves {#sec-ins-3.455 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.455}

(1) Findings.

(a) The commissioner finds that long-term care policies and life insurance-long-term care coverage are offered and marketed to a population which is particularly susceptible to pressure sales tactics and misleading or fraudulent sales activities. These products are also complex and difficult for most purchasers to analyze and understand.

(b) The purchase of any of these products is an important and significant decision because of the cost and the significance of these insurance products in planning and providing for long-term care. This section and s. Ins 3.46 are adopted to provide adequate protection for Wisconsin insureds and the public.

(2) Applicability.

(a) This section does not apply to an accelerated benefit coverage of a life insurance policy, endorsement or rider as described under s. Ins 3.46 (2).

(b) This section, except for subs. (6) and (8), does not apply to individual long-term care policy or life insurance-long-term care coverage, to a group long-term care policy or life insurance-long-term care coverage or a certificate under the group policy, or to a renewal policy or coverage or certificate, if:

The individual long-term care policy or life insurance-long-term care coverage was issued prior to June 1, 1991;
The group policy is issued prior to June 1, 1991 and all certificates under the policy are issued prior to June 1, 1991; or
The group policy is issued prior to June 1, 1991 and the policy is exempt from s. Ins 3.46 under s. Ins 3.46 (2) (b).

(c) Section Ins 3.46 in effect prior to June 1, 1991 and subs. (6) and (8) apply to those policies, coverages or certificates which qualify for exemption under par. (b).

(3) Definitions. In this section:

(a) “Basis for continuation of coverage” means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. The commissioner shall make a determination as to the substantial equivalency of benefits, and in doing so, shall take into consideration the differences between managed care and non-managed care plan, including but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.

(b) “Basis for conversion of coverage” means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy, and any group policy that it replaced, for at least 3 months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy he or she is covered, without evidence of insurability.

(c) “Converted policy” means an individual policy of long-term care insurance providing benefits identical to or benefits determined by the commissioner to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made. Where the group policy form which conversion is made restricts provision of benefits and services to or contains incentives to use certain providers or facilities, the commissioner, in making a determination as to the substantial equivalency of the benefits, shall take into consideration the differences between managed-care and non-managed-care plans, including but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity. The converted policy offered shall be on a form generally available in the state.

(d) “Exceptional increase” means an increase in premium by an insurer that the commissioner determines is justified under any of the following circumstances:

Changes in laws or rules applicable to long-term care coverage in this state.
Increased and unexpected utilization that affects the majority of insurers of similar products.

(e) “Guaranteed renewable” has the meaning given in s. Ins 3.46 (3) (f).

(f) “Incidental” means that the value of the long-term care benefits provided is less than 10% of the total value of the benefits provided over the life of the policy measured as of the date of issue.

(g) “Life insurance-long-term care coverage” has the meaning given in s. Ins 3.46 (3) (j).

(h) “Long-term care policy” has the meaning given in s. Ins 3.46 (3) (k).

(i) “Managed-care plan” is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.

(j) “Qualified actuary” means a member in good standing of the American academy of actuaries.

(k) “Similar policy forms” means all of the long-term care, nursing home and home health care insurance policies and certificates offered by an insurer that fall within one of the following categories:

Institutional long-term care, nursing home benefits only.
Non-institutional long-term care, home health care benefits only.
Comprehensive long-term care, nursing home and home health care benefits.

(4) Application of the insurance code to long-term care, nursing home and home health care group policies. A group or blanket long-term care policy or certificate may be exempt, under s. 600.01 (1) (b) 3., Stats., from chs. 600 to 646, Stats., and rules adopted under those statutes only if:

(a) The policy is issued for delivery and delivered in another state;

(b) The policy is subject to regulatory requirements substantially similar to those provided under chs. 600 to 646, Stats., and the rules;

(d) The policy and sufficient information to enable the office to determine compliance with pars. (a) to (c) is filed with the office; and

(e) The office makes a written determination that the policy complies with pars. (a) to (c) and that the policy is not contrary to the public interest, before the policy or certificates under the policy are marketed or solicited in this state.

(5) Loss ratio requirements.

(a) Insurers shall set and maintain rates and benefits for long-term care policies so that the loss ratio is at least:

65%, for individual policies.
65%, for group policies which issue coverage as the result of solicitation of individuals through the mail or the mass media, including, but not limited to, print or broadcast advertising.
75%, for group policies other than those subject to subd. 2.

(b) For the purpose of this subsection a loss ratio shall be calculated on the basis of the ratio of the present value of the expected benefits to the present value of the expected premium over the entire period of coverage. An insurer shall consider and evaluate the following:

Statistical credibility of incurred claims experience and earned premium over the entire period of coverage;
The entire period for which rates have been computed to provide coverage;
Experienced and projected trends;
Concentration of experience within early policy duration;
Expected claim fluctuation;
Experience refunds, adjustments or dividends;
Renewability features;
Interest; and
Product features such as elimination periods, deductibles and maximum limits.
All appropriate expense factors.
Experimental nature of the coverage.
Policy reserves.
Mix of business by risk classification.

(c) An insurer shall submit its calculations of the loss ratio for a long-term care policy at the same time it submits a long-term care policy form and at any time that it makes a filing for rates under a long-term care policy.

(d) The provisions of this subsection apply only to policies issued prior to January 1, 2002.

(6) Annual loss ratio report. An insurer shall annually, not later than April 1, file a report with the office in the form prescribed by the commissioner regarding its loss ratios and loss experience under long-term care policies. The report shall be certified to by a qualified actuary.

(7) Long-term care, nursing home and home health care policies, continuation and conversion requirements.

(a) A group policy, as defined by s. 632.897 (1) (c), Stats., which is a long-term care policy shall provide terminated insureds the right to continue under the group policy as required under s. 632.897, Stats.

(b) An individual long-term care policy that provides coverage for a spouse shall permit the spouse to obtain individual coverage as required under s. 632.897 (9), Stats., upon divorce or annulment.

(c) For the purpose of s. 632.897, Stats., an insurer provides reasonably similar individual coverage to a person converting from a long-term care policy only if the insurer offers an individual policy that is identical to or in excess of the benefits provided under the terminated coverage.

(d) In addition to offering the individual conversion policy as required under par. (c), an insurer may also offer the person the alternative of an individual conversion policy that complies with all of the following:

Is not underwritten.
Complies with this section and s. Ins 3.46.
Provides coverage of care in an institutional setting, if the original policy provided coverage in an institutional setting.
Provides coverage of care in a community-based setting, if the original policy provided coverage in a community-based setting.

(e) Written application for the converted policy shall be made and the first premium due, if any, shall be paid as directed to the insurer within 30 days after notice of termination of group coverage. The converted policy shall be issued effective on the day following the termination of coverage under the group policy, and shall be guaranteed renewable annually.

(f) Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured’s age at inception of coverage under the group policy from which conversion is made. Where the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured’s age at inception of coverage under the group policy replaced except when the premium was a composite premium. If the premium for the policy from which conversion is made was a composite premium then at conversion the premium shall be based upon attained age at the time of conversion.

(g) The offer of continuation of coverage or issuance of a converted policy shall comply with s. 632.897, Stats., except when either of the following occurs:

Termination of group coverage resulted from an individual’s failure to make any required payment of premium or contribution when due.
The terminating coverage is replaced not later than 31 days after termination by group coverage effective on the day following the termination of coverage providing benefits identical to or in excess of those provided by the terminating coverage and the premium for which is calculated in a manner consistent with the requirements of par. (f).

(h) Notwithstanding any other provision of this section, a converted policy issued to an individual who at the time of conversion is covered by another long-term care insurance policy that provides benefits on the basis of incurred expenses, may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, would result in payment of more than 100% of incurred expenses. The provision shall only be included in the converted policy if the converted policy also provides for a premium decrease or refund that reflects the reduction in benefits payable.

(i) A converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, may not exceed those that would have been payable had the individual’s coverage under the group policy remained in force and effect.

(j) Notwithstanding any other provision of this section, an insured individual whose eligibility for group long-term care coverage is based upon his or her relationship to another person shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.

(8) Reserve standards for long-term care, nursing home and home health care policies and life insurance-long-term care coverage.

(a)

Policy reserves for life insurance-long-term care coverage shall be determined in accordance with s. 623.06 (2) (g), Stats. Claim reserves must also be established if a life insurance-long-term care coverage is in claim status.
Reserves for coverage subject to this paragraph should be based on the multiple decrement model utilizing all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event shall the reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefits.
In the development and calculation of reserves for policies and riders subject to this subsection, due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures and all other considerations which have an impact on projected claim costs, including, but not limited to, the following:

a. Definition of insured events,

b. Covered long-term care facilities,

c. Existence of home convalescence care coverage,

d. Definition of facilities,

e. Existence or absence of barriers to eligibility,

f. Premium waiver provision,

g. Renewability,

h. Ability to raise premiums,

i. Marketing method,

j. Underwriting procedures,

k. Claims adjustment procedures,

L. Waiting period,

m. Maximum benefit,

n. Availability of eligible facilities,

o. Margins in claim costs,

p. Optional nature of benefit,

q. Delay in eligibility for benefit,

r. Inflation protection provisions, and

s. Guaranteed insurability option.

Any applicable valuation morbidity table shall be certified as appropriate as a statutory valuation table by a member of the American academy of actuaries.

(b) Reserves for long-term care policies shall be determined in accordance with s. Ins 3.17 (8) (b) using tables established for reserve purposes by a qualified actuary meeting the requirements of s. Ins 6.12 and acceptable to the commissioner.

(9) Long-term care rate increase standards.

(a) The initial premium rate schedule provided an insured covered by a long-term care policy may not increase during the initial 3 years in which the policy is in force.

(b) Except as provided in par. (d), any increase in the premium rate schedule provided an insured after the initial 3-year period is subject to the following:

Any premium rate increase after the initial 3-year period is guaranteed for at least 2 years after its effective date;
For those insureds age 75 or above and whose long term care policy(s) has been in force for at least 10 years, no rate increase shall exceed 10%;
If an insurer of any long-term care policy increases rates for a policy by more than 50% in any 3-year period, the insurer shall discontinue issuing all long-term care policies in this state for a period of 2 years from the effective date of such rate increase.

a. If an insurer issues both individual and group long-term care policies, the insurer shall discontinue issuing the type of coverage (individual and/or group) for which rates were increased more than 50% in a 3-year period.

b. All rate filings subject to this requirement shall include a past history of all previous rate increases and a certification of the maximum rate increase over the last thirty-five months including the current rate increase as a percent of the premium in the first month of the 35 month period.

c. This provision shall also apply to any replacing insurer which purchases or otherwise assumes a block of long-term care policies from a prior insurer. For purposes of this provision, any rate increases of the prior insurer shall apply to the replacing insurer.

The premium charged to an insured may not increase due to either:

a. The increasing age of the insured at ages beyond 65; or

b. The duration the insured has been covered under the policy.

(c) Long-term care policies which provide for inflation protection shall be subject to the restrictions contained in pars. (a) and (b). However, the purchase of additional coverage may not be considered a premium rate increase for purposes of determining compliance with par. (b) at the time additional coverage is purchased. The premium charged for the purchase of additional coverage shall be subject to par. (b) for any subsequent premium rate increases.

(d) The commissioner may institute future rulemaking proceedings to amend the provisions in par. (b) in appropriate circumstances, including the following:

Applicable state or federal law is enacted which materially affects the insured risk.
Unforeseen changes occur in long-term care delivery, insured morbidity or insured mortality.
Judicial interpretations or rulings are rendered regarding policy benefits or benefit triggers resulting in unforeseen claim liabilities.

(e) Except as provided in par. (f) the provisions of this subsection apply only to long-term care insurance policies and certificates issued from August 1, 1996 to December 31, 2001.

(f) The provisions of this subsection do not apply to any group long-term care insurance policy or certificate issued to any labor organization or to any trust or trustee of a fund established by any employer or labor organization for members or former members if the group policy was in force prior to August 1, 1996.

(9m) Premium rate schedule increases, requesting and determining exceptional rate increases.

(a) An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the commissioner at least 60 days prior to the notice to the policyholders and shall include all of the following:

The required disclosure of rating practices to consumers notice as described under s. Ins 3.46 (9) (b).
A certification by a qualified actuary that the premium rate filing is in compliance with the provisions of this subsection and if the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated.
An actuarial memorandum justifying the rate schedule change request that includes all of the following:

a. Lifetime projections of earned premiums and incurred claims based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale, including all of the following:

b. Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger contingent benefit upon lapse.

c. Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, and what other actions taken by the insurer have been relied on by the actuary.

d. A statement that policy design, underwriting and claims adjudication practice have been taken into consideration.

e. If it is necessary to maintain consistent premium rates for new certificates and certificates receiving a rate increase, the insurer shall file composite rates reflecting projections of new certificates.

A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the commissioner.
Sufficient information for review of the premium rate schedule increase by the commissioner.
For exceptional increases, the projected experience should be limited to the increases in claims expenses attributable to the approved reasons for the exceptional increase. If the commissioner determines that offsets may exist, the insurer shall use appropriate net projected experience.
The commissioner may request a review by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase.

(b) All premium rate schedule increases shall be determined in accordance with all of the following requirements:

The commissioner, in determining that the necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.
Exceptional increases shall provide that 70% of the present value of projected additional premiums from the exceptional increase will be returned to policyholders in benefits.
Premium rate schedule increases shall be calculated such that the sum of the accumulated value of incurred claims, without the inclusion of active life reserves, and the present value of future projected incurred claims, without the inclusion of active life reserves, will not be less than the sum of the following:

a. The accumulated value of the initial earned premium times 58%.

b. Eighty-five percent of the accumulated value of prior premium rate schedule increases on an earned basis.

c. The present value of future projected initial earned premiums times 58%.

d. Eighty-five percent of the present value of future projected premiums not in this subd. 3. c. on an earned basis.

If a policy form has both exceptional and other increases, the values in subd. 3. b. and d. shall also include 70% for exceptional rate increase amount.
All present and accumulated values used to determine rate increases shall use the maximum valuation interest rate for contract reserves as specified in s. Ins 3.17. The actuary shall disclose, as part of the actuarial memorandum, the use of any appropriate averages.

(c) For each rate increase that is implemented, the insurer shall file for review by the commissioner updated projections as defined in par. (a) 3. a. annually for the next 3 years and include a comparison of actual results to projected values. The commissioner may extend the period to greater than 3 years if actual results are not consistent with projected values from prior projections.

(d) If any premium rate in the revised premium rate schedule is greater than 200% of the comparable rate in the initial premium schedule, lifetime projections, as defined in par. (a) 3. a., shall be filed for review by the commissioner every 5 years following the end of the required period in par. (c).

(e) If the commissioner has determined that the actual experience following a rate increase does not adequately match the projected experience and that the current projections under moderately adverse conditions demonstrate that incurred claims will not exceed proportions of premiums specified in par. (b), the commissioner may require the insurer to make premium rate schedule adjustments or take other measures to reduce the difference between the projected and actual experience. In determining whether the actual experience adequately matches the projected experience, consideration should be given to par. (a) 3. e., if applicable.

(f) If the majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse, the insurer shall file all of the following:

A plan, subject to commissioner approval, for improved administration or claims processing designed to eliminate the potential for further deterioration of the policy form requiring further premium rate schedule increases, or both, or to demonstrate that appropriate administration and claims processing have been implemented or are in effect; otherwise the commissioner may impose the condition in par. (g).
The original anticipated lifetime loss ratio, and the premium rate schedule increase that would have been calculated according to par. (b) had the greater of the original anticipated lifetime loss ratio or 58% been used in the calculations described in par. (b) 3. a. and c.

(g)

For a rate increase filing that meets the following criteria, the commissioner shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following each increase to determine if significant adverse lapsation has occurred or is anticipated when all of the following conditions occur:

a. The rate increase is not the first rate increase requested for the specific policy form or forms.

b. The rate increase is not an exceptional increase.

c. The majority of the policies or certificates to which the increase is applicable are eligible for the contingent benefit upon lapse.

If significant adverse lapsation has occurred, is anticipated in the filing or is evidenced in the actual results as presented in the updated projections provided by the insurer following the requested rate increase, the commissioner may determine that a rate spiral exists. Following the determination that a rate spiral exists, the commissioner may require the insurer to offer, without underwriting, to all in force insureds subject to the rate increase the option to replace existing coverage with one or more reasonably comparable products being offered by the insurer or its affiliates.
The offer described in subd. 2. shall be subject to the approval of the commissioner, be based on actuarially sound principles, but not be based on attained age, and shall provide that maximum benefits under any new policy accepted by an insured shall be reduced by comparable benefits already paid under the existing policy.
The insurer shall maintain the experience of all the replacement insureds separate from the experience of insureds originally issued the policy forms. If a rate increase on the policy form, the rate increase shall be limited to the maximum rate increase determined based on the combined experience or the maximum rate increase determined based only on the experience of the insureds originally issued the form plus 10%, whichever is less.

(h) If the commissioner determines that the insurer has exhibited a persistent practice of filing inadequate initial premium rates for long-term care, nursing home, and home health care insurance, the commissioner may, in addition to the provisions of par. (g), either prohibit the insurer from filing and marketing comparable coverage for a period of up to 5 years, or prohibit the insurer from offering all other similar coverages and require the insurer to limit marketing of new applications to the products subject to recent premium rate schedule increases.

(i) Paragraphs (a) through (h) shall not apply to policies for which the benefits provided by the policy are incidental.

(j) Except as provided in pars. (k) and (L) the provisions of this subsection apply to any long-term care, nursing home or home health care policy or certificate issued in this state on or after January 1, 2002.

(k) For group long-term care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002 the provisions of this subsection shall apply on the first policy anniversary occurring at least 12 months after January 1, 2002.

(L) In lieu of filing the projections required by pars. (c) and (d) with the commissioner, an insurer may file projections with the employer if that employer has at least 5,000 eligible employees of whom at least 250 are covered under the policy or the employer pays at least 20% of the annual group premium in the year preceding the increase.

(10) Initial filing requirements.

(a) This subsection applies to any long-term care, nursing home and home health care policy issued in this state on or after January 1, 2002.

(b) An insurer shall file all of the following with the commissioner at least 30 days before making a long-term care insurance policy available for sale:

A copy of the disclosure documents as required by s. Ins 3.46 (9).
An actuarial certification consisting of all the following:

a. A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated.

b. A statement that the policy design and coverage provided have been reviewed and taken into consideration.

c. A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration.

d. A complete description of the basis for contract reserves that are anticipated to be held under the form.

e. Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held.

f. A statement that the assumptions used for reserves contain reasonable margins for adverse experience.

g. A statement that the net valuation premium for renewal years does not increase except for attained-age rating where permitted.

h. A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur. An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship. If the gross premiums for certain age groups appear to be inconsistent with this requirement, the commissioner may request a demonstration under subd. 3. based on a standard age distribution.

i. A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the insurer except for reasonable differences attributable to benefit or a comparison of the premium schedules for similar policy forms that are currently available from the insurer with an explanation of the differences.

The commissioner may request an actuarial demonstration that benefits are reasonable in relation to premiums. The actuarial demonstration shall include either premium and claim experience on similar policy forms, adjusted for any premium or benefit differences, relevant and credible data from other studies, or both.
If the commissioner asks for additional information under this provision, the period in par. (b) does not include the period during which the insurer is preparing the requested information.

History

Cr. Register, April, 1991, No. 424, eff. 6-1-91; cr. (9), Register, July, 1996, No. 487, eff. 8-1-96; CR 00-188: cr. (3) (c) to (g), (5) (b) 10. to 13., (d), (9m) and (10), am. (9) (e), r. and recr. (9) (f), Register July 2001, No. 547 eff. 1-1-02; EmR0817: emerg. r. and recr. (3), am. (7) (b) to (d), cr. (7) (e) to (j), eff. 6-3-08; CR 08-032: r. and recr. (3), am. (7) (b) to (d), cr. (7) (e) to (j) Register October 2008 No. 634, eff. 11-1-08; correction in (2) (b) 3. made under s. 13.92 (4) (b) 7., Stats., Register October 2008 No. 634.

Wis. Admin. Code § Ins 3.46 Standards for long-term care, nursing home and home health care insurance and life insurance-long-term care coverage {#sec-ins-3.46 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.46}

(1) Findings. The findings under s. Ins 3.455 (1) are incorporated by reference. The commissioner finds that the adoption of minimum standards, compensation restrictions and disclosure requirements for long-term care and life insurance-long-term care coverage will reduce marketing abuses and will assist consumers in their attempts to understand the benefits offered and to compare different products. The commissioner finds that failure to comply with this section is misleading and deceptive under s. 628.34 (12), Stats., and constitutes an unfair trade practice.

(2) Applicability.

(b) This section, except for sub. (10) (b) to (e), does not apply to an individual long-term care policy or life insurance-long-term care coverage, to a group long-term care policy or life insurance-long-term care coverage or a certificate under the group policy, or to a renewal policy or coverage or certificate, if:

The individual long-term care policy or life insurance-long-term care coverage was issued prior to June 1, 1991; or
The group policy is issued prior to June 1, 1991 and all certificates under the policy are issued prior to June 1, 1991.

(c) Section Ins 3.46 in effect prior to June 1, 1991 and sub. (10) (b) to (e) apply to those policies, coverages or certificates which qualify for exemption under par. (b).

(d) This section does not apply to an accelerated benefit coverage of a life insurance policy, rider or endorsement that:

Provides payments on the occurrence of a severe illness or injury without regard to the incurral of expenses for services relating to the illness or injury; and
Is not sold primarily for the purpose of providing coverage of nursing home or home health care, or both.

(3) Definitions. In this section:

(a) “Assisted living facility” or “assisted living care facility” means a living arrangement in which people with special needs reside in a facility that provides supportive services to persons unable to live independently and requires supportive services, including, but not limited to, personal care and assistance taking medications, and that is in compliance with ch. DHS 89.

(b) “Cognitive impairment” means a deficiency in a person’s short-term or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

(c) “Compensation” means remuneration of any kind, including, but not limited to, pecuniary or non-pecuniary remuneration, commissions, bonuses, gifts, prizes, awards, finder’s fees, and policy fees.

(d) “Department” means the Wisconsin department of health services.

(e) “Group long-term care insurance” means a long-term care insurance policy that is delivered or issued for delivery in this state and issued to one or more employers or labor organizations or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or both, for employees or former employees, or both, or for members or former members, or both, of the labor organizations; or a professional, trade or occupational association for its members or former or retired members, or both, if the association is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation and has been maintained in good faith for purposes other than obtaining insurance or an association or a trust or the trustees of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering the policy within this state the association or the insurer of the association shall demonstrate that at least 25% of its members are residents of this state.

(f) “Guaranteed renewable for life” means an individual policy renewal provision that continues the insurance in force unless the premium is not paid on time, that prohibits the insurer from changing any provision of the policy, endorsement or rider while the insurance is in force without the express consent of the insured, and that requires the insurer to renew the policy, endorsement or rider for the life of the insured and to maintain the rates in effect for the policy, endorsement or rider at time of issuance, except the provision may permit the insurer to revise rates but on a class basis only.

(g) “Guide to long-term care” means the booklet prescribed by the commissioner which provides information on long-term care, including insurance, and advice to consumers on the purchase of long-term care insurance.

(h) “Home health care services” means medical and non-medical services, provided to ill, disabled or infirm persons in their residences. Such services may include homemaker services, assistance with activities of daily living and respite care services.

(i) “Irreversible dementia” means deterioration or loss of intellectual faculties, reasoning power, memory, and will due to organic brain disease characterized by confusion, disorientation, apathy or stupor of varying degrees that is not capable of being reversed and from which recovery is impossible. Irreversible dementia includes, but is not limited to, Alzheimer’s disease.

(j) “Life insurance-long-term care coverage” means coverage that includes all of the following:

Provides coverage for convalescent or custodial care or care for a chronic condition or terminal illness.
Is included in a life insurance policy or an endorsement or rider to a life insurance policy.

(k) “Long-term care insurance” means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis; for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. The term includes group and individual annuities and life insurance policies or riders that provide directly or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term includes qualifying partnership policies. Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Long-term care insurance does not include an insurance policy that is offered primarily to provide basic Medicare supplement coverage. With regard to life insurance, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits and where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this section, any product advertised, marketed or offered as long-term care insurance shall be subject to the provisions of this section.

(L) “Long-term care insurance policy qualifying for the Wisconsin Long-Term Care Insurance Partnership Program” or “qualifying partnership policy” means a long-term care insurance policy that is intended to qualify an insured under the Wisconsin Long-Term Care Insurance Partnership Program, as defined at s. 49.45 (31) (a), Stats.

(m) “Long-term care policy” means a disability insurance policy, or an endorsement or rider to a disability insurance policy, designed or intended primarily to be marketed to provide coverage for care that is convalescent or custodial care or care for a chronic condition or terminal illness. Long-term care policy includes, but is not limited to, a nursing home policy, endorsement or rider and a home health care policy, endorsement or rider. The term does not include any of the following:

A Medicare supplement policy, Medicare replacement policy, or an endorsement or rider to such a policy.
A continuing care contract, as defined in s. 647.01 (2), Stats.
A rider designed specifically to meet the requirements for coverage of skilled nursing care under s. 632.895 (3), Stats.
Life insurance-long-term care coverage.

(n) “Medicaid” means the federal and state entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources established by Title XIX, 42 U.S.C. 1396 to 1396r-3. The federal government provides matching funds to the state Medicaid programs.

(o) “Medicare” means the hospital and medical insurance program established by Title XVIII, 42 U.S.C. 1395 to 1395ss, as amended.

(p) “Medicare eligible persons” means persons who qualify for Medicare.

(q) “Mental or nervous disorder” may not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.

(r) “Noncancellable” means an individual policy in which the insured has the right to continue the insurance in force by the timely payment of premiums during which period the insurer has no right to unilaterally make any change in any provision of the insurance or in the premium rate.

(s) “Outline of coverage” means a document that gives a brief description of benefits in the format prescribed in Appendix 1 to this section and which complies with sub. (8).

(t) “Personal care” means the provision of hands-on services to assist an individual with activities of daily living.

(u) “Qualified long-term care services” means services that meet the requirements of section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, including the following:

Necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services.
Maintenance or personal care services that are required by a chronically ill individual.
Services that are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(v) “Skilled nursing care,” “personal care,” “home care,” “specialized care,” “assisted living care,” and other services shall be defined in relation to the level of skill required, the nature of the care and the setting in which care shall be delivered.

(x) “Wisconsin Long-Term Care Insurance Partnership Program” or “state partnership program” means the program developed by the department to meet the requirements of s. 49.45 (31), Stats.

(4) General form requirements for long-term care, nursing home and home health care policies and life insurance-long-term care coverage. Forms for a long-term care policy, life insurance-long-term care coverage and certificates shall:

(a) Provide coverage for each person insured for convalescent and custodial care and care for chronic conditions and terminal illness.

(b) Establish fixed daily benefit limits only if the highest limit is not less than $60 per day. This fixed daily benefit applies to the total long-term care insurance in force for any one insured.

(c) Establish a fixed daily benefit limit based on the level of the covered care only if the lowest limit of daily benefits provided for under the policy or coverage is not less than 50% of the highest limit of daily benefits and the following when applicable:

If the policy provides for home health or community care services, it shall provide total home health or community care coverage that is a dollar amount equivalent to at least one-half of one year’s coverage available for nursing home benefits under the policy or certificate, at the time covered home health or community care services are being received. This requirement may not apply to policies or certificates issued to residents of continuing care retirement communities.
Home health care coverage may be applied to the non-home health care benefits provided in the policy or certificate when determining maximum coverage under the terms of the policy or certificate.

(d) Provide for an elimination period only if:

It is expressed in a number of days per lifetime or per period of confinement;
It is clearly disclosed;
Days for which Medicare provides coverage are counted for the purpose of determining expiration of the elimination period; and
It does not exceed 365 days.

(e) Provide for a lifetime maximum limit only if the limit provides not less than 365 days of coverage. Only days of coverage under the policy, coverage or certificate may be applied against a lifetime maximum limit. Coverage by Medicare may not be applied against a lifetime maximum limit.

(f) Clearly disclose that it does not cover duplicate payments by Medicare for nursing home care or home health care if it has either exclusion.

(g) Provide coverage regardless of whether care is medically necessary. Coverage shall be triggered in conformance with the provisions contained in subs. (17) and (18).

(h) Not limit or condition coverage or benefits by requiring prior hospitalization or prior receipt of care, or benefits for care, in an institutional setting.

(i) Cover irreversible dementia. Coverage may not be excluded or limited on the basis of irreversible dementia.

(j) Define terms used to describe covered services, including, but not limited to, “skilled nursing care,” extended care facility,” “convalescent nursing home,” “personal care,” or “home care” services, if those terms are used, in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider shall meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the providers of services under another name.

(k) All providers of services, including, but not limited to, “skilled nursing facility,” “extended care facility,” “convalescent nursing home,” “personal care facility,” “specialized care providers,” “assisted living,” and “home care agency,” shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services in the state where the policy was issued. When the definition requires that a provider be appropriately licensed, certified or registered, it shall also state what requirements a provider shall meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of such services to be licensed, certified or registered, or if the state licenses, certifies or registers the provider of services under another name.

(m) Not exclude or limit coverage by type of illness, treatment, medical condition or accident, except it may include exclusions or limits for any of the following:

Preexisting conditions or diseases. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy and shall be labeled as “Preexisting Condition Limitations.”
Illness, treatment or medical condition arising out of any one or more of the following:

a. Treatment provided in a government facility, unless otherwise required by law.

b. Services for which benefits are available under Medicare or other governmental programs, except Medicaid, or under a state or federal worker’s compensation, employer’s liability, occupational disease law, or any motor vehicle no-fault law.

c. Services provided by a member of the insured’s immediate family or for which no charge is normally made in the absence of insurance.

d. War or act of war, whether declared or undeclared.

e. Participation in a felony, riot or insurrection.

f. Service in the armed forces or its auxiliary units.

g. Suicide, sane or insane, attempted suicide or intentionally self-inflicted injury.

h. Aviation, however, this exclusion applies only to non-fare-paying passengers.

Mental or nervous disorders; however, this may not permit exclusion or limitation of benefits on the basis of Alzheimer’s Disease.
Alcoholism or drug addiction.
Expenses for services or items available or paid under another long-term care insurance or health insurance policy.
This paragraph is not intended to prohibit exclusions or limitation by type of provider. In this subdivision, “state of policy issue” means the state in which the individual policy or certificate was originally issued. However, no long-term care insurer may deny a claim because services are provided in a state other than the state of policy issue when either of the following conditions occurs:

a. When a state other than the state of policy issue does not have the provider licensing, certification, or registration required in the policy, but where the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification or registration.

b. When a state other than the state of policy issue licenses, certifies or registers the provider under another name.

This paragraph is not intended to prohibit territorial limitations.
If payment of benefits is based on standards described as “usual and customary,” “reasonable and customary” or words of similar import shall include a definition of these terms and include an explanation of the terms in its accompanying outline of coverage and comply with s. Ins 3.60 (5).
In the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Medicare or would be so reimbursable but for the application of a deductible or coinsurance amount.
Subject to the policy provisions, any plan of care required under the policy shall be provided by a licensed health care practitioner and does not require insurer approval. The insurer may provide a predetermination of benefits payable pursuant to the plan of care. This does not prevent the insurer from having discussions with the licensed health care practitioner to amend the plan of care. The insurer may also retain the right to verify that the plan of care is appropriate and consistent with generally accepted standards.
A long-term care policy containing post-confinement, post-acute care, or recuperative benefits shall include in a separate policy provision entitled “Limitation or Conditions on Eligibility for Benefits,” the limitations or conditions applicable to these benefits, including any required number of days of confinement.

(n) Not exclude or limit any coverage of care provided in a community-based setting, including, but not limited to, coverage of home health care, by any of the following:

Requiring that care be medically necessary.
Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services before community-based care is covered.
Limiting eligible services to services provided by registered nurses or licensed practical nurses.
Requiring that the insured have an acute condition before community-based care is covered.
Limiting benefits to services provided by Medicare certified agencies or providers.

(o) Provide substantial scope of coverage of facilities for any benefits it provides for care in an institutional setting.

(p) Provide substantial scope of coverage of facilities and programs for any benefits it provides for care in a community-based setting.

(q) Contain a description of the benefit appeal procedure and comply with s. 632.84, Stats.

(r) If coverage of care in a community-based setting is included, provide coverage of all types of care provided by state licensed or Medicare certified home health care agencies. A long-term care insurance policy may not, if it provides benefits for home health care or community care services limit or exclude benefits by any of the following acts:

Requiring that the insured or claimant would need care in a skilled nursing facility if home health care services were not provided.
Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services, or both, in a home, community or institutional setting before home health care services is covered.
Requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide or other licensed or certified home care worker acting within the scope of his or her licensure or certification.
Excluding coverage for personal care services provided by a home health aide.
Requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service.
Requiring that the insured or claimant have an acute condition before home health care services are covered.
Limiting benefits to services provided by Medicare-certified agencies or providers.
Excluding coverage for adult day care services.

(s) If coverage of care in an institutional setting is provided, not condition eligibility for coverage of custodial or intermediate care on the concurrent or prior receipt of intermediate or skilled care.

(t) Include a provision which allows for reinstatement of coverage, in the event of lapse, if the insurer is provided proof of cognitive impairment or the loss of functional capacity and if the reinstatement of coverage is requested within 5 months after termination and provision is made for the collection of past due premiums, where appropriate. The standard of proof of cognitive impairment or loss of functional capacity to be used in evaluating an application for reinstatement may not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity, if any, contained in the policy and certificate.

(u) Require a signed acceptance by the individual insured for all riders or endorsements added to an individual long-term care insurance policy after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy, except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy. After the date of issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage are required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, rider, or endorsement.

(5) Form requirements for long-term care, nursing home and home health care policies only.

(a) This subsection and ss. Ins 3.13 (2) (j) and 3.39 (9) (a) and ss. 632.76 and 632.897, Stats., do not apply to life insurance-long-term care coverage.

(b) A form for long-term care policy or certificate shall:

Comply with the restrictions on preexisting condition provisions under s. 632.76, Stats.
Include the unrestricted right to return the policy or certificate within 30 days of the date it is received by the policyholder and comply with s. 632.73 (2m), Stats.
If it is a policy or certificate which covers care in both institutional and community-based settings, contain a caption as follows:
If it is a policy or certificate which covers care only in an institutional setting, contain a caption as follows:
If it is a policy or certificate which covers care in a community setting only, contain a caption as follows:
Contain the caption required under subd. 3., 4. or 5. imprinted on the face of the policy or certificate in type not smaller than 18-point and either in contrasting color from the text or with a distinctly contrasting background which is at least as prominent as contrasting color.
Include an extension of benefits provision which provides that if the policy is terminated for any reason, including, but not limited to, failure to pay premium, any benefits provided for care in an institutional setting will continue to be payable for institutionalization if the institutionalization begins when the policy is in force and continues without interruption after termination. This extension of benefits may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy elimination period and all other applicable provisions of the policy.
If it is an individual policy, be plainly printed in black or blue ink in a uniform type of a style in general use with not less than 10-point with a lower case unspaced alphabet length not less than 120-point. If it is a group policy, certificates issued under the policy shall be plainly printed in black or blue ink in a uniform type of a style in general use, not less than 10-point with a lower case unspaced alphabet length not less than 120-point.
If it is an individual policy, include a provision which provides that the policy is guaranteed renewable for life or noncancellable, then such provision shall be appropriately captioned and shall appear on the first page of the policy and shall include any reservation by the insurer of the right to change premiums and any automatic renewal premium increase based on the policyholder’s age.

(6) Nursing home and home health care coverage forms may not use the term “long-term care”. Only a form for a long-term care policy, life insurance-long-term care coverage or certificate which provides substantial coverage of care in both an institutional setting and in a community-based setting may use the term “long-term care” or a substantially similar term.

(7) Misrepresentations prohibited.

(a) No insurer or intermediary may use the term “long-term care” or similar terminology in an advertisement or offer of a policy, coverage or certificate unless the policy, coverage or certificate advertised or offered:

Covers care in both institutional and community-based settings;
Complies with this section; and
Is approved as a long-term care policy or certificate covering care in both institutional and community settings and as appropriately using the term “long-term care” by the office.

(b) No insurer may file a form under s. 631.20, Stats., for a long-term care policy, life insurance-long-term care coverage or certificate, unless the form complies with this section.

(8) Outline of coverage.

(a) An outline of coverage for a long-term care policy, life insurance-long-term care coverage or certificate shall:

Have captions printed in 18-point bold letters and conspicuously placed;
Be printed in an easy to read type and written in easily understood language; and
Comply with s. Ins 3.27 (5) (L) and (9) (zh).

(b) No insurer or intermediary may use an outline of coverage to comply with sub. (9) or advertise, market or offer a long-term care policy, life insurance-long-term care coverage or certificate, unless prior to the use, advertising, marketing or offer the outline of coverage is approved in writing by the office.

(c) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy all of the following:

“Notice to Buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations.”
A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation by the insurer of the right to change premium. Continuation or conversion provisions of group coverage shall be specifically described.

(d) This par. does not apply to a group that is offered coverage as a result of collective bargaining and has guaranteed issue.

(9) Disclosure when soliciting.

(a) An insurer or intermediary at the time the insurer or intermediary contacts a person to solicit the sale of a long-term care policy, life insurance-long-term care coverage or certificate shall deliver to the person:

A copy of the current edition of the guide to long-term care; and
An outline of coverage.

(b) Other than a policy for which no applicable premium rate or rate schedule increases can be made, an insurer shall provide all of the following information to the applicant at the time of application or enrollment:

A statement that the policy may be subject to rate increases in the future.
An explanation of potential future premium rate revisions and the policyholder’s or certificateholder’s option in the event of a premium rate revision.
The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase.
A general explanation for applying premium rate or rate schedule adjustments that shall include a description of when premium rate or rate schedule adjustments will be effective, such as next anniversary date or next billing date, and the right to a revised premium rate or rate schedule as provided in subd. 2. if the premium rate or rate schedule is changed.
Information regarding each premium rate increase on this policy form or similar policy forms over the past 10 years for this state or any other state that, at a minimum, identifies the policy forms for which premium rates have been increased; the calendar years when the form was available for purchase; and the amount or percentage of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.

(c) The insurer may as part of the disclosure under par. (b) in a fair manner, provide additional explanatory information related to the rate increases.

(d) For purposes of the disclosure requirement under par. (b), an insurer shall have the right to exclude from the disclosure premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.

(e) For purposes of the disclosure requirement under par. (b), if an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of the effective date of this subsection or the end of a 24 month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling insurer shall include the disclosure of that rate increase.

(f) For purposes of the disclosure requirement under par. (b), if the acquiring insurer files for a subsequent rate increase, even within the 24 month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers, the acquiring insurer must make all disclosures required, including disclosure of the earlier rate increase.

(g) An applicant shall sign an acknowledgement at the time of application that the insurer made the disclosure required under par. (b) 1. and 5.

(h) An insurer shall use the forms in Appendices 1, 2 and 5 to comply with the requirements of pars. (b), (g) and (i).

(i) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificateholders, if applicable, at least 60 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by par. (b) when the rate increase is implemented.

(j) This subsection shall apply as follows:

Except as provided in subd. 2., this subsection applies to any long-term care, nursing home or home health care policy or certificate issued in this state on or after January 1, 2002.
For group long-term care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002 the provisions of this subsection shall apply on the first policy anniversary occurring at least 12 months after January 1, 2002.

(k) An insurer shall provide copies of the disclosure forms required in Appendices 2 and 5 to the applicant.

(L)

In the case of a group insurance policy defined in s. 600.03 (23), Stats., any requirement that a signature of an insured be obtained by an intermediary or insurer shall be deemed satisfied if all of the following are met:

a. The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. Verification of enrollment and enrollment information shall be provided to the enrollee in writing.

b. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records.

c. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information and personal medical information is maintained.

The insurer shall make available, upon request of the commissioner, records that will demonstrate the insurer’s ability to confirm enrollment and coverage amounts.
This par. does not apply to a group that is offered coverage as a result of collective bargaining and has guaranteed issue.

(m) With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This paragraph may not apply to qualified long-term care insurance contracts.

(10) Underwriting.

(a) No insurer may issue a long-term care policy, life insurance-long-term care coverage or a certificate to an applicant 75 years of age or older, unless prior to issuing coverage the insurer obtains one of the following:

A copy of a physical examination.
An assessment of functional capacity.
An attending physician’s statement.
Copies of medical records.

(b) An insurer selling or issuing long-term care policies or life insurance-long-term care coverage shall maintain a record of all policies, coverage or certificate rescissions or reformations, including voluntary rescissions or reformations, categorized by policies, coverages and certificates within this state and nationwide.

(c) An insurer subject to par. (b) shall file a report with the office regarding rescissions and reformations not later than March 1 each year on the form prescribed by the commissioner.

(d) An insurer shall maintain a record of its claims administration guidelines for processing claims under long-term care policies and life insurance-long-term care coverage and shall provide the record to the office on request.

(e) Sections Ins 3.28 and 3.31 apply to long-term care policies.

(f) All applications for long-term care insurance policies or certificates, except those that are guaranteed issue, shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant and shall comply with all of the following when applicable:

If the application contains a question that asks whether the applicant has had medication prescribed by a physician, it shall also ask the applicant to list the medication that has been prescribed.
If the medications listed in the application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the insurer may not rescind the policy or certificate for that condition.

(g) The following language shall be set out in bold font and in a conspicuous location that is in close conjunction with the applicant’s signature block on an application for a long-term care insurance policy or certificate:

(h) The following language, or language substantially similar to the following, shall be set out in bold font and in a conspicuous location on the long-term care insurance policy or certificate at the time of delivery:

(i) A copy of the completed application or enrollment form shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.

(j) Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those that the insured voluntarily effectuated and shall annually furnish this information to the commissioner in the format contained in Appendix 8.

(11) Sale of long-term care and limited benefit policies; required offer of coverage with inflation protection.

(a) No insurer may advertise, market or offer a long-term care policy or certificate unless the insurer has a form approved under s. 631.20, Stats., for the policy or certificate which adds inflation protection no less favorable than one of the following:

Benefit levels and maximum benefit amounts increase annually and are annually compounded at a rate of not less than 5%. The policy or certificate may provide that the individual insured or certificate holder will be permitted to decline a benefit increase and that if any benefit increase is declined future increases will not be available. Declination of a increase must be by express written election at the time the increase is to take effect.
Benefit levels and maximum benefit amounts increase annually and are annually compounded at a rate equal to the increase in the consumer price index (urban) for the previous year. The insurer may elect to provide in the form that the individual insured or certificate holder will be permitted to decline a benefit increase and that if the benefit increase is declined future increases will not be available. Such a provision shall provide that declination of an increase shall be by express written election at the time the increase is to take effect.
Coverage of a specified percentage, not less than 80%, of actual or reasonable charges for expenses incurred.
Activities of daily living and cognitive impairment triggers shall be described in the policy in a separate paragraph and shall be labeled “Eligibility for the Payment of Benefits.” If an attending physician or other specified person is required to certify a certain level of functional dependency in order to be eligible for benefits, this too shall be specified.

(b) No insurer may file a form for a long-term care policy or certificate under s. 631.20, Stats., unless the application form is filed with the policy or certificate form and the application form contains a clear and conspicuous disclosure of the offer required under par. (c).

(c) No insurer or intermediary may contact any person to solicit the sale of a long-term care policy or certificate unless, at the time of contact, the intermediary or insurer makes a clear and conspicuous offer to the person to provide the long-term care policy or certificate with the benefit levels selected by the person and inflation protection as provided under par. (a).

(d) No insurer or intermediary may accept an application for a long-term care policy or certificate unless it is signed by the applicant and the applicant has indicated acceptance or rejection of the inflation protection on the application.

(e) If a long-term care policy is a group policy the applicant for the purpose of par. (d) is the proposed certificate holder.

(f) No insurer or intermediary may advertise or represent that a long-term care policy includes inflation protection unless the policy includes inflation protection at least as favorable as provided under par. (a) 1., 2. or 3.

(g) This subsection does not require an insurer to accept an application for a long-term care policy or certificate with inflation protection as provided by this subsection if the applicant would be rejected under underwriting criteria for the policy or certificate without the inflation protection.

(h) Insurers offering group long-term care policies are exempt from pars. (d) and (e) if they comply with all of the following:

The policy is issued to a local, municipal, county, or state public employee group.
The group coverage was negotiated as part of a collective bargaining agreement.
The group coverage is provided to all eligible employees on a guaranteed issue basis.
The policy provides insureds with at least 5% compound annualized inflation protection.

(12) Sale of long-term care policy or certificate or life insurance-long-term care coverage with lengthy elimination period.

(a) No insurer may advertise, market or offer a long-term care policy or certificate, or life insurance-long-term care coverage with an elimination period exceeding 180 days unless the insurer has a form approved under s. 631.20, Stats., providing the identical coverage, but with an elimination period of 180 days or less.

(b) No insurer may file a form for a long-term care policy or certificate or life insurance-long-term care coverage containing an elimination period in excess of 180 days, unless the application form contains a clear and conspicuous disclosure of the offer required under par. (c).

(c) No insurer or intermediary may contact any person to solicit the sale of a long-term care policy or certificate or life insurance-long-term care coverage with an elimination period in excess of 180 days unless, at the time of the contact, the intermediary or insurer makes a clear and conspicuous offer to the person to provide the policy, certificate or coverage with an elimination period of 180 days or less.

(d) No insurer or intermediary may accept an application for a long-term care policy or certificate, or life insurance-long-term care coverage, unless it is signed by the applicant and has indicated acceptance or rejection of the offer required under par. (c) on the application.

(e) If a policy or coverage is a group policy or coverage, the applicant for the purpose of par. (d) is the proposed certificate holder.

(f) This subsection does not require an insurer to accept an applicant for a policy, certificate or coverage with a 180-day or less elimination period if the applicant would be rejected for the same policy, certificate or coverage with the elimination period in excess of 180 days.

(13) Commission limits for long-term care, nursing home and home health care policies.

(a) An insurer may provide compensation to an intermediary, and an intermediary may accept compensation for the sale of a long-term care policy or certificate only if the compensation provided in the 2nd year or period and subsequent years is the same and is provided for at least 5 renewal years.

(b) Except as provided in par. (c), no person may provide compensation to an intermediary, and no intermediary may accept compensation, relating to the replacement of a long-term care policy or certificate which is greater than the renewal compensation provided by the replacing insurer for the replacing policy or certificate. Long-term care policies this paragraph and par. (c) apply to include, but are not limited to, long-term care policies, nursing home policies and home health care policies issued prior to June 1, 1991.

(c) A person may provide to an intermediary, and an intermediary may accept, compensation relating to the replacement of a long-term care policy or certificate; which compensation is no greater than the first-year compensation provided by the replacing insurer for the replacing policy or certificate if, in addition to requirements contained in sub. (14), all of the following criteria are satisfied:

The replacing insurer has established reasonable standards for which first-year compensation is appropriate for the replacement.
The standards referenced in subd. 1. include all of the following standards:

a. The replacing policy is suitable for the applicant.

b. The replacing policy materially improves the position of the applicant, including, but not limited to, the coverage, price, premium stability, or financial strength ratings of the insurer.

c. The intermediary has done an assessment of the replacement transaction justifying the replacement according to the insurer’s replacement standards and this subd. 2. c. and submits that assessment to the insurer as part of the application for replacement.

d. The insurer evaluates each replacement and affirmatively approves or denies the replacement’s qualification for first-year compensation of the replacing policy.

e. The standards and methodology are subject to review by the office of the commissioner of insurance.

The replacing insurer has established an auditable methodology for evaluating replacements that qualify for first-year compensation.

(14) Replacement; long-term care, nursing home and home health care policies.

(a) If a long-term care policy or certificate replaces another long-term care policy or certificate, the replacing insurer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new long-term care policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.

(b) If a group long-term care policy is replaced by another group long-term care policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(c)

Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent, except where the coverage is sold without an agent, containing the following questions may be used:

a. Do you have another long-term care insurance policy or certificate in force (including a health care service contract or health maintenance organization contract)?

b. Did you have another long-term care insurance policy or certificate in force during the last 12 months?

c. If so, with which [company or insurer]?

d. If that policy lapsed, when did it lapse?

e. Are you covered by Medicaid?

f. Do you intend to replace any of your medical or health insurance coverage with this policy [certificate]?

Agents shall list any other health insurance policies they have sold to the applicant, including all of the following:

a. List policies sold that are still in force.

b. List policies sold in the past 5 years that are no longer in force.

Upon determining that a sale will involve replacement, an insurer; other than an insurer using direct response solicitation methods, or its intermediaries; shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in compliance with Appendix 6.
Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in compliance with Appendix 7.
Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured and policy number or address including zip code. Notice shall be made within 5 working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.
Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of s. Ins 2.07. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

(d) An intermediary taking an application for a long-term care policy or certificate shall do all of the following:

List any other health insurance policies or certificates the intermediary has sold to the applicant.
List separately the policies or certificates that are still in force.
List policies or certificates sold in the past which are no longer in force.
Submit the lists to the insurer with the application.

(e) Every insurer and person marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

Establish marketing procedures to assure that any comparison of policies by its intermediaries or other producers will be fair and accurate.
Establish marketing procedures to assure excessive insurance is not sold or issued.
Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for a long-term care policy or certificate already has an accident and sickness or a long-term care policy or certificate and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contract, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.
Establish auditable procedures for verifying compliance with this paragraph.

(f) In recommending the purchase or replacement of any long-term care policy or certificate an intermediary shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

(g) Replacement of long-term care, nursing home and home health care policies and certificates issued prior to June 1, 1991 is also subject to this subsection.

(15) Unintentional lapse; long-term care, nursing home and home health care policies.

(a) As part of the application process, an insurer shall obtain from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive a notice of lapse or termination of the policy or certificate for nonpayment of premium or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice. Designation may not constitute acceptance of any liability by the third party for services provided to the insured. The written designation shall include the following:

Space for clearly listing at least one person.
The person’s name and address.
In the case of an applicant who elects not to designate an additional person, the waiver shall state, “Protection against unintentional lapse. I understand that I have a right to designate at least one person, other than myself, to receive notice of lapse or termination of this policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate any person to receive such notice.”

(b) For those insureds who designate another person as provided in par. (a), the insurer, after the policy or certificate is issued shall send a letter to the designated person indicating that the insured has designated the person to receive notice of lapse or termination of the insured’s long-term care, nursing home or home health care policy or certificate. The letter shall ask the person to correct any information concerning the name or address of the person. It shall also explain the rights and duties of the designated person.

(c) Not less than once every 2 years an insurer shall notify its policyholders of their right to designate a person to receive the notices contained in par. (a). The notification shall allow policyholders to change, add to or, in the case of those policyholders who elected not to designate a person, designate a person to receive the notices provided in par. (a).

(d) When an insured pays premium through a payroll deduction plan, the requirements contained in par. (a) need not be met until 60 days after the insured is no longer on a payroll deduction plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.

(e) No long-term care, nursing home, or home health care policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those designated by the insured pursuant to par. (a) at the address provided by the insured for purposes of receiving notices of lapse or termination. Notice may not be given until 30 days after a premium is due and unpaid.

(16) Suitability; long-term care, nursing home and home health care policies.

(a) This subsection may not apply to life insurance policies that accelerate benefits for long-term care.

(b) Every insurer marketing long-term care insurance policies shall do all of the following:

Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant.
Train its agents in the use of its suitability standards.
Maintain a copy of its suitability standards.
Report annually to the commissioner all of the following:

a. The total number of applications received from residents of this state.

b. The number of those who declined to provide information on the personal worksheet.

c. The number of applicants who did not meet the suitability standards.

d. The number of applicants who chose to confirm after receiving a suitability letter.

(c)

To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration:

a. The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage.

b. The applicant’s goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs.

c. The values, benefits and costs of the applicant’s existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.

The insurer, and where an agent is involved, the agent shall make reasonable efforts to obtain the information set out in subd. 1. The efforts shall include presentation to the applicant, at or prior to application, the “Long-Term Care Insurance Personal Worksheet.” The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in Appendix 2, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer’s personal worksheet shall be filed with the commissioner.
A completed personal worksheet shall be returned to the insurer prior to the insurer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.
The sale or dissemination outside the company or agency by the insurer or agent of information obtained through the personal worksheet in Appendix 2 is prohibited.

(d) The insurer shall use the suitability standards it has developed pursuant to this section in determining whether issuing long-term care insurance coverage to an applicant is appropriate.

(e) Agents shall use the suitability standards developed by the insurer in marketing long-term care insurance.

(f) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled “Things You Should Know Before You Buy Long-Term Care Insurance” shall be provided. The form shall be in the format contained in Appendix 3, in not less than 12 point type.

(g) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application. In the alternative, the insurer shall send the applicant a letter similar to the sample letter in Appendix 4. However, if the applicant has declined to provide financial information, the insurer may use some other method to verify the applicant’s intent. Either the applicant’s returned letter or a record of the alternative method of verification shall be made part of the applicant’s file.

(h) The insurer shall maintain and have available for review by the commissioner the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who, after receiving a suitability letter, indicated that the insurer should resume processing the application.

(17) Standards for benefit triggers; long-term care, nursing home and home health care policies.

(a) The following definitions apply to this subsection:

“Activities of daily living” includes at least bathing, continence, dressing, eating, toileting, and transferring.
“Bathing” means washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.
“Cognitive impairment” means a deficiency in a person’s short- or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.
“Continence” means the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for catheter or colostomy bag.
“Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.
“Eating” means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.
“Hands-on assistance” means physical assistance, either minimal, moderate or maximal, without which the individual would not be able to perform the activity of daily living.
“Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.
“Transferring” means moving into or out of a bed, chair or wheelchair.

(b) A long-term care, nursing home only and home health care only policy or certificate shall condition the payment of benefits on a determination of the insured’s ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits may not be more restrictive than requiring either a deficiency in the ability to perform not more than 3 of the activities of daily living or the presence of cognitive impairment.

(c)

Activities of daily living shall include at least those contained in the definition in par. (a).
Insurers may use deficiencies to perform activities of daily living to determine when covered benefits are payable in addition to those contained in par. (a) as long as they are defined in the policy.

(d) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however, the provisions may not restrict, and are not in lieu of, the requirements contained in pars. (b) and (c).

(e) For purposes of this section, the determination of a deficiency may not be more restrictive than any of the following:

Requiring hands-on assistance of another person to perform the prescribed activities of daily living.
If the deficiency is due to the presence of cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured and others.

(f) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.

(g) Long-term care, nursing home only and home health care only policies shall include a clear description of the process for appealing and resolving benefit determinations.

Note: The rule revision effective August 1, 1996 applies to any policy solicited, delivered or issued after September 1, 1996. After August 1, 1996 but before September 1, 1996, the insurer may market policies under either the current rule or the revised rule, if a policy form conforming to this section has been approved.

(18) Tax qualified long term care, nursing home and home health care policies. This subsection applies to long term care, nursing home or home health care policies which are intended to be tax qualified under and comply with the requirements of section 7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code.

(a) In order to qualify for certain tax treatment, long term care, nursing home only and home health care only policy provisions may contain the following conditions as defined in section 7702B of the Internal Revenue Code of 1986 as amended and any regulations and administrative pronouncements issued thereunder notwithstanding sub. (17):

The terms “severe cognitive impairment” and “substantial supervision” may be used in lieu of the term “cognitive impairment” and its accompanying supervision requirement may be used as a benefit trigger in sub. (17) (a) 3. and (e) 2.
The term “substantial assistance” may be used in lieu of the term “hands-on-assistance” in sub. (17) (c) 1.
The requirement that the claimant obtain a certification from a licensed health care practitioner, as defined in section 7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code, as a condition for claim payment that the functional incapacity or inability to perform at least 2 activities of daily living triggering benefits under the policy is expected to last at least 90 days, may be imposed by the insurer.
Except as noted in subds. 1., 2. and 3., the definitions and provisions in sub. (17) apply to this subsection.

(b) The policy shall contain a clear disclosure that the policy is intended to be a tax qualified long term care policy.

(c) The outline of coverage shall prominently disclose that, in order to meet the requirements of a tax qualified policy, the functional incapacity or inability to perform activities of daily living triggering benefits under the policy must be expected to last for at least 90 days.

(d) All other applicable provisions in this section or s. Ins 3.455 shall continue to apply to tax qualified long term care, nursing home and home health care policies.

(19) Nonforfeiture benefit requirements for long-term care.

(a) No insurer may advertise, market or offer a long–term care, nursing home only or home health care only policy or certificate unless the insurer offers, at the time of sale, a shortened benefit period nonforfeiture benefit.

(b) If the offer required to be made under par. (a) is rejected, the insurer shall provide the contingent benefit upon lapse described in this section.

(c)

After rejection of the offer required under par. (a) for individual and group policies without nonforfeiture benefits issued after the effective date of this subsection, the insurer shall provide a contingent benefit upon lapse.
If a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured’s initial annual premium set forth in the table in the subdivision based on the insured’s issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 60 days prior to the due date of the premium reflecting the rate increase.
On or before the effective date of a substantial premium increase as described in subd. 3. the insurer shall do all of the following:

a. Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased.

b. Offer to convert the coverage to a paid-up status where the amount payable for each benefit is 90% of the amount payable in effect immediately prior to lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period. This option may be elected at any time during the 120-day period referenced in subd. 3.

c. Notify the policyholder or certificateholder that a default or lapse at any time during the 120-day period referenced in subd. 3. shall be deemed to be the election of the offer to convert in subd. 4. b., if the ratio is 40% or more.

(d) The required benefits continued as nonforfeiture benefits under par. (a), including contingent benefits upon lapse under par. (b), are computed as follows:

“Attained age rating” as applied in this paragraph is defined as a schedule of premiums starting from the issue date which increases with age at least 1% per year prior to age 50, and at least 3% per year for age 50 and beyond.
The nonforfeiture benefit shall provide paid-up long-term care, nursing home only or home care only insurance coverage after lapse. The amounts and frequency of benefits in effect at the time of lapse, but not increased thereafter, shall be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in subd. 3.
The standard nonforfeiture credit shall be at least 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit may not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of par. (e).
The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first 3 years and subsequent years. For a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of end of the tenth year following the policy or certificate issue date or of the end of the second year following the date the policy or certificate is no longer subject to attained age rating.
Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

(e) All benefits paid by the insurer while the policy or certificate is in premium–paying status and in the paid-up status may not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium-paying status.

(f) There shall be no difference in the minimum nonforfeiture benefits as required under this subsection for group and individual policies.

(g) Premiums charged for a policy or certificate containing nonforfeiture benefits shall be subject to the loss ratio requirements contained in s. Ins 3.455 (5) treating the policy as a whole.

(h) This subsection shall apply as follows:

Except as provided in subd. 2., the provisions of this subsection apply to any long-term care, nursing home, and home health care policy issued in this state on or after January 1, 2002.
For group long-term care, nursing home, and home health care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002, which policy was in force on January 1, 2001, the provisions of this subsection shall not apply.

(i) To determine whether contingent nonforfeiture upon lapse provisions are triggered under par. (c) 3. a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.

(j) A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured’s initial annual premium set forth in par. (c) 3. based on the insured’s issue age, the policy or certificate lapses within 120 days of the due date of the premium so increased, and the ratio is 40% or more. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase.

(20) Incontestability period. An insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim only as permitted under ss. 631.11 (1) (b) and 632.76, Stats., and only if in addition to complying with ss. 631.11 (1) (b) and 632.76, Stats., any of the following apply:

(a) For a policy or certificate that has been in force for less than 6 months, the insurer shows the misrepresentation is material to the acceptance for coverage.

(b) For a policy or certificate that has been in force for at least 6 months but less than 2 years, the insurer shows the misrepresentation is both material to the acceptance for coverage and pertains to the condition for which benefits are sought.

(c) For a policy or certificate that has been in force 2 years or more, the insurer shows that the insured knowingly, intentionally and fraudulently misrepresented relevant facts relating to the insured’s health.

(d)

No long-term care insurance policy or certificate may be field issued based on medical or health status unless the compensation to the field issuer is not based on the number of policies or certificates issued.
For purposes of this paragraph, a policy or certificate that is “field issued” means the producer or third-party administrator using the insurer’s underwriting guidelines underwrites the policy not the insurer, pursuant to the authority granted to the producer or third-party administrator by an insurer.

(e) If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.

(f) In the event of the death of the insured, this subdivision may not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by s. 632.46, Stats. In all other situations, this subdivision shall apply to life insurance policies that accelerate benefits for long-term care.

(21) Reporting requirements.

(a) Every insurer shall maintain records for each intermediary of that intermediary’s amount of replacement sales as a percent of the intermediary’s total annual sales and the amount of lapses of long-term care insurance policies sold by the intermediary as a percent of the intermediary’s total annual sales.

(b) Every insurer shall report annually by June 30 the 10% of its intermediaries with the greatest percentages of lapses and replacements as measured by par. (a) using Appendix 10.

(c) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely intermediary activities regarding the sale of long-term care insurance.

(d) Every insurer shall report annually by June 30 the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year using Appendix 10.

(e) Every insurer shall report annually by June 30 the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year using Appendix 10.

(f) Every insurer shall report annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied using Appendix 9.

(22) Filing requirements for advertising. Every insurer, health care service plan or other entity providing long-term care insurance or benefits in this state shall provide a copy of any long-term care insurance advertisement whether through written, radio or television medium to the commissioner as required by s. Ins 3.27. In addition, all advertisements shall be retained by the insurer, health care service plan or other entity for at least 3 years from the date the advertisement was first used.

(23) Standards for marketing.

(a) Every insurer or other entity marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

Establish marketing procedures and intermediary training requirements to assure that both of the following are met:

a. Any marketing activities, including any comparison of policies, by its intermediaries or other producers will be fair and accurate.

b. Excessive insurance is not sold or issued.

Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy the following notice:
Provide copies of the disclosure forms required in Appendices 2 and 3 to the applicant.
Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts as defined in s. Ins 3.465 (2) (d), an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.
Every insurer or entity marketing long-term care insurance shall establish auditable procedures for verifying compliance with this paragraph.
If the state in which the policy or certificate is to be delivered or issued for delivery has a senior insurance counseling program, the insurer shall, at solicitation, provide written notice to the prospective policyholder and certificateholder that the program is available and the name, address and telephone number of the program.
For long-term care insurance policies and certificates, use the terms “noncancellable” or “level premium” only when the policy or certificate conforms with sub. (3) (f).
Provide an explanation of contingent benefit upon lapse provided for in sub. (19) (c), and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in sub. (15) (e).

(b) In addition to the practices prohibited in s. 628.34 (12), Stats., the following acts and practices are prohibited by insurers or other entities marketing long-term care insurance coverage in this state, directly or through its intermediaries:

“Twisting.” Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer.
“High pressure tactics.” Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.
“Cold lead advertising.” Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.
“Misrepresentation.” Misrepresenting a material fact in selling or offering to sell a long-term care insurance policy.

(c) In regards to any transaction involving a long-term care insurance product, no person subject to regulation under chs. 600 to 655, Stats., may knowingly prevent or dissuade or attempt to prevent or dissuade, any person from any of the following:

Filing a complaint with the office of the commissioner of insurance.
Cooperating with the office of the commissioner of insurance in any investigation.
Attending or giving testimony at any proceeding authorized by law.

(d) If an insured exercises the right to return a policy during the free-look period, the issuer shall mail the entire premium refund directly to the person who paid the premium.

(e)

With respect to the obligations set forth in this subsection, the primary responsibility of an association, as described in s. 600.01 (1) (b) 3., Stats., when endorsing or selling long-term care insurance shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.
The insurer shall file with the office of the commissioner of insurance all of the following material:

a. The policy and certificate.

b. A corresponding outline of coverage.

c. All advertisements requested by the insurance department.

The association shall disclose in any long-term care insurance solicitation the following:

a. The specific nature and amount of the compensation arrangements, including all fees, commissions, administrative fees and other forms of financial support, that the association receives from endorsement or sale of the policy or certificate to its members.

b. A brief description of the process under which the policies and the insurer issuing the policies were selected.

If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.
The board of directors of associations selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.
The association shall also do all of the following:

a. Conduct an examination of its policies, including benefits, features, and rates and subsequently update the examination in the event of material change at the time of the association’s decision to endorse or engage the services of a person with expertise in long-term care insurance not affiliated with the insurer.

b. Actively monitor the marketing efforts of the insurer and its intermediaries.

c. Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

d. Subd. 6. a. to c. may not apply to qualified long-term care insurance contracts.

No group long-term care insurance policy may be issued to an association unless the insurer files with the office of the commissioner of insurance the information required in this subsection.
An insurer may not issue a long-term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subsection.
Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of s. 628.34 (11), Stats.

(24) Availability of new services or providers.

(a) An insurer shall notify policyholders of the availability of a new long-term care policy series that provides coverage for new long-term care services or providers material in nature and not previously available through the insurer to the general public. The notice shall be provided within 12 months of the date the new policy series is made available for sale in this state.

(b) Notwithstanding par. (a), notification is not required for any policy issued prior to the effective date of this section or to any policyholder or certificateholder who is eligible for benefits, is within an elimination period or is receiving benefits, or who previously received benefits under the terms of the policy, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.

By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured’s attained age.
By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate.
By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged. The cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate.

(d) An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For purposes of this paragraph, “limited distribution channel” means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased such a proprietary policy shall be notified when a new long-term care policy series that provides coverage for new long-term care services or providers material in nature is made available to that limited distribution channel.

(e) Policies issued pursuant to this subsection may not be considered replacements.

(f) Where the policy is offered through an employer, labor organization, or professional, trade or occupational association, the required notification in par. (a) shall be made to the offering entity.

(g) Nothing in this subsection shall prohibit an insurer from offering any policy, rider, certificate or coverage change to any policyholder or certificateholder. However, upon request any policyholder may apply for available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.

(h) This subsection does not apply to life insurance policies or riders containing accelerated long-term care benefits.

(25) Right to reduce coverage and lower premiums.

(a)

Every long-term care insurance policy and certificate shall include a provision that allows the policyholder or certificateholder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

a. Reducing the maximum benefit.

b. Reducing the daily, weekly or monthly benefit amount.

The insurer may also offer other reduction options that are consistent with the policy or certificate design or the insurer’s administrative processes.

(b) The provision shall include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

(c) The age to determine the premium for the reduced coverage shall be based on the age used to determine the premiums for the existing coverage.

(d) The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

(e) If a policy or certificate is due to lapse, the insurer shall provide a written reminder to the policyholder or certificateholder of his or her right to reduce coverage and premiums in the notice required by sub. (15) (e).

(f) This subsection does not apply to life insurance policies or riders containing accelerated long-term care benefits.

(26) Insurance intermediary training requirements. This section applies to all insurance intermediaries that sell, solicit or negotiate long-term care insurance products in this state. For purposes of this paragraph, an hour of training means a period of study consisting of no less than 50 minutes. The requirements of this paragraph do not supersede any other intermediary education requirements contained in chs. Ins 26 and 28.

(a) No insurance intermediary may sell, solicit or negotiate long-term care insurance in this state unless the intermediary is duly licensed and appointed by an insurer and has completed the initial training and ongoing training every 24 months as specified in s. 628.348 (1), Stats. The insurer shall be able to verify compliance with the training requirements as specified in this paragraph and s. 628.348 (2), Stats. The training shall meet the requirements set forth in this paragraph to par. (d).

a. Initial training. The initial training required shall be no less than 8 hours, of which 2 hours shall contain Wisconsin specific Medicaid and long-term care information. Training shall be completed in one six-hour course for non-Wisconsin specific Medicaid and long-term care information training and one two-hour course for Wisconsin specific Medicaid and long-term care information or one eight-hour course that includes the two-hours of training containing specific Medicaid and long-term care information.

b. Ongoing training. After completion of the initial 8 hours of training, all insurance intermediaries shall complete one 4-hour of training course specific to long-term care insurance and shall incorporate updates to the state partnership program as is available from the department’s website. Training shall be completed as specified in par. (b) 2.

The training specified in this subsection may not include training that is insurer or company product specific or that includes any sales or marketing information, materials, or training, other than those required by state or federal law.
The training required by this subsection shall be submitted and approved and may be approved as continuing education courses under ch. Ins 28.
The training required by this subsection shall consist of topics related to long-term care insurance, long-term care services and the state partnership program. The training shall include, but not be limited to, all of the following:

a. State and federal regulations and requirements and the relationship between qualified state long-term care partnership plan policies and other public and private coverage of long-term care services, including Medicaid programs in this state.

b. Available long-term care services and providers.

c. Changes or innovations in long-term care services or providers.

d. Alternatives to the purchase of private long-term care insurance.

e. The effect of inflation on benefits and the importance of inflation protection.

f. Insurance suitability standards and guidelines.

Wisconsin specific Medicaid and long-term care training shall consist of the training developed and made available by the department.
Satisfaction of the training requirements in any state shall be deemed to satisfy the training requirements in this state subject to verification and compliance with the training requirements in subd. 1. except for the initial 2 hours of Wisconsin specific Medicaid and long-term care information training.

(b)

Insurance intermediaries licensed prior to January 1, 2009, shall complete the initial training prior to selling long-term care products on or after January 1, 2009. Completion of initial training courses on or after October 27, 2007, that meet the requirements of par. (a) 4., may be counted towards completion of the initial 8 hour training requirement.
For purposes of complying with s. 628.348 (1), Stats., compliance with this subsection will comply with s. 628.348 (1), Stats. Insurance intermediaries who complete initial training by January 1, 2009, are required to complete the required 4 hours of ongoing training by the first complete license renewal cycle as specified in s. Ins 6.63. Insurance intermediaries completing initial training after January 1, 2009 shall complete the required 4 hours of ongoing training by the date of their next complete license renewal cycle as specified in s. Ins 6.63.

(c) Insurers subject to this section shall obtain and maintain verification that the intermediaries appointed with the insurer received the training required by sub. (1) and shall make such information available to the commissioner upon request.

(d) Insurers offering long-term care insurance intended as a qualifying partnership policy shall maintain records that its authorized insurance intermediaries have demonstrated an understanding of the state partnership program and the relationship of the state partnership program to public and private coverage of long-term care including Wisconsin Medicaid long-term care programs. Information maintained shall be in a form that allows the commissioner to provide assurance to the department that the insurer’s intermediaries have received the long-term care insurance training.

Note: The amendment to sub. (4) (g) and creation of sub. (18) first applies to any tax qualified long term policy solicited in Wisconsin after December 31, 1996.

History

Cr. Register, June, 1981, No. 305, eff. 11-1-81; cr. (3) (c), Register, June, 1982, No. 318, eff. 7-1-82; am. (1) and (3) (b), Register, March, 1985, No. 351, eff. 4-1-85; (6m) deleted under s. 13.93 (2m) (b) 16., Stats., Register, March, 1985, No. 351; r. and recr. Register, December, 1986, No. 372, eff. 1-1-87; r. and recr., Register, April, 1991, No. 424, eff. 6-1-91; cr. (3) (cm), (4) (t), (9) (b), (11m), (15), (16), (17), am. (4) (b), (g), renum. (9) (intro.), (a) and (b) to be (9) (a) (intro.), (a) 1. and 2., Register, July, 1996, No. 487, eff. 8-1-96; am. (4) (g) and cr. (18), Register, August, 1997, No. 500, eff. 9-1-97; r. (9) (b), Register, January, 1999, No. 517, eff. 2-1-99; CR 00-188: cr. (3) (j), (4) (u), (9) (b) to (j) and (19), am. (5) (b) 5. and 9., r. (11m), Register July 2001, No. 547 eff. 1-1-02; EmR0817: emerg. r. (2) (a), am. (2) (d) (intro.), (4) (c), (j) to (n), (r), (5) (a), (b) 9., (16) (b), r. and recr. (3), (14), (19) (c) 4. and (d), cr. (8) (c), (d), (9) (k) to (m), (10) (f) to (j), (11) (a) 4., (19) (j) and (20) to (26), eff. 6-3-08; CR 08-032: r. (2) (a), am. (2) (d) (intro.), (4) (c), (j) to (n), (r), (5) (a), (b) 9., (16) (b), r. and recr. (3), (14), (19) (c) 4. and (d), cr. (8) (c), (d), (9) (k) to (m), (10) (f) to (j), (11) (a) 4., (h), (19) (j) and (20) to (26) Register October 2008 No. 634, eff. 11-1-08; corrections in (3) (a), (11) (h) and (20) made under s. 13.92 (4) (b) 1. and 7., Stats., Register October 2008 No. 634; 2013 Wis. Act 278: cons. and renum. (13) (a) (intro.) and 2. to (13) (a) and am., r. (13) (a) 1., am. (13) (b), cr. (13) (c) Register May 2014 No. 701, eff. 6-1-14.

Wis. Admin. Code § Ins 3.465 Wisconsin long-term care partnership program {#sec-ins-3.465 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.465}

(1) General applicability. The provisions within s. Ins 3.46 regarding insurance transactions for long-term care and life insurance policies with long-term care provisions apply to insurance transactions described within this section.

(2) Definitions. The definitions contained in ss. Ins 3.455 and 3.46 also apply in this section. In addition, the following definitions apply in this section:

(a) “Automatic exchange” means the issuance of a notice from an insurer informing an existing insured that the policy the insured purchased prior to January 1, 2009, from the insurer has been approved by the commissioner as a policy that meets the requirements of the state’s partnership program and, as such, the policy will be treated from the date of the notice as a qualifying partnership policy.

(b) “Consumer price index” means the consumer price index for all urban consumers, U.S. city average, all items, as determined by the Bureau of Labor Statistics of the United States Department of Labor.

(c) “Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” means an individual or group insurance long-term care, nursing home or home health care contract that meets the requirements of section 7702B(b) of the Internal Revenue Code of 1986, as amended, or the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of sections 7702B(b) and (c) of the Internal Revenue Code of 1986, as amended.

(d) “Qualifying partnership policy exchange” means the exchange of an existing long-term care insurance plan with an identical policy that on or after January 1, 2009 is certified by the insurer to meet the federal requirements established for the state’s partnership program or the exchange of an existing long-term care insurance policy with an identical policy except for the addition of a benefit or rider that, on or after January 1, 2009, is certified by the insurer to meet the federal requirements established for the state’s partnership program.

(e) “Secretary” means the U. S. Secretary of the Department of Health and Human Services.

(3) Qualifying partnership policies.

(a) This section applies to an insurer offering a long-term care policy that is intended to qualify an insured under the state’s partnership program and that is in compliance with the requirements of 42 U.S.C 1396p (b).

(b) In order for a long-term care policy to qualify as a qualifying partnership policy, the policy shall comply with the requirements set forth in s. 49.45 (31), Stats., and the all of the following:

Be filed with and approved by the commissioner prior to use and contain the certification referenced in sub. (5) (a), and comply with s. 631.28, Stats.
Meet the requirements of a tax-qualified long-term care insurance contract as defined in section 7702B(b) of the Internal Revenue Code of 1986, as amended.
Meet all applicable requirements of this section and ss. Ins 3.455 and 3.46.
Be accompanied by a clear disclosure that the policy is intended to be a qualifying partnership policy. The disclosure shall be in the format contained in Appendix 1.
Provide inflation protection provisions in compliance with sub. (5).
Not base underwriting criteria upon whether or not the policy is a qualifying partnership policy.

(4) Form requirements for qualifying partnership policies. An insurer that offers a long-term care insurance policy that is intended to qualify an insured under the state’s partnership program shall comply with all of the following:

(a) File the policy, outline of coverage, premium rates, and actuarial memorandum to the commissioner in accordance with s. 631.20, Stats., and s. Ins 3.455, and include the qualifying partnership policy certification form.

Note: The qualifying partnership policy certification form (OCI No. 26-113) can be obtained from the Office of the Commissioner of Insurance at no cost from the OCI website http://oci.wi.gov or by writing to the State of Wisconsin Office of the Commissioner of Insurance 125 S. Webster, Madison, WI 53703.

(b) Submit the qualifying partnership policy certification form to the commissioner, prior to use, for approval if an insurer intends to use a previously approved policy to qualify as a qualifying partnership policy.

(c) File the endorsement or rider and submit the qualifying partnership policy certification form to the commissioner, prior to use, for approval if the insurer intends to amend a previously approved policy with an endorsement or rider, as needed, to qualify the policy as a qualifying partnership policy.

(d) Certification shall be in the format specified by the commissioner and identified as OCI No. 26-113, and comply with the following:

The certification shall be made and signed by an officer of the insurer having the authority to bind the insurer and shall include full contact information for the certifying officer.
The certification for pars. (b) and (c) shall identify the policy by the original form number and approval date.

(5) Inflation protection requirements. An insurer offering a long-term care insurance policy that is intended to qualify an insured under the state partnership program shall comply with the following inflation protection provisions.

(a) For a person who is less than 61 years of age as of the date of purchase of the policy, the policy shall provide compound annual inflation protection that complies with one of the following:

Provide and maintain a level premium that contains automatic annual compounded inflation increases at a rate that is at least 3%.
Provide and maintain a level premium that contains automatic annual compounded inflation increases at a rate based on changes in the consumer price index.
Provide for annual compounded inflation increases at a rate that is at least 3% and meet all of the following requirements:

a. Each benefit increase occurs automatically, unless the insured specifically rejects an increase.

b. The increases shall be provided until the insured has at least attained age 76 and each increase up to and including the increase that takes effect at age 76 may not be rejected by the insured in order to retain qualifying partnership policy status.

c. Increases may end when the insured has attained age 76, rejected an offer of inflation increase, or becomes eligible for benefits on or after age 76.

d. The additional premium for each increase under this feature may be based on the premium rates that apply to the insured’s attained age at the time of the increase.

e. Rejection of an increase may not limit the coverage under the policy, except for the asset disregard feature of a qualified partnership policy, and from the insured receiving future premium increases as contemplated in s. Ins 3.455.

(b) For a person who is at least 61 years of age but less than 76 years of age as of the date of purchase of the policy, the policy shall provide inflation protection that meets the requirements of par. (a) or an inflation protection feature that provides at least 3% annual simple inflation protection.

(c) For a person who is at least 76 years of age as of the date of purchase of the policy, the policy may provide inflation protection with terms no less restrictive than those identified in pars. (a) and (b), but inflation protection is not required.

(6) Disclosure when soliciting. In addition to the requirements of s. Ins 3.46, an insurer issuing or marketing a policy that is intended to qualify an insured for the state’s partnership program shall explain at the time of solicitation the benefits associated with a qualifying partnership policy and comply with all of the following:

(a)

An insurer or its intermediary shall provide to each prospective applicant all of the following:

a. Qualifying partnership policy notices in the format contained in Appendix 1 and 2.

b. The Guide to Long-term Care booklet.

c. The Wisconsin Long-term Care Programs guide.

No insurer or intermediary shall be responsible for providing applicants the revised guides until 90 days after the insurer or intermediary has been given notice that the revised guides are available.

(b) For a qualifying partnership policy issued to a group when an outline of coverage is not delivered, the insurer or intermediary shall deliver copies of the qualifying partnership policy disclosure notice, The Guide to Long-term Care booklet, and The Wisconsin Long-term Care Programs guide.

(c) For a life insurance policy that offers long-term care insurance as a provision in the policy or in a rider that is intended to qualify an insured under the state’s partnership program, the insurer or intermediary at the time of solicitation shall deliver the disclosure notice (Appendix 1), the Guide to Long-term Care booklet, and the Wisconsin Long-term Care Programs guide.

(7) Other disclosures.

(a) When an insurer is made aware that the insured or certificateholder initiated a policy change request or declined a benefit increase that will result in the loss of the status as a qualifying partnership policy, the insurer shall provide, in writing, an explanation of how such action impacts the insured. The insurer shall also advise the insured or certificateholder of how to retain the policy as a qualified partnership policy, if requested.

(b) If a qualifying partnership policy no longer meets the requirements of the state’s partnership program, the insurer shall explain, in writing, to the policyholder or certificateholder the reason for the loss of status.

(c) The insurer shall provide a completed qualifying partnership policy summary document in the format of OCI No. 26-114, when requested by the insured or the insured’s authorized representative.

(8) Exchange of long-term care insurance policy to a qualifying partnership policy.

(a) Restrictions on exchange.

Insurers offering long-term care policies that are intended to qualify an insured under the state’s partnership program are subject to s. Ins 3.455 (9m).
Insurers issuing an automatic exchange shall comply with all of the following:

a. Only a policy that requires no modifications or additions is eligible for an automatic exchange.

b. The new policy may not be underwritten.

c. The rate used in determining the premium charged for the new policy shall be determined using the original issue age and risk class of the insured that was used to determine the rate of the existing policy and may not contemplate that the new policy is a qualified partnership policy.

d. Insurers issuing automatic exchanges shall provide insureds, at the time of notice of the automatic exchange, a copy of Appendix 1, the Guide to Long-Term Care booklet and the Wisconsin Long-Term Care Programs guide. After issuance of the notice for automatic exchange, if the insured does not decline the offer, the insurer shall provide the insured a copy of Appendix 2.

e. Insurers issuing an automatic exchange shall offer to the insured, at the time of notice of the automatic exchange, the option to decline the automatic exchange and retain the existing policy if the insured responds within a period of time not less than 120 days.

An insurer offering an exchange as to a qualifying partnership policy with an actuarial value of benefits exceeding the actuarial value of benefits of the existing policy shall be subject to all of the following:

a. The insurer shall treat the exchange as a replacement and comply with s. Ins 3.46, including suitability.

b. The insurer shall apply its new business long-term care underwriting guidelines to the increased benefits only.

c. The premium charged for the new policy shall be determined using the method in subd. 3. for existing benefits and the rate for the additional benefits using the then current age and risk class of the insured for the additional benefits only.

An insurer shall maintain documentation of the actuarial value analysis determination and shall provide the analysis to the commissioner upon request.

(b) Offer of exchange. An insurer that submits and receives approval to offer a long-term care insurance policy that is intended to be a qualifying partnership policy in this state may, subject to the following requirements, offer an exchange:

Within one year from the date the insurer begins to advertise, market, offer, sell, or issue policies that are intended to be qualifying partnership policies, on a one-time basis in writing, offer to all existing policyholders or certificateholders that were issued long-term care coverage by the insurer with an issue date on or after February 8, 2006, the option to exchange their existing long-term care policy for a qualifying partnership policy. Insurers may offer the exchange option to policyholders or certificateholders with long-term care policies issued prior to February 8, 2006, pursuant to a plan filed with the commissioner.
The offer shall be made on a nondiscriminatory basis without regard to the age or health status of the insured.
The offer shall remain open for a minimum of 120 days from the date of the mailing by the insurer.
The effective date of the partnership plan policy shall be the date of the exchanged policy.
In the event of an exchange, the insured may not lose any rights that have accrued under the original policy including, but not limited to, rights established because of the lapse of time related to pre-existing condition exclusions, elimination periods, or incontestability clauses.
The written offer to exchange shall include the disclosure form contained in Appendix 2 and also shall include the Guide to Long-Term Care booklet and the Wisconsin Long-Term Care Programs guide. The insurer shall file with the commissioner, prior to use and for informational purposes, the exchange letter to be used in the exchange offer.

The new policy offered in an exchange or automatic exchange shall be of a form that is offered for sale by the insurer in the general market at the time of exchange.
A policy received in an exchange on or after January 1, 2009, is treated as newly issued and thus is eligible for partnership program status. For purposes of applying the Medicaid rules relating to the state partnership program, the addition of a rider, endorsement, or change in schedule page for a policy may be treated as giving rise to an exchange.

(d) Exceptions and exemptions.

Insurers offering group long-term care policies are exempt from subs. (5) to (7) and (8) (a) to (c), if they comply with all of the following:

a. The policy is issued to a local, municipal, county, or state public employee group.

b. The group coverage was negotiated as part of a collective bargaining agreement.

c. The group coverage is provided to all eligible employees on a guaranteed issue basis.

d. The policy provides insureds with at least 5% compound annualized inflation protection.

e. The policy meets the requirements of subs. (3) and (4).

f. No later than one year from the date the insurer begins to advertise, market, offer, sell, or issue policies that are intended to be qualifying partnership policies, the insurer shall provide notice that the policy meets the requirements of a qualifying partnership plan and shall provide the insureds with Appendix 1, the Guide to Long-Term Care booklet and the Wisconsin Long-Term Care Programs guide. The insurer shall file with the commissioner, prior to use and for informational purposes, the exchange letter to be used in the exchange offer.

g. To accomplish an automatic exchange the insurer shall apply the exchange to all group members.

h. The effective date of the qualifying partnership policy shall be the date of the exchanged policy.

i. In the event of an exchange, the insured and its certificateholders may not lose any rights that have accrued under the original policy including, but not limited to, rights established because of the lapse of time related to pre-existing condition exclusions, elimination periods, or incontestability clauses.

Notwithstanding par. (b), an insurer is not required to offer an exchange to an individual who is eligible for benefits or within an elimination period or who is, or who has been in, claim status on or after January 1, 2009, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders or certificateholders meet all eligibility requirements, including plan design, underwriting, if applicable, and payment of the required premium.

History

EmR0817: emerg. cr. eff. 6-3-08; CR 08-032: cr. Register October 2008 No. 634, eff. 11-1-08.

Wis. Admin. Code § Ins 3.47 Cancer insurance solicitation {#sec-ins-3.47 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.47}

(1) Findings. Information on file in the office of the commissioner of insurance shows that significant misunderstanding exists with respect to cancer insurance. Consumers are not aware of the limitations of cancer insurance and do not know how cancer insurance policies fit in with other health insurance coverage. Many of the sales presentations used in the selling of cancer insurance are confusing, misleading and incomplete and consumers are not getting the information they need to make informed choices. The commissioner of insurance finds that such presentations and sales materials are misleading, deceptive and restrain competition unreasonably as considered by s. 628.34 (12), Stats., and that their continued use without additional information would constitute an unfair trade practice under s. 628.34 (11), Stats., and would result in misrepresentation as defined and prohibited in s. 628.34 (1), Stats.

(2) Purpose. This section interprets s. 628.34 (12), Stats., relating to unfair trade practices. It requires insurers and intermediaries who sell cancer insurance to give all prospective buyers of cancer insurance a shopper’s guide prepared by the national association of insurance commissioners.

(3) Scope. This section applies to all individual, group and franchise insurance policies or riders which provide benefits for or are advertised as providing benefits primarily for the treatment of cancer. This section does not apply to solicitations in which the booklet, “Health Insurance Advice for Senior Citizens,” is given to applicants as required by s. Ins 3.39.

(4) Definition. “A Shopper’s Guide to Cancer Insurance” means the document which contains the language set forth in Appendix I to this section.

(5) Disclosure requirements.

(a) Each insurer offering a policy or rider described in sub. (3) shall print, and the insurer and its intermediaries shall provide to all prospective purchasers of any policy or rider subject to this section, a copy of “A Shopper’s Guide to Cancer Insurance” at the time the prospect is contacted by the insurer or intermediary with an invitation to apply, as defined in s. Ins 3.27 (5) (g).

(b) “A Shopper’s Guide to Cancer Insurance” shall be printed in an easy-to-read type of not less than 12-pt. size.

History

Cr. Register, June, 1981, No. 306, eff. 8-1-81; am. (2) to (5), r. (6), r. and recr. Appendix, Register, September, 1990, No. 417, eff. 10-1-90.

Wis. Admin. Code § Ins 3.49 Wisconsin automobile insurance plan {#sec-ins-3.49 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.49}

(1) Purpose. This section interprets s. 619.01 (6), Stats., to continue a plan to make automobile insurance available to those who are unable to obtain it in the voluntary market by providing for the equitable distribution of applicants among insurers and outlines access and grievance procedures for such a plan.

(2) Definitions. In this section:

(a) “Committee” means the governing committee of the Wisconsin Automobile Insurance Plan which is the group of companies administering the Plan.

(b) “Plan” means the Wisconsin Automobile Insurance Plan, an unincorporated facility established by s. 204.51, 1967 Stats., and continued under s. 619.01 (6), Stats.

(3) Filing and access. The committee shall submit revisions to its rules, rates and forms for the Plan to the commissioner. Prior approval by the commissioner of the documents is required before they may become effective. The documents shall provide:

(a) Reasonable rules governing the equitable distribution of risks by direct insurance, reinsurance or otherwise and their assignment to insurers;

(b) Rates and rate modifications applicable to such risks which shall not be excessive, inadequate or unfairly discriminatory;

(d)

A method by which an applicant to the Plan denied insurance or an insured under the Plan whose insurance is terminated may request the committee to review the denial or termination and by which an insurer subscribing to the Plan may request the committee to review actions or decisions of the Plan which adversely affect the insurer. The method shall specify that requests for review must be made in writing to the Plan and that the decision of the committee in regard to the review may be appealed by the applicant, insured or insurer to the commissioner of insurance as provided for in ch. Ins 5. A request for review does stay the termination of coverage.
The committee’s decision under subd. 1. shall be in writing and shall include notice of the right to a hearing under ch. Ins 5 if the person files a petition for a hearing with the commissioner of insurance not later than 30 days after the notice is mailed. The notice shall describe the requirements of s. Ins 5.11 (1).

Note: A petition under subd. 2. shall be filed as provided in s. Ins 5.17.

The office of the commissioner of insurance shall hold a hearing within 30 days after receipt of a complete petition under subd. 2., unless the petitioner waives the right to a hearing within 30 days. At the hearing, the petitioner has the burden of proving by a preponderance of the evidence that the committee’s decision is erroneous under the policy terms or the plan’s rules.
Filing a petition under subd. 2. does not stay the action of the plan with respect to termination of coverage. The plan shall comply with the final decision and order in the contested case proceeding.

(e) The commissioner shall maintain files of the Plan’s approved rules, rates, and forms and such documents must be made available for public inspection at the office of the commissioner of insurance.

History

Cr. Register, November, 1984, No. 347, eff. 12-1-84; renum. (3) (d) to be (3) (d) 1. and am., cr. (3) (d) 2. to 4., Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 3.51 Reports by individual practice associations {#sec-ins-3.51 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.51}

(1) Definitions. For the purpose of this section only:

(a) “Accountant” means an independent certified public accountant who is duly registered to practice and in good standing under the laws of this state or a state with similar licensing requirements.

(b) “Individual practice association” means an individual practice association as defined under s. 600.03 (23g), Stats., which contracts with a health maintenance organization insurer or a limited service health organization to provide health care services which are principally physician services.

(c) “Work papers” are the records kept by the accountant of the procedures followed, the tests performed, the information obtained, and conclusions reached pertinent to the examination of the financial statements of the independent practice association. Work papers include, but are not limited to, work programs, analysis, memorandum, letters of confirmation and representation, management letters, abstracts of company documents and schedules or commentaries prepared or obtained by the accountant in the course of the examination of the financial statements of the independent practice association and which support the accountant’s opinion.

(2) Filing of annual audited financial reports. Unless otherwise ordered by the commissioner, an individual practice association shall file an annual audited financial report with the commissioner within 180 days after the end of each individual practice association’s fiscal year. This section applies to individual practice associations for fiscal years terminating on or after March 31, 1991. The annual audited financial report shall report the assets, liabilities and net worth; the results of operations; and the changes in net worth for the fiscal year then ended on the accrual basis in conformity with generally accepted accounting practices. The annual audited financial report shall not be presented on the cash basis or the income tax basis or any other basis that does not fully account for all the independent practice association’s liabilities incurred as of the end of the fiscal year. The annual audited financial report shall include all of the following:

(a) Report of independent certified public accountant.

(b) Balance sheet.

(d) Statement of changes in financial position.

(e) Statement of changes in net worth.

(f) Notes to the financial statements. These notes shall include those needed for fair presentation and disclosure.

(g) Supplemental data and information which the commissioner may from time to time require to be disclosed.

(3) Scope of audit and report of independent certified public accountant. Financial statements filed under sub. (2) shall be audited by an independent certified public accountant. The audit shall be conducted in accordance with generally accepted auditing standards. The commissioner may from time to time require that additional auditing procedures be observed by the accountant in the audit of the financial statements of the independent practice association under this rule.

(4) Availability and maintenance of cpa work papers.

(a) An independent practice association required to file an audited financial report under this rule shall, if requested by the office, require the accountant to make available to the office all the work papers prepared in the conduct of the audit. The independent practice association shall require that the accountant retain the audit work papers for a period of not less than 5 years after the period reported.

(b) The office may photocopy pertinent audit work papers. These copies are part of the office’s work papers. Audit work papers are confidential unless the commissioner determines disclosure is necessary to carry out the functions of the office.

(5) Contracts. A health maintenance organization insurer contracting with an independent practice association shall include provisions in the contract which are necessary to enable the individual practice association to comply with this section including, but not limited to:

(a) Provisions providing for timely access to records;

(b) Provisions providing for maintenance of necessary records and systems and segregation of records, accounts and assets; and

(c) Other provisions necessary to ensure that the individual practice association operates as an entity distinct from the insurer.

History

Cr. Register, August, 1990, No. 416, eff. 9-1-90.

Wis. Admin. Code § Ins 3.53 HIV testing {#sec-ins-3.53 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.53}

(1) Findings. The tests listed in sub. (4) (e) have been specified by the state epidemiologist in part B (4) of a report entitled “Validated positive, medically significant and sufficiently reliable tests to detect the presence of human immunodeficiency virus (HIV), antigen or nonantigenic products of HIV or an antibody to HIV,” dated January 24, 1997. The commissioner of insurance, therefore, finds that these tests are sufficiently reliable for use in underwriting individual life, accident and health insurance policies.

(2) Purposes. The purposes of this section are:

(a) To implement s. 631.90 (3) (a), Stats.

(b) To establish procedures for insurers to use in obtaining informed consent for HIV testing and informing individuals of the results of a positive HIV test.

(d) To restrict the use of certain information on HIV testing in underwriting group life, accident and health insurance policies.

(3) Definitions. In this section:

(a) “AIDS” means acquired immunodeficiency syndrome.

(b) “AIDS service organization” means a state designated organization in this state that provides AIDS prevention and education services to the general public and offers direct care and support services to persons with HIV and AIDS at no cost.

(d) “HIV” has the meaning given under s. 631.90 (1), Stats.

(e) “Medical information bureau, inc.” means the nonprofit Delaware incorporated trade association, the members of which are life insurance companies, that operates an information exchange on behalf of its members.

(f) “State epidemiologist” has the meaning given under s. 252.01 (6), Stats.

(g) “Wisconsin AIDSline” means the state designated statewide AIDS information and medical referral service.

(4) Testing; use; prohibitions.

(a) For use in underwriting an individual life, accident or health insurance policy, an insurer may require that the person to be insured be tested, at the insurer’s expense, for the presence of HIV, antigen or nonantigenic products of HIV or an antibody to HIV.

(b) An insurer that requires a test under par. (a) shall, prior to testing, obtain a signed consent form, in substantially the format specified in Appendix A, either from the person to be tested or from one of the following if the specified condition exists:

The person’s parent or guardian, if the person is under 14 years of age.
The person’s guardian, if the person is adjudged incompetent under ch. 54, Stats.
The person’s health care agent, as defined in s. 155.01 (4), Stats., if the person has been found to be incapacitated under s. 155.05 (2), Stats.

(c) The insurer shall provide a copy of the consent form to the person who signed it and shall maintain a copy of each consent form for at least one year.

(d) The insurer shall provide with the consent form a copy of the document, “Resources for persons with a positive HIV test/The implications of testing positive for HIV.” Each insurer shall either obtain copies of the document from the office of the commissioner of insurance or reproduce the document itself. If the document is revised, the insurer shall begin using the revised version no later than 30 days after receiving notice of the revision from the office of the commissioner of insurance.

Note: The document referred to in this paragraph is form number OCI 17-001. It may be obtained from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison, Wisconsin 53707-7873.

(e) Tests may be used under par. (a) only if the tests meet the following criteria:

A single specimen which is repeatedly reactive using any food and drug administration “FDA” licensed enzyme immunoassay “EIA” HIV antibody test and confirmed positive using an FDA licensed HIV antibody confirmatory test.
A single specimen which is repeatedly reactive using any FDA licensed HIV antigen test and an FDA licensed EIA HIV antibody test. A specimen which is repeatedly reactive to an FDA licensed HIV antigen test shall be confirmed through a neutralization assay. A specimen which is repeatedly reactive to an FDA licensed EIA HIV antibody test shall be tested with an FDA licensed HIV antibody confirmatory test.
A single specimen which is tested for the presence of HIV using a molecular amplification method for the detection of HIV nucleic acids consistent with national committee for clinical laboratory standards.
A single specimen which is tested for the presence of HIV using viral culture methods.

(f) A test under par. (e) shall be performed by a laboratory which meets the requirements of the federal health care financing administration under the clinical laboratory improvement amendments act of 1988.

(g)

An insurer that uses an application asking whether the person to be insured has been tested for the presence of HIV, antigen or nonantigenic products of HIV or an antibody to HIV may ask only whether the person has been tested using one or more of the tests specified in par. (e).
Notwithstanding subd. 1., the insurer may not require or request the disclosure of any information as to whether the person to be insured has been tested at an anonymous counseling and testing site designated by the state epidemiologist or at a similar facility in another jurisdiction or through the use of an anonymous home test kit, or to reveal the results of such a test.

(5) Positive test result; insurer’s obligation.

(a) If a test under sub. (4) (e) is positive and, in the normal course of underwriting, affects the issuance or terms of the policy, the insurer shall provide written notice to the person who signed the consent form that the person tested does not meet the insurer’s usual underwriting criteria because of a test result. The insurer shall request that the person provide informed consent for disclosure of the test result to a health care provider with whom the person wants to discuss the test result.

(b) If informed consent for disclosure is obtained, the insurer shall provide the designated health care provider with the test result. If the person refuses to give informed consent for disclosure, the insurer shall, upon the person’s request, provide the person who signed the consent form with the test result. The insurer shall include with the report of the test result all of the following:

A statement that the person should contact a private health care provider, a public health clinic, an AIDS service organization or the Wisconsin AIDSline for additional medical evaluation or referral for such services.
The toll-free telephone number of the Wisconsin AIDSline.
A copy of the document specified in sub. (4) (d).

(6) Confidentiality of test results. An insurer that requires a person to be tested under sub. (4) (a) may disclose the test result only as described in the consent form obtained under sub. (4) (b) or with written consent for disclosure signed by the person tested or a person specified in sub. (4) (b) 1. to 3.

(7) Group policies; additional prohibition. In underwriting group life, accident or health insurance on an individual basis, in addition to the restrictions specified in s. 631.90 (2), Stats., an insurer may not use or obtain from any source, including the medical information bureau, inc., any of the following:

(a) The results of a person’s test for the presence of HIV, antigen or nonantigenic products of HIV or an antibody to HIV.

(b) Any other information on whether the person has been tested for the presence of HIV, antigen or nonantigenic products of HIV or an antibody to HIV.

History

Cr. Register, May, 1987, No. 377, eff. 6-1-87; r. and recr. Register, April, 1991, No. 424, eff. 5-1-91; am. (1), (3) (b) and (5) (b) 1., r. (3) (c), (d) and (4) (f), renum. (3) (e) to (i) and (4) (g) and (h) to be (3) (c) to (g) and (4) (f) and (g) and am. (3) (f) and (g), (4) (f) and (g), r. and recr. (4) (e), Register, May, 1998, No. 509, eff. 6-1-98; correction in (4) (b) 2. made under s. 13.92 (4) (b) 7., Stats., Register October 2008 No. 634.

Wis. Admin. Code § Ins 3.54 Home health care benefits under disability insurance policies {#sec-ins-3.54 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.54}

(1) Purpose. This section implements and interprets ss. 628.34 (1) and (12), 631.20 and 632.895 (1) and (2), Stats., for the purpose of facilitating the administration of claims for coverage of home health care under disability insurance policies and the review of policy forms. The commissioner of insurance shall disapprove a policy under s. 631.20, Stats., if that policy does not meet the minimum requirements specified in this section.

(2) Scope. This section applies to disability insurance policies.

(3) Definitions. In this section:

(a) “Disability insurance policy” means a disability insurance policy as defined under s. 632.895 (1) (a), Stats., which provides coverage of expenses incurred for in-patient hospital care.

(b) “Home health aide services” means nonmedical services performed by a home health aide which:

Are not required to be performed by a registered nurse or licensed practical nurse; and
Primarily aid the patient in performing normal activities of daily living.

(c) “Home care visits” means the period of a visit to provide home care, without limit on the duration of the visit, except each consecutive 4 hours in a 24-hour period of home health aide services is one visit.

(d) “Medically necessary” means that the service or supply is:

Required to diagnose or treat an injury or sickness and shall be performed or prescribed by the physician;
Consistent with the diagnosis and treatment of the sickness or injury;
In accordance with generally accepted standards of medical practice; and
Not solely for the convenience of the insured or the physician.

(4) Minimum requirements.

(a) All disability insurance policies including, but not limited to, medicare supplement or replacement policies, shall provide a minimum of 40 home care visits in a consecutive 12-month period for each person covered under the policy and shall make available coverage for supplemental home care visits as required by s. 632.895 (2) (e), Stats.

(b) An insurer shall review each home care claim under a disability insurance policy and may not deny coverage of a home care claim based solely on Medicare’s denial of benefits.

(c) An insurer may deny coverage of all or a portion of a home health aide service visit because the visit is not medically necessary, not appropriately included in the home care plan or not necessary to prevent or postpone confinement in a hospital or skilled nursing facility only if:

The insurer has a reasonable, and documented factual basis for the determination; and
The basis for the determination is communicated to the insured in writing.

(d) In determining whether a home care claim, including a claim for home health aide services, is reimbursable under a disability insurance policy, an insurer may apply claim review criteria to determine that home is an appropriate treatment setting for the patient and that it is not reasonable to expect the patient to obtain medically necessary services or supplies on an outpatient basis, subject to the requirements of s. 632.895 (2) (g), Stats.

(e) An insurer shall disclose and clearly define the home care benefits and limitations in a disability insurance policy, certificate and outline of coverage. An insurer may not use the terms “homebound” or “custodial” in the sections of a policy describing home care benefits, exclusions, limitations, or reductions.

(f) In determining whether a home care claim under a disability insurance policy involves medically necessary part-time or intermittent care, an insurer shall give due consideration to the circumstances of each claimant and may not make arbitrary decisions concerning the number of home care visits within a given period which the insurer will reimburse. An insurer may not deny a claim for home care visits without properly reviewing and giving due consideration to the plan of care established by the attending physician under s. 632.895 (1) (b), Stats. An insurer may use claim review criteria based on the number of home care visits in a period for the purpose of determining whether a more thorough review of a home care claim or plan is conducted.

(g) An insurer may use claim review criteria under par. (d) or (f) only if the criteria and review process do not violate s. Ins 6.11. An insurer shall comply with s. 628.34 (1), Stats., when communicating claim review criteria to applicants, insureds, providers or the public.

History

Cr. Register, April, 1976, No. 376, eff. 6-1-87.

Wis. Admin. Code § Ins 3.55 Benefit appeals under long-term care policies, life insurance-long-term care coverage {#sec-ins-3.55 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.55}

(1) Purpose. This section implements and interprets s. 632.84, Stats., for the purpose of establishing minimum requirements for the internal procedure for benefit appeals that insurers shall provide in long-term care policies, life insurance-long-term care coverage. This section also facilitates the review by the commissioner of these policy forms.

(2) Scope. This section applies to individual and group nursing home insurance policies issued or renewed on or after August 1, 1988, and to long-term care policies and life insurance-long-term care coverage issued or renewed on and after June 1, 1991, except for polices or coverage exempt under s. Ins 3.455 (2) (b). This section does not apply to health maintenance organizations, limited service health organization or preferred provider plan, as those are defined in s. 609.01, Stats.

(3) Definitions. In this section:

(a) “Benefit appeal” means a request for further consideration of actions involving the denial of a benefit.

(b) “Denial of a benefit” means any denial of a claim, the application of a limitation or exclusion provision, and any refusal to continue coverage.

(cg) “Life insurance-long-term care coverage” has the meaning provided under s. Ins 3.46 (3) (j).

(cm) “Long-term care policy” has the meaning provided under s. Ins 3.46 (3) (k).

(4) Minimum requirements.

(a) Pursuant to s. 632.84 (2), Stats., an insurer shall include an internal procedure for benefit appeals in any long-term care policy or life insurance-long-term care coverage.

(b) The insurer shall provide the policyholder and insured with a written description of the benefit appeals internal procedure at the time the insurer gives notice of the denial of a benefit. The written description shall include the name, address, and phone number of the individual designated by the insurer to be responsible for administering the benefit appeals internal procedure.

(c) An insurer shall describe the benefit appeals internal procedure in every policy, group certificate, and outline of coverage. The description shall include a statement on the following:

The insured’s right to submit a written request in any form, including supporting material, for review by the insurer of the denial of a benefit under the policy; and
The insured’s right to receive notification of the disposition of the review within 30 days of the insurer’s receipt of the benefit appeal.

(d) An insurer shall retain records pertaining to a benefit appeal filed and the disposition of this appeal for at least 3 years from the date that the insurer files with the commissioner under sub. (5) the annual report in which information concerning the appeal is reported.

(e) No insurer may impose a time limit for filing a benefit appeal that is less than 3 years from the date the insurer gives notice of the denial of a benefit.

(f) An insurer shall make any internal procedure established pursuant to s. 632.84, Stats., available to the commissioner upon request and in as much detail as the commissioner requests.

(5) Reports to the commissioner. An insurer offering a long-term care insurance policy or rider shall report to the commissioner by March 31 of each year a summary of all benefit appeals filed during the previous calendar year and the disposition of these appeals, including:

(a) The name of the individual designated by the insurer to be responsible for administering the benefit appeals internal procedure;

(b) Changes made in the administration of claims as a result of the review of benefit appeals;

(d) The date each benefit appeal was filed and, if within the calendar year, subsequently resolved;

(e) The date each benefit appeal carried over from the previous calendar year was resolved;

(f) The nature of each benefit appeal; and

(g) A summary of each benefit appeal resolution.

(6) Policy disapproval. The commissioner shall disapprove a policy under s. 631.20, Stats., if that policy does not meet the minimum requirements specified in this section.

History

Cr. Register, May, 1989, No. 401, eff. 1-1-90; am. (1), (2) and (4) (a), r. (3) (f), cr. (3) (cg) and (cm), Register, April, 1991, No. 424, eff. 6-1-91; EmR0817: emerg. am. (3) (cg) and (cm), eff. 6-3-08; CR 08-032: am. (3) (cg) and (cm) Register October 2008 No. 634, eff. 11-1-08; CR 19-036: am. (title), (1), (2), r. (3) (d), (e), am. (4) (a), (5) (intro.) Register December 2019 No. 768, eff. 1-1-20.

Wis. Admin. Code § Ins 3.60 Disclosure of information on health care claim settlements {#sec-ins-3.60 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.60}

(1) Purpose. This section implements and interprets s. 628.34 (1) (a) and (12), Stats., for the purpose of allowing insureds and providers access to information on the methodology health insurers use to determine the eligible amount of a health insurance claim and permitting insureds to obtain estimates of amounts that their insurers will pay for specific health care procedures and services.

(2) Definitions. In this section:

(a) “C.D.T.” means the American dental association’s current dental terminology.

(b) “C.P.T.” means the American medical association’s current procedural terminology.

(3) Applicability.

(a) This section applies to an individual or group health insurance contract or certificate of individual coverage issued in this state that provides for settlement of claims based on a specific methodology, including but not limited to, usual, customary and reasonable charges or prevailing rate in the community, by which the insurer determines the eligible amount of a provider’s charge.

(b) This section applies to a health maintenance organization to the extent that it makes claim settlement determinations for out-of-plan services as described in par. (a).

(4) Data requirements. Any insurer that issues a policy or certificate subject to this section shall base its specific methodology on a data base that meets all of the following conditions:

(a) The fees in the data base shall accurately reflect the amounts charged by providers for health care procedures and services rather than amounts paid to or collected by providers, and may not include any medicare charges or discounted charges from preferred provider organization providers.

(b) The data base shall be capable of all of the following:

Compiling and sorting information for providers by C.D.T. code, C.P.T. code or other similar coding acceptable to the commissioner of insurance.
Compiling and sorting by zip code or other regional basis, so that charges may be based on the smallest geographic area that will generate a statistically credible claims distribution.

(d) No data in the data base at the time of an update under par. (c) may be older than 18 months.

(e) If the insurer uses an outside vendor’s data base the insurer may supplement it with data from the insurer’s own claim experience.

(f) An insurer may supplement a statistical data base with other information that establishes that providers accept as payment without balance billing amounts less than their initial or represented charge only if:

The insurer makes the disclosure required under sub. (6) (a) 1. e.;
The information establishes that the provider generally and as a practice accepts the payment without balance billing regardless of which insurer is providing coverage; and
The information is no older than 18 months before the date of an update under par. (c), clearly establishes the practice, is documented and is maintained in the insurer’s records during the period that the information is used and for 2 years after that date.

(5) Disclosure requirements upon issuance of policy.

(a) Each policy and certificate subject to this section shall include all of the following:

A clear statement, printed prominently on the first page of the policy or in the form of a sticker, letter or other form included with the policy, that the insurer settles claims based on a specific methodology and that the eligible amount of a claim, as determined by the specific methodology, may be less than the provider’s billed charge. This subdivision does not apply to a closed panel health maintenance organization that does not provide coverage for nonemergency services by noncontracted providers.
If the policy or certificate includes a provision offering to defend the insured if a provider attempts to collect any amount in excess of that determined by the insurer’s specific methodology, less coinsurance and deductibles, a clear statement that such a provision does not apply if the insured signs a separate agreement with the provider to pay any balance due.

(b) At the time a policy or certificate is issued, the insurer shall provide the policyholder or certificate holder with the telephone number of a contact person or section of the company that can furnish insureds with the information required to be disclosed under sub. (6).

(6) Requests for disclosure.

(a) Each insurer issuing a policy or certificate subject to this section shall, upon request, provide the insured with any of the following:

A description of the insurer’s specific methodology including, but not limited to, the following:

a. The source of the data used, such as the insurer’s claim experience, trade association’s data, an expert panel of providers or other source.

b. How frequently the data base is updated.

c. The geographic area used in determining the eligible amount.

d. If applicable, the percentile used to determine usual, customary and reasonable charges.

e. The conditions and procedures under which a statistical data base is supplemented under sub. (4) (f).

The amount allowable under the insurer’s guidelines for determination of the eligible amount of a provider’s charge for a specific health care procedure or service in a given geographic area. The insurer is required to disclose the specific amount which is an allowable charge under the insurer’s guidelines only if the provider’s charge exceeds the allowable charge under the guidelines. The estimate may be in the form of a range of payment or maximum payment.

(b) Paragraph (a) does not require an insurer to disclose specifically enumerated proprietary information prohibited from disclosure by a contract between the insurer and the source of the data in the data base.

(c) A request under par. (a) may be oral or written. The insurer may require the insured to provide reasonably specific details, including the provider’s estimated charge, and the C.P.T. or C.D.T. code, about the health care procedure or service before responding to the request. The response may be oral or written and the insurer shall respond within 5 working days after the date it receives a sufficient request. As part of the response, the insurer shall inform the requester of all of the following:

That the policy benefits are available only to individuals who are eligible for benefits at the time a health care procedure or service is provided.
That policy provisions including, but not limited to, preexisting condition and contestable clauses and medical necessity requirements, may cause the insurer to deny a claim.
That policy limitations including, but not limited to copayments and deductibles, may reduce the amount the insurer will pay for a health care procedure or service.
That a policy may contain exclusions from coverage for specified health care procedures or services.

(d) An insurer that provides a good faith estimate under par. (a) 2., based on the information provided at the time the estimate is requested, is not bound by the estimate.

(e) Upon request, an insurer shall provide the commissioner of insurance with information concerning the insurer’s specific methodology.

(7) Disclosure accompanying payment. If an insurer, based on its specific methodology, determines that the eligible amount of a claim is less than the amount billed, the insurer shall disclose with the remittance advice or explanation of benefits form under s. Ins 3.651, which accompanies payment to the provider or the insured, the telephone number of a contact person or section of the company from whom the provider or the insured may request the information specified under sub. (6) (a) 1.

(8) Violation. A pattern of providing inaccurate or misleading responses under sub. (6) (c) is a violation of s. 628.34 (1) (a), Stats.

History

Cr. Register, December, 1992, No. 444, eff. 1-1-93; reprinted to correct copy in (4) (d), (6) (a) 2. and (c) (intro.), Register, February, 1993, No. 446; r. and recr. (7), Register, August, 1993, No. 452, eff. 9-1-93.

Wis. Admin. Code § Ins 3.65 Standardized claim format {#sec-ins-3.65 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.65}

(1) Purpose; applicability. This section implements s. 632.725 (2) (a) and (b), Stats., by designating and establishing requirements for use of the forms that health care providers in this state shall use on and after July 1, 1993, for providing a health insurance claim form directly to a patient or filing a claim with an insurer on behalf of a patient.

(2) Definitions. In this section and in s. Ins 3.651:

(a) “ADA dental claim form” means the uniform dental claim form approved by the American dental association for use by dentists.

(b) “CDT-1 codes” means the current dental terminology published by the American dental association.

(d) “DSM-III-R codes” means the American psychiatric association’s codes for mental disorders.

(e) “HCFA” means the federal health care financing administration of the U.S. department of health and human services.

(f) “HCFA-1450 form” means the health insurance claim form published by HCFA for use by institutional providers.

(g) “HCFA-1500 form” means the health insurance claim form published by HCFA for use by health care professionals.

(h) “HCPCS codes” means HCFA’s common procedure coding system which includes all of the following:

Level 1 codes which are the CPT-4 codes.
Level 2 codes which are codes for procedures for which there are no CPT-4 codes.
Levels 1 and 2 modifiers.

(i) “Health care provider” has the meaning given in s. 632.725 (1), Stats.

(j) “ICD-9-CM codes” means the disease codes in the international classification of diseases, 9th revision, clinical modification published by the U.S. department of health and human services.

(k) “Medicare” means Title XVIII of the federal social security act.

(L) “Medical assistance” means Title XIX of the federal social security act.

(m) “Revenue codes” means the codes which are included in the Wisconsin uniform billing manual and which are established for use by institutional health care providers by the national uniform billing committee.

Note: The publications and forms referred to in subsection (2) may be obtained as follows:HCFA-1500 form and instructions

From the U.S. Government Printing Office, 710 North Capitol Street NW, Washington, DC 20401, all of the following:

HCPCS codes

ICD-9-CM codes

HCFA-1450 form and instructions

From the American Dental Association, 211 East Chicago Avenue, Chicago, IL 60611, both of the following:

CDT-1 codes

ADA dental claim form and CDT-1 User’s Manual

From Order Department: OP054192, the American Medical Association, P. O. Box 10950, Chicago, IL 60610: CPT-4 codes

From the American Psychiatric Association, 1400 K Street, NW, Washington, DC 20005: DSM-III-R codes

From the Wisconsin Hospital Association, 5721 Odana Road, Madison, WI 53719: Wisconsin Uniform Billing Manual and revenue codes

(3) Use of hcfa-1500 form.

(a) Required users; instructions. For providing a health insurance claim form directly to a patient or filing a claim with an insurer on behalf of a patient, all of the following health care providers shall use the format of the HCFA-1500 form, following HCFA’s instructions for use:

A nurse licensed under ch. 441, Stats.
A chiropractor licensed under ch. 446, Stats.
A physician, podiatrist or physical therapist licensed under ch. 448, Stats.
An occupational therapist, occupational therapy assistant or respiratory care practitioner certified under ch. 448, Stats.
An optometrist licensed under ch. 449, Stats.
An acupuncturist licensed under ch. 451, Stats.
A psychologist licensed under ch. 455, Stats.
A speech-language pathologist or audiologist licensed under subch. II of ch. 459, Stats., or a speech and language pathologist licensed by the department of public instruction.
A social worker, marriage and family therapist or professional counselor certified under ch. 457, Stats.
A partnership of any providers specified under subds. 1. to 9.
A corporation of any providers specified under subds. 1. to 9. that provides health care services.
An operational cooperative sickness care plan organized under ss. 185.981 to 185.985, Stats., that directly provides services through salaried employees in its own facility.

(b) Coding requirements. In addition to HCFA’s coding instructions, the following restrictions and conditions apply to the use of the HCFA-1500 form:

The only coding systems an insurer may require a health care provider to use are the following:

a. HCPCS codes.

b. ICD-9-CM codes.

c. DSM-III-R codes, if no ICD-9-CM code is available.

For anesthesia services for which there is no applicable HCPCS level 1 anesthesia code, a health care provider shall use the applicable HCPCS level 1 surgery code.
An insurer may not require a health care provider to use any other verbal descriptor with a code or to furnish additional information with the initial submission of a HCFA-1500 form except under the following circumstances:

a. When the procedure code used describes a treatment or service which is not otherwise classified.

b. When the procedure code is followed by the CPT-4 modifier 22, 52 or 99. A health care provider using the modifier 99 may use item 19 of the HCFA-1500 form to explain the multiple modifiers.

c. When required by a contract between the insurer and health care provider.

A health care provider may use item 19 of the HCFA-1500 form to indicate that the form is an amended version of a form previously submitted to the same insurer by inserting the word “amended” in the space provided.

(c) Use of unique identifiers. In completing the HCFA-1500 form, the individual or entity filing the claim shall do all of the following:

In item 17a, use the unique physician identifier number assigned by HCFA or, if the physician does not have such a number, the physician’s taxpayer identification number assigned by the U. S. internal revenue service.
In item 33, use both of the following:

a. The name and address of the payee.

b. The unique physician identifier number assigned by HCFA to the individual health care provider who performed the procedure or ordered the service or, if the individual does not have such a number, the individual’s taxpayer identification number assigned by the U. S. internal revenue service.

(4) Use of hcfa-1450 form.

(a) Required users; instructions. For providing a health insurance claim form directly to a patient or filing a claim on behalf of a patient, all of the following health care providers shall use the format of the HCFA-1450 form, following the instructions for use in the Wisconsin uniform billing manual:

A hospice licensed under subch. VI of ch. 50, Stats.
An inpatient health care facility, as defined in s. 50.135 (1), Stats.
A community-based residential facility, as defined in s. 50.01 (1g), Stats.

(b) Coding requirements. The only coding systems an insurer may require a health care provider to use are the following:

ICD-9-CM codes.
Revenue codes.
If charges for professional health care provider services are included, HCPCS or DSM-III-R codes.

(c) Claims for outpatient services; supplemental form permitted. A hospital may use a HCFA-1500 form to supplement a HCFA-1450 form if necessary to complete a claim for outpatient services.

(5) Use of ada dental claim form.

(a) Required users; instructions. For providing a health insurance claim form directly to a patient or filing a claim with an insurer on behalf of a patient, a dentist or a corporation or partnership of dentists shall use the format of the ADA dental claim form, following the instructions for use in the American dental association CDT-1 user’s manual.

(b) Coding. An insurer may not require a dentist to use any code other than the following:

CDT-1 codes.
CPT-4 codes.

(6) General provisions.

(a) Insurers to accept forms. No insurer may refuse to accept a form specified in sub. (3) (a), (4) (a) or (5) (a) as proof of a claim.

(b) Filing claims. A health care provider may file a claim with an insurer using either a paper form or electronic transmission. If a health care provider does not file a claim on behalf of a patient, the health care provider shall provide the patient with the same form that would have been used if the provider had filed a claim on behalf of the patient.

If the information conveyed by standard coding is insufficient to enable an insurer to determine eligibility for payment, the insurer may require a health care provider to furnish additional medical records to determine medical necessity or the nature of the procedure or service provided.
The 30-day period allowed for payment of a claim under s. 628.46 (1), Stats., begins when the insurer has sufficient information to determine eligibility for payment.

(d) Use of current forms and codes. In complying with this section, a health care provider shall do all of the following that are applicable:

Use the most current version of the HCFA-1500 or HCFA-1450 claim form and accompanying instructions by the mandatory effective date HCFA specifies for use in filing medicare claims.
Begin using modifications to a required coding system for all billing and claim forms by the mandatory effective date HCFA specifies for use in filing medicare claims.
Use the most current version of the ADA dental claim form.

History

Cr. Register, August, 1993, No. 452, eff. 9-1-93; am. (6) (b), Register, February, 1994, No. 458, eff. 3-1-94; corrections in (4) (a) 2. and 3. made under s. 13.93 (2m) (b) 7., Stats., Register, July, 1999, No. 523; correction in (4) (a) 1. made under s. 13.92 (4) (b) 7., Stats., Register March 2017 No. 735.

Wis. Admin. Code § Ins 3.651 Standardized explanation of benefits and remittance advice format {#sec-ins-3.651 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.651}

(1) Purpose. This section implements s. 632.725 (2) (c), Stats., by prescribing the requirements for the following, to be used by insurers providing health care coverage to one or more residents of this state:

(a) Remittance advice forms that insurers furnish to health care providers.

(b) Explanation of benefits forms that insurers furnish to insureds.

(2) Definitions. In addition to the definitions in s. Ins 3.65, in this section, “claim adjustment reason codes” means the claim disposition codes of the American national standards institute accredited standards committee X12 (ASC X12).

Note: The claim adjustment reason codes referenced in subsections (2), (3) (b) 4. i., (4) (a) 5. f. and (5), form OCI 17-007, may be obtained from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison, Wisconsin 53707-7873 or on the Office of the Commissioner of Insurance website at http://oci.wi.gov/.

(3) Remittance advice to health care providers.

(a) Use of remittance advice form required; exception.

With each payment to a health care provider, an insurer shall provide a remittance advice form conforming to the format specified in Appendix A, except as provided in subd. 2. and par. (d).
The remittance advice form of an insurer with less than $50,000 in annual premiums for health insurance sold in this state, as reported in its most recent annual statement, is not required to conform to the format specified in Appendix A but, with each payment to a health care provider, the insurer shall provide a remittance advice form which includes all of the applicable information specified in par. (b).

(b) Information required. The remittance advice form shall include, at a minimum, all of the following information:

The insurer’s name and address and the telephone number of a section of the insurer designated to handle questions and appeals from health care providers.
The insured’s name and policy number, certificate number or both.
The last name followed by the first name and middle initial of each patient for whom the claim is being paid, the patient identification number and the patient account number, if it has been supplied by the health care provider.
For each claim, all of the following on a single line:

a. The date or dates the service was provided or procedure performed.

b. The CPT-4, HCPCS or CDT-1 code.

c. The amount charged by the health care provider.

d. The amount allowed by the insurer.

e. The deductible amount.

f. The copayment amount.

g. The coinsurance amount.

h. The amount of the contractual discount.

i. Each claim adjustment reason code, unless the claim is adjusted solely because of a deductible, copayment or coinsurance or a combination of any of them.

j. The amount paid by the insurer toward the charge.

If an insurer includes claims for more than one policyholder or certificate holder on the same remittance advice form, all claims for the same policyholder or certificate holder shall be grouped together.
If an insurer includes claims for more than one patient on the same remittance advice form, all claims for the same patient shall be grouped together.

(d) Format; exceptions. Notwithstanding par. (a) 1. and Appendix A:

An insurer may print its remittance advice form in either horizontal or vertical format.
A remittance advice form need not include a column for any item specified in par. (b) 4. which is not applicable, but the order of the columns that are included may not vary from the order shown in Appendix A, except as provided in subd. 3.
A remittance advice form may provide additional information about claims by including one or more columns not shown in Appendix A immediately before the column designated for the claim adjustment reason code.
An insurer may alter the wording of a column heading shown in Appendix A provided the meaning remains the same.
If necessary for clarity when claims for more than one insured or more than one patient are included on the same form, an insurer shall vary the location of the information specified in par. (b) 2. and 3. to ensure that it appears with the claim information to which it applies.

(e) An insurer shall send the remittance advice form to the payee designated on the claim form.

Note: If, on March 1, 1994, an insurer has a contract with a health care provider that governs the form and content of remittance advice forms, s. Ins 3.651 (3), as affected March 1, 1994, first applies to the insurer on the date the contract is renewed, but no later than December 31, 1994.

(4) Explanation of benefits for insureds.

(a) The explanation of benefits form for insureds shall include, at a minimum, all of the following:

The insurer’s name and address and the telephone number of the section of the insurer designated to handle questions and appeals from insureds relating to payments.
The insured’s name, address and policy number, certificate number or both.
A statement as to whether payment accompanies the form, payment has been made to the health care provider or payment has been denied.
The last name followed by the first name and middle initial of each patient insured under the policy or certificate for whom claim information is being reported, and the patient account number, if it has been supplied by the health care provider.
For each patient listed, all of the following that are applicable, using a single line for each procedure or service:

a. The health care provider as indicated on the claim form.

b. The date the service was provided or procedure performed.

c. The CPT-4, HCPCS or CDT-1 code.

d. The amount charged by the health care provider if the insured may be liable for any of the difference between the amount charged and the amount allowed by the insurer.

e. The amount allowed by the insurer. An insurer may modify this requirement if necessary to provide information relating to supplemental insurance.

f. Each claim adjustment reason code, unless the claim is for a dental procedure for which there is no applicable code, in which case the insurer shall provide an appropriate narrative explanation as a replacement for the information required under subd. 7.

g. The applicable deductible amount, if any.

h. The applicable copayment amount, if any.

i. The amount paid by the insurer toward the charge.

A general description of each procedure performed or service provided.
A narrative explanation of each claim adjustment reason code. An insurer may provide information in addition to the narrative accompanying the code on form OCI 17-007.
Any of the following that apply:

a. The total deductible amount remaining for the policy period.

b. The total out-of-pocket amount remaining for the policy period.

c. The remaining amount of the policy’s lifetime limit.

d. The annual benefit limit.

(b) Unless requested by the insured, an insurer is not required to provide an explanation of benefits if the insured has no liability for payment for any procedure or service, or is liable only for a fixed dollar copayment which is payable at the time the procedure or service is provided.

(5) Claim adjustment reason codes; use. The office shall prepare updated claim adjustment reason code forms at least semiannually and shall notify insurers of their availability. In preparing remittance advice and explanation of benefits forms, an insurer shall use the claim adjustment reason codes provided by the office of the commissioner of insurance by no later than the first day of the 4th month beginning after being notified that an updated list of codes is available.

History

Cr. Register, August, 1993, No. 452, eff. 9-1-93; emer. r. and recr. (3) and (5), renum. (4) (a) 5. b., c. and 8. to 11. to be (4) (a) 5. c., b. and 8. a. to d., am. (4) (a) 6. and 7., cr. (4) (a) 8. (intro.), eff. 10-1-93; r. and recr. (3) and (5), renum. (4) (a) 5. b., c. and 8. to 11. to be (4) (a) 5. c., b. and 8. a. to d., am. (4) (a) 6. and 7., cr. (4) (a) 8. (intro.), Register, February, 1994, No. 458, eff. 3-1-94.

Wis. Admin. Code § Ins 3.67 Benefit appeals under certain policies {#sec-ins-3.67 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.67}

(1) Definitions. In this section:

(a) “Defined network plan” has the meaning provided under s. 609.01 (1b), Stats.

(am) “Expedited request” means a request where the standard resolution process may include any of the following:

Serious jeopardy to the life or health of the enrollee or the ability of the enrollee to regain maximum function.
In the opinion of a physician with knowledge of the enrollee’s medical condition, would subject the enrollee to severe pain that cannot be adequately managed without the care or treatment that is the subject of the request.
Is determined to be an expedited request by a physician with knowledge of the enrollee’s medical condition.

(b) “Grievance” means any dissatisfaction with the provision of services or claims practices of an insurer offering a defined network plan, limited service health organization or preferred provider plan or administration of a defined network plan, limited service health organization or preferred provider plan by the insurer that is expressed in writing to the insurer by, or on behalf of, an enrollee.

(c) “Health care plan” has the meaning provided under s. 628.36 (2) (a) 1., Stats., including fixed indemnity and specified disease insurance but does not include coverage ancillary to property and casualty insurance and Medicare + Choice plans.

(d) “Limited service health organization” has the meaning provided under s. 609.01 (3), Stats.

(f) “Self-insured plan” has the meaning provided under s. 632.85 (1) (c), Stats.

(2) Drugs and devices. A health care plan or self-insured plan that provides coverage of only certain specified prescription drugs or devices shall develop a process through which an enrollee’s physician may present medical evidence to obtain an individual patient exception for coverage of a prescription drug or device.

(3) Coverage of experimental treatments.

(a) Any coverage limitations for experimental treatment shall be defined and clearly disclosed in every policy issued by a health care plan or self-insured plan in accordance with s. 632.855 (2), Stats.

(b) A health care plan or self-insured plan that limits coverage for experimental treatment shall have an internal procedure consistent with s. 632.855 (3), Stats., including issuing a written coverage decision within 5 business days of receipt of the request.

(4) Appeal procedure. The procedure for defined network plan enrollees to appeal a decision under subs. (2) and (3) is delineated under s. Ins 18.03. For other health care plans, the appeal procedure established under this section shall include all of the following:

(a) The opportunity for the policyholder or certificate holder, or an authorized representative of the policyholder or certificate holder, to submit a written request, which may be in any form and which may include supporting material, for review by the insurer of the denial of any benefits under the policy.

(b) If an insurer denies any benefit under sub. (2) or (3), the insurer shall, at the time the insurer gives notice of the denial of benefits, provide the policyholder with a written description of the appeal process.

(c) The health care plan or self-insured plan shall acknowledge, in writing, a request for review of coverage under sub. (2), within 5 business days of receiving it.

(d) Within 30 calendar days after receiving the request under sub. (2) or (3), the health care plan or self-insured plan shall provide the disposition of the review and notify the person who submitted the request for review of the results of the review.

(e) A process to resolve an expedited request for review as expeditiously as the health condition requires but not to exceed 72 hours from the receipt of a substantially completed request under sub. (2) or (3).

(f) An insurer shall describe the procedure established under this subsection in every policy, group certificate and outline of coverage issued in connection with a health care plan.

(g) Each insurer offering a health care plan shall keep together, at its home or principal office, all records of appeals under this subsection. The insurer shall make these records available for review during examinations or at the request of the commissioner.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; correction in (1) (e) made under s. 13.93 (2m) (b) 7., Stats., Register December 2002 No. 564; correction in (4) made under s. 13.93 (2m) (b) 7., Stats., Register April 2003 No. 568; CR 05-059: renum. (1) (a) and (e) to be (1) (am) and (a), am. (1) (a) and (b) and (4) (intro.) Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 3.75 Continuation of discontinued employer provided health group policy coverage for employees and their dependents {#sec-ins-3.75 omnilex-key=us-wi-regs-official--agency-ins--Ins 3.75}

(1) Purpose. The purpose of this section is to allow assistance eligible individuals to elect continued coverage provided under s. 632.897, Stats., in circumstances where the group policy is discontinued on or after June 30, 2009, and not replaced. The rule applies only to individuals who are eligible for a premium subsidy under the federal American Recovery and Reinvestment Act of 2009 P.L. 111-5, as amended. The federal act makes the premium subsidy available to those individuals who are eligible due to an involuntary employment termination prior to June 1, 2010.

(2) Definitions. In addition to the definitions in section 9126 of 2009 Wisconsin Act 11, in this section, unless the context requires otherwise:

(a) “Assistance eligible individual” has the meaning provided in section 3001 (a) (3) of the federal act.

(b) “Federal act” means the American Recovery and Reinvestment Act of 2009, P.L. 111-5, as amended by section 1010 of the federal department of defense appropriations act, 2010 (P.L.111-118), the temporary extension act of 2010 (P.L. 111-144) and the continuing extension act of 2010 (P.L. 111-157).

(c) “Terminated insured” means an insured under s. 632.897 (1) (f) and (2) (b) 2., Stats., whose employment has been involuntarily terminated on or after September 1, 2008, and prior to June 1, 2010, who has been continuously covered under a group policy for at least 3 months and who satisfies one of the following:

Would be entitled to elect continued coverage under s. 632.897, Stats., but for the fact that the group policy was discontinued on or after June 30, 2009, and not replaced by another group policy offered by the employer during the terminated insured’s 30-day election period under s. 632.897 (3) (a), Stats.
Is receiving, on behalf of themselves and, if applicable, a spouse or dependents, continued coverage under s. 632.897, Stats., due to an involuntary termination of employment that occurred on or after September 1, 2008, but prior to June 1, 2010, and, on or after June 30, 2009, the group policy is discontinued and not replaced by a group policy offered by the employer.

(3) Additional continuation coverage election opportunity for assistance eligible individuals when an employer discontinues and does not replace group policy coverage.

(a) Except as provided in pars. (c) and (d), an insurer shall permit a terminated insured to elect continuation of coverage under the terms of an employer’s group policy if the group policy is discontinued on or after June 30, 2009.

(b) An insurer shall permit a terminated insured to elect continuation of coverage on behalf of themselves and the terminated insured’s spouse and dependents if the spouse or dependents were covered under the group policy at the time the group policy was discontinued.

(c) An insurer may limit continuation of coverage under this section to individuals who are under the federal act who are assistance eligible individuals.

(d) This section does not require continuation of coverage if the individual satisfies all of the following:

Establishes residence outside this state.
Fails to make timely payment of a required premium amount after notice as required under s. 631.36 (2) (b), Stats.
Becomes eligible for similar coverage under another employer’s group policy or for benefits under title XVIII of the Social Security Act.
Ceases to be eligible for premium assistance under section 3001 (a) (2) of the federal act.
The individual’s eligibility for continued coverage would have otherwise ceased under s. 632.897, Stats., if the group policy had not been discontinued.

(e) Coverage under this section, if elected under par. (a), shall continue uninterrupted from the date of the employer’s discontinuance of the group policy. An insurer is not required to continue coverage for a period covered by a conversion policy issued under s. 632.897, Stats., for the period prior to the date of election of continuation coverage.

(f) An insurer shall provide a right to an individual conversion policy on termination of continuation of coverage under this section if the terminated insured tenders the first premium within 30 days after the continued coverage terminates. The insurer shall either include notice of this right and a description of how to make payment of premium in the notice required under sub. (4) (b) or shall provide notice prior to termination of the continuation coverage. The conversion policy shall conform to the requirements of s. 632.897 (4), Stats. An insurer is not required to issue a conversion policy under this paragraph if issuance of an individual conversion policy is not required under the standards established in s. 632.897 (4) (d), Stats.

(4) Notice.

(a) An employer shall provide written notice in the form required by par. (b) to each terminated insured prior to the date of discontinuance of the group policy. An employer or insurer is not required to give notice to a terminated insured who is not, or who is not entitled to elect coverage for, an assistance eligible individual.

(b) The notice required under this subsection shall include a description of the discontinuance of the group policy; the right to continuation under sub. (3) (a) and (b); an explanation of the procedure for electing continued coverage; the payment amounts required for continuation coverage; and the manner, place, and time in which the payments shall be paid. The notice shall also include a description of the premium subsidy, the notice required under section 3001 (a) (7) of the federal act, and a description of when the continuation coverage will discontinue, including a description of discontinuance under sub. (3) (d) 4.

(c) If an employer that is required to provide the notice as required under pars. (a) and (b) fails to provide the notice within the time required, the insurer shall provide the notice specified in par. (b) within 10 days after the date the insurer acquires knowledge the employer has not provided the notice or the date the insurer exercising due diligence should know that the employer has not provided the notice.

(d) Insurance intermediaries shall provide reasonable assistance to insurers by notifying employers of the requirement to provide notice under this subsection and by making reasonable efforts to assist insurers in determining whether the employer complies and, if not, by making reasonable efforts to assist the insurer in giving notice.

(e) A terminated insured may elect continuation of coverage by electing continuation coverage and paying the premium due under sub. (5) (a) to either the employer or the insurer, as directed by the notice required under par. (b), within 30 days after notice is given as required under par. (a) or (c).

(5) Premium.

(a) The insurer may charge for coverage continued under this section an amount no more than 100% of the cost the employer incurred for providing the group policy coverage, including group rate adjustments on the date the group policy would have renewed that are based on applying rating factors to group changes that occurred prior to the discontinuance of the group policy. The employer or insurer shall collect only 35% of that amount from the terminated insured. The insurer may collect any premium subsidy available under the federal act.

(b) An insurer may require payment of premium for all required continuation coverage periods, including for periods prior to the date of election.

(c) An employer, if requested by the insurer, shall collect and remit to the insurer premium due under this section. An insurer may require the employer to collect and remit premium due from a terminated insured, spouse, or dependent under this section. An insurer may not condition continuation of coverage on the employer collection and remittance of premium. An insurer shall treat payment by a terminated insured, spouse, or dependent to the employer as receipt and payment to the insurer unless the insurer directs that payment be made to the insurer. An insurer may direct a terminated insured, spouse, or dependent to pay the premium to either the employer or to the insurer, including by direction in the notice under sub. (4) (b).

(d) An employer must notify an insurer when the employer discontinues a group policy and does not replace the group policy. An insurer may require the employer to give it notice when it discontinues a group policy and does not replace the group policy. An insurer may not condition continuation of coverage under this section on employer notice of such discontinuance.

(6) Portability. For an individual who elects continuation of coverage under this section, the period, if any, from the date of the termination of the individual’s group policy coverage to the commencement of continuation of coverage under this section shall be disregarded for the purpose of determining the 63-day period under s. 632.746 (3) (b), Stats.

(7) Contract terms preserved. An insurer may restrict coverage provided under this section to the terms of the group policy to the extent the terms do not conflict with this section. Nothing in this section prohibits an insurer from applying deductibles and other cost sharing according to the terms of the group policy, including according to policy periods based on renewal dates that would have occurred had the policy not been discontinued. An insurer may apply policy modifications that were included in notice given to the employer under s. 631.36, Stats., or requested by the employer, that took effect or would have taken effect prior to or on the date of the discontinuance of the policy. An insurer may include provisions for administration of this section in its group policy and certificates.

(8) Extended premium payment right, coverage, and notice pursuant to section 1010 of the federal department of defense appropriations act, 2010. An insurer must provide the rights provided by, and must comply with the provisions of, section 1010 (c) of the federal department of defense appropriation act, 2010 (P.L.111-118), for assistance eligible individuals who are or were eligible for coverage under this section or s. 632.897, Stats., including:

(a) The rules relating to 2009 extension, including the right to elect to pay premiums retroactively and maintain coverage under this section or s. 632.897, Stats.

(b) The rules relating to notification as provided under section 1010 (c) of the federal department of defense appropriation act, 2010 (P.L.111-118), as amended.

History

EmR0925: emerg. cr., eff. 10-2-09; EmR0945: emerg. am. (2) (c), cr. (8), eff. 1-7-10; CR 09-096 and CR 10-038: cr. Register December 2010 No. 660, eff. 1-1-11; correction in (7) made under s. 13.92 (4) (b) 7., Stats., Register December 2010 No. 660; CR 17-015: am. (6) Register December 2017 No. 744, eff. 1-1-18.

Chapter Ins 4 FIRE AND ALLIED LINES INSURANCE

Wis. Admin. Code § Ins 4.01 Interpretation and implementation of s. 632.05 (2), Stats {#sec-ins-4.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 4.01}

(1) Scope. Section 632.05, Stats., and this section apply to policies issued or renewed on or after November 29, 1979, which insure real property owned and occupied by the insured as a dwelling.

(2) Interpretations.

(a) Seasonal dwellings. A dwelling used seasonally shall be considered as owned and occupied by the insured if it is not rented to a non-owner for any period of time.

(b) Outbuildings. Outbuildings insured under the same policy as an owner-occupied dwelling are not subject to s. 632.05 (2), Stats.

(c) Mobile homes. Mobile homes as defined in s. 66.0435 (1) (d), Stats., shall not be considered real property and shall not be subject to the requirements of s. 632.05 (2), Stats.

(d) Multifamily units. A policy insuring multiple unit residential property, with at least one unit occupied by the owner shall be subject to s. 632.05 (2), Stats., if there are no more than 4 dwelling units on the property.

(e) Combined commercial and residential properties. A policy insuring real property any part of which is used for commercial (non-dwelling) purposes other than on an incidental basis is not subject to s. 632.05 (2), Stats.

Note: In Seider v. Musser, 2000 WI 76, 236 Wis. 2d 211, 612 N.W.2d 659, the supreme court ruled that sub. (2) (e) is invalid.

(g) Property under construction. Section 632.05 (2), Stats., shall not apply to a policy which insures real property under construction unless the property is completed and is occupied by the owner as a dwelling.

(h) Operation of building laws. Real property owned and occupied by the insured which is partially destroyed but ordered destroyed under a fire ordinance or similar law shall be considered wholly destroyed for purposes of s. 632.05 (2), Stats.

History

Cr. Register, April, 1981, No. 304, eff. 5-1-81; r. (2) (f), Register, March, 1983, No. 327, eff. 4-1-83; correction in (2) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; correction in (2) (c) made under s. 13.92 (4) (b) 7., Stats., Register February 2013 No. 686.

Wis. Admin. Code § Ins 4.08 Inland marine insurance exempt from filing requirements {#sec-ins-4.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 4.08}

(1) Purpose. In accordance with s. 625.04, Stats., the purpose of this section is to exempt from the filing requirements of s. 625.13, Stats., all classes of inland marine risks.

(2) Scope. This section shall apply to inland marine insurance transacted under the authorization of s. Ins 6.75 (2) (a).

(3) Exempt classes. Insurers and rate service organizations are exempt from s. 625.13, Stats., in respect to the filing of rates and supplementary rate information for all classes of inland marine insurance.

History

Cr. Register, December, 1969, No. 168, eff. 1-1-70; emerg. am. (2), eff. 6-22-76; am. (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (2), Register, March, 1979, No. 279, eff. 4-1-79; r. (3) (a) 1. to 38., Register, August, 1981, No. 308, eff. 9-1-81; am. (1), (2), and (3) (a) (intro.), Register, June, 1986, No. 366, eff. 7-1-86.

Wis. Admin. Code § Ins 4.10 Wisconsin insurance plan {#sec-ins-4.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 4.10}

(1) Purpose. This section is intended to implement and interpret s. 619.01, Stats., for the purpose of establishing procedures and requirements for a mandatory risk sharing facility for basic property insurance coverage. This section is also intended to encourage improvement of and reasonable loss prevention measures for properties located in Wisconsin and to further orderly community development.

(2) Scope. This section shall apply to all insurers included in sub. (3) (d) except those organized under ch. 612, Stats., assessment mutual insurance companies and insurers who write reinsurance only.

(3) Definitions.

(a) “Basic property insurance” means the insurance coverages described in subds. 1. and 3. against direct loss to real and tangible property at a fixed location. The Plan may use customary policy forms and endorsements to effect coverage contemplated by this paragraph. Other coverage may be added to the Plan by endorsement or policy provision upon approval by the commissioner.

Coverage provided in the customary fire policy and in the customary extended coverage as authorized by s. Ins 6.75 (2) (a).
Coverage at least equivalent to that provided in a modified coverage form homeowners policy.

(b) “Farm risks” means all buildings and their contents whether occupied by the owner or by an employee or by a tenant, located on or used in connection with land devoted to any one or more of the following purposes and where gross annual receipts from those purposes are in excess of $5,000:

Cultivation of the soil
Rearing or keeping of livestock or poultry
Producing fruit, grain, vegetables, hay or other produce

Dwellings, permanent or seasonal, designed for occupancy by not more than 4 families or containing not more than 4 apartments.
Private outbuildings used in connection with any of the foregoing.
Trailer homes at a fixed location.
Household and personal property in risks described in subds. 1 through 5.
Tenants’ contents in apartment houses.

(d) “Insurer” means any insurance company authorized to transact in this state on a direct basis basic property insurance, including the property insurance components of multi-peril policies.

(e) “Location” means a single building and its contents or contiguous buildings and their contents under one ownership.

(f) “Manufacturing risks” means those risks eligible to be written under the customary manufacturing business interruption policy forms approved by the commissioner. The following are not considered manufacturing risks:

Dry cleaning and laundering—Carpet, rug, furniture, or upholstery cleaning; diaper service or infants’ apparel laundries; dry cleaning; laundries; linen supply.
Installation, servicing and repair—Electrical equipment; electronic equipment; glazing; household furnishings and appliances; office machines; plumbing, heating and air conditioning; protective systems for premises, vaults and safes.
Laboratories—Blood banks; dental laboratories; medical or x-ray laboratories.
Duplicating and similar services—Blue printing and photocopying services; bookbinding; electrotyping; engraving; letter service (mailing or addressing companies); linotype or hand composition; lithographing; photo engraving; photo finishing; photographers (commercial).
Warehousing—Cold storage (locker establishments); warehouse, cold storage; warehouse, furniture or general merchandise.
Miscellaneous—Barber shops; beauty parlors; cemeteries; dog kennels; electroplating; equipment rental (not contractors’ equipment); film and tape rental; funeral directors; galvanizing, tinning, and detinning; radio broadcasting, commercial wireless and television broadcasting; taxidermists; telephone or telegraph companies; textiles (bleaching, dyeing, mercerizing or finishing of property of others); veterinarians and veterinary hospitals.

(g) “Motor vehicles” means vehicles which are self-propelled.

(h) “Weighted premiums written” means:

Gross direct premiums less return premiums, dividends paid or credited to policyholders, or the unused or unabsorbed portions of premium deposits, with respect to property in this state excluding premiums on risks insured under the Plan, for basic property insurance, for homeowners multiple peril policies, and for the basic property insurance premium components of all other multiple peril policies.
In addition, 100% of the premiums obtained for homeowners multiple peril policies shall be added to 100% of the premiums obtained for basic property insurance and the basic property insurance premium components of all other multiple peril policies. The basic year for the computation shall be the second preceding calendar year.

(i) “The Wisconsin Insurance Plan,” in this section referred to as the Plan, means the nonprofit, unincorporated mandatory risk-sharing facility established by this section to provide for basic property insurance and to assist applicants in securing basic property insurance.

(4) Eligible risks.

(a) All risks at a fixed location shall be eligible for inspection and considered for insurance under the Plan except motor vehicles, farm risks, and manufacturing risks as defined in sub. (3) (b), (f), and (g).

(b) The maximum limits of coverage for the type of basic property insurance defined in sub. (3) (a) 1. which may be placed under the Plan are $350,000 on the dwelling and $175,000 on personal property for any habitational risk at one location and $500,000 on any other eligible risk.

(d) The maximum limits of coverage for the type of basic property insurance defined in sub. (3) (a) 3. which may be placed under the Plan are $350,000 on the dwelling with the customary percentage limits for other structures, personal property and loss of use and $100,000 on personal liability and $1,000 medical payments to others for any risk at one location.

(5) Membership.

(a) Every insurer, as defined in sub. (3) (d), licensed to write one or more components of basic property insurance, as defined in sub. (3) (a), shall be considered a member of the Plan. Any other insurer may, upon application to and approval by the governing committee, become a member.

(b) An insurer’s membership terminates when the insurer is no longer authorized to write basic property insurance in Wisconsin, but the effective date of termination shall be the last day of the fiscal year of the Plan in which termination occurs. Any insurer so terminated shall continue to be governed by the provisions of this section until it completes all of its obligations under the Plan.

(c) Any voluntary insurer member may terminate its membership only as of the last day of the fiscal year of the Plan by giving written notice to the Plan 30 days prior to the last day of the fiscal year of the Plan. The governing committee upon a majority vote may terminate the membership of a voluntary insurer. Any such terminated member shall continue to be governed by the provisions of this section until it completes all of its obligations under the Plan.

(d) Subject to the approval of the commissioner, the governing committee may charge a reasonable annual membership fee.

(6) Administration.

(a) The Plan shall be administered by the governing committee, subject to the supervision of the commissioner, and operated by a manager appointed by the governing committee.

(b) The governing committee shall consist of 11 members, each of whom shall serve for a period of one year or until a successor is elected or designated. Each shall have one vote.

Four members shall be nominated by national and state associations that represent property and casualty insurers. If more than four members are nominated, the commissioner shall designate the four members from the list of nominations.
All other insurers not members of the associations in subd. 1 shall elect one member by weighted votes based on each insurer’s weighted premiums written.
The commissioner shall appoint members to represent: stock agents—one member mutual agents—one member consumers and other persons not affiliated in any way with the insurance industry—4 members
Not more than one insurer in a group under the same management or ownership shall serve on the governing committee at the same time. Nominees for individuals to serve as consumer members and as representatives of other persons not affiliated in any way with the insurance industry shall be sought from community groups, local agencies, and from other members of the governing committee.

(7) Duties of the governing committee.

(a) The governing committee shall meet as often as may be required to perform the general duties of the administration of the Plan or on the call of the commissioner. Six members of the committee present or by proxy shall constitute a quorum. Members of the committee who choose to appoint a proxy shall give a written proxy to the person elected to act as proxy. The written proxy shall then be filed with the governing committee, thus ensuring the validity of the proxy’s actions as the governing committee performs its duties.

(b) The governing committee shall be empowered to appoint a manager, who shall serve at the pleasure of the committee, to budget expenses, levy assessments, disburse funds, and perform all other duties of the Plan. The adoption of or substantive changes in pension plans or employee benefit programs for the manager and staff shall be subject to approval of the governing committee.

(c) The governing committee may designate, with the approval of the commissioner, a rate service organization as defined in s. 625.02 (2), Stats., to make inspections as required under the Plan and to perform such other duties as may be authorized by the governing committee.

(d) The manager shall annually prepare an operating budget which shall be subject to approval of the governing committee.

(e) The governing committee shall submit to the commissioner periodic reports setting forth information as the commissioner may request.

(f) The governing committee shall separately code all policies written by the Plan so that appropriate records may be compiled for purposes of performing loss prevention and other studies of the operation of the Plan.

(g) The governing committee shall authorize the manager to file rates, surcharge schedules and forms for prior approval by the commissioner.

(h) The governing committee shall prepare such agreements and contracts as may be necessary for the execution of this section consistent with its provisions.

(8) Annual and special meetings.

(a) There shall be an annual meeting of the insurers on a date fixed by the governing committee at which time members may be chosen under sub. (6) (b) 1., 2. and 4.

(b) A special meeting shall be called within 40 days by the governing committee after receipt of a written request from any 10 insurers, not more than one of which may be in a group under the same management or ownership.

(c) The time and place of all meetings shall be reasonable. Twenty days’ notice of an annual or special meeting shall be given in writing by the governing committee to all insurers as defined by sub. (3) (d). Six members present in person or by proxy shall constitute a quorum. Voting by proxy shall be permitted.

(d) Any matter not inconsistent with the law or this section may be proposed and voted upon at any special meeting of the committee. Notice of any such proposal shall be mailed to each insurer not less than 20 days prior to the final date fixed by the committee for voting thereon.

(9) Application for insurance.

(a) Any person having an insurable interest in an eligible risk under sub. (4) (a), and who has received within the last 6 months a notice of rejection or cancellation from an insurer, may apply for insurance by the Plan. The notice of rejection or cancellation shall accompany the application.

(b) An inspection need not be made if the governing committee determines that insurance can be provided for specified classes of risks on the basis of representations of the applicant or the insurance agent.

(c) The Plan may bind coverage. The Plan may wait until receipt of the inspection report or receipt of additional underwriting information before determining whether to bind coverage.

(10) Inspection procedure.

(a) The inspection by the Plan shall be without cost for the applicant.

(b) The manner and scope of the inspection shall be prescribed by the Plan with the approval of the commissioner.

(c) An inspection report shall be made for each property inspected covering pertinent structural and occupancy features as well as the general condition of the building and surrounding structures. Representative photographs may be taken during the inspection to indicate the pertinent features of building, construction, maintenance, occupancy, and surrounding property.

(e) After the inspection, a copy of the completed inspection report and any relevant photographs shall be kept on file by the Plan. The report shall include a description of any deficient physical condition charges proposed by the inspector. A copy of the inspection report shall be made available to the applicant or agent upon request.

(11) Procedure after inspection and receipt of application.

(a) After receipt of the application, the inspection report, and any additional underwriting information requested from the applicant, and the application, the Plan shall within 5 business days complete and send to the applicant an action report advising him or her of one of the following:

That the risk is acceptable. If the inspection reveals substandard conditions, appropriate charges may be imposed but the report shall specify the improvements necessary for removal of each such charge.
That the risk is declined unless reasonable improvements noted in the action report are made by the applicant and confirmed by reinspection.
That the risk is declined because it fails to meet reasonable underwriting standards as set forth in sub. (12) or (13). Reasonable underwriting standards as set forth in sub. (12) or (13) shall not include neighborhood or area location or any environment hazard beyond the control of the property owner.

(b) If the risk is accepted, the action report shall advise the applicant of:

The amount of coverage the Plan agrees to write.
The amount of coverage the Plan agrees to write, if specified improvements are made.
The amount of coverage the Plan agrees to write only if a large or special deductible is agreed to by the applicant.

(c) If the risk is accepted, the Plan, upon receipt of the premium, shall deliver the policy to the applicant or to the licensed agent designated by the applicant for delivery to the applicant. The Plan shall remit the commissions to the licensed agent designated by the applicant. If no licensed agent is so designated, the policy shall be delivered to the applicant and the commission shall be retained by the Plan.

(d) If the risk is conditionally declined under par. (a) 2. but can be improved to meet reasonable standards the Plan shall promptly advise the applicant what improvements noted in the action report should be made to the property. Upon completion of the improvements by the applicant or property owner, the Plan when so notified, shall have the property promptly reinspected under sub. (10) and shall send a new action report to the applicant.

(e) If a risk is declined under par. (a) 3., the Plan shall promptly send copies of the inspection and action reports to the applicant and shall advise the applicant of the right to a hearing set forth in sub. (16) (a).

(12) Reasonable underwriting standards for property coverage. The following characteristics may be used in determining whether a risk is acceptable for property coverage. Where there is more than one cause for declination, all shall be listed and complied with before the property may be accepted for insurance purposes.

(a) Physical condition of property; however, the mere fact that a property does not satisfy all current building code specifications will not, of itself, suffice as a reason for declination.

(b) The property’s present use such as extended vacancy or extended unoccupancy of the property for 60 consecutive days. Properties that are vacant or unoccupied for more than 60 days may be insured while rehabilitation or reconstruction work is actively in process meaning that the insured or owner should make monthly progress in order to complete the rehabilitation or reconstruction within a one year time frame.

(c) Other specific characteristics of ownership, condition, occupancy or maintenance, that violate the law and that result in substantial increased exposure to a loss. Any circumstance considered under this paragraph must relate to the peril insured against.

(d) Characteristics of ownership or maintenance of building including any 2 of the following conditions:

Failure to pay real estate taxes on the property after the taxes have been delinquent for one year or more. Real estate taxes shall not be deemed to be delinquent for this purpose even if they are due and constitute a lien so long as a grace period remains under local law during which such taxes may be paid without penalty.
Failure, within the insured’s control, to furnish water for 30 consecutive days or more.
Failure, within the insured’s control, to furnish heat for 30 consecutive days or more during the heating season.
Failure, within the insured’s control, to furnish public lighting for 30 consecutive days or more.

(e) Physical condition of buildings which results in an outstanding order to vacate, an outstanding demolition order or in being declared unsafe in accordance with the applicable law.

(f) One or more of the conditions for nonrenewal as listed in sub. (14) currently exist. The Plan shall, upon notice that conditions at the buildings have changed, consider new application for coverage.

(g) Vandalism and malicious mischief coverage shall not be provided for a dwelling or commercial property where the property has been subject to 2 vandalism and malicious mischief losses, each loss amounting to at least $500.00 in the immediately preceding 12-month period or 3 or more such losses in the immediately preceding 24-month period.

(h) Previous loss history or matters of public record concerning the applicant or any person defined as an insured under the policy.

(i) Any other guidelines which have been approved by the commissioner.

(13) Reasonable underwriting standards for liability coverage. The following characteristics may be used in determining whether a risk is acceptable for liability insurance on homeowner policies:

(a) Liability insurance shall only be provided as contained in the Wisconsin Insurance Plan homeowners policy.

(c) Liability insurance shall not be provided for risks with any of the following deficiencies, as disclosed by the application or inspection, until they have been corrected.

Broken, cracked, uneven or otherwise faulty steps, porches, decks, sidewalks, patios and similar areas.
Downspouts or drains which discharge onto sidewalks or driveways.
Unsafe conditions including inadequate lighting of stairways.
Animals known to be vicious or animals which have caused a liability claim.
Swimming pools or private ponds not fenced in accordance with local regulations.
Unsafe, or the absence of, handrails.
Junk cars, empty refrigerators or other potentially dangerous objects in the yard which are an attraction to children.

(d) Previous loss history or matters of public record concerning the applicant or any person defined as an insured under the policy.

(e) Any other guidelines which have been approved by the commissioner.

(f) Liability insurance may not be provided where there is a business operating at the insured location, unless the applicant has in force a business liability policy with limits of at least $100,000 per occurrence providing premises liability coverage.

(g) Liability insurance shall not be provided where the applicant owns three or more horses or other riding animals, unless the applicant has in force a liability policy with limits of at least $100,000 per occurrence providing coverage for the ownership and use of these horses or these other riding animals.

(14) Cancellation; nonrenewal and limitations; review of eligibility.

(a) The Plan shall not cancel or refuse to renew a policy issued by the Plan except for the following:

Facts as confirmed by inspection or investigation which would have been grounds for nonacceptance of the risk by the Plan had they been known to the Plan at the time of acceptance.
Changes in the physical condition of the property or other changed conditions as confirmed by inspection or investigation that make the risk uninsurable under sub. (12) or (13).
Nonpayment of premiums.
At least 65% of the rental units in the building are unoccupied, and the insured has not received prior approval from the Plan of a rehabilitation program which necessitates a high degree of unoccupancy.
Unrepaired damage exists and the insured has stated that repairs will not be made or such time has elapsed as clearly indicates that the damage will not be repaired. The elapsed time under this subdivision is a length of time over 60 days where the damage remains unrepaired, unless there are known to be extenuating circumstances.
After a loss, permanent repairs following payment of the claim have not been commenced within 60 days, unless there are known to be extenuating circumstances. The 60-day period starts upon acceptance of payment of the claim.
Property has been abandoned for 90 days or more.
Utilities such as electric, gas or water services have been disconnected or the insured has failed to pay an account for such services within 120 days;
Real estate taxes have not been paid for a 2-year period after the taxes have become delinquent. Real estate taxes shall not be deemed to be delinquent for this purpose if they are due and constitute a lien, so long as a grace period remains under local law under which taxes may be paid without penalty.
There is good cause to believe based on reliable information that the building will be burned for the purpose of collecting the insurance on the property. The removal of damaged salvageable items, such as normally permanent fixtures, from the building shall be considered under this item when the insured can give no reasonable explanation of such removal.
A named insured or loss payee or other person having a financial interest in the property being convicted of the crime of arson or a crime involving a purpose to defraud an insurance company. The fact that an appeal has been entered shall not negate the use of this subdivision.
The property has been subject to more than 2 losses, each loss amounting to at least $500 or 1% of the insurance in force, whichever is greater, in the immediately preceding 12-month period, or more than 3 such losses in the immediately preceding 24-month period, provided that the cause of such losses is due to the conditions which are the responsibility of the owner named insured or due to the actions of any person defined as an insured under the policy.
Theft frequency in which there have been more than 2 thefts, each loss amounting to at least $500 in a 12-month period.
Material misrepresentation in any statement to the Plan.
On homeowners policies, excessive theft or liability losses. If on a given property there have been 2 or more losses within a 2-year period or 3 or more losses within a 5-year period, with theft and liability evaluated separately, the Plan may convert the homeowners policy to a dwelling policy.
On homeowner policies, excessive vandalism and malicious mischief losses. In the event that a given property has been subject to 2 vandalism and malicious mischief losses, each loss amounting to at least $500.00, in the immediately preceding 12-month period or 3 or more such losses in the immediately preceding 24-month period, the Plan may convert the homeowners policy to a dwelling policy without vandalism and malicious mischief coverage.

(d) The Plan shall terminate all insurance contracts in accordance with s. 631.36, Stats.

(e) At the completion of 36 months of coverage and prior to 48 months, each risk shall be reviewed for its eligibility for coverage in the voluntary market. The risk shall be submitted by the Plan to the agent of record, if any, for a search of the voluntary market. If the agent resubmits the risk to the Plan, it must be resubmitted by a new application and accompanied by a current rejection notice. The Plan shall reinspect the risk before coverage is provided.

(15) Assessments.

(a) Participation and assessments by and upon each insurer in the Plan for losses and expenses in connection with Plan business shall be levied and assessed by the governing committee of the Plan on the basis of participation factors determined annually, giving effect to the proportion which such insurer’s weighted premiums written bears to the aggregate weighted premiums written by all insurers in the Plan.

(b) If any member fails to pay an assessment within 30 days after it is due, the unpaid assessment may be collected from the remaining members.

(16) Right to hearing.

(a) Each notice by the plan to an insured or applicant of cancellation, nonrenewal, reduction in coverage or declination shall include notice of the right to a hearing under ch. Ins 5, if the person files a petition for a hearing with the commissioner of insurance not later than 30 days after the notice is mailed. The notice shall describe the requirements of s. Ins 5.11 (1).

(b) The office of the commissioner of insurance shall hold a hearing within 30 days after receipt of a complete petition under par. (a), except under either of the following circumstances:

The issue is the plan’s intent to cancel, nonrenew or reduce the petitioner’s coverage, and the plan waives the right to a hearing within 30 days.
The issue is the plan’s declination of the petitioner’s application for coverage and the petitioner waives the right to a hearing within 30 days.

(c) At the hearing the petitioner has the burden of proving by a preponderance of the evidence that the plan’s decision is erroneous under this chapter or the policy terms.

(d) Filing a petition under par. (a) stays the action of the plan with respect to cancellation, nonrenewal or reduction in coverage. The petitioner’s coverage shall remain in effect during the pendency of the proceedings as long as the petitioner continues to pay the plan premium.

(e) The plan shall comply with the final decision and order in the contested case proceeding. A final decision and order affirming the plan’s decision to cancel, nonrenew or reduce the petitioner’s coverage shall take effect 30 days after the date of the final decision and order. Upon receipt of the final decision and order, the plan shall notify the petitioner of the action it intends to take to implement the order.

Note: A petition under sub. (16) shall be filed as provided in s. Ins 5.17.

(17) Commission.

(a) Commission to the licensed agent designated by the applicant shall be 10% of all policy premiums. The Plan shall not license agents.

(b) In the event of cancellation of a policy, or if an endorsement is issued which requires the premium to be returned to the insured, the agent shall refund ratably to the Plan commissions on the return premium at the same rate at which such commissions were originally paid.

(18) Public education. In cooperation with the insurance commissioner, the Plan shall undertake a continuing education program with insurers, agents and consumers about the Plan’s insurance program and its availability. All insurers and agents shall cooperate fully in the continuing education program.

(19) Cooperation and authority of agents.

(a) Each insurer shall require its licensed agents to cooperate fully in the accomplishment of the intents and purposes of the plan.

(b) Licensed insurance agents may not act as agents for the Plan.

Bind coverage for the Plan.
Alter or change policies issued by the Plan.
Settle losses of the Plan.
Act on behalf of the Plan or commit the Plan to any course of action.

(d) Insurance agents shall assist applicants who need to apply for coverage under the plan and shall submit applications that meet the requirements of sub. (9). Agents shall follow the rules and procedures of the Plan.

(20) Review by commissioner. The governing committee shall report to the commissioner the name of any insurer or agent which fails to comply with the provisions of the Plan or with any rules prescribed thereunder by the governing committee or to pay within 30 days any assessment levied.

(21) Indemnification. Each person serving on the governing committee or any of its subcommittees, each member of the Plan, and the manager and each officer and employee of the Plan shall be indemnified by the Plan against all cost, settlement, judgment, and expense actually and necessarily incurred by that person in connection with the defense of any action, suit, or proceeding in which that person is made a party by reason of that person being or having been a member of the governing committee, or a member or manager or officer or employee of the Plan except in relation to matters as to which that person has been judged in an action, suit, or proceeding to be liable by reason of willful misconduct in the performance of that person’s duties as a member of the governing committee, as a member, manager, officer or employee of the Plan. This indemnification shall not apply to any loss, cost or expense on insurance policy claims under the Plan. Indemnification under this section shall not be exclusive of other rights to which the member, manager, officer, or employee may be entitled as a matter of law.

(22) Effective date. This rule shall take effect as provided by s. 227.22, Stats., on the first day of the month following its publication in the register.

History

Cr. Register, December, 1969, No. 168, eff. 1-1-70; am. (3) (c) and (4) (b), cr. (4) (c), am. (5) (a) and (9) (a), renum. (9) (b) to be (c), and cr. (9) (b), am. (11) (a) 3. a. and c. and cr. 3. d, am. (15) (b) 2. and 4., Register, June, 1971, No. 186, 7-1-71; am. (3) (c) 3., Register, August, 1971, No. 188, eff. 9-1-71; emerg. am. (2), (3) (c) 1., 2., and 3., eff. 6-22-76; am. (2), (3) (c) 1., 2, and 3, Register, September, 1976, No. 249, eff. 10-1-76; am. (3) (c), (4) (b) and (23), Register, April, 1977, No. 256, eff. 5-1-77; am. (3) (h) 2., Register, May, 1978, No. 269, eff. 6-1-78; am. (6) and (23), Register, December, 1978, No. 276, eff. 1-1-79; am. (3) (c) 1., 2. and 3. and (6) (b) 1., Register, March, 1979, No. 279, eff. 4-1-79; am. (6) (b) 1., (7) (a) and (b), Register, May, 1979, No. 281, eff. 6-1-79; am. (6) (b) (intro.), Register, December, 1979, No. 288, eff. 1-1-80; am. (1), (2), (7) (e) and (g) and (19), r. (22) and (23), Register, April, 1981, No. 304, eff. 5-1-81; r. and recr., Register, August, 1983, No. 332, eff. 9-1-83; corrections in (10), (11) (14) and (22) made under 13.93 (2m) (b) 5. and 7., Stats., Register, April, 1992, No. 436; r. and recr. (16) (a) to (c), renum. (16) (d) to be (14) (e), Register, March, 1996, No. 483, eff. 4-1-96; am. (3) (a) 3., (b), (g), (4) (b), (c), (7) (a), (d), (e), (8) (b), (d), (9) (b), (c), (10) (e), (11) (a) (intro.), 3., (c), (e), (12) (b), (h), (13) (d), (14) (a) 2., 5., 6. 12., r. (3) (c) 2., 3., (8) (e), (10) (d), (13) (b), (14) (b) and (c), cr. (4) (d), (13) (f), (g), r. and recr. (18) and (19), Register, December, 1998, No. 516, eff. 1-1-99; correction in (19) made under s. 13.93 (2m) (b) 1., Stats., Register, February, 1999, No. 518; CR 18-097: am. (3) (a) (intro.), 1., r. (3) (a) 2., am. (4) (b), r. (4) (c), am. (4) (d), (6) (b) (intro.), 1., 3., (7) (a), (8) (c) Register August 2020 No. 776, eff. 9-1-20; correction in (3) (a) 1. made under s. 35.17, Stats., Register January 2021 No. 781.

Chapter Ins 5 ADMINISTRATIVE ACTIONS; RULES OF PROCEDURE FOR CONTESTED CASES

Subchapter I Scope; Definitions

Wis. Admin. Code § Ins 5.01 Purpose; applicability {#sec-ins-5.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.01}

(1) This chapter interprets subch. III of ch. 227, Stats., and ss. 102.31 (4), 153.78, 601.44 (6), and 601.62, Stats., and applies to administrative actions under the jurisdiction of the commissioner, and the PCF board.

(2) This chapter does not apply to rule-making hearings under subch. II of ch. 227, Stats.

(3) This chapter does not require a contested case proceeding before the issuance of a declaratory order under s. 601.41 (4) (b), Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; correction in (1) made under s. 13.92 (4) (b) 7., Stats., Register January 2011 No. 661; CR 18-092: am. (1) Register March 2020 No. 771, eff. 4-1-20.

Wis. Admin. Code § Ins 5.03 Definitions {#sec-ins-5.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.03}

In this chapter:

(1) “Commissioner” means the commissioner of insurance or the deputy commissioner of insurance acting under s. 601.11 (1) (b), Stats.

(2) “Contested case” has the meaning given in s. 227.01 (3), Stats.

(3) “Declaratory ruling” means an administrative decision by the commissioner or a board which, after a contested case proceeding, determines the applicability of a statute or rule enforced by the commissioner to any person, property or state of facts.

(4) “Hearing” means the trial of the issues in a contested case.

(6) “License” means any license, permit, approval, certificate of authority, certificate of registration or similar form of permission required by law and issued under chs. 601 to 655, Stats.

(7) “Office” means the office of the commissioner.

(8) “PCF board” means the board of governors of the Wisconsin health care liability insurance plan and patients compensation fund established under s. 619.04 (3), Stats.

(9) “Person” means a natural person, corporation, limited liability company, partnership, cooperative, association, trust, other business entity or government entity.

(10) “Subpoena” means a command to give testimony or provide evidence.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; correction in (5) made under s. 13.93 (2m) (b) 7., Stats., Register June 2005 No. 594; CR 18-092: r. (5) Register March 2020 No. 771, eff. 4-1-20.

Subchapter II Declaratory Ruling

Wis. Admin. Code § Ins 5.05 Petition for declaratory ruling {#sec-ins-5.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.05}

An interested person may file with the commissioner or a board a petition for a declaratory ruling under s. 227.41, Stats. The petition shall comply with s. 227.41 (2), Stats., and shall state how the petitioner may be affected by the statute or rule referenced in the petition.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.06 Response to petition {#sec-ins-5.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.06}

Within a reasonable time after a petition is filed under s. Ins 5.05, the commissioner or board shall grant or deny the petition. If the petition is granted, the commissioner or board shall initiate a contested case under s. 227.41 (1), Stats., by issuing a notice of hearing in the form specified in s. Ins 5.12. If the petition is denied, the commissioner or board shall issue a denial notice in writing, specifying the reason for the denial. The commissioner or board may permit the petitioner to amend the petition if it does not fully comply with s. 227.41 (2), Stats., or s. Ins 5.05.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Subchapter III Investigations; Orders Issued by Office; Form Filing Disapprovals

Wis. Admin. Code § Ins 5.07 Complaint; investigation {#sec-ins-5.07 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.07}

(1) Any person may file with the office a complaint about any person subject to regulation under ch. 153, Stats., or chs. 600 to 655, Stats.

(2) Based on a complaint under sub. (1) or other information available, the office may investigate to determine whether there is probable cause to take action against a person subject to regulation under ch. 153, Stats., or chs. 600 to 655, Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.08 Orders {#sec-ins-5.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.08}

(1) Issuance. If the office determines, based on its examination or investigation of a person regulated under ch. 153, Stats., or chs. 600 to 655, Stats., that there is probable cause to believe that a person has violated any provisions of those chapters, a rule promulgated under those chapters or an order under s. 601.41 (4) (a) and 601.63, 601.64 or 601.65, Stats., the office may issue an order under s. 153.78 or 601.41 (4) (a), Stats., or issue a notice of hearing under s. 601.62, Stats., and s. Ins 5.12, or both.

(2) Contents of order.

(a) An order under s. 153.78, Stats., or ss. 601.41 (4) (a) and 601.63, 601.64 or 601.65, Stats., shall be accompanied by notice of the right to a hearing under s. 601.62 (3) (a), Stats., shall be captioned as provided in s. Ins 5.17 (1) and shall include all of the following:

The identity and, if known, the address of each respondent to whom the order is directed.
A statement of the facts constituting the basis for the order.
A reference to each statute, rule or order which each respondent allegedly violated.
A description of what the order requires each respondent to do.
The signature and title of the designated employee of the office who issued the order.

(b) An order under s. 631.20 (4), Stats., disapproving a form filing shall be accompanied by notice of the right to a hearing under s. 601.62 (3) (a), Stats., and shall include all of the following:

An explanation of why the form was not approved.
A reference to each statute or administrative rule relied on for the disapproval.
The signature of the employee of the office issuing the disapproval.

(3) Summary orders.

(a) The office may issue any of the following:

A summary order under ss. 227.51 (3) and 628.10 (2) (b), Stats., suspending an intermediary agent’s license and ordering the agent to cease and desist from all activities of a licensed intermediary.
A summary order under s. 645.21 (2), Stats., or a seizure order under s. 645.23 (1), Stats., to an insurer.
A summary order under any other section of the statutes suspending a license issued by the office.

(b) A summary order shall take effect upon service under s. Ins 5.17 (3) or upon actual notice of the order to the respondent or the respondent’s attorney, whichever is sooner, and shall continue in effect until the effective date of the final decision and order in any contested case proceeding arising out of the order.

A finding either that the public health, safety or welfare requires emergency action or that irreparable harm to the property or business of the insurer or to the interests of its policyholders, creditors or the public may occur unless the summary order is issued.
A statement that the order is in effect and remains in effect until the effective date of the final decision and order in any contested case proceeding arising out of the order unless otherwise ordered by the commissioner.

(d) The office shall simultaneously serve a notice of hearing under s. Ins 5.12 with a summary order under this subsection.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; corrections in (1) and (2) (a) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register January 2011 No. 661.

Subchapter IV Adverse Decision of Office, Board, Plan, Fund or Council; Right to Hearing; Petition

Wis. Admin. Code § Ins 5.09 Right to hearing before commissioner {#sec-ins-5.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.09}

Any of the following may initiate a contested case proceeding before the commissioner by filing with the commissioner a petition meeting the requirements of s. Ins 5.11 within the time limit specified in the applicable statute or administrative rule:

(1) A person named as respondent in an order issued under s. Ins 5.08.

(2) An insurer whose form filing has been disapproved under s. 631.20, Stats.

(3) A person whose application for a license is denied.

(4) A person specified under s. 626.31 (4) (a), Stats., entitled to a review of an action or decision of the Wisconsin compensation rating bureau.

(5) An insurer entitled to a hearing under s. 102.31 (4), Stats., based on a recommendation of the department of workforce development.

(6) An applicant or policyholder who receives notice under s. Ins 4.10 (16) from the Wisconsin insurance plan of cancellation, nonrenewal, reduction in coverage or declination.

(7) An applicant, policyholder or insurer entitled under s. Ins 3.49 (3) (d) 1. to appeal a decision of the governing committee of the Wisconsin automobile insurance plan.

(8) A person who receives a forfeiture assessment from the office of health care information under s. 153.78, Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; correction in (5) made under s. 13.93 (2m) (b) 6., Stats., Register, June, 1997, No. 498; correction in (8) made under s. 13.92 (4) (b) 7., Stats., Register January 2011 No. 661.

Wis. Admin. Code § Ins 5.10 Right to hearing before PCF board {#sec-ins-5.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.10}

(1) Any of the following may initiate a contested case proceeding before the PCF board by filing with the board a petition meeting the requirements of s. Ins 5.11:

(a) A person adversely affected by a classification decision of the Wisconsin health care liability insurance plan or patients compensation fund under s. Ins 17.24 (3).

(b) A health care provider whose coverage under the Wisconsin health care liability insurance plan is cancelled or nonrenewed under s. Ins 17.25 (16).

(c) A health care provider entitled to a hearing under s. Ins 17.285 (9) (a) on a recommendation of the patients compensation fund peer review council.

(2) A health care provider is not entitled to a contested case proceeding to resolve an issue regarding coverage by the Wisconsin health care liability insurance plan, patients compensation fund or both. Any such issue shall be resolved by civil litigation.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.11 Petition; response; effect {#sec-ins-5.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.11}

(1) Contents.

(a) A petition for a hearing need not be in any particular form, but shall be in writing and shall include all of the following:

The name and address of the petitioner.
The date of the petition.
Any of the following:

a. The case number of the order that adversely affects the petitioner and an explanation of why the petitioner believes the order should be withdrawn or modified.

b. A statement of how the petitioner is adversely affected by a decision of the office, board, plan, fund or council, a reference to any legal deficiency in the decision and the date on which the petitioner received notice of the decision.

c. If the petition relates to a denial by the office of the petitioner’s application for a license, a statement of why the petitioner believes the denial should be modified or rescinded.

d. If the petition relates to a form filing disapproval, a statement of why the petitioner believes the form should be approved.

If an attorney will appear on behalf of the petitioner, the attorney’s name and address.

(2) Response. After receipt of a petition, the office shall take one of the following actions:

(a) Schedule the matter for hearing by issuing a notice of hearing under s. Ins 5.12.

(b) If the petition is not timely filed, notify the petitioner that the order is final because the petition was not filed within the specified time period.

(c) If the petition does not satisfy the requirements of sub. (1) (a), notify the petitioner that the order is final because of the inadequacy of the petition or, in the case of an unrepresented individual, refer the matter to the administrative law judge who shall notify the petitioner in writing what additional information is needed to complete or clarify the petition before the matter can be scheduled for hearing.

(d) If neither the commissioner, a board or an official or employee of the office designated by the commissioner or a board will act as administrative law judge, refer the petition to the person who will act as administrative law judge for appropriate action under pars. (a) to (c).

(3) Effect. A petition for a hearing on an order under ss. 601.41 (4) (a) and 601.63, Stats., does not stay or modify the order, but the administrative law judge may, upon a motion by the respondent, suspend the order as provided under s. 601.63 (4), Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Subchapter V Notice of Hearing Pleadings; Form and Filing of Documents

Wis. Admin. Code § Ins 5.12 Notice of hearing {#sec-ins-5.12 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.12}

(1) Form. The office or administrative law judge shall serve on each named party in a contested case a notice of hearing which shall include all of the following:

(a) The title, in the form prescribed in s. Ins 5.17 (1) (d), and the case number of the contested case.

(b) The name and address of each party. In the case of a person licensed by the office, the latest address on file with the office shall be conclusively presumed to be the person’s correct address.

(d) The name of the administrative law judge.

(e) The class of the contested case under s. 227.01 (3), Stats.

(f) The statutory authority under which the contested case will be conducted.

(g) The purpose of the hearing.

(h) The matter to be decided.

(i) The date, time and place scheduled for the hearing.

(j) If the hearing is a class 2 proceeding, the allegations in the form specified in sub. (2), or in the alternative, the notice of hearing may incorporate by reference an order under s. Ins 5.08.

(k) The date by which the respondent must submit an answer if an answer is required.

(L) The date the notice of hearing is issued.

(m) The signature of the attorney assigned to the contested case by the office, or the signature of the administrative law judge if no attorney is assigned by the office.

(n) A statement of the possible consequences of failing to answer or appear, as provided in s. Ins 5.21.

(2) Allegations.

(a) Except as provided in sub. (1) (j), each notice of hearing in a class 2 proceeding shall include allegations of the facts constituting the basis for the proceeding. If continuing conduct is alleged, the allegations shall state its general nature and the approximate time covered. If one or more individual incidents are alleged, each one shall be alleged with sufficient particularity to enable the respondent to deny, admit or defend it.

(b) Each notice of hearing shall specify the statute or rule alleged to have been violated by the conduct alleged.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.13 Answer {#sec-ins-5.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.13}

(1) Answer required. Each named respondent required to file an answer shall answer the notice of hearing by the specified time, unless additional time is allowed by stipulation of the parties or the administrative law judge, for good cause, allows a respondent additional time to answer or to amend the answer. The answer shall be signed by the respondent or by an attorney representing the respondent. If the respondent is a corporation, limited liability company, partnership, cooperative or other association, the answer may be signed by any of its officers or employees.

(2) Contents.

(a) An answer need not be in any particular form but shall include all of the following:

The case number designated in the notice of hearing.
The date of the answer.
A specific denial of each material allegation of fact or law which the respondent controverts. A denial shall meet the substance of the allegation denied. If the respondent intends in good faith to deny only a part or qualification of an allegation, the respondent shall admit as much of the allegation as is true and material and shall deny only the remainder.
If applicable, a statement that the respondent is without knowledge or information sufficient to form a belief as to the truth of a specified allegation. This statement has the effect of a denial.
A statement of any matter constituting a defense, affirmative defense or mitigation of the matter charged which the respondent wishes to have considered.

(b) Notwithstanding par. (a), the administrative law judge may accept a timely written communication from an unrepresented respondent as a sufficient answer, if the communication provides the administrative law judge with sufficient information to determine the matters specified under par. (a). If the answer is insufficient, the administrative law judge may order a respondent to file a sufficient answer within a specified time period.

(c) Each material allegation not controverted in an answer filed within the specified time shall be taken as true. Any new matter set forth under par. (a) 5. is deemed controverted without service of a reply.

(d) A respondent’s failure to raise an issue in an answer constitutes waiver of the issue, unless the administrative law judge allows the respondent to amend the answer under s. Ins 5.15 (2).

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.15 Amendment of pleadings {#sec-ins-5.15 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.15}

(1) Section 802.09 (1) to (4), Stats., applies in contested cases under this chapter.

(2) The administrative law judge may permit a party to amend an answer or pleading at any time during a contested case. The administrative law judge may deny a motion to amend if the amendment would unduly delay or disrupt the proceeding or would constitute a significant injustice to any party.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.17 Papers; identification; form; filing; service {#sec-ins-5.17 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.17}

(1) Papers captioned. Except as otherwise permitted by the administrative law judge, each party shall, to the extent practicable, caption each pleading, notice, motion, brief, stipulation, decision, order and other paper filed in a contested case with all of the following:

(a)

If the contested case arises under ch. Ins 17, the heading,“Board of the Patients Compensation Fund.”
In any other case, the heading, “Commissioner of Insurance.”

(b) The name of the paper.

(d) The title of the contested case in the form, “In the Matter of . . .” followed by one of the following:

The name and designation of the petitioner in a class 1 proceeding.
The name and designation of each respondent in a class 2 proceeding.
The name and designation of the petitioner and the name and designation of one of the following respondents in a class 3 proceeding:

a. The Wisconsin compensation rating bureau in a contested case arising under s. 626.31 (4), Stats., and s. Ins 5.09 (4) or s. 102.31 (4), Stats., and s. Ins 5.09 (5).

b. The Wisconsin insurance plan in a contested case arising under ss. Ins 4.10 (16) and 5.09 (6).

c. The Wisconsin automobile insurance plan in a contested case arising under ss. Ins 3.49 (3) (d) 1. and 5.09 (7).

d. The Wisconsin health care liability insurance plan, the patients compensation fund or both in a contested case arising under ss. Ins 5.10 (1) (a) or (c) and 17.24 (3).

e. The Wisconsin health care liability insurance plan in a contested case arising under ss. Ins 5.10 (1) (b) and 17.25 (16).

f. The patients compensation fund peer review council in a contested case arising under ss. Ins 5.10 (1) (c) and 17.285 (9).

(2) Form. Except as otherwise permitted or ordered by the administrative law judge, each paper filed shall comply with all of the following:

(a) It shall be printed or typewritten on only one side of 8-1/2 by 11 inch paper.

(b) It shall be signed by the party, by the party’s attorney or, if the party is a corporation, limited liability company, partnership, cooperative or other association, by any of its officers or employees. The name and mailing address shall be printed or typewritten immediately after the signature.

(3) Filing; service.

(a) Filing of a paper is complete upon its receipt by the office or the administrative law judge before 4:30 p.m. on any business day.

(b) Whenever a party files a paper in a contested case, that party shall, on the same date, serve a copy on every other party.

(c) By filing a paper in a contested case, the filing party certifies that he or she has served a copy on every other party as required by par. (b). No other affidavit of mailing or service is required.

(d) If any party claims not to have received a copy of any filed paper, an affidavit of mailing constitutes presumptive proof of service.

(e) Mailing by the office to a person regulated by the office at the latest mailing address the person has on file with the office constitutes presumptive proof of service.

(f) Section 801.14 (2), Stats., shall govern the method and completion of service of papers. Documents exceeding 15 pages in length may not be filed with the office or administrative law judge by facsimile transmission.

(g) Section 801.15 (5), Stats., does not apply to proceedings under this chapter.

(4) Copies to administrative law judge. If the office or a board, plan, fund or council is not a party to a contested case, each party shall furnish the administrative law judge with a copy of each paper served on the other parties except papers served in connection with discovery.

(5) Address. Unless otherwise ordered by the administrative law judge, the address for serving and filing documents with the office, the PCF Board or the administrative law judge is: Office of the Commissioner of Insurance Attn: Legal Unit, 101 E. Wilson St., P. O. Box 7873, Madison, WI 53703. Facsimile transmission number: 608-264-6228.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; correction in (5) made under s. 13.93 (2m) (b) 6., Stats., Register, February, 1999, No. 518; CR 04-131: am. (5) Register June 2005 No. 594, eff. 7-1-05; CR 09-022: am. (3) (e) Register August 2009 No. 644, eff. 9-1-09; CR 18-092: r. (1) (a) 2., am. (5) Register March 2020 No. 771, eff. 4-1-20; correction in (5) made under s. 13.92 (4) (b) 6., Stats., Register December 2024 No. 828.

Subchapter VI Administrative Law Judge Authority; Sanctions

Wis. Admin. Code § Ins 5.19 Administrative law judges {#sec-ins-5.19 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.19}

(1) Appointment. The commissioner, an official or employee of the office designated by the commissioner, an employee borrowed from another agency as provided in s. 227.46 (1) (intro.), Stats., or a person employed as a special project or limited-term employee by the office or appointed according to the terms of a contract to which the office is a party, shall act as administrative law judge for each contested case.

(2) Authority and duties. The administrative law judge may do any of the following:

(a) Require the parties to submit supplementary pleadings in order to clarify positions or issues.

(b) Consolidate proceedings and order the joinder of parties.

(d) Provide interpreters under s. 885.37 (3) (b) and (3m), Stats.

(e) Make procedural rulings and issue scheduling and other orders.

(f) Adjourn or postpone proceedings.

(g) Grant extensions of time to file papers.

(h) Issue subpoenas to compel the attendance of witnesses and the production of evidence.

(i) Regulate discovery proceedings and issue orders to compel or limit discovery.

(j) Hold prehearing conferences.

(k) Preside over and regulate the course of hearings.

(L) Administer oaths and affirmations.

(m) Receive evidence and make evidentiary rulings.

(n) Impose or recommend sanctions for disobedient parties.

(o) Require or permit parties to file written briefs and arguments.

(p) Supervise the compilation of the record.

(q) Order preparation of a written transcript of oral proceedings and supervise preparation of the transcript.

(r) Issue proposed decisions.

(s) Advise the final decision maker on final decisions and orders.

(t) Issue final decisions and orders if appointed as final decision maker by the commissioner or a board.

(u) Certify the contested case record to a circuit court, if necessary for a judicial review proceeding.

(v) Take any other action authorized by law.

(3) Limits of authority. The administrative law judge may not exercise any authority that is reserved to the final decision maker under this chapter, unless the commissioner or a board orders that the administrative law judge’s decision is the final decision.

(4) Impartiality.

(a) An administrative law judge shall withdraw from a contested case if he or she has a personal bias regarding the matter or another reason for disqualification that prevents him or her from acting in an impartial manner.

(b) A party filing a motion under s. 227.46 (6), Stats., to disqualify an administrative law judge in a class 2 or 3 proceeding shall include in an affidavit attached to the motion a description of each specific act or situation which the party believes demonstrates the administrative law judge’s personal bias or other basis for disqualification. The party shall also file a brief citing any applicable case law on which the party relies.

(c) A motion under par. (b) is timely if it is filed before the prehearing conference or within 10 days after the party acquires knowledge or, with reasonable diligence, should have acquired knowledge of facts allegedly demonstrating personal bias or other reason for disqualification of the administrative law judge.

(d) Failure to file a timely and sufficient affidavit under par. (b) constitutes a waiver of the right to object to the qualification of the administrative law judge.

(e) An administrative law judge is not disqualified solely because he or she is an employee of the office, or solely because the administrative law judge has presided over a case involving the same or related parties, facts or issues in the past.

(5) Ex parte communications. If an administrative law judge receives an ex parte communication which violates s. 227.50 (1), Stats., the administrative law judge shall deal with the ex parte communication as provided under s. 227.50 (2), Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.21 Failure to appear, answer or comply with administrative law judge’s order {#sec-ins-5.21 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.21}

(1) Failure to answer or appear.

(a) If a party other than due to excusable neglect, fails to file an answer by the date specified in the notice of hearing or fails to appear at the prehearing conference or fails to appear at the scheduled hearing, the administrative law judge shall promptly issue and serve a final decision finding the party in default, accepting the opposing party’s allegations as true and deciding the case based on those allegations. If proof of any fact is necessary for the administrative law judge to issue the decision the administrative law judge shall receive the proof.

(b) The administrative law judge may relieve a party from a default decision only if:

The party files a motion for relief within a reasonable time but not more than one year after the decision is mailed; and
The party establishes that the failure to file an answer or to appear was due to excusable neglect. For the purpose of this paragraph failure to receive a notice, pleading, decision, or other document in a proceeding is not a basis to establish excusable neglect if the notice, pleading, decision, or other document was mailed to the address of a licensee of the office at the address shown in the office records, to an address provided by the party in the course of the proceeding or to the address of an attorney representing the party. If the office does not have such an address, failure to receive the document does not establish excusable neglect if the document is mailed to an address the party represents to the public or otherwise as a business address.

(2) Sanctions against disobedient party. If a party fails to disclose witnesses or evidence under s. Ins 5.35, fails to comply with a subpoena, fails to make a required appearance, fails to respond to discovery or fails to comply with an order issued by the administrative law judge, the administrative law judge, on his or her own motion or on a motion by an opposing party, may by order do any of the following which the administrative law judge considers just in relation to the disobedient party’s failure:

(a) Disqualify the disobedient party from further participation in the proceedings.

(b) Stay further proceedings until the disobedient party cures the failure.

(d) Dismiss the proceeding, or any part of the proceeding, if the proceeding was initiated at the request of the disobedient party.

(e) Strike the pleadings of the disobedient party or render a decision accepting the opposing party’s allegations as true and decide the case based on the allegations, or both.

(f) Award expenses as provided under s. 804.12 (1) (c), (2) (b) or (3), Stats., against a party subject to an action brought by the office. Under this section, expenses cannot be awarded against the state or its agencies.

(g) Impose a forfeiture under s. 601.64, Stats., against a respondent subject to an action brought by the office for any violation of an order of the administrative law judge compelling discovery. An order compelling discovery issued by the administrative law judge to a respondent is an order under s. 601.41 (4), Stats. Under this section, a forfeiture cannot be imposed against the state or its agencies.

(3) Notice; opportunity to object.

(a) If an order under sub. (2) would constitute a final decision in the contested case, the administrative law judge shall issue the order as a proposed decision under s. Ins 5.43, giving the parties opportunity to object. An order dismissing any party, proceeding or cause of action is a final decision for purposes of s. 227.52, Stats.

(b) The final decision maker shall issue the final decision under s. Ins 5.45 after considering any objections to the proposed decision under s. Ins 5.43 (2).

(c) The final decision maker may order the hearing reopened if the party to whom the proposed decision is issued shows good cause for any failure described in sub. (2) (intro.).

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; CR 04-131: am. (1), (2) (intro.), cr. (2) (e) to (g) Register June 2005 No. 594, eff. 7-1-05.

Subchapter VII Motions; Subpoenas; Record; Miscellaneous Provisions

Wis. Admin. Code § Ins 5.23 Appearances {#sec-ins-5.23 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.23}

(1) A party may appear in person or by an attorney licensed to practice law in this state.

(2) Each party or person appearing for a party shall furnish his or her name and mailing address to the administrative law judge and shall promptly notify the administrative law judge of any change of address. The mailing address last furnished to the administrative law judge shall be conclusively presumed to be the correct address.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.25 Motions {#sec-ins-5.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.25}

(1) General. A person requesting an order from the administrative law judge shall make the request in the form of a motion which clearly describes the order sought and the grounds for granting it. A person may move the administrative law judge for any substantive or procedural order authorized by law, including any of the following:

(a) An order dismissing a party or case for lack of personal or subject matter jurisdiction. A motion to dismiss for lack of jurisdiction may be made at any point in the proceeding, but shall be made as soon as the basis for the motion becomes apparent to the moving party.

(b) An order dismissing a contested case before a hearing for failure to state a claim on which relief can be granted.

(c) An order granting summary judgment as to any issue or the entire matter under consideration. A motion for summary judgment shall be brought and decided in accordance with s. 802.08, Stats.

(2) Form of motion. Every motion, except the following, shall be submitted in writing with at least 7 calendar days’ notice to all parties, unless each nonmoving party waives the notice requirement:

(a) An oral motion made at a prehearing conference or hearing, unless the administrative law judge requires that the motion be submitted in writing.

(b) An oral motion for an extension of time to file a paper. An administrative law judge may rule on a motion under this paragraph on an ex parte basis. The administrative law judge shall notify every other party if the motion is granted.

(3) Written motions. A person filing a written motion shall comply with s. Ins 5.17 (1) to (5). A moving party offering any affidavit, brief or other document in support of a motion shall include a copy of each document with the motion unless the administrative law judge permits or orders otherwise.

(4) Motion hearing; notice.

(a) Except as provided in sub. (2) (b), the administrative law judge shall give all parties an opportunity to argue a motion, orally or in writing, before ruling on it. The administrative law judge shall notify all parties of any scheduled motion hearing.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; CR 04-131: cr. (1) (c) Register June 2005 No. 594, eff. 7-1-05.

Wis. Admin. Code § Ins 5.27 Subpoenas {#sec-ins-5.27 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.27}

(1) General. The administrative law judge or a party’s attorney of record may issue a subpoena in a contested case to compel the attendance of any witness or the production of relevant evidence. The person issuing the subpoena shall serve a copy on all other parties. Sections 814.67 and 885.06, Stats., govern the payment of witness fees and expenses.

(2) Request for subpoena. A party may request the administrative law judge to issue a subpoena on behalf of that party by submitting the proposed subpoena for the administrative law judge’s signature. The administrative law judge may not sign a blank subpoena form. The requesting party is responsible for serving the subpoena and for paying any service, witness and travel fees.

(3) Denial; limitations. The administrative law judge may limit the scope of a subpoena or deny a request for a subpoena if it appears to be unreasonable, oppressive, excessive in scope or unduly burdensome.

(4) Compliance. In addition to the sanctions provided under s. Ins 5.21, a person who fails to comply with a subpoena issued under this section may be compelled as provided under s. 885.12, Stats., and may be subject to administrative sanctions including, but not limited to, sanctions for a violation of an order issued under ss. 601.41 (4) and 601.42 (4), Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; CR 04-131: am. (4) Register June 2005 No. 594, eff. 7-1-05.

Wis. Admin. Code § Ins 5.29 Record of oral proceedings; transcripts {#sec-ins-5.29 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.29}

(1) Method of recording.

(a) The administrative law judge shall provide for a stenographic or electronic recording of oral proceedings in a contested case. Proceedings shall be electronically recorded unless a board is the final decision maker or the administrative law judge determines that a stenographic record is necessary, in which case, the office or administrative law judge shall provide for the stenographic record.

(b) Instead of an electronic recording of oral proceedings, any party may provide for a stenographic record at the party’s own expense. A party other than the office that provides for a stenographic record shall furnish the administrative law judge with the original and the attorney for the office, if any, with a copy of the transcript at no cost.

(2) Electronic recording; copies. If the administrative law judge makes an electronic recording of oral proceedings in a contested case, the administrative law judge shall furnish a copy of the recording to any party who requests a copy. The fee for an audio cassette recording is $10.00 per cassette or any part of a cassette, except as provided in sub. (4).

(3) Transcript.

(a)

The administrative law judge may order the preparation of a transcript from an electronic recording at the request of the parties or at the administrative law judge’s discretion.
If some or all parties agree that a transcript is needed, the administrative law judge shall furnish each party requesting a transcript with a copy of the prepared transcript. The parties requesting a transcript shall share the cost of preparation equally, except as provided in sub. (4).

(b) Any party, within 14 calendar days after the date the transcript is delivered or mailed, may file with the administrative law judge a written notice of any claimed error, and shall serve a copy of the notice on every other party. Any other party may contest the claimed error within 20 calendar days after the date the notice was mailed or delivered by notifying the administrative law judge and the other parties. The administrative law judge shall make a determination on the claim of error and shall notify all parties of any corrections.

(c) If the office prepares a written transcript for its own purposes, or at the request of any party for purposes of judicial review under s. 227.53, Stats., the office shall assume the cost of transcription. Any person may obtain a copy of the transcript by paying the office’s standard copying fee for public records.

(4) Copies for indigent parties. The office or administrative law judge shall furnish a free copy of the transcript, if one has been prepared, or of the electronic recording of proceedings to any party who submits a written motion and demonstrates to the administrative law judge’s satisfaction that the party has a legal need for it and cannot afford to purchase a copy. The request shall include the purpose for which the copy is needed.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.31 Proceedings open to public; exceptions {#sec-ins-5.31 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.31}

(1) Proceedings open. The public may attend the proceedings in every contested case except as provided in s. 601.44 (6) or 645.24 (1), Stats., or as otherwise ordered by the administrative law judge.

(2) Exceptions. Upon motion by any party, the administrative law judge may do any of the following by order:

(a) Prohibit the disclosure of information or restrict attendance at any portion of a proceeding if the administrative law judge determines that the order is necessary to prevent disclosure of a trade secret, as defined in s. 227.46 (7) (b), Stats., or other information which is protected by law from public disclosure.

(b) Exclude prospective witnesses from attending portions of a proceeding if the administrative law judge determines that the order will promote the interests of justice. Exclusionary orders shall conform to s. 906.15, Stats.

(c) Prohibit any person from further attendance at a proceeding if that person engages in disruptive behavior which inhibits the orderly conduct of the proceeding.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Subchapter VIII Prehearings; Hearing Procedure

Wis. Admin. Code § Ins 5.33 Prehearing conference {#sec-ins-5.33 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.33}

(1) Purposes. One or more prehearing conferences may be held to consider or determine any of the following:

(a) Possibilities for settling the case.

(b) The clarification of issues.

(d) The possibility of obtaining stipulations of fact, law or evidence that will avoid unnecessary arguments or offers of proof.

(e) The party having the burden of proof in the proceeding.

(f) The identification of witnesses and evidence for hearing.

(g) Limitations on the number of witnesses.

(h) The deadline for prefiling exhibits and prepared testimony under s. Ins 5.39 (5) (e).

(i) Prehearing motions and discovery requests.

(j) The need for an interpreter under s. 885.37 (3) (b), Stats.

(k) The scheduling of proceedings in the contested case, including the date, time and location of additional prehearing conferences, motion hearings and the hearing.

(L) The scheduling of any telephonic testimony that will be offered.

(m) Other matters which may aid the orderly consideration and disposition of the contested case.

(2) Memorandum. At the conclusion of a prehearing conference, the administrative law judge shall prepare a memorandum for the record under s. 227.44 (4) (b), Stats., which summarizes the action taken and the agreements reached at the conference. Agreements reached are binding on the parties throughout the proceeding, except as otherwise ordered by the administrative law judge. The administrative law judge may, in conjunction with the memorandum, issue any procedural orders necessary to implement the actions taken at the prehearing conference. Copies of the memorandum shall be served on all parties.

(3) Submission on briefs. If the parties agree, during or after a prehearing conference, that there is no dispute of material fact, the matter may be submitted to the administrative law judge on written stipulated facts and briefs, as provided in s. Ins 5.41.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; correction in (1) (j) made under s. 13.93 (2m) (b) 7., Stats., Register June 2005 No. 594.

Wis. Admin. Code § Ins 5.35 Discovery {#sec-ins-5.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.35}

(1) Class 2 contested cases. In a class 2 contested case, every party is entitled to discovery as provided in s. 227.45 (7), Stats., and ch. 804, Stats.

(2) Other contested cases. In a class 1 or class 3 contested case, the administrative law judge may by order authorize discovery by any party under s. 227.45 (7), Stats., and ch. 804, Stats. Except as provided in s. 227.45 (7) (a) to (d), Stats., the decision to grant or deny a discovery request in a class 1 or class 3 contested case is subject to the administrative law judge’s discretion. The administrative law judge may issue a discovery order in response to a motion by any party.

(3) Exchange of evidence and witness lists.

(a) Except as provided under par. (b), or unless the administrative law judge orders otherwise, each party in a contested case shall serve every other party with all of the following by the date ordered by the administrative law judge:

The name and address of every person whom the party intends to call as a witness at the hearing. Expert witnesses shall be identified as such.
A copy of every document which the party intends to offer as evidence at the hearing.
A description of each item of physical evidence which the party intends to offer as evidence at the hearing. Upon request by any other party, the party offering the physical evidence shall permit the requesting party to make reasonable inspection of the physical evidence before the hearing.

(b) Paragraph (a) does not apply to witnesses or evidence used solely to impeach witness testimony.

(c) After considering all of the following and any other relevant factors, the administrative law judge may exclude evidence offered by a party who, without showing good cause, fails to comply with par. (a):

The prejudice or surprise to the party against whom the evidence is offered and the ability of the party to cure any prejudice.
The extent to which waiver of the requirements of par. (a) would disrupt the orderly and efficient hearing of the contested case.
Bad faith or willfulness in failing to comply with par. (a).

(4) Protective orders. Upon motion by any party, and for good cause shown, the administrative law judge may issue a protective order under s. 804.01 (3), Stats., limiting discovery in any contested case, including a class 2 contested case.

(5) Order compelling discovery. If a person fails to respond to a discovery request under this section, the party seeking discovery may move the administrative law judge for an order compelling discovery. Upon motion by any party, the administrative law judge may issue an order compelling discovery under s. 804.12, Stats.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.37 Stipulations; settlement {#sec-ins-5.37 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.37}

(1) Stipulations. The parties may stipulate to any matter at issue in a contested case. The parties may submit a written stipulation signed by the parties to the administrative law judge who shall enter it in the record. During a proceeding, the administrative law judge, or any of the parties at the direction of the administrative law judge, shall dictate the contents of any oral stipulation for inclusion in the record.

(2) Settlement. At any time during a contested case proceeding, the parties may agree to settle the case. The parties shall notify the administrative law judge of the agreement to settle.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.39 Hearing {#sec-ins-5.39 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.39}

(1) Date, time and location.

(a) A hearing shall be held at the date, time and location specified in the notice of hearing under s. Ins 5.12, or at another date, time and location ordered by the administrative law judge. In rescheduling the date, time and location, the administrative law judge shall consider all of the following:

The location and convenience of office staff involved in the proceeding.
The location and convenience of witnesses.
The location and convenience of the parties.

(b) A hearing, or any portion of a hearing, may be held by telephone or video-conference if the administrative law judge determines that this method is justified for the convenience of any party or witness, and that no party is unfairly prejudiced by this method. The party calling a witness to testify by telephone or video-conference shall notify the administrative law judge before the hearing to allow for making the necessary arrangements and is responsible for providing the witness with a complete set of numbered copies of all exhibits.

(2) Opening hearing.

(a) The administrative law judge shall open the hearing with a concise statement of its scope and purpose and shall enter the appearances in the record. If the administrative law judge permits opening statements, they shall be limited to the following:

A brief summary or outline in clear and concise form of the evidence intended to be offered.
A statement of the ultimate legal points relied upon.

(b) Opening statements are optional with each party, and do not constitute evidence. The administrative law judge may limit the length of opening statements.

(3) Order of hearing; burden of proof.

(a) In a class 1 proceeding where the office has denied a license application, the office shall proceed first with the presentation of evidence. The petitioner has the burden of proving, by a preponderance of the evidence, that the denial should be modified or rescinded.

(b) In a class 2 proceeding, the office shall proceed first with the presentation of evidence and has the burden of proving its case by a preponderance of the evidence.

(c) In any case not governed by par. (a) or (b), the petitioner shall proceed first with the presentation of evidence unless the administrative law judge specifies a different order of proof to promote an orderly consideration of the contested case. The petitioner has the burden of proof unless the administrative law judge orders otherwise. The standard of proof shall be a preponderance of the evidence. The rules of civil procedure for actions in circuit court shall guide the administrative law judge in deciding the order of proof and the party having the burden of proof, if disputed.

(4) Witnesses.

(a) Oath or affirmation. The administrative law judge or court reporter, if one is present, shall administer an oath or affirmation to each witness, including a witness appearing by telephone or video-conference, before he or she testifies, as provided in s. 906.03, Stats.

(b) Examination of witnesses.

If the office is a party to the proceeding, an employee of the office designated by the commissioner to act as counsel for the office shall examine and cross-examine witnesses on behalf of the office.
A party or the party’s attorney on behalf of the party, may examine and cross-examine witnesses. Only one individual may examine or cross-examine a witness on behalf of a party except with permission from the administrative law judge.
The administrative law judge may examine any witness.

(c) Adverse witnesses. Any party may call as an adverse witness any other party, any officer, agent or employee of a party or any witness on behalf of a party, if permitted by the administrative law judge.

(d) Cross-examination. Cross-examination is not limited to matters covered on direct examination. The administrative law judge may limit cross-examination as necessary to avoid needless waste of time or undue harassment of witnesses.

(e) Limitation. The administrative law judge may limit the scope of redirect and recross-examination.

(f) Leading questions. Leading questions may not ordinarily be used in the direct examination of a witness, but may be used in cross-examination. A party may use leading questions in the direct examination of either of the following:

An opposing party, or an officer, agent or employee of an opposing party.
A witness who is hostile, unwilling, adverse or evasive, if the administrative law judge permits the use of leading questions in the examination of that witness.

(5) Evidence.

(a) Admissibility.

The receipt of testimony and other evidence in contested cases is governed by s. 227.45, Stats. The administrative law judge shall admit evidence that has reasonable probative value, but shall exclude evidence that is immaterial, irrelevant or unduly repetitious, or that lacks reasonable probative value. The administrative law judge may admit hearsay evidence and shall accord it as much weight as the administrative law judge considers warranted by the circumstances.
Evidence submitted at the hearing need not be limited to matters set forth in the pleadings. If variances occur, the pleadings shall be considered conformed to the evidence. The administrative law judge may grant a postponement if necessary to give a party adequate time to rebut the evidence involved in a variance.

(b) Objections; offers of proof.

If the administrative law judge sustains an objection to the admission of evidence, the party seeking to have the evidence admitted may make an offer of proof. The administrative law judge shall direct the form of the offer of proof.
Failure of a party to object on the record to the admission of any evidence is a waiver of the right to object.
Failure of a party to make an offer of proof is a waiver of the right to object to the administrative law judge’s ruling on the objection.
The administrative law judge may order the parties to brief any objection. If the party making the objection fails to brief it, the objection is waived.

(c) Documents. Documentary exhibits shall, as far as practicable, be on 8-1/2 by 11 inch paper, unless the administrative law judge permits otherwise or unless the document is a form printed on 8-1/2 by 14 inch paper. The administrative law judge may order charts used as exhibits to be reduced to 8-1/2 by 11 inch copies.

(d) Copies. The administrative law judge may permit the filing or use of a copy in place of any original document, subject to authentication by the proponent if its authenticity is challenged in a prehearing motion.

(e) Prefiled exhibits and prepared testimony. The administrative law judge may permit or order the parties to submit evidence in the form of documentary exhibits or prepared testimony or both before the hearing. The administrative law judge shall specify the date by which the evidence shall be submitted, in order to allow the parties reasonable time for review. Exhibits and testimony submitted under this paragraph shall be admitted in evidence as though given orally if the author is present and available for cross-examination.

(f) Technical data. If evidence consists of technical data that would make oral presentation difficult to follow, or if information can be more effectively presented visually, it may be presented in exhibit form and supplemented and explained by oral testimony.

(g) Use of depositions.

Section 804.07, Stats., governs the use of depositions.
The parties may stipulate to the admission of a deposition in addition to those required to be admitted under s. 227.45 (7), Stats.

(h) Additional evidence. At the hearing, the administrative law judge may order or the parties may stipulate to the admission of additional documentary evidence after the close of testimony. The administrative law judge shall keep the record open until the additional evidence is filed or the specified time for filing it has expired without its being filed. The administrative law judge may, at the request of the stipulating parties, extend the time for filing the additional evidence.

(6) Off-the-record discussions. During a hearing, the administrative law judge may permit discussions off the record. If the administrative law judge decides that a discussion off the record is relevant, he or she may summarize it on the record or require the parties to discuss the matter on the record.

(7) Postponement; adjournment. The administrative law judge may, for good cause and after consideration of the potential hardship to other parties, grant a postponement or adjourn a hearing.

(8) Reopening. After the record is closed, no further evidence shall be added to the record except by order of the administrative law judge. The administrative law judge may reopen the record to take further evidence if a party moves for reopening and shows to the administrative law judge’s satisfaction that there is evidence that could not reasonably have been discovered before the record was closed and that it should be admitted in the interest of justice, or that documentary evidence used at the hearing was inadvertently omitted. The administrative law judge may, on his or her own motion, reopen a hearing to take additional testimony or admit additional documentary evidence.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.40 Costs to prevailing party {#sec-ins-5.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.40}

(1) Motion.

(a) An individual or small business or small nonprofit corporation, as defined in s. 227.485 (2) (c) and (d), Stats., that believes it may be entitled to costs under s. 227.485 (3), Stats., may make a motion for costs as provided in par. (b), (c) or (d). The motion shall include proof that the party is eligible for an award of costs under s. 227.485 (7), Stats.

(b) If a hearing is held, a party believing that it may prevail shall make a motion for costs, if any, before the close of the hearing. The moving party and the attorney representing the office in a class 2 proceeding or the office, board, plan, fund or council in a class 1 or class 3 proceeding shall include arguments on the motion in the briefs ordered by the administrative law judge.

(c) If the matter is submitted to the administrative law judge on briefs without a hearing, a party believing that it may prevail shall file a motion for costs, if any, at the time the parties agree to submit the matter on briefs or within a reasonable time thereafter as permitted by the administrative law judge, but not later than the due date of the party’s brief. The moving party and the attorney representing the office in a class 2 proceeding or the office, board, plan, fund or council in a class 1 or class 3 proceeding shall include arguments on the motion in the briefs ordered by the administrative law judge.

(d)

If the matter is finally disposed of other than by a decision under s. Ins 5.45, the prevailing party shall file a motion for costs, if any, and a brief in support of the motion within 30 calendar days after receiving notice of the final disposition, except that if the parties settle the matter by stipulation, a prevailing party may not file a motion for costs unless the stipulation expressly authorizes the party to do so.
The attorney representing the office in a class 2 proceeding or the office, board, plan, fund or council in a class 1 or class 3 proceeding shall file a brief in opposition to the motion within 30 calendar days after the deadline for filing under subd. 1.

(2) Proposed decision on motion.

(a) If the motion for costs is filed under sub. (1) (b) or (c), the administrative law judge shall decide the motion as part of the proposed decision under s. Ins 5.43. Even if the administrative law judge is the final decision maker in the matter, the decision on the motion for costs shall be issued as a proposed decision.

(b) If the motion for costs is filed under sub. (1) (d), the administrative law judge shall issue a proposed decision on the motion under s. Ins 5.43.

(3) Procedure for determining costs.

(a) Documentation. If the administrative law judge recommends that the prevailing party be awarded costs, the prevailing party shall, within 30 calendar days after service of the proposed decision under sub. (2), submit documentation of all of the following to the administrative law judge and to the office, board, plan, fund or council:

The number of hours for which compensation is sought, itemized according to the work performed, the dates it was performed and the identity of the individual performing the work.
The hourly rate customarily charged by each individual for whom compensation is sought and, if compensation in excess of $75 an hour for attorney fees is sought, justification for a higher rate as required under s. 814.245 (5) (a) 2., Stats.
Costs for which reimbursement is sought.

(b) Reply. Within 15 calendar days after the submission of documentation under par. (a), the attorney representing the office, board, plan, fund or council which is a party to the contested case may file a written response contesting any of the costs.

(c) Determination of costs. The administrative law judge shall determine the eligible costs as provided under s. 227.485 (5), Stats., and if the final decision maker awards costs, the amount awarded shall be included in the final decision.

(4) Final decision. If the final decision maker awards costs despite the administrative law judge’s recommendation to the contrary, the parties and the administrative law judge shall, after the final decision is issued, follow the procedure in sub. (3) within the specified time periods.

(5) Judicial review. A final decision awarding costs is subject to judicial review under s. 227.52, Stats. A party may seek judicial review of a final decision granting or denying an award of costs, regardless of whether the party petitions for judicial review of the final decision on the merits of the contested case.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.41 Arguments; briefing {#sec-ins-5.41 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.41}

(1) Filing.

(a) Unless the administrative law judge permits oral argument instead of briefing or determines that briefing is not necessary, each party shall file a written brief conforming to sub. (2) on the issues involved in the hearing. If a brief contains a summary of evidence or facts relied on, it shall, if possible, include references to specific exhibits or pages of the record containing the evidence. No new evidence may be attached to or referred to in a brief, other than evidence admitted under s. Ins 5.39 (8).

(b) The party having the burden of proof shall file the first brief, unless the parties stipulate to the simultaneous filing of briefs. The administrative law judge may permit or order the filing of reply briefs. Each party shall file its brief by the date specified by the administrative law judge, unless he or she grants an extension of the time for good cause shown. The administrative law judge may refuse to consider any brief that is not filed on a timely basis. The filing of a party’s brief before the specified date does not affect the deadlines for subsequent briefs.

(2) Format; length.

(a) The following standards apply to all briefs which shall:

Be printed or handwritten on only one side of 8-1/2 by 11 inch paper.
Be double spaced.
Have margins of not less than one inch on all sides.
If typewritten or typeset, have a typeface containing not less than 12 characters to the inch.

(b)

A party’s initial typewritten or typeset brief may not exceed 40 pages in length.
A party’s initial handwritten brief may not exceed 20,000 words or 50 pages in length.

(c)

A party’s subsequent typewritten or typeset brief may not exceed 10 pages in length.
A party’s subsequent handwritten brief may not exceed 4,000 words or 12 pages in length.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Subchapter IX Decisions

Wis. Admin. Code § Ins 5.43 Proposed decision {#sec-ins-5.43 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.43}

(1) Issued by administrative law judge. If the administrative law judge is not the final decision maker in a contested case, the administrative law judge shall prepare a proposed decision for consideration by the final decision maker. The proposed decision shall include proposed findings of fact, proposed conclusions of law, a recommended final order and the administrative law judge’s signed opinion explaining the proposed decision. The administrative law judge shall serve a copy of the proposed decision on each party.

(2) Objections by parties.

(a) Any party may file written objections to the administrative law judge’s proposed decision under sub. (1). Unless the final decision maker specifies a different time period, an objecting party shall file objections within 20 calendar days after service of the proposed decision and shall serve copies on the other parties. The objecting party shall identify the legal or factual grounds for each objection, and may file a written brief in support of the objections.

(b) Any other party may file a written response to the objections under par. (a) within 10 calendar days after the objections are filed.

Extend or limit the time for filing objections or responses to objections.
Permit the parties to make further oral or written arguments to the final decision maker.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 5.45 Final decision {#sec-ins-5.45 omnilex-key=us-wi-regs-official--agency-ins--Ins 5.45}

(1) Final decision maker.

(a) If the proceeding arises under ch. Ins 17 or a petition for a declaratory ruling under s. 619.04, Stats., or ch. 655, Stats., the PCF board shall be the final decision maker unless the PCF board directs that the administrative law judge’s decision shall be final.

(c) In any other case, the commissioner shall be the final decision maker unless the commissioner directs that the administrative law judge’s decision shall be final.

(2) Contents; notice of rights. The final decision maker, after considering any proposed decision and objections under s. Ins 5.43, shall issue the final decision in a contested case. The final decision shall include findings of fact, conclusions of law, an order, the notice required under s. 227.48, Stats., and a copy of the relevant statutory provisions. If the final decision varies from the administrative law judge’s proposed decision, the final decision shall explain the reasons for the variation.

(3) Administrative law judge as final decision maker. If the administrative law judge is designated as the final decision maker, the administrative law judge may issue a final decision under sub. (1) without first issuing a proposed decision under s. Ins 5.43, except as provided in s. Ins 5.21 (2).

(4) Parties for review.

(a) Each of the following, unless dismissed as a party by the administrative law judge, is a party under s. 227.47, Stats., for purposes of review under s. 227.53, Stats.:

The office, if it participated in the proceeding as a party.
The petitioner, if any.
Each respondent.
Any person permitted to intervene by the administrative law judge.

(b) The administrative law judge shall prepare a list of persons who are parties for purposes of review under s. 227.47, Stats., and shall include in the proposed decision the name and address of each person on the list. In determining the parties in addition to those specified in par. (a), the administrative law judge shall consider all of the following criteria:

The nature of the proceeding.
The persons affected by the decision and the extent of that effect.
The nature of the participation by those involved in the proceeding, including attendance at hearings, cross-examination of witnesses and submission of briefs.

(c) Each person listed as a party under par. (b) shall be served with the final decision and any posthearing motion or petition for rehearing, reopening or judicial review, submitted by any party after service of the final decision, and with any correspondence or other document directly related to the hearing or decision.

History

Cr. Register, March, 1996, No. 483, eff. 4-1-96; correction in (1) (b) made under s. 13.93 (2m) (b) 7., Stats., Register June 2005 No. 594; CR 17-015: r. (1) (b) Register December 2017 No. 744, eff. 1-1-18.

Chapter Ins 6 GENERAL

Wis. Admin. Code § Ins 6.01 Foreign company to operate 2 years before admission {#sec-ins-6.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.01}

Experience has demonstrated that until a company has engaged in the business of insurance for at least 2 years there is not a sufficient basis upon which to form a judgment as to whether its methods and practices in the conduct of its business are such as to safeguard the interests of its policyholders and the people of this state. Therefore, no application of a foreign insurance company or mutual benefit society for a license to transact business in Wisconsin will be considered until it has continuously transacted the business of insurance for at least 2 years immediately prior to the making of such application for license.

History

1-2-56.

Wis. Admin. Code § Ins 6.02 Company to transact a kind of insurance 2 years before admission {#sec-ins-6.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.02}

(1) Experience has demonstrated that until a company has engaged in a kind of insurance or in another kind of insurance of the same class for at least 2 years, there is not a sufficient basis upon which to form a judgment as to whether its methods and practices in the conduct of its business in such kind of insurance or another kind in the same class of insurance, are such as to safeguard the interests of its policyholders and the people of this state. Therefore, no application of a foreign insurance company or mutual benefit society for a license to transact a kind of insurance business in Wisconsin will be considered until it has continuously transacted that kind of insurance, or another kind of insurance in the same class of insurance as that for which it makes such application for at least 2 years immediately prior to making such application. For the purposes hereof, insurance is divided into kinds of insurance according to the provisions of s. Ins 6.75, each subsection setting forth a separate kind, and into classes of insurance upon the basis of and including the said kinds as follows:

(a) Fire insurance includes the kinds in s. Ins 6.75 (2) (a).

(b) Life insurance includes the kinds in s. Ins 6.75 (1) (a) and (b) but excluding all insurance on the health of persons other than that authorized in s. 627.06, Stats., and s. Ins 6.70.

(2) Provided, however, that nothing herein shall preclude consideration of an application to transact the kind of insurance in s. Ins 6.75 (1) (c) or (2) (c) if the applicant company has transacted any of the kinds of insurance in s. Ins 6.75 (1) (a) and (b) or (2) (d), (e), (k) and (n) continuously for 2 years immediately prior to the making of application for license to transact the kind of insurance in s. Ins 6.75 (1) (c) or (2) (c).

History

1-2-56; emerg. am. eff. 6-22-76; am. Register, September, 1976, No. 249, eff. 10-1-76; am. Register, March, 1979, No. 279, eff. 4-1-79; corrections made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1997, No. 498.

Wis. Admin. Code § Ins 6.03 Domestication of nondomestic insurer {#sec-ins-6.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.03}

(1) Purpose. Under s. 611.223 (1) (a), Stats., a nondomestic insurer may apply to the commissioner to become a domestic insurer. In accordance with s. 611.223 (1) (b), Stats., this section specifies the contents of the application needed from a nondomestic insurer to obtain a certificate of incorporation and certificate of authority to be a domestic insurer.

(2) Scope. This section applies to each nondomestic insurer which submits to the commissioner under s. 611.223 (1) (a), Stats., an application for a certificate of incorporation and a certificate of authority for domestic insurers.

(3) Required contents of the application. The application for a certificate of incorporation and a certificate of authority shall be filed in accordance with s. 611.223 (1) (a), Stats., and shall include the following information:

(a) Information on the corporation and officers and directors, including all of the following:

The names, and for the preceding 10 years all addresses and all occupations of all existing and proposed directors and officers;
Certified copies of the articles and bylaws of the corporation and of any proposed amendments thereto in conjunction with the change of domicile;
All agreements relating to the corporation to which any existing or proposed director or officer is a party;
The present and proposed compensation of existing and proposed directors and officers; and
The holding company information required in s. Ins 40.03 (3) if the insurer must report this information under s. 617.11 (1), Stats.

(b) The applicant’s plan for conducting the insurance business, including any proposed changes to the applicant’s current manner of conducting the insurance business, containing all of the following information:

A description of the geographical area in which the applicant conducts business;
The types of insurance the applicant writes;
The applicant’s marketing methods;
A summary of the applicant’s policies on reinsurance business ceded, including information regarding retentions, maximum risks, types of contracts such as pro rata, excess of loss, and any other information which may be material to this part of the applicant’s operation;
A summary of the applicant’s policies on assumed reinsurance including information regarding retentions, maximum risks, types of business, types of contracts to be issued, and other factors which may be material to this part of the applicant’s operations;
A brief summary of the applicant’s investment policy;
The applicant’s annual statements for the three most recent years and a projection of the anticipated operating results of the corporation at the end of the next five years of operation, based on reasonable assumptions of loss experience, premium and other income, operating expenses and acquisition costs; and
To the extent requested by the commissioner, the applicant’s method of establishing premium rates.

(c) A certificate from the authority which regulates the insurance industry in the applicant’s state of domicile, stating that the authority has given all requisite approvals and that the applicant’s corporation is in good standing with the authority and in compliance with the laws of the state of domicile; and

(d) Any other relevant information required by the commissioner from an applicant.

(4) Application material; fees.

(a) An insurer may obtain materials for application for a certificate of incorporation and certificate of authority by requesting them from the commissioner of insurance, P.O. Box 7873, Madison, Wisconsin 53707-7873.

(b) In accordance with s. 601.31 (1) (a), Stats., an insurer shall submit a $100 fee to the commissioner at the same time that the insurer submits the application for the certificates of incorporation and authority.

(5) Issuance of certificate.

(a) The commissioner shall issue within 180 days of receiving a completed application submitted in accordance with s. 611.223 (1) (a), Stats., a certificate of incorporation and a certificate of authority to the insurer submitting the application if the commissioner determines that the insurer satisfies the requirements of s. 611.223 (1) (a) 1. to 3., Stats. A failure by the commissioner to issue the certificate of incorporation and a certificate of authority within 180 days does not constitute acceptance of the application.

(b) In accordance with s. 601.31 (1) (b), Stats., an insurer shall submit a $100 fee to the commissioner upon issuance of the certificate of incorporation and certificate of authority.

History

Cr. Register, May, 1989, No. 401, eff. 6-1-89; correction in (3) (a) 5. made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530.

Wis. Admin. Code § Ins 6.05 Filing of insurance forms {#sec-ins-6.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.05}

(1) Purpose. This section interprets and implements ss. 601.42, 631.20, 631.22 and 631.61, Stats.

(2) Scope. The requirements of this section shall apply to forms subject to s. 631.01, Stats., for the lines of insurance listed in s. Ins 6.75, except s. Ins 6.75 (2) (b) and (k).

(3) Definitions.

(a) “Affiliated insurer” means an insurer which is a member or subscriber to a rate service organization licensed under s. 625.32, Stats., and which has authorized the rate service organization to file forms on its behalf.

(b) “Certificate of compliance and readability” means a document in substantially identical format to Appendix A which is signed by an officer of the insurer.

(c) “Certificate of readability” means a written statement signed by an officer of the insurer stating that the form is subject to s. Ins 6.07 and that the form meets the minimum standards set forth in that section.

(d) “OCI” means the office of the commissioner of insurance.

(e) “Submission” means a filing under s. 631.20, Stats., or any request received by the office of the commissioner of insurance for approval of a single form or combination of forms.

(f) “Transmittal document” means a document substantially identical in format to the form established by standards adopted by the National Association of Insurance Commissioners (NAIC), on which an insurer shall list information about each form submitted for approval.

Note: A copy of the transmittal document may be obtained at no cost from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison WI 53707-7873, or at the Office’s web address: oci.wi.gov.

(4) Filing procedure.

(a) Each paper submission of forms shall include all of the following:

A properly completed insurance transmittal document in duplicate.
A properly completed certificate of compliance and readability in substantially identical format as in Appendix A.
A filing letter that contains the following information:

a. In the case of a form that alters or replaces a previously approved form, a description of the change.

b. One copy of each form in final format exactly as it will be offered for issuance or delivery in the state of Wisconsin, except for hypothetical data and other appropriate variable material.

If a form contains variable material or language, a written description identifying the range of the variable material or language.
A second copy of each form, if the insurer requires an OCI stamped copy for its records.
A copy of the previously approved form clearly marked “for reference only” if the current form is to supercede the previously approved form.
If the submission of forms is filed by a third-party on behalf of an insurer, a letter from the insurer, authorizing the third-party to file forms on its behalf.
A self-addressed return envelope of sufficient size to return one copy of the materials in subds. 1. and 6., to the insurer.

(b) Each electronic submission of forms shall include all of the following:

All of the data elements on the transmittal document.
A properly completed certificate of compliance and readability in substantially identical format as in Appendix A.
A filing letter that contains all of the following information:

a. In the case of a form that alters or replaces a previously filed form, a description of the changes.

b. The form number and approval or filing date of any form superseded by the new form.

One copy of each form in final electronic format exactly as it will be offered for issuance or delivery in the state of Wisconsin, except for hypothetical data and other appropriate variable material.
If a form contains variable material or language, a written description identifying the range of the variable material or language.
A copy of the previously approved or filed form clearly marked “for reference only” if the current form is to supersede the previously approved or filed form.
If the submission of forms is filed by a third-party on behalf of an insurer, a letter from the insurer authorizing the third-party to file forms on its behalf.

(5) Insurer records. Each insurer shall maintain a file of all forms approved or filed under s. 631.20, Stats., for use in Wisconsin until all exposure on the risks insured against has terminated. The file is subject to examination and the commissioner may request that any portion of the file be available for review within ten days of a written request.

(6) Incomplete filing. The commissioner shall reject without further review any filing which does not include all of the items in sub. (4) (a) and (b).

(7) Penalty. Insurers violating the provision of this rule by using unapproved or unfiled forms shall be subject to the penalties in s. 601.64, Stats. Each form issued to an individual policyholder shall constitute a separate violation.

History

Cr. Register, July, 1958, No. 31, eff. 8-1-58; am. (3), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76; r. and recr. Register, November, 1977, No. 263, eff. 12-1-77; r. and recr. (4), Register, January, 1980, No. 289, eff. 2-1-80; am. (4) (a), (b) (intro.) and 7., Register, February, 1982, No. 314, eff. 3-1-82; cr. (4) (c) and (d), Register, July, 1982, No. 319, eff. 8-1-82; r. and recr. December, 1987, No. 384, eff. 1-1-88; r. (5), renum. (6) to (8) to be (5) to (7), Register, July, 1989, No. 403, eff. 8-1-89; CR 10-076: am. (3) (b), (4) (a) (intro.), 1. to 5., 8., 9., (5), (6), (7), renum. (3) (d), (e), (f) to be (3) (f), (d), (e) and am., renum. (4) (b) to be (4) (c), cr. (4) (b) Register January 2011 No. 661, eff. 2-1-11.

Wis. Admin. Code § Ins 6.06 Minimum documentation in support of rate filings {#sec-ins-6.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.06}

(1) Purpose. The purpose of this section is to establish the minimum supplementary rate information required to be submitted with rate filings to the commissioner. Statutes interpreted or implemented by this section are ss. 601.42 (1g), 625.01, 625.02 (3), and 625.11, Stats.

(2) Scope. Except as provided in sub. (4), any insurer or rate service organization which is subject to s. 625.13 (1), Stats., and is filing rates for any kind or line of direct insurance in this state shall include, in that filing, the supplementary rate information required by sub. (5) or (6).

(3) Definitions.

(a) A “frequency trend factor” means any factor which adjusts the past number of paid or incurred claims to reflect more accurately the number of claims that can be expected to develop during the period the proposed rates will be used.

(b) A “loss adjustment factor” means any factor used to modify or adjust the actual losses paid or incurred during the period under examination or review.

(c) A “loss development factor” means any factor used either to adjust the reported amount of incurred losses to include incurred but not reported losses or to correct errors in the estimation of loss reserves for reported claims that have not been paid, or both.

(d) A “premium adjustment factor” means any factor used to modify or adjust the actual premiums earned during the period under examination or review.

(e) A “rate level factor” means any factor that adjusts prior earned premiums to the premiums that would have been earned if the present rates had been in effect throughout the period under examination or review.

(f) A “severity trend factor” means any factor which adjusts the past average claim amount to reflect more accurately the average claim amount that can be expected to develop during the period the proposed rates will be used.

(4) Exemptions.

(a) Life and disability insurance as defined in s. Ins 6.75 (1), disability insurance as defined in s. Ins 6.75 (2) (c), title insurance as defined in s. Ins 6.75 (2) (h), mortgage guaranty insurance as defined in s. Ins 6.75 (2) (i), municipal bond insurance as defined in s. Ins 3.08 (3) (e), and worker’s compensation insurance as defined in s. Ins 6.75 (2) (k) are exempt from the provisions of this section.

(b) All companies licensed under ch. 612, Stats., are exempt from the provisions of this section.

(5) Supplemental rate information. A rate filing and accompanying supplemental rate information shall be appropriately organized for the kind, class or line of business for which the filing is being made. Except as provided in sub. (6), all rate filings shall include the following supplementary rate information:

(a)

At least 3 separate and consecutive years of both Wisconsin and aggregate of all states’ experience showing:

a. Premiums earned;

b. Losses paid;

c. Separate reserves for reported but unpaid losses; and

d. Reserves for losses incurred but not reported.

If any of the information required by subd. 1. is omitted or less than 3 years’ experience is provided, an explanation shall be submitted.

(b) An explanation of the rate-making procedures including a description of any statistical data and actuarial methods utilized; or a statement of facts and other detailed information which explain judgments used; or a statement as to how the rates of the filing company compare with those of the competition, providing detail where the rates are substantially higher or lower; or any combination.

(c) Explanation of the permissible or target loss ratio, including an explanation of how any investment income has been taken into account.

(d) When used, any premium adjustment factors and loss adjustment factors by year and an explanation of methods and judgments underlying each factor. Loss adjustment factors include but are not limited to loss development factors, frequency trend factors, and severity trend factors. Premium adjustment factors include but are not limited to rate level factors.

(6) Other supplemental rate information. The commissioner may accept supplemental information other than that required by sub. (5) if the insurer or rate service organization can demonstrate to the commissioner that this information fully supports the rate filing and complies with s. 625.11, Stats.

(7) Use of rate service organization rates. A member of or subscriber to a rate service organization licensed under s. 625.32, Stats., shall file supplementary rate information if its rates deviate from those filed on its behalf by the rate service organization. Such a filing shall be as required by subs. (5) and (6).

(8) Additional information. The commissioner may require additional rate filing information if the commissioner determines that the original filing does not explain the proposed rate. Such additional information shall be provided within 30 days of the request.

History

Cr. Register, March, 1988, No. 387, eff. 4-1-88; am. (5) (a) 1. intro. and (9), Register, November, 1988, No. 395, eff. 12-1-88; r. (9) and Appendix, Register, January, 1995, No. 469, eff. 2-1-95; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530.

Wis. Admin. Code § Ins 6.07 Insurance policy language simplification {#sec-ins-6.07 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.07}

(1) Purpose. The purpose of this rule is to establish minimum standards for legibility, coherence and understandability in consumer insurance policies delivered or issued for delivery in the state of Wisconsin on or after the effective dates stipulated in sub. (8). Sections of statutes interpreted or implemented by this rule are ss. 631.20 (2) (a) and 631.22, Stats.

(2) Scope. This rule shall apply to “consumer insurance policies”as defined in sub. (3) and not exempted under sub. (5).

(3) Definitions.

(a) In this section “consumer insurance policy”means a life, disability, property or casualty insurance policy, or a certificate or a substitute for a certificate for group life, disability, property or casualty insurance coverage, which is issued to a person for personal, family or household purpose and a copy of which is customarily, in the insurance industry, delivered or is required by law, rule or agreement to be delivered to the person obtaining insurance coverage.

(b) The term “text” as used in this section shall include all printed or electronic matter except the following:

The name and address of the insurer; the name, number or title of the consumer insurance policy; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and
Any such form language that is drafted to conform to the requirements of any federal law, regulation or agency interpretation; any form language required by any collectively bargained agreement; any medical terminology; any words which are defined in the form; and any form language required by state law or regulation; provided, however, the insurer identifies the language or terminology excepted by this subdivision and certifies, in writing to the commissioner, that the language or terminology is entitled to be excepted by this subdivision.

(4) Minimum standards.

(a) In addition to any other requirements of law, no consumer insurance policy, unless excepted under sub. (5), shall be delivered or issued for delivery in this state on or after the dates such forms must be approved under this section, unless:

The text achieves a minimum score of 50 for those policies labeled as Medicare supplement policies as defined by s. Ins 3.39 and a minimum score of 40 for all other policies included under this rule, on the Flesch reading ease test as described in par. (b), or an equivalent score on any other comparable test as provided in par. (c) or this subsection unless a lower score is authorized under sub. (7);
It is printed, except for specification pages, schedules and tables, in not less than 10 point type, one point leaded;
It is appropriately divided and captioned, presented in a meaningful sequence, and the style, arrangement and overall appearance of the policy enhance its understandability;
It contains a table of contents or an index of the principal sections of the policy if the policy contains more than 3,000 words or if the policy has more than 3 pages;
It contains a single section listing exclusions or the exclusions are listed within the form and given at least equal prominence including same type size;
It defines words and expressions which are not commonly understood, or whose commonly understood meaning is not intended;
Cross-referencing between sections of the policy is maintained at a minimum.

(b) For the purpose of this section, a Flesch reading ease test score shall be measured by the following method:

For consumer insurance policies containing 10,000 words or less of text, the entire form shall be analyzed. For such forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.
The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multiplied by a factor of 1.015.
The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of 84.6.
The sum of the figures computed under subds. 2. and 3. subtracted from 206.835 equals the Flesch reading ease score for the consumer insurance policy.
For purposes of subds. 2., 3., and 4., the following procedures shall be used:

a. A contraction, hyphenated word, or numbers and letters, when separated by spaces, shall be counted as one word;

b. A unit of words ending with a period, semicolon, or colon, but excluding headings and captions, shall be counted as a sentence; and

c. A syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. Where the dictionary shows 2 or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.

The title or name of a state or federal government organization or regulatory entity that is required to be used within the policy form may be excluded from the Flesch readability score.

(c) Any other reading test may be approved by the commissioner for use as an alternative to the Flesch reading ease test if it is comparable in result to the Flesch reading ease test.

(5) Exemptions. This section does not apply to:

(a) Any policy that is a security subject to federal jurisdiction;

(b) Any group policy; however, this shall not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;

(c) Any group annuity contract that serves as a funding vehicle for pension, profit-sharing or deferred compensation plans;

(d) Renewal policies whose terms are not altered in any way. Changes in premium, monetary limits or language required by federal and state laws and regulations adopted after the effective date of this rule are not alterations under this section.

(e) Any form used in exchange, pursuant to a contractual provision, for an individual life policy delivered or issued for delivery on a form approved prior to the date that the form must be approved under this section.

(6) Certification. Filings subject to this section shall be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score or stating that the score is lower than the minimum required but should be approved in accordance with sub. (7). The actual readability score for each form shall be stated in the cover letter or as a data element in an electronic filing and the insurer shall fully identify the method or computer program used to determine the readability score. To confirm the accuracy of any certification, the commissioner may require the submission of further information to verify the certification in question.

(7) Powers of the commissioner. The commissioner may authorize a lower score than the Flesch reading ease score required in sub. (4) (a) 1., whenever, at the sole discretion of the commissioner, it is found that a lower score: will provide a more accurate reflection of the understandability of a consumer insurance policy; is warranted by the nature of a particular form or type or class of such forms; or is caused by certain language which is drafted to conform to the requirements of any state law, rule or commissioner’s interpretation.

(8) Effective date.

(a) This section shall apply to the following consumer insurance policies no later than 6 months after December 1, 1980:

Private passenger automobile.
Homeowners,
Dwelling fire,
Individual disability excluding disability income,
Medicare supplement,
Individual life and annuity.

(b) This section shall apply to the following consumer insurance policies no later than 12 months after December 1, 1980.

Renewal policies with altered terms,
Group disability certificates,
Disability income,
All consumer insurance policies not included under pars. (a) and (c) of this subsection.

(c) This section shall apply to all Town Mutual insurers and also other insurers whose written premiums for the most recent calendar year did not exceed $500,000 statewide, no later than 18 months after December 1, 1980, regardless of the requirements under pars. (a) and (b).

(d) Any consumer insurance policy that has been approved prior to the effective date of this rule and meets the standards set by this rule need not be refiled for approval but may continue to be lawfully delivered or issued for delivery in this state upon the filing with the commissioner of a list of the forms and accompanied by a certificate for each form in the manner provided in sub. (6).

(e) The dates in pars. (a), (b), (c) and (d) may be extended at the commissioner’s sole discretion, but not beyond May 8th, 1982.

Note: The treatment of s. Ins 6.07 by CR 10-076 first apply to policies issued or renewed eight months following February 1, 2011.

History

Cr. Register, November, 1980, No. 299, eff. 12-1-80; CR 10-076: am. (3) (b) (intro.), 2., (4) (a) 5., (5) (a), (c), (6), (8) (d), r. and recr. (4) (a) 1., 2., cr. (4) (a) 8., (b) 6., (d), (9) Register January 2011 No. 661, eff. 2-1-11; EmR1101: eff. 2-9-11; CR 11-021: r. and recr. (4) (a) (intro.), 1., 2., 5., r. (4) (a) 8., (d), (9) Register August 2011 No. 668, eff. 9-1-11.

Wis. Admin. Code § Ins 6.08 Claimant representatives {#sec-ins-6.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.08}

(1) Purpose. This section provides limited regulatory guidelines concerning the activities of claimant representatives. This section also protects insurance consumers from practices that the commissioner finds to be unfair trade practices. The commissioner finds as unfair trade practices those practices in which a claimant representative requires property to be repaired by a specified repair facility or contractor for repairs, receives compensation for the referral of business to a repair facility or contractor for repairs, operates as a repair facility or contractor for repairs, participates in the insurance claim payments to a repair facility or contractor for repairs, fails to disclose to the consumer the method of compensation and fails to provide the consumer with copies of contracts entered into between the claimant representative and consumer. This section requires a claimant representative to disclose his or her method and manner of compensation to the consumer and prohibits a claimant representative from engaging in practices that create potential conflicts of interest. This section implements and interprets s. 628.34 (11) and (12), Stats. This section is in addition to, and does not affect, s. 757.30, Stats.

(2) Scope. This section applies to all claimant representatives transacting business in this state.

(3) Definitions. As used in this section:

(a) “Contractor for repairs” means the person, firm or corporation performing the repair work or furnishing the materials for the repair work, or both, for a building, dwelling or structure.

(b) “Claimant representative” means any person, except an attorney licensed to practice law in the state, who receives compensation from a claimant in exchange for representing or advising the claimant in negotiations for the settlement of a claim against an insurer arising out of the coverage provided by an insurance policy. A claimant representative does not include a person whose sole service to the claimant is to provide to the claimant an estimate or appraisal for repairs.

(c) “Repair facility” means the person, firm or corporation performing the repair work or furnishing the materials for the repair work, or both, for tangible personal property other than a building, dwelling or structure.

(4) Disclosure requirements.

(a) No claimant representative may accept compensation for performing services for or otherwise assisting a claimant with an insurance claim unless, prior to performing any services and prior to the claimant’s assuming any obligation to pay for adjusting services, the claimant representative clearly and conspicuously discloses and explains to the claimant in writing the method and manner of receiving and accounting for compensation for services performed.

(b) A claimant representative shall submit to the claimant a copy of any written contract entered into between the claimant representative and claimant within 5 working days after the contract is signed by the claimant. A claimant representative shall commit to writing any oral agreement entered into between the claimant representative and claimant and shall submit a copy of the writing to the claimant within 10 working days after the agreement is made.

(5) Prohibited practices.

(a) No claimant representative may require that repairs of property be performed by a specific repair facility or contractor for repairs.

(b) No claimant representative may receive any compensation from a repair facility or contractor for repairs for referring business to the repair facility or contractor for repairs.

(c) No claimant representative may operate as a repair facility or contractor for repairs or participate in any manner in the insurance claim payments to a repair facility or contractor for repairs.

History

Cr. Register, October, 1988, No. 394, eff. 11-1-88.

Wis. Admin. Code § Ins 6.09 Prohibited acts by captive agents of lending institutions and others {#sec-ins-6.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.09}

(1) Purpose. This rule implements and interprets applicable statutes, including but not limited to ch. 628, Stats., prohibiting concerted acts of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance as unfair methods of competition and as unfair or deceptive acts or practices in the business of insurance.

(2) Definitions.

(a) Agent. A natural person, other than a captive agent, holding a valid and current certificate of registration as an insurance agent and one or more valid and current licenses to represent one or more admitted insurers in the solicitation and sale of policies of insurance in this state.

(b) Borrower. Any person, firm, association, or corporation which obtains, other than in the regular course of its trade or business, a loan of money or credit from a lending institution on the security of real or personal property in return for a promise to repay the consideration at a time subsequent.

(c) Captive agent. An agent who is a director, officer, or employee of the lending institution which, in connection with a loan transaction, holds or acquires a security interest in real or personal property of a borrower.

(d) Lending institution. Any person, firm, association, or corporation, whether or not licensed or chartered by any agency of government, which in the regular course of business lends money or credit to a borrower on the security of real or personal property in return for the borrower’s promise to repay the consideration at a time subsequent.

(e) Policy of insurance. Any policy, certificate or memorandum of insurance affording in whole or in part any one or more of the kinds of insurance described, respectively, in any paragraph of s. Ins 6.75 (2).

(3) Declaration of policy.

(a) Every borrower in this state should be afforded a reasonable opportunity to purchase any policy of insurance, the form, content, and provisions of which have previously been approved by the office of the commissioner of insurance for use in this state, for the purpose of providing insurance coverage on real or personal property required by a lending institution to be placed in force by the borrower at the borrower’s expense to protect its security interest in such real or personal property.

(b) Every borrower in this state should be afforded a reasonable opportunity to purchase a policy of insurance, from any insurer and through any agent currently licensed by the office of the commissioner of insurance to issue or sell in this state, which is designed to protect and which affords protection for security interests in real or personal property and which is required by a lending institution to be placed in force by the borrower at the borrower’s expense for such purpose.

(c) At the minimum, every borrower in this state should be afforded the opportunity at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy affording adequate limits of insurance with respect to such property provided that such replacement policy has been approved for use in this state, and the insurer currently licensed by the office of the commissioner of insurance.

(4) Prohibited acts. Each of the following acts is declared to constitute the commission, by concerted action, of an act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance and is prohibited:

(a) Refusal to accept policy.

The solicitation or sale by a captive agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of such captive agent’s lending institution in real or personal property of the borrower if such lending institution has refused or then refuses to accept for such purpose the policy of any insurer licensed in this state, the form, content, and provisions of which have previously been approved as appropriate for the insurance of such security interest on the property of such borrower by the office of the commissioner of insurance for use in this state.
The solicitation or sale by an agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of any lending institution in real or personal property of such borrower if such agent knows or in the exercise of reasonable care should have known that such lending institution has refused or then refuses to accept for such purpose the policy of any insurer licensed in this state, the form, content, and provisions of which have previously been approved as appropriate for the insurance of such security interest on the property of such borrower by the office of the commissioner of insurance for use in this state.

(b) Restriction on replacement of existing policy.

The solicitation or sale by a captive agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of such captive agent’s lending institution in real or personal property of the borrower if such lending institution then imposes or enforces any requirement or condition, whether or not assented thereto by a borrower, which abrogates or otherwise penalizes or restricts the right of any borrower, exercisable at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy effectively to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy approved by the office of the commissioner of insurance which affords adequate limits of insurance with respect to such property.
The solicitation or sale by an agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of any lending institution in real or personal property of such borrower if such agent knows or in the exercise of reasonable care should have known that such lending institution then imposes or enforces any requirement or condition, whether or not assented to by a borrower, which abrogates or otherwise penalizes or restricts the right of any borrower, exercisable at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy effectively to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy approved by the office of the commissioner of insurance which affords adequate limits of insurance with respect to such property.

(5) Free choice of insurance; town mutual insurers.

(a) A person may not disapprove, under s. 628.34 (5), Stats., a policy of insurance issued by a town mutual insurer licensed in this state based wholly or partially on the ground that:

The insurer does not have an acceptable rating with a rating service or publication;
The policy of insurance is assessable; or
The financial condition of the insurer is unacceptable, unless the condition constitutes a violation of s. Ins 13.06 or 13.09.

(b) A person may disapprove a policy issued by a town mutual insurer based wholly or partially on the ground that it does not have a mortgagee clause in the form permitted under s. Ins 13.04 (7) (b).

(6) Nonapplication. The provisions of this rule shall not apply to renewal of any policy of insurance where the obligation of the borrower to procure insurance for the security interest of the lending institution accrued prior to the effective date of this rule.

History

Cr. Register, December, 1968, No. 156, eff. 1-1-69; am. (1), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (1) and (2) (e), eff. 6-22-76; am. (1) and (2) (e), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (e), Register, March, 1979, No. 279, eff. 4-1-79; renum. (5) to be (6), cr. (5), Register, May, 1986, No. 365, eff. 6-1-86.

Wis. Admin. Code § Ins 6.10 Property and casualty premium restrictions {#sec-ins-6.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.10}

(1) Purpose. This section requires insurers who may return a premium that is less than the pro rata unearned premium to disclose this to the insured. This section also establishes prohibitions concerning specified practices relating to premiums. This section implements and interprets ss. 227.10 (1), 601.01 (2), 625.13 (1), 628.34 (1), (3), (11), and (12), 631.20 and 631.36 (2), Stats.

(2) Scope. This section applies to all lines or classes of insurance classified as property and casualty insurance in s. Ins 6.75 (2), except lines or classes of insurance providing disability insurance under s. Ins 6.75 (2) (c) and (k).

(3) Definitions. In this section:

(a) “Pro rata unearned premium” means the pro rata portion of the written premium covering the unexpired portion of the policy term for which the written premium has been charged by the insurer to the policyholder.

(b) “Written premium” means the entire amount of premium charged a policyholder for the term of the policy.

(4) Premium in excess of pro rata earned premium: filing, restrictions, disclosures.

(a) An insurer shall file with the commissioner in accordance with s. 625.13, Stats., and s. Ins 6.06 any schedule of return premium applicable in the event of policy cancellation wherein the return of premium is less than the pro rata unearned premium for that policy form. The rate filing shall include the basis of the premium calculation in the event of a policy cancellation.

(b) Subject to par. (c), in any policy under which an insurer may return a premium that is less than the pro rata unearned premium, the insurer shall provide the policyholder with a separate written notice that the policyholder may pay a substantial penalty if the policyholder cancels the policy prior to its expiration date. No insurer may return a premium that is less than the pro rata unearned premium until at least 10 days after the insurer mails or delivers this written notice to the policyholder.

(c) Notwithstanding pars. (a) and (b), no insurer may return to the policyholder a premium that is less than the pro rata unearned premium if the insurer initiates cancellation or for a cancellation due to the nonpayment of premium.

(5) Miscellaneous premium prohibition. No insurer may initiate cancellation of one policy solely to apply the pro rata unearned premium of that policy to the balance due on another policy.

History

Cr. Register, August, 1989, No. 404, eff. 10-1-89; am. (2), Register, April, 1992, No. 436, eff. 5-1-92.

Wis. Admin. Code § Ins 6.11 Insurance claim settlement practices {#sec-ins-6.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.11}

(1) Purpose. This rule is to promote the fair and equitable treatment of policyholders, claimants and insurers by defining certain claim adjustment practices which are considered to be unfair methods and practices in the business of insurance. The rule implements and interprets applicable statutes including but not limited to ss. 601.04 (3), 601.01 (2), and 645.41 (3), Stats.

(2) Scope. This rule applies to the kinds of insurance identified in s. Ins 6.75, transacted by insurers as defined in s. 600.03 (27), Stats., and nonprofit service plans subject to ch. 613, Stats.

(3) Unfair claim settlement practices.

(a) Any of the following acts, if committed by any person without just cause and performed with such frequency as to indicate general business practice, shall constitute unfair methods and practices in the business of insurance:

Failure to promptly acknowledge pertinent communications with respect to claims arising under insurance policies.
Failure to initiate and conclude a claims investigation with all reasonable dispatch.
Failure to promptly provide necessary claims forms, instructions and reasonable assistance to insureds and claimants under its insurance policies.
Failure to attempt in good faith to effectuate fair and equitable settlement of claims submitted in which liability has become reasonably clear.
Failure upon request of a claimant, to promptly provide a reasonable explanation of the basis in the policy contract or applicable law for denial of a claim or for the offer of a compromise settlement.
Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.
Failure to affirm or deny coverage of claims within a reasonable time after proof of loss has been completed.
Failure to settle a claim under one portion of the policy coverage in order to influence a settlement under another portion of the policy coverage.
Except as may be otherwise provided in the policy contract, the failure to offer settlement under applicable first party coverage on the basis that responsibility for payment should be assumed by other persons or insurers.
Compelling insureds and claimants to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them.
Refusing payment of claims solely on the basis of the insured’s request to do so without making an independent evaluation of the insured’s liability based upon all available information.
Failure, where appropriate, to make use of arbitration procedures authorized or permitted under any insurance policy.
Adopting or making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.

(b) Any of the following acts committed by any person shall constitute unfair methods and practices in the business of insurance:

Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.
Failure to make provision for adequate claims handling personnel, systems and procedures to effectively service claims in this state incurred under insurance coverage issued or delivered in this state.
Failure to adopt reasonable standards for investigation of claims arising under its insurance policies.
Violating the requirements established in s. 632.85, Stats.

(4) Prompt defined. Except where a different period is specified by statute or rule and except for good cause shown, the terms “prompt” and “promptly” as used in this rule shall mean responsive action within 10 consecutive days from receipt of a communication concerning a claim.

(5) Penalty. The commission of any of the acts listed in sub. (3) (a) or (b) 2. or 3. shall subject the person to revocation of license to transact insurance in this state. Violations of this rule or any order issued thereunder shall subject the person violating the same to s. 601.64, Stats.

History

Cr. Register, October, 1971, No. 190, eff. 11-1-71; am. (1), Register, September, 1973, No. 213, eff. 10-1-73; am. (2), Register, February, 1974, No. 218, eff. 3-1-74; emerg. am. (2), eff. 6-22-76; am. (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436, eff. 5-1-92; cr. (3) (b) 4., Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 6.12 Qualification of actuaries {#sec-ins-6.12 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.12}

(1) Purpose.

(a) The purpose of this rule is to protect the interests of insurers, insureds, insurance beneficiaries, insurance claimants, insurance company stockholders, and trustees, employers, covered employees, retired employees and terminated employees of employee welfare funds by establishing requirements for use of the terms actuary or actuarial. This rule interprets and implements ss. 601.41, 601.42, 601.43, Stats., and ch. 628, Stats.

(b) It is not the purpose of this rule to require any insurer or rate service organization to employ an actuary except as may be otherwise required by statute or other administrative rule, nor does this rule require that filings under ch. 625, Stats., be prepared or submitted by a qualified actuary. Further, this rule is not intended to prohibit the strictly internal use by insurers of job titles containing the term actuary.

(2) Scope. This rule shall apply to all reports or representations subject to supervision by the commissioner of insurance.

(3) Signature as an actuary. No document filed with this office which requires the signature of an actuary will be accepted unless the person signing as an actuary is a member of the American academy of actuaries or has otherwise demonstrated actuarial competence to the commissioner.

(4) Actuarial representation. No person in any representation made to the public or to this office in respect to any matter subject to this rule shall use the word actuary or actuarial to indicate a degree of professional competence unless that person is a member of the American academy of actuaries or has otherwise demonstrated actuarial competence to the commissioner.

(5) Level of competency. No member of the American academy of actuaries or a person who has otherwise demonstrated actuarial competence to the commissioner shall use the word actuary or actuarial in any presentation subject to this rule unless he or she is qualified to give the actuarial advice required or requested.

(6) Penalty. Violations of this rule or any order issued thereunder shall subject the person to s. 601.64, Stats., or other applicable statute.

History

Cr. Register, October, 1971, No. 190, eff. 11-1-71; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (3) to (5) made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; corrections in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610.

Wis. Admin. Code § Ins 6.13 Open records; privileged or confidential records {#sec-ins-6.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.13}

(1) Records of the office of the commissioner of insurance are subject to subch. II of ch. 19, Stats., and are open to inspection as required under subch. II of ch. 19, Stats.

(2) The office of the commissioner may withhold and retain as confidential any record which may be withheld and retained as confidential under subch. II of ch. 19, Stats., including, but not limited to, a record which may be withheld or which is privileged under any law or the rules of evidence, as attorney-work product under the rules of civil procedure, as attorney-client privileged material under s. 905.03, Stats., as a medical record under ss. 146.81 to 146.84, Stats., or as privileged under s. 601.465, Stats.

(3) The office, under s. 601.465, Stats., may refuse to disclose and prevent any person from disclosing, in response to a request for production, deposition, subpoena, or otherwise, information obtained from the National Association of Insurance Commissioners or another state’s insurance department under pledge of confidentiality or for the purpose of conducting an investigation or examination or obtained, produced or created in the course of an inquiry under s. 601.42, Stats., or examination under s. 601.43, Stats. This privilege applies to information obtained, produced or created before or after the effective date of s. 601.465, Stats., and regardless of whether an inquiry, investigation or examination has been concluded, except it does not apply to a document which is an adopted examination report.

History

Cr. Register, June, 1973, No. 210, eff. 7-1-73; am. (3) (b), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (2) (a), (4) and (5), made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; r. and recr. Register, July, 1993, No. 451, eff. 8-1-93.

Wis. Admin. Code § Ins 6.17 Regulation of surplus lines insurance {#sec-ins-6.17 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.17}

(1) Purpose. This rule implements and interprets ss. 601.42, 601.72, 601.73, 618.41 and 618.43, Stats., for the purpose of facilitating the regulation of surplus lines insurance business in this state.

(2) Prohibited placement. No licensed surplus lines agent may place contracts of insurance with any unauthorized insurer:

(a) For the classes of insurance specified by s. Ins 6.75 (2) (h), (i) and (k), and

(b) For any kind of insurance not specifically authorized by any of the other paragraphs of s. Ins 6.75.

(3) Responsibilities of surplus lines agent. Every licensed surplus lines agent who procures surplus lines insurance shall:

(a) Forward promptly to the policyholder a completed copy of a Surplus Lines Insurance Proposal in a form substantially as in Appendix 1 to this rule.

(b) When applicable, forward promptly to the policyholder a notice that the unauthorized insurer with which the insurance is to be placed is not on the list of unauthorized nondomestic insurers which the commissioner believes to be reliable and solid, along with notice of any other deficiencies of the insurer of which the agent has knowledge.

(c) Keep in his or her office in this state a full and true record of each surplus lines insurance contract procured by him or her, evidenced by a copy of the daily report or other documents to show at least the following information:

Amount of the insurance and perils insured against;
Brief general description of property insured and where located;
Gross premium charged;
Return premium paid, if any;
Rate of premium charged upon the several items of property;
Effective date of the contract, and the terms thereof;
Name and post-office address of the insured;
Name and home office address of the insurer;
Amount collected from the insured; and
A copy of the notice required by par. (b).

(d) The record required by par. (d) shall be open at all times to examination by the commissioner without notice, and shall be so kept available and open to the commissioner for 3 years (5 years for notice required by par. (b)) next following the expiration or cancellation of the contract.

(4) Advertising by surplus lines agent. A surplus lines agent may advertise the availability of services in procuring, on behalf of persons seeking insurance, contracts with insurers not holding a certificate of authority in Wisconsin, but such advertisements shall not refer to any particular unauthorized insurer or insurers.

(5) Report and payment of tax-surplus lines insurance. All premium tax collected by the surplus lines agent shall be reported and forwarded to the commissioner on or before March 1, for all insurance procured, renewed or continued during the preceding calendar year with unauthorized insurers. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office’s website.

(6) Penalty. Any violation of this rule shall subject the agent to immediate revocation of the agent’s surplus lines license and to other forfeitures and penalties provided by s. 601.64, Stats.

Note: 2011 Wisconsin Act 224 changed the tax rate for surplus lines insurance which is ocean marine insurance to the same 3% rate for all other surplus lines insurance. Any previous reference to a ½ of 1% rate for ocean marine insurance in this rule is not enforceable as that insurance is now taxed at the same 3% rate for all surplus lines insurance.

History

Cr. Register, December, 1973, No. 216, eff. 1-1-74; am. (1), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (2) (a) and (b), eff. 6-22-76; am. (2) (a) and (b), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (a) and (b), Register, March, 1979, No. 279, eff. 4-1-79; r. (3) (c), renum. (3) (d) and (e) to be (3) (c) and (d), am. (4), (6) and appendix 1, Register, August, 1982, No. 320, eff. 9-1-82; corrections in (3) (c) (intro.) made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; CR 22-076: am. (5), r. appendix 2 Register July 2023 No. 811, eff. 8-1-23.

Wis. Admin. Code § Ins 6.18 Reporting and payment of tax by unauthorized insurers transacting business in violation of law {#sec-ins-6.18 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.18}

(1) Purpose. This rule implements and interprets ss. 601.42, 610.11 and 618.43, Stats., for the purpose of facilitating the reporting and collection of tax due the state of Wisconsin from unauthorized insurers transacting business in violation of Wisconsin law.

(2) Reporting and payment of tax by unauthorized insurers transacting business in violation of law. All premium tax shall be reported and forwarded to the commissioner on or before March 1, for all insurance which applies to exposures located wholly or partially within this state written, renewed or continued during the preceding calendar year by an unauthorized insurer. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office’s website.

(3) Penalty. Any violation of this rule shall subject the person violating the same to s. 601.64, Stats.

History

Cr. Register, December, 1973, No. 216, eff.1-1-74; CR 22-076: am. (2), r. appendix 1 Register July 2023 No. 811, eff. 8-1-23.

Wis. Admin. Code § Ins 6.19 Reporting and taxation of directly placed unauthorized insurance {#sec-ins-6.19 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.19}

(1) Purpose. This rule implements and interprets ss. 601.42, 618.42 and 618.43, Stats., for the purpose of facilitating the reporting and collection of tax due the state of Wisconsin from persons who directly procure or renew insurance in an unauthorized insurer.

(2) Reporting directly placed unauthorized insurance. The procurement or renewal of insurance from any unauthorized insurer shall be reported within 60 days to the commissioner on a form substantially the same as Appendix 1 to this rule.

(3) Reporting and payment of tax for directly placed unauthorized insurance. All premium tax shall be reported and forwarded to the commissioner on or before March 1, for all insurance which applies to exposures located wholly or partially within this state procured, renewed or continued during the preceding calendar year in an unauthorized insurer. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office’s website.

(4) Penalty. Any violation of this rule shall subject the person violating the same to s. 601.64, Stats.

Note: This report, pursuant to s. 618.42 (2), Stats., must be filed with the Commissioner of Insurance within 60 days after effectuation of any new or renewal insurance contract independently procured from an unauthorized insurer. A separate report is required for each new or renewal insurance contract. A 3% Tax on the premiums charged for such contracts during the calendar year ending December 31 must be paid to the Commissioner on or before March 1 next succeeding.

History

Cr. Register, December, 1973, No. 216, eff. 1-1-74; CR 22-076: am. (3), r. appendix 2 Register July 2023 No. 811, eff. 8-1-23.

Wis. Admin. Code § Ins 6.20 Investments of insurance companies {#sec-ins-6.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.20}

(1) Purpose. The purpose of this rule is to implement and interpret ch. 620, Stats., for the purpose of establishing procedures and requirements for investments of insurance companies.

(2) Scope. This rule shall apply to all insurers subject to ch. 620, Stats.

(3) Definitions. As used in this rule:

(am) “Derivative instrument” has the meaning contained in the accounting practices and procedures manual of the national association of insurance commissioners. “Derivative instrument” includes derivatives embedded within an investment.

(e) “Fixed charges” includes interest on all debt, and amortization of debt discount.

(ee) “Foreign country” means any country other than the United States and Canada.

(em) “Foreign government” means any governmental unit or instrumentality that is not in the United States or Canada.

(es) “Foreign issuer” means any issuer that is not domiciled in the United States or Canada and is not a foreign government. An issuer domiciled in the United States or Canada shall be deemed a foreign issuer when the issuer is a shell business entity or special purpose vehicle, unless the investment is assumed, accepted, guaranteed, insured or otherwise backed by an entity domiciled in the United States or Canada that is not a shell business entity or special purpose vehicle.

(f) “Money market mutual fund” means a fund that meets the conditions of 17 Code of Federal Regulations Par. 270.2a-7, under the Investment Company Act of 1940 (15 USC 80a-1 et seq.), as amended or renumbered.

(g) “Net earnings available for fixed charges” means income after allowance for operating and maintenance expenses, depreciation and depletion, and taxes other than federal and state income taxes, but without allowance for extraordinary nonrecurring items of income or expense appearing in the regular financial statements of the issuing company. If the issuing company has acquired, prior to the date of investment, substantially all the assets of another company by purchase, merger, consolidation or otherwise, the net earnings available for fixed charges of the other company for the portion of the test period that preceded acquisition may be included in accordance with a consolidated earnings statement covering the period.

(h) “Net earnings available for fixed charges and dividends” shall be determined in the same manner as “net earnings available for fixed charges” but after allowance for federal and state income taxes.

(hg) “Nationally Recognized Statistical Rating Organization” or “NRSRO” means a credit rating agency registered with the U.S. securities and exchange commission, pursuant to the Credit Rating Agency Reform Act of 2006, as amended.

(hr) “No-load mutual fund” means a mutual fund whose shares are sold without any sales charges, or commissions, including sales compensation that is on an immediate or deferred basis or in some combination of immediate and deferred compensation. No-load mutual funds may impose fees for redemption, exchange, distribution, marketing, or other purposes unrelated to sales charges or commissions.

(i) “Preferred dividend requirements” include dividends at the maximum prescribed rate on all stock ranking as to dividends on parity with or prior to that being acquired, whether or not the dividends are cumulative.

(k) “Real estate” or “real property” includes leaseholds.

(L) “Repurchase transaction” means a transaction in which an insurer purchases securities from a business entity which is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period or upon demand.

(4) General limitations on restricted insurers. No insurer restricted under s. 620.03, Stats., may invest in any of the following classes of assets, unless prior permission is granted by the commissioner:

(a) Any securities of an issuer who has defaulted on any payment on any debt security within the previous 5 years.

(b) Any asset under s. 620.22 (9), Stats.

(5) Special limitations pertaining to a restricted insurer other than a town mutual insurer. An insurer that is restricted under s. 620.03, Stats., and is not a town mutual insurer shall not invest in any of the following investments:

(a) Bonds or evidences of indebtedness. An insurer shall not invest in bonds or evidences of indebtedness described in s. 620.22 (1), Stats., unless the bonds or evidences of indebtedness are lawfully authorized and have at least one of the following characteristics:

At the time of purchase have a 1 or 2 designation by the national association of insurance commissioners, or an equivalent rating by a NRSRO.
The bonds or evidences of indebtedness are of a municipally owned public utility of this state created pursuant to section 3 of article XI of the constitution, and the net book value of the property pledged as security for the bonds has been established or approved by the public service commission, and the total issue of the bonds does not exceed 50% of the net book value of such property.
Principal and interest are payable from revenues of a public utility or railroad owned by or held for the benefit of any governmental unit in the United States or Canada, if they are adequately secured by mortgage or lien on property or by specific pledge or revenues, and lawful authorizing resolutions or ordinance of the governing body of the unit require that during the life of the bond or evidence of indebtedness the rates, fees, tolls or charges together with any other revenues pledged shall at all times produce revenues sufficient to pay all expenses of operation and maintenance, interest as promised and the principal sum when due.
The bonds or evidences of indebtedness are of public utilities in the United States or Canada and are either adequately secured by mortgage, pledge or other collateral, or have had net earnings available for fixed charges that for the previous 3 fiscal years have averaged per year not less than 1 1/2 times the average annual fixed charges.
The bonds or evidences of indebtedness are of a United States or Canadian private corporation, and they are either adequately secured by mortgage, pledge or other collateral, or are issued by a corporation which has had net earnings available for fixed charges that have averaged for the previous 5 years, and equaled for each of the previous 2 years an annual amount which exceeded average annual fixed charges by at least 50%, or 25% in the case of corporations engaged primarily in wholesale or retail merchandising, installment, commercial and consumer financing, factoring or small loan business.

(b) Equipment securities. In equipment securities or in certificates of an equipment trust under sub. (8) (b) unless the obligor’s net earnings have averaged at least 2 times its average annual fixed charges for the previous 3 years.

On the security of encumbered property, but property shall not be deemed encumbered because of unpaid but not delinquent assessments and taxes, mineral, oil or timber rights, easements for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, with or without a reversionary clause, or leases under which rents or profits are reserved to the owner;
In excess of 2/3 of the fair market value, including buildings covered by the mortgage. If the value of buildings constitute part of the security, the buildings must be insured adequately to protect the insurer’s security interest. The 2/3 limitation shall not apply to any loan fully insured by a federal insurance corporation; nor
On the security of a leasehold interest in real property unless it is unencumbered except by rentals owed to the owner of the fee, has at least 25 years yet to run, and then for no more than 50% of the fair market value of the leasehold less the present value of all rentals due upon it to the owner of the fee.

(d) Preferred shares. In preferred shares unless the issuing company has had, disregarding fixed charges on indebtedness and dividend requirements on preferred stock for the retirement of which provision has been made at the date of the investment, net earnings:

Available for fixed charges and dividends that during the previous 5 fiscal years have averaged not less than twice the sum of the fixed charges, maximum contingent interest and preferred dividend requirements of the issuing company; or
Available for fixed charges and dividends that for each of the previous 3 fiscal years have been not less than 1 1/2 times the sum of the fixed charges, maximum contingent interest and preferred dividend requirements of the issuing company; or
Available to meet preferred dividend requirements of the previous 5 years, after allowance for fixed charges and federal and state income taxes, that have averaged not less than 3 times the preferred dividend requirements.

(e) Common stock. In common stock except:

In accordance with a plan of acquisition proposed by the insurer and approved by the commissioner; and
In common stocks which are authorized securities for NASDAQ, the automated quotation system of the National Association of Securities Dealers.

(f) Real property. In any investment under s. 620.22 (4) or (5), Stats., except with prior written approval of the commissioner.

(g) Limitations on amount of investment.

Except as permitted under subd. 2., more than 3% of assets in securities of any single issuer unless it obtains the prior written permission of the commissioner or unless the investment is in securities of the government of the United States or its instrumentalities or in securities guaranteed by the full faith and credit of the United States; or
More than 10% of assets in the securities of one state, of one instrumentality of a state, or of one governmental unit of a state.

(6) Town mutual insurance companies.

(a) Status as a restricted insurer. Town mutual insurance companies authorized to operate under the provisions of ch. 612, Stats., are restricted insurers and are subject to the restrictions of ss. 612.36 and 620.03 (1), Stats., sub. (4) and other applicable provisions of this section. The commissioner may grant exemptions under s. 620.03 (2), Stats.

(b) Permitted investments. Except as permitted by pars. (c), (d) and (e), a town mutual insurer may only invest in one or more of the following:

Treasury bonds, treasury notes, treasury bills or any other direct obligations of the United States government or agencies or instrumentalities of the United States government with a final maturity 15 years or less, except that no part of the amount determined under this paragraph shall be invested in zero coupon bonds or collateralized mortgage obligations.
Demand deposit, interest bearing accounts and certificates of deposit in financial institutions, including banks, savings and loan associations and credit unions, except that the amount of an insurer’s investment with each such financial institution shall be limited to the total amount eligible for insurance under the financial institution’s depositor insurance program.
Bonds of any United State or Canadian corporation that at the time of purchase have a 1 or 2 designation by the national association of insurance commissioners, or an equivalent rating by a NRSRO, except that no part of the amount determined under this paragraph shall be invested in zero coupon bonds, collateralized mortgage obligations, payment in kind bonds, or bonds with a final maturity of more than 15 years.
Bonds of any United States municipality that at the time of purchase have a 1 or 2 designation by the national association of insurance commissioners or an equivalent rating by a NRSRO, with a final maturity of 15 years or less, except that no amount shall be invested in zero coupon bonds.
No more than an aggregate of 5% of assets in cumulative dividend preferred stock of any United States or Canadian corporation that at the time of purchase has a 1 or 2 designation by the national association of insurance commissioners, or an equivalent rating by a NRSRO.

5g. Shares in no-load mutual funds, provided that all of the following requirements are met:

a. Each no-load mutual fund shall have an expense ratio, including any fees for marketing or distribution, of 1.20% or less.

b. Each no-load mutual fund shall have as a stated investment objective, as disclosed in its prospectus, an intent to invest 80% or more of its assets under management in bonds of any direct obligations of the United States government or agencies or instrumentalities of the United States government, any United States or Canadian corporation, or any United States municipality, that, at the time of purchase, have a 1 or 2 designation by the national association of insurance commissioners, or an equivalent rating by a NRSRO.

c. Each no-load mutual fund shall have an intent, as stated in its prospectus, to maintain a weighted average maturity of 8 years or less.

d. Each no-load mutual fund investment must be carried at the fair market value on the annual statement filed with the commissioner.

e. Each town mutual insurer shall file a prospectus of each fund purchased in accordance with this paragraph with the commissioner no later than February 15 of the year immediately following the year the purchase was made.

5r. Shares of exchange-traded funds, provided that all of the following requirements are met:

a. Each exchange-traded fund shall have an expense ratio, including any fees for marketing or distribution, of 1.20% or less.

b. Each exchange-traded fund shall have as a stated investment objective, as disclosed in its prospectus, an intent to invest 80% or more of its assets under management in bonds of any direct obligations of the United States government or agencies or instrumentalities of the United States government, any United States or Canadian corporation or any United States municipality, that, at the time of purchase, have a 1 or 2 designation by the national association of insurance commissioners, or equivalent ratings by a NRSRO.

c. Each exchange-traded fund shall have an intent, as stated in its prospectus, to maintain a weighted average maturity of 8 years or less.

d. Each exchange-traded fund investment shall be carried at the fair market value on the annual statement filed with the commissioner.

e. Each town mutual insurer shall file a prospectus of each fund purchased in accordance with this paragraph with the commissioner no later no later than February 15 of the year immediately following the year the purchase was made.

Shares in money market mutual funds.

(c) Minimum expected assets. A town mutual insurer may invest in assets permitted under par. (d) only if, on December 31 of the preceding year, its assets invested in accordance with par. (b) were in an amount at least equal to the sum of its liabilities plus the greatest of the following:

100% of the net written premiums and assessments for the 12-month period ending December 31.
33% of the direct written premiums and assessments for the 12-month period ending December 31.
$300,000.

(d) Permitted investments for assets in excess of minimum expected assets. A town mutual insurer may invest assets in excess of the amount determined under par. (c) in one or more of the following:

Unrated bonds of a Wisconsin municipality or political subdivision not included in par. (b). Any bonds purchased under this subdivision must be direct obligations of the municipality or political subdivision, and no investment shall be made in unrated industrial revenue or industrial development bonds. Such investments shall not exceed 3% of assets in any single issue or 10% of assets in a single issuer or its affiliates;
Bonds with a final maturity of more than 15 years that would otherwise be classified within par. (b) 1., 3. or 4.

3c. Stock which is either common stock or preferred stock of a licensed insurance company domiciled in this state which reinsured town mutual insurers in this state at the time it converted from a mutual insurance corporation to a stock insurance corporation.

3g. Common or preferred stock or convertible securities of any United States, Canadian or foreign corporation not included in par. (b) that are traded on a federally regulated securities exchange in the United States.

3L. Shares in no-load mutual funds, which have an expense ratio, including any fees for marketing or distribution, of 1.20% or less and have as their stated investment objective, as disclosed in their prospectus, an intent to invest 80% or more of their assets under management in common or preferred stock or convertible securities of any United States, Canadian or foreign corporation not included in par. (b).

3p. Shares of exchange-traded funds, which have an expense ratio, including any fees for marketing or distribution, of 1.20% or less and have as their stated investment objective, as disclosed in their prospectus, an intent to invest 80% or more of their assets under management in common or preferred stock or convertible securities of any United States, Canadian or foreign corporation not included in par. (b).

3t. Shares in no-load mutual funds with a weighted average maturity of more than 8 years that would otherwise be permitted under par. (b) 5g.

3x. Shares in exchange-traded funds with a weighted average maturity of more than 8 years that would otherwise be permitted under par. (b) 5r.

Any subsidiaries formed to provide services ancillary to the town mutual insurer’s insurance operations. Subsidiaries are considered ancillary subsidiaries if they are engaged principally in insurance-related activities such as acting as an insurance agent or providing claims adjusting services. A town mutual insurer may invest in a subsidiary only with the prior written approval of the commissioner and the investment may not exceed the amount approved by the commissioner or 10% of assets, whichever is less.
Real property needed for the convenient transaction of the insurer’s business, provided that the insurer obtains the prior written approval of the commissioner.
Real estate loans on property meeting the requirements of sub. (5) (c) and investment in real estate partnerships. Any investment in real estate partnerships shall be with the prior approval of the commissioner.
Investments not otherwise permitted by this paragraph, and not specifically prohibited by statute or rule, to the extent of not more than 5% of the insurer’s assets. This includes the cash surrender value of life insurance policies and annuities of insurers authorized to do business in Wisconsin.

(e) Town mutual insurer reinsurer stock. A town mutual insurer is not required to divest stock described in par. (d) 3c. This type of stock is an authorized investment and is not an asset invested in accordance with par. (b).

(f) Limitations on amount of investment. A town mutual insurer may not invest in any of the following:

Except as permitted under subd. 2., more than 3% of assets in securities of any single issuer unless it obtains the prior written permission of the commissioner or unless the investment is in securities of the government of the United States or its instrumentalities or in securities guaranteed by the full faith and credit of the United States.
More than 10% of assets in the securities of one state, of one instrumentality of a state, or of one governmental unit of a state.
More than 10% of assets in any single mutual fund.
More than 10% of assets in any single exchange-traded fund.
More than 20% of assets in investments sponsored or managed by any single issuer or its affiliates with respect to mutual funds and exchange-traded funds.

(g) Transition and divestment. Except as provided under par. (e), a town mutual insurer shall comply with all of the following:

A town mutual insurer that holds investments permitted under par. (d) but no longer meets the minimum asset test of par. (c) may continue to hold such investments so long as the town mutual insurer holds investments in accordance with par. (b) in an amount that is no less than the sum of its liabilities plus the greatest of any of the following:

a. 75% of the net written premiums and assessments for the 12-month period ending December 31.

b. 33% of the direct written premiums and assessments for the 12-month period ending December 31.

c. $300,000.

A town mutual insurer shall divest of any investment which does not meet the requirements of pars. (b) to (f) due to decline in the rating of a bond, the insurer’s size, limitations on investments or any other reason, within three years of its noncompliance.
If at the time of purchase a town mutual insurer investment did not meet the requirements of pars. (b) to (f), then the town mutual insurer shall immediately divest of the investment.

(h) Authorization of investments by the board of directors.

The board of directors of a town mutual shall adopt a written plan for acquiring and holding investments and for engaging in investment practices which specifies guidelines as to the quality, maturity, diversification of investments and other specifications including investment strategies intended to assure that the investments and investment practices are appropriate for the business conducted by the insurer, its liquidity needs and the amount of its surplus. The board shall review and assess the company’s technical and administrative capabilities and expertise with regard to investments before adopting a written plan concerning any investment strategy or investment practice. The board shall give due consideration to all commissions and expenses associated with each investment, and the effect of such costs on anticipated returns and on liquidity.
All investments acquired and held under this section shall be acquired and held under the supervision and direction of the board of directors of the town mutual insurer. The town mutual insurer board of directors shall require that all investments be authorized or approved by the board or a committee of the board charged with the responsibility to supervise and direct its investments in accordance with delegations, standards, limitations, and investment objectives prescribed by the board.
For all mutual funds held by a town mutual insurer, the insurer shall maintain in its records the fund’s prospectus and latest issued annual financial statement.

a. If a town mutual insurer utilizes the services of an investment advisor, the town mutual shall have, and maintain, a written agreement with the investment advisor, that shall be approved by the board of directors. A separate agreement shall be entered into for each specific arrangement.

b. Each written agreement with an investment advisor shall include a description of the scope and nature of the services to be provided; the standard of care to be provided; how or whether the investment strategy, including asset allocations, and any applicable limitations, incorporates the board approved investment policy; the level of authority the advisor exercises over the insurer’s portfolio, whether discretionary or non-discretionary; a description of all types of compensation to the investment advisor; and a description as to how investment transactions, holdings, and portfolio performance will be communicated to the company’s board of directors, including the frequency, content and means of reporting.

c. An agreement under subd. 4. b. shall clearly state whether the investment advisor is, or is not, acting as a fiduciary with respect to the town mutual insurer. A fiduciary is someone whose conduct is subject to the fiduciary duty standard, as defined under applicable rules, regulations, or standards of conduct promulgated by the U.S. securities and exchange commission.

(i) Custody. In addition to the requirements of s. 610.23, Stats., the shares of any mutual fund in which a town mutual insurer invests may be held in the direct custody of the town mutual insurer, and the shares must be maintained either in book entry form with the mutual fund’s registrar and transfer agent, or in certificate form. If the town mutual insurer does not have direct custody of the shares, the shares shall be held in the custody of a bank or bank and trust company.

(7) Bonds permissible. Bonds permissible under s. 620.22 (1), Stats., include:

(a) Direct obligations of the United States or Canada, or of other governmental units therein;

(b) Obligations payable from and adequately secured by specifically pledged revenues of such governmental units or their instrumentalities, including corporations owned by or operated for such units; and

(8) Additional authorized investments. An insurer may, in addition to investments authorized by s. 620.22 (1) to (7), Stats., invest its assets in the following classes of investments, up to the limits stated, and in the case of insurers that are subject to special restrictions under s. 620.03, Stats., in accordance with any other rules made applicable to them:

(a) Mortgage bonds of farm loan banks authorized under the federal farm loan act, and debentures issued by the banks for cooperatives established pursuant to the farm credit act of 1933, as amended;

(b) Equipment securities or certificates of any equipment trust evidencing rights to receive partial payments agreed to be made upon any contract of leasing or conditional sale;

(c) The purchase and ownership of machinery or equipment, which is or will become subject to contracts for sale or use under which contractual payments may reasonably be expected to return the principal of and provide earnings on the investment within the anticipated useful life of the property which shall be not less than 5 years but the aggregate of such investments shall not exceed 3% of the insurer’s assets;

(d) Loans upon the collateral security of any securities that the insurer could lawfully purchase, but not exceeding 90% of the market value of the securities up to an amount which, together with like securities owned, does not exceed the limits on the purchase of such securities;

(e) Evidences of indebtedness not otherwise authorized of the kind which if held by a bank would be eligible for discount, rediscount, purchase or sale by federal reserve banks or other government agencies having similar powers and functions but the aggregate of such investments shall not exceed 1% of the insurer’s assets;

(f) Shares of savings and loan associations to the extent that they are insured or guaranteed by the United States government or any agency thereof;

(g) The cash surrender values of life insurance policies of companies authorized to do business in Wisconsin;

(h) For a company authorized to transact a credit insurance business, the claims and demands that it has guaranteed;

(i) For a company authorized to transact a title insurance business, materials and plant necessary for the convenient transaction of business — not exceeding 50% of minimum capital or 5% of assets, whichever is greater;

(L) Direct obligations of the international bank for reconstruction and development, the inter-American development bank, the African development bank and the Asian development bank but the aggregate of such investments shall not exceed 2% of the insurer’s assets;

(n) Shares of investment companies or investment trusts registered under the Federal Investment Company Act of 1940, 15 USC 80a-1 et seq., as amended — regarded as part of the common stock portfolio of the insurer.

(8g) Foreign investments. An insurer, and in the case of insurers that are subject to special restrictions under s. 620.03, Stats., in accordance with any other rules applicable to them, may invest in foreign investments, in addition to investments authorized by s. 620.22 (1) to (7), Stats., that meet the following criteria and limitations:

(a) An insurer with assets less than $500,000,000 as of the financial statement filing date may invest up to 1% of assets in direct obligations of foreign governments.

(b) An insurer with assets equal to at least $500,000,000 as of the financial statement filing date may invest up to 4% of assets in direct obligations of foreign governments that at the time of purchase have a 1 or 2 designation from the national association of insurance commissioners, or equivalent ratings by a NRSRO and, in addition, up to 1% of assets in the direct obligations of foreign governments without regard to ratings.

(c) An insurer with assets less than $500,000,000 as of the financial statement filing date may invest up to 2% of assets in loans, securities or investments of foreign issuers which are of substantially the same kinds, classes and investment grades as those eligible for investment under ch. 620, Stats., and supplementary rules.

(d) An insurer with assets equal to at least $500,000,000 as of the financial statement filing date may invest up to 8% of assets in loans, securities or investments of foreign issuers which are substantially the same kinds, classes and investment grades as those eligible for investment under ch. 620, Stats, and supplementary rules.

(e) All investments in a foreign country, foreign government, and foreign issuers are subject to all of the following aggregate limits:

All investments in a single foreign country, 4% of assets.
All investments of a single foreign issuer and its foreign issuer affiliates, 3% of assets.
All investments denominated in a single foreign currency, 5% of assets excluding investments under par. (f).

(f) An insurer doing business in a foreign country may invest in assets in that foreign country, or in that country’s currency, that are needed to meet the insurer’s obligations, provided the investment would be permitted if made in this state.

(g) An insurer are responsible for monitoring their compliance with individual and aggregate limitations on all investments in a foreign country, foreign government, and foreign issuer, including such investments held indirectly through mutual funds, and must maintain a record of all such investments, which shall be reconciled at least quarterly and be available for production upon the request of the commissioner.

(8r) Derivative instruments. An insurer, and in the case of an insurer that is subject to special restrictions under s. 620.03, Stats., to the extent other rules are applicable to them, may invest in derivative instruments in addition to investments authorized by s. 620.22 (1) to (7), Stats., provided all of the following requirements are met:

(a) Derivative instrument contracts shall be entered into to protect the investment portfolio of an insurer against the risk of changing asset values or interest rates, to enhance its liquidity, to aid in cash flow management, as a substitute for cash market transactions, and for any other purpose consistent with the investment objectives for the assets of an insurer stated in s. 620.01, Stats.

(b) The aggregate market value of all derivative instruments outstanding may not exceed 10% of the insurer’s assets.

(c) An insurer may purchase put options or sell call options only with regard to derivative instruments or financial instruments owned by the insurer, or which may be obtained through the exercise of warrants or conversion rights held by the insurer.

(d) An insurer may purchase call options or sell put options on derivative instruments or financial instruments only if the amount of the instrument, which may be acquired upon exercise of the option, when aggregated with current holdings, would be an authorized investment under s. 620.22 (1) to (7), Stats., or this subsection, and would not exceed the limitations specified in s. 620.23, Stats., or this section.

(e) The board of directors or its authorized committee shall first approve the insurer’s plan relating to such investments, which plan must contain specific policy objectives and strategies, establish aggregate maximum limits in such investments and internal control procedures, and identify the duties, expertise and limits of authority of personnel authorized by the board of directors to engage in such transactions on behalf of the insurer.

(f) A copy of the insurer’s plan shall be filed with the commissioner 30 days prior to its effective date. The commissioner may disapprove the plan within the 30-day period after receipt.

(9) Changes in qualification of investments. Any investment originally made under s. 620.22 (9), Stats., may thereafter be considered as falling within any other class of investment for which it subsequently qualifies.

(10) Valuation.

(a) General. Security valuations contained in “Valuations of Securities”, issued by the Committee on Valuation of Securities of the National Association of Insurance Commissioners, will be followed in implementing this chapter.

(b) Insurance policies. Insurance policies purchased under sub. (8) (g) will be valued at their cash surrender value.

(c) Claims and demands guaranteed by insurer. When an insurer authorized to sell credit insurance purchases, under sub. (8) (h), claims and demands it has guaranteed, it shall value them at face value or at cost, whichever is less, and shall set up a separate and adequate “loss reserve for guaranteed claims purchased” in an amount satisfactory to the commissioner.

History

Cr. emerg. eff. 5-2-72; cr. Register, July, 1972, No. 199, eff. 8-1-72; am. (5) (a) 1., Register, October, 1974, No. 226, eff. 11-1-74; r. and recr. (5) (g), cr. (6) (c), Register, December, 1974, No. 228, eff. 1-1-75; emerg. am. (6) (a), eff. 6-22-76, am. (6) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (8) (intro.), (b), (c), (e), (j), (k) and (l), Register, August, 1981, No. 308, eff. 9-1-81; reprinted to correct printing error in (8) (f), Register, March, 1983, No. 327; correction in (9) made under s. 13.93 (2m) (b) 7., Stats., Register, December, 1984, No. 348; renum. (3) (a) to (e) to be (3) (e) to (h) and (j), cr. (3) (a) to (d), (i), (4) (c) and (8) (o), am. (4) (a) and (b) and (8) (n), Register, April, 1987, No. 376, eff. 5-1-87; am. (8) (l), Register, October, 1990, No. 418, eff. 11-1-90; corrections in (4) (b) and (6) (b) 3. made under s. 13.93 (2m) (b) 5. and 7., Stats., Register, April, 1992, No. 436; renum. (3) (f) to (j) to be (3) (g) to (k), cr. (3) (f), (L), (6) (d) to (h), am. (5) (intro.), (6) (a), r. and recr. (5) (g), (6) (b), (c), Register, December, 1996, No. 492, eff. 1-1-97; CR 20-002: r. (3) (a), cr. (3) (am), r. (3) (b), (d), cr. (3) (ee), (em), (es), (hg), (hr), r. (3) (j), am. (4), (5) (intro.), (a) (intro.), r. and recr. (5) (a) 1., am. (5) (a) 2. to 5., cr. (6) (a) (title), am. (6) (b) (intro.), 1. to 5., cr. (6) (b) 5g., 5r., am. (6) (b) 6., (c) (title), 1., 2., cr. (6) (d) (title), r. (6) (d) 3. (intro.), renum. (6) (d) 3. a. to c. to (6) (d) 3c., 3g., 3L and am. (6) (d) 3g., 3L., cr. (6) (d) 3p., 3t., 3x., r. (6) (d) 5., 8., am. (6) (d) 9., cons. (6) (e) (title), (intro.), 1., 2., renum. to (6) (e) and am., r. (6) (e) 3., am. (6) (f) (intro.), 1., cr. (6) (f) 3. to 5., r. and recr. (6) (g), cr. (6) (h) 4., (i), r. (8) (j), (k), (m), (o), cr. (8g), (8r) Register August 2020 No. 776, eff. 9-1-20; correction in (3) (am), (6) (h) 4. c., made under s. 35.17, Stats., Register August 2020 No. 776; republished to correct an error in transcription in (8) and correction in (8) (n) made under s. 35.17, Stats., Register October 2020 No. 778.

Wis. Admin. Code § Ins 6.25 Joint underwriting and joint reinsurance associations {#sec-ins-6.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.25}

(1) Purpose. This section, pursuant to s. 625.04, Stats., is intended to encourage an active, economical and efficient insurance market; to provide for the regulation of marketing practices; and to exempt certain insurers and organizations from the provisions of s. 625.33, Stats., with respect to joint underwriting or joint reinsurance.

(2) Scope. Subsection (3) applies to joint underwriting and joint reinsurance involving the insurance of risks associated with:

(a) Nuclear energy.

(b) Commercial aircraft.

(d) Crude oil production and processing.

(e) Municipal bonds.

(f) Commercial property policies insuring property damage, business interruption, extra expense, rents and other time element coverages, for any policy whose total property damage limit is an amount not less than $50,000,000.

(g) Excess and umbrella liability with limits in excess of $25 million to risks with underlying coverage or self-insured for a minimum of $25 million.

(3) Persons exempted. If any of the following joint underwriting associations and joint reinsurance associations is licensed as a rate service organization under s. 625.32, Stats., each insurer-member thereof shall be exempted from the provisions of s. 625.33, Stats., with respect to agreements between or among insurer-members to adhere to certain rates and rules in providing insurance or reinsurance as members of such association:

(a) Aircraft products insurance association

(b) Industrial risk insurers

(d) Mutual atomic energy reinsurance pool

(e) American nuclear insurers

(f) Nuclear energy property insurance association

(g) Municipal bond insurance association

(h) American excess insurance association.

(4) Limitation on membership disciplinary action. No person may impose any penalty or other adverse consequence for failure of any insurer to adhere to the rates or rules of any joint underwriting association or joint reinsurance association of which the insurer is a member, except termination of or expulsion of the insurer from membership in the association.

(5) Penalty. Violations of this section shall be subject to s. 601.64, Stats.

History

Cr. Register, September, 1973, No. 213, eff. 10-1-73; am. (2) and (3), Register, August, 1974, No. 224, eff. 9-1-74; am. (3) (e), Register, May, 1975, No. 233, eff. 6-1-75; am. (3), Register, February, 1976, No. 242, eff. 3-1-76; am. (3) (e), Register, November, 1978, No. 275, eff. 12-1-78; cr. (2) (f), Register, January, 1983, No. 325, eff. 2-1-83; emerg. cr. (2) (g) and (3) (h), eff. 12-12-86; am. (1), (2) (intro.) to (e), (4) and (5), cr. (2) (g) and (3) (h), Register, May, 1987, No. 377, eff. 6-1-87.

Wis. Admin. Code § Ins 6.30 Instructions for uniform classifications of expenses of fire and marine and casualty and surety insurers {#sec-ins-6.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.30}

For the purpose of establishing uniformity in classifications of expenses of fire and marine and casualty and surety insurers recorded in statements and reports filed with and statistics reported to the commissioner of insurance, all such insurers shall observe the instructions set forth below. These instructions shall not apply to single line accident and health insurance companies, assessment accident and health associations, hospital and medical service or indemnity organizations, single line title insurance companies, or town mutual insurance companies.

(1) Part I.

(a) List of operating expense classifications for annual statement purposes for fire and marine and casualty and surety insurers.

Claim Adjustment Services:

a. Direct

b. Reinsurance Assumed

c. Reinsurance Ceded

Commission and Brokerage:

a. Direct

b. Reinsurance Assumed

c. Reinsurance Ceded

d. Contingent-Nete. Policy and Membership Fees

Allowances to Managers and Agents
Advertising
Boards, Bureaus and Associations
Surveys and Underwriting Reports
Audit of Assureds’ Records
Salaries
Employee Relations and Welfare
Insurance
Directors’ Fees
Travel and Travel Items
Rent and Rent Items
Equipment
Printing and Stationery
Postage, Telephone and Telegraph, Exchange and Express
Legal and Auditing
Taxes, Licenses and Fees:

a. State and Local Insurance Taxes

b. Insurance Department Licenses and Fees

c. Payroll Taxes

d. All Other (excluding Federal and Foreign Income and Real Estate)

Real Estate Expenses
Real Estate Taxes
Miscellaneous

(b) Instructions relating to operating expense classifications.

Claim Adjustment Services

a. Direct

b. Reinsurance Assumed

c. Reinsurance Ceded

Commission and Brokerage.

a. Direct

b. Reinsurance Assumed

c. Reinsurance Ceded

Note: Examples Relating to the Treatment of Commission on Reinsurance Assumed and Reinsurance Ceded:

1. Company A cedes business to Company B under a treaty specifying a commission of 35% and an allowance for taxes and board fees of 5%. On the statement filed by Company A, both the 35% and the 5% shall be entered in Commission and Brokerage-Reinsurance Ceded. On the statement filed by Company B, both the 35% and the 5% shall be entered in Commission and Brokerage-Reinsurance Assumed.

2. Company A cedes 10% of all its business to Company B under an agreement whereby Company B pays 10% of all actual expenses, on such business, incurred by Company A. Assume the expenses of Company A on the business reinsured as follows:

Note: These are not intended to show the complete list of expenses involved but are given only for illustration purposes.

On the statement filed by Company A the commission and allowances by Company B shall be credited as follows:

On the statement filed by Company B the commission and allowances made to Company A shall be debited as follows:

d. Contingent — Net

e. Policy and Membership Fees

Allowances to Managers and Agents
Advertising
Boards, Bureaus and Associations
Surveys and Underwriting Reports
Audit of Assureds’ Records
Salaries
Employee Relations and Welfare

a. Pensions and Insurance Benefits for Employees

b. All Other

Insurance
Directors’ Fees
Travel and Travel Items
Rent and Rent Items
Equipment
Printing and Stationery
Postage, Telephone and Telegraph, Exchange and Express
Legal and Auditing
Taxes, Licenses and Fees

a. State and Local Insurance Taxes

b. Insurance Department Licenses and Fees

c. Payroll Taxes

d. All other (excluding Federal and Foreign Income and Real Estate)

Real Estate Expenses
Real Estate Taxes
Miscellaneous
General Instructions in Connection With Operating Expense Classifications

a. Joint Expenses

b. Expenses for Account of Another

c. Income from Special Services

d. Analogous Items

INDEX to s. Ins 6.30 (1)

The references are to subparagraphs in paragraph (b) of subsection (1).

Accident and loss prevention billed specifically — 6

Accident and loss prevention literature — 6

Accident and loss prevention organizations — 5

Accident insurance for employees — 9-a

Accounting societies, dues and subscriptions to — 12

Actuarial societies, dues and subscriptions to — 12

Adding machine tape — 15

Adjusters — 1-a

Adjustment services — 1

Advertising, operating expense classification — 4

Advertising, help wanted — 9-b

Advertising in connection with owned real estate — 19

Advertising required by law when only the minimum space required by law is taken — 18-d

Advertising required by law when more than the minimum space required by law is taken — 4

Advisory organizations — 5

Agents’ allowances, reimbursements and payments computed as percentage of premiums — 2-a

Agents’ allowances, reimbursements and payments not computed as percentage of premiums — 3

Agents’ licenses — 18-b

Allocated loss adjustment expenses — 1-a

Allowances to managers and agents, operating expense classification — 3

Alterations and repairs of leased premises — 13

Analogous items — 22-d

Analysis pads — 15

Appeal costs relating to claim adjustment — 1-a

Appraisals relating to claim adjustment — 1-a

Assessments for fire patrol — 18-a

Assessments of boards, bureaus and associations — 5

Associations, underwriting — 5

Attorneys’ fees relating to claim adjustment — 1-a

Attorneys’ fees — 17

Audit bureaus — 5

Audit of assureds’ records, operating expense classification — 7

Auditing relating to claim adjustment — 1-a

Auditing fees of independent auditors for auditing payrolls and other premium bases — 7

Auditing fees of independent auditors for examining records of home and branch offices — 17

Automobiles, depreciation, rent, repairs and expenses of — 12; insurance of — 10

Automobile license plates — 12

Bank charges for collection and exchange — 16

Billboards — 4

Binders and posts — 15

Board allowances, reinsurance — 2-b, 2-c

Boards, bureaus and associations, operating expense classification — 5

Bonds covering employees — 10

Bonds, premium cost, relating to claim adjustment — 1-a

Bonus to employees — 8

Booklets for accident and loss prevention — 6

Books, newspapers and periodicals including investment, tax and legal publications and services — 15

Branch office rent — 13

Broadcasts — 4

Brokerage to employees when the activities for which the commissions are paid are not a part of their duties as employees — 2-a

Brokerage to employees when the activities for which the commissions are paid are a part of their duties as employees — 8

Brokerage, direct — 2-a

Brokerage, reinsurance assumed — 2-b

Brokerage, reinsurance ceded — 2-c

Brokers’ allowances, reimbursements and payments computed as a percentage of premiums — 2-a

Brokers’ allowances, reimbursements and payments not computed as a percentage of premiums — 3

Bureaus — 5

Burglary and robbery insurance premiums — 10

Business licenses — 18-a, 18-b, and 18-d

Cables — 16

Calendars for advertising purposes — 4

Capital stock taxes — 18-d

Carbon paper — 15

Cartage, express and freight — 16

Catering for employees — 9-b

Certificates of compliance — 18-b

Charges for claim adjustment services of underwriting pools, syndicates and associations — 1-a

Character or credit reports relating to claim adjustment — 1-a

Character reports for underwriting purposes — 6

Character reports on employees — 9-b

Charities, contributions to — 21

Circulars, advertising in — 4

Civic clubs, dues and subscriptions to — 12

Claim adjustment services, operating expense classification — 1

Claim adjustment services, separation of — 1-a

Claim organizations — 5

Cleaning costs — 13

Collection charges of banks — 16

Collection fees and expenses of others than employees for collecting balances — 17

Commercial reports — 6

Commercial reporting services — 6

Commission and brokerage, operating expense classification — 2

Commission and brokerage, direct — 2-a

Commission and brokerage, reinsurance assumed — 2-b

Commission and brokerage, reinsurance ceded — 2-c

Commission and brokerage, tax and board allowances — 2-b, 2-c

Commission and brokerage, reinsurance brokerage — 2-b, 2-c

Commission and brokerage, contingent or profit — 2-d

Commission and brokerage, policy and membership fees — 2-e

Commission to employees when the activities for which the commissions are paid are a part of their duties as employees — 8

Commission under quota share and pool agreements — 2-b, 2-c

Compensation insurance — 9-a

Compensation to janitors, caretakers, etc., paid in connection with owned real estate — 19

Compensation to employees — 8

Contingent commission — 2-d

Contributions to employees — 9-b

Contributions to organized charities — 21

Copies of certificates and documents relating to claim adjustment — 1-a

Corporation licenses — 18-a, 18-b, and 18-d

Court costs relating to claim adjustment — 1-a

County and municipal taxes, licenses and fees — 18-a

Credit or character reports relating to claim adjustment — 1-a

Credit or character reports for underwriting purposes — 6

Credit or character reports on employees or applicants for employment — 9-b

Custodian fees — 17

Depreciation of automobiles — 12

Depreciation of furniture, equipment and office machines — 14

Desk top equipment — 15

Detective reports relating to claim adjustment — 1-a

Direct, claim adjustment services — 1-a

Direct, commission and brokerage — 2-a

Directors’ fees, operating expense classification — 11

Directory listings — 4

Dismissal allowances to employees — 8

District agents, payments to — 2-a and 3

Documentary stamps on reinsurance — 18-d

Documents relating to claim adjustment — 1-a

Donations to employees — 9-b

Donations to organized charities — 21

Drawings in connection with advertising — 4

Dues and subscriptions to accounting, legal, actuarial or similar societies — 12

Dues to social clubs or affairs — 12

Dues to boards, bureaus and associations — 5

Electric lamp replacements — 13

Employees, commission and brokerage to — 2 and 8

Employees’ expenses while traveling — 12

Employee relations and welfare, operating expense classification — 9

Engineering billed specifically — 6

Entertainment for employees — 9-b

Entertainment of guests — 12

Entry fees relating to claim adjustment — 1-a

Envelopes — 15

Equipment, operating expense classification — 14

Equipment, rent, repairs and depreciation of — 14; insurance of — 10

Etchings in connection with advertising — 4

Examinations, medical, relating to claim adjustment — 1-a

Exchange — 16

Expenses for account of another — 22-b

Experience data — 5

Expert witnesses relating to claim adjustment — 1-a

Express, freight and cartage — 16

Express, freight and cartage of employees while traveling — 12

Favors and presents given to others than employees — 12

Fees and expenses of others than employees for collecting balances — 17

Fees for automobile license plates — 12

Fees for insurance department examinations — 18-b

Fees, medical, relating to claim adjustment — 1-a

Fees, notary, relating to claim adjustment — 1-a

Fees, notary — 17

Fees of boards, bureaus and associations — 5

Fees on owned real estate — 20

Fees paid to directors — 11

Fees, taxes and licenses — 18

Fidelity bonds covering employees — 10

Filing fees — 18-b

Fire patrol assessments — 18-a

Fire records — 6

Food for employees — 9-b

Frames for agents — 4

Freight, express and cartage — 16

Furniture, depreciation, rent and repairs of — 14; insurance of — 10

Gatherings for employees — 9-b

General agents, payments to — 2-a and 3

Gifts to employees — 9-b

Glue — 15

Group life insurance for employees — 9-a

Guests, cost of transportation, hotel, meals and entertainment — 12

Heat, light, power and water charges in leased premises — 13

Health insurance for employees — 9-a

Help wanted advertising — 9-b

Home office rent — 13

Hospital bills of employees — 9-b

Hospital records relating to claim adjustment — 1-a

Hospitalization insurance for employees — 9-a

Hotel expenses for guests — 12

Hotel expenses for employees while traveling — 12

House organs distributed to others than employees — 4

House organs for use of employees — 15

Ice — 13

Income from special services — 21 and 22-c

Income taxes, state — 18-d

Independent adjusters — 1-a

Industrial commissions — 18-a

Injury to payments to employees — 9

Ink — 15

Inspection billed specifically — 6

Inspection bureaus — 5

Insurance, accident — 9

Insurance, automobile — 10

Insurance, burglary and robbery — 10

Insurance department examinations — 18-b

Insurance department licenses and fees — 18-b

Insurance, health — 9-a

Insurance, in connection with owned real estate — 19

Insurance, on office contents — 10

Insurance, operating expense classification — 10

Insurance, public liability — 10

Insurance, retirement — 9-a

Insurance, worker’s compensation — 9-a

Interest, taxes, etc., paid in lieu of rent for leased premises — 13

Investment counsel fees — 17

Joint expenses — 21 and 22-a

Journals — 15

Lawyers’ expenses relating to claim adjustment — 1-a

Lawyers’ fees and expenses — 17

Leased premises, cost of alterations and repairs — 13

Leased premises, interest, taxes, etc., paid in lieu of rent — 13

Leased premises, light, heat, power and water charges — 13

Leave pay for employees — 8

Ledgers — 15

Legal and auditing, operating expense classification — 17

Legal expenses relating to claim adjustment — 1-a

Legal expenses — 17

Legal societies, dues and subscriptions to — 12

Letterheads — 15

Licenses on owned real estate — 20

Licenses, taxes and fees — 18

License plates, automobile — 12

Life insurance for employees — 9-a

Light, heat, power and water charges in leased premises — 13

Literature for accident and loss prevention — 6

Literature for advertising purposes — 4

Local agents, payments to — 2-a and 3

Local insurance taxes — 18-a

Loss adjustment expenses — 1

Loss prevention billed specifically — 6

Loss prevention literature — 6

Loss prevention organizations — 5

Machines, depreciation, rent and repairs of — 14; insurance of — 10

Mailing lists — 4

Maintaining owned real estate — 19

Managers, payments to — 2-a and 3

Maps relating to claim adjustment-1-a

Maps and corrections — 6

Marine profits taxes — 18-d

Meals for employees while traveling — 12

Meals for guests — 12

Medals for agents — 4

Medical bills of employees — 9-b

Medical examinations relating to claim adjustment — 1-a

Medical examiners, services of, for underwriting purposes — 6

Medical testimony relating to claim adjustment — 1-a

Membership and policy fees — 2-e

Minute books — 15

Miscellaneous, operating expense classification — 21

Moral hazard, reports — 6

Municipal and county taxes, licenses and fees — 18-a

Newspapers, advertising in — 4

Newspapers, books, periodicals, etc., including investment, tax and legal publications and services — 15

Notary fees — 17

Notary fees relating to claim adjustment — 1-a

Nurse service to employees — 9-b

Office agents, payment to — 2-a and 3

Office machines, depreciation, rent and repairs of — 14; insurance of — 10

Office maintenance expense — 13

Office rent — 13

Office supplies — 15

Old age benefit taxes — 18-c

Operating expenses of owned real estate — 19

Overtime — 8

Outings for employees — 9-b

Pamphlets, advertising in — 4

Paper in bills covering advertising — 4

Paper stock — 15

Payroll audit — 7

Payroll taxes — 18-c

Pencils and pens — 15

Pensions — 9-a

Periodicals, advertising in — 4

Periodicals, newspapers, books, etc., including investment, tax and legal publications and services — 15

Personal property taxes — 18-d

Photographs relating to claim adjustment — 1-a

Photostatic copies — 15

Physical examinations of employees — 9-b

Pins — 15

Placards for accident and loss prevention — 6

Plates in connection with advertising — 4

Policies and policy forms — 15

Policy and membership fees — 2-e

Policy claims, investigation and adjustment — 1-a

Pools and associations — 5

Pool and quota share agreements — 2-b and 2-c

Post office boxes, rent of — 13

Postage machines — 14

Postage expenses incurred by employees while traveling — 12

Postage, telephone, telegraph, exchange and express, operating expense classification — 16

Power, light, heat and water charges in leased premises — 13

Premium cost of bonds relating to claim adjustment — 1-a

Premium taxes, licenses and fees — 18-a

Premiums for insurance on office contents — 10

Presents and favors given to others than employees — 12

Printed forms — 15

Printers’ equipment, rent, repairs and depreciation of — 14; insurance of — 10

Printing and stationery, operating expense classification — 15

Printing and stationery relating to claim adjustment — 1-a

Printing in bills covering advertising — 4

Process, service of, relating to claim adjustment — 1-a

Producers, payments to — 2-a and 3

Profit commission — 2-d

Programs, advertising in — 4

Prospect lists — 4

Public liability insurance premiums — 10

Public relations counsel — 4

Publication fees — 18-d

Publications, advertising in — 4

Publications such as house organs, for use of employees — 15

Punch cards — 15

Punched card equipment — 14

Punched card services — 21

Qualifying bond premiums — 18-d

Quota share and pool agreements — 2-b and 2-c

Radio broadcasts — 4

Radiograms — 16

Rate manual — 5

Rating organizations — 5

Rating plans — 5

Real estate expenses, operating expense classification — 19

Real estate taxes, operating expense classification — 20

Regional agents, payments to — 2-a and 3

Registrar fees — 17

Reinsurance assumed, claim adjustment services — 1-b

Reinsurance assumed, commission and brokerage — 2-b

Reinsurance ceded, claim adjustment services — 1-c

Reinsurance ceded, commission and brokerage — 2-c

Rent and rent items, operating expense classification — 13

Rent of furniture, equipment and office machines — 14

Rent of automobiles — 12

Reopened case funds — 18-a

Repairs and alterations in leased premises — 13

Repairs of automobiles — 12

Repairs of furniture, equipment and office machines — 14

Retirement allowances — 9-a

Retirement insurance — 9-a

Safe deposit boxes, rent of — 13

Safekeeping, storage and warehouse space, rent of — 13

Salaries, operating expense classification — 8

Salaries paid in connection with owned real estate — 19

Second injury funds — 18-a

Security funds — 18-a

Service organizations — 5

Services, tabulating, rendered by outside organizations — 21

Sickness payments to employees — 9

Signs for accident and loss prevention — 6

Signs for agents — 4

Social clubs, dues and subscriptions to — 12

Solicitors, payment to — 2-a and 3

Souvenirs for general distribution — 4

Souvenirs not generally distributed — 12

Space occupied in buildings owned — 13

Stamp pads — 15

Staples and staplers — 15

State income taxes — 18-d

State industrial commissions — 18-a

State insurance taxes — 18-a

State licenses and fees — 18-b

State premium taxes, licenses and fees — 18-a

State security funds — 18-a

Statement publication fees — 18-d

Stationery — 15

Statistical agencies — 5

Statistical services — 21

Stenographers’ fees relating to claim adjustment — 1-a

Stock taxes — 18-d

Storage, safekeeping and warehouse space, rent of — 13

Subpoenas relating to claim adjustment — 1-a

Subscriptions to accounting, legal, actuarial and similar societies — 12

Subscriptions to social or civic clubs or affairs — 12

Supper money — 9-b

Surety bonds covering employees — 10

Survey reports relating to claim adjustment — 1-a

Surveys and underwriting reports, operating expense classification — 6

Syndicates, underwriting — 5

Tabulating services — 21

Tax allowances, reinsurance — 2-b and 2-c

Tax expert services — 17

Taxes, interest, etc., paid in lieu of rent for leased premises — 13

Taxes, licenses and fees, operating expense classification — 18

Taxes, real estate — 20

Telephone and telegraph — 16

Telephone and telegraph expenses of employees while traveling — 12

Teletype — 16

Time clock service charges — 13

Towels — 13

Training of employees — 9-b

Training pay of employees — 8

Transcripts of testimony relating to claim adjustment — 1-a

Transfer agents’ fees — 17

Transfer of employees — 12

Transfer taxes — 18-d

Transportation of guests — 12

Transportation of employees — 12

Travel and Travel Items, operating expense classification — 12

Traveling expenses of employees — 12

Trustees’ fees — 17

Underwriters’ boards — 5

Underwriting reports — 6

Underwriting syndicates — 5

Unemployment insurance taxes — 18-c

Visiting nurse service — 9-b

Wages paid in connection with owned real estate — 19

Warehouse, storage and safekeeping space, rent of — 13

Waste baskets — 15

Water, light, heat and power in leased premises — 13

Watchperson expenses relating to claim adjustment — 1-a

Weather reports relating to claim adjustment — 1-a

Welfare of employees — 9-b

Witnesses relating to claim adjustment — 1-a

Worker’s compensation insurance — 9-a

(2) Part II.

(a) Instructions relating to the allocation of joint expenses to companies.

Joint Expenses a. Joint Expenses, as described in s. Ins 6.30 (1) (b) 22. a., shall be allocated to companies as follows:

b. Definitions

c. Other Bases Permitted or Prescribed

d. Other Instructions Applicable

e. Records Required

f. Interim Allocations of Joint Expenses

(3) Part III.

(a) Instructions relating to the composition of, and allocation to, expense groups.

List of Expense Groups
Composition of the Expense Groups.

a. Investment Expenses.

b. Loss Adjustment Expenses.

c. Acquisition, Field Supervision and Collection Expenses

d. Taxes

e. General Expenses

Allocation to Expense Groups

a. Expenses shall be allocated to expense groups as follows:

b. Definitions

c. Other Bases Permitted or Prescribed

d. Other Instructions Applicable

e. Records Required

(4) Part IV.

(a) Instruction relating to allocation to lines of business.

Lines of Business
Allocation of Expenses to Lines of Business

a. The allocation of expenses to lines of business shall be by expense groups. Each classification of expense within each expense group shall be allocated separately to lines of business on the bases of allocation prescribed as follows.

b. Definitions

c. Other Bases Permitted or Prescribed

d. Other Instructions Applicable

e. Records Required

(5) Part V.

(a) Special instructions relating to the allocation of salaries and other expenses.

General Procedures in Allocating Salaries

a. Direct Allocations

b. Allocations Other Than Direct

General Instructions Regarding Allocation Bases

a. Number of Items or Units

b. Time Studies

c. Overhead on Other Allocations

d. Premiums

e. Dollar Volume of Losses

f. Other Special Studies

g. Weightings

h. Bases Shall be Appropriate

i. General Work on Totals

j. Bases Shall Be Made in Current Period

Special Statements and Records Required

a. Allocation of Salaries Form

b. Recapitulation of Salaries Form

c. Detail of Allocation Bases Form

Note: The Detail of Allocation Bases Form need not be prepared each year, but with appropriate changes in supporting worksheets, etc., may remain current as long as the bases are in effect.

The Detail of Allocation Bases Form is identified as Form C and four illustrations of the form are shown. The allocation bases No. 1, 101, 105 and 501 shown on the Allocation of Salaries Form have been carried into the forms and specimen explanations given.

History

Cr. Register, July, 1959, No. 43, eff. 8-1-59.

Wis. Admin. Code § Ins 6.31 Interpretations of the instructions for uniform classifications of expenses of fire and marine and casualty and surety insurers {#sec-ins-6.31 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.31}

(1) Purpose.

(a) This rule is intended to implement and interpret uniform accounting instructions in s. Ins 6.30.

The following kinds of expense shall be allocated to indicated operating expense classifications.

a. When contingent commission payments are large in number and small in average amount, a method of allocation based on the over-all profit in each line of business should yield reasonably correct allocations.

b. Company-owned automobiles and equipment may be depreciated on a 100% basis.

c. A company may carry company-owned automobiles and equipment as an asset (non-admitted) and deduct depreciation each year.

d. Handling of certain filing charges: Where a company sells a policy to a long haul firm and that firm requests that the insuring company make a “filing” with a State Commerce Commission in a state in which it is not licensed and another insurance company on behalf of the first insurance company actually issues the policy and makes the required filing, charging a nominal fee for the transaction, the company receiving the fee should credit it to “Direct Premiums” and the company paying the fee should charge it to “Direct Premiums.”

The following kind of expense shall be allocated to the indicated expense group:
When commission on reinsurance is on a “sliding scale” or “guaranteed profit” basis both the tentative commission and any adjustments brought about by the “sliding scale” or “guaranteed profit” provisions should be allocated to Commission and Brokerage-Reinsurance Assumed or Commission and Brokerage-Reinsurance Ceded.

Note: To make clear the meaning of “sliding scale” and “guaranteed profits” the following is submitted:

Most of these contracts provide for a flat commission ranging from about 30% to 37 1/2%, paid on a written basis. Additional profit commissions are paid at a later date on an earned basis as specified by a formula embodied in the contract. These profit commissions are paid as the result of savings in the loss ratio. A common provision is that 1/2% profit commission shall be paid for each 1% saving in the loss ratio. Sometimes a portion of the scale may provide for a “1 for 1” profit commission, i.e., a full 1% profit commission for each 1% saving in the loss ratio.

For example, a contract may provide for a flat commission of 35%, with a “1/2 for 1” profit commission to be paid the ceding company for any saving in the loss ratio under 55%, until the profit commission reaches 10%, or a total commission of 45%.

Some contracts provide for a possible “return commission.” In the preceding example, if the loss ratio should exceed the breaking point of 55%, then the ceding company might have to pay a return commission to the reinsurer on a “1/2 for 1” basis until return commissions of, say, 5% have been returned, thus reducing the ultimate net commission from 35% to 30%. If the loss ratio should run under 35% or exceed 65%, then such saving or loss would ordinarily be carried forward to the computation for the following year.

The most common form of “surplus aid” is the “guaranteed profit”contract. Its principal characteristic is that it transfers unearned premium reserve from the ceding company to the reinsurer and results in an immediate increase in the ceding company’s surplus by the amount of the tentative commissions received, but because all such tentative commissions are subject to return to the reinsurer, does not actually relieve the ceding company of risk. The ceding company still remains exposed to the same risk as before. It is in the position of paying 2% to 5% of the ceded premiums to induce a reinsurer to sign a contract which has no ultimate effect other than to reduce its surplus by 2% to 5% of these premiums.

Guaranteed profit contracts are often written in a form similar to a quota share or portfolio of reinsurance contract, or a combination of both. The tentative commission is ordinarily 45% or 50%. The reinsurer’s fee is generally 2%, 3%, or 5% of the amount ceded. Most quota-share type contracts are subject to monthly reporting and settlements. The contract usually provides for additional commissions to be increased by 1% for each 1% decrease in the loss ratio, and return commissions on the basis of 1% for each 1% increase in the loss ratio. An example follows:

In a situation similar to the one illustrated, the ceding company pays to the reinsurer the gross reinsurance premiums less 45% commissions, or a net 55%. As losses are determined they are paid by the reinsurer until the ceding company has received back from the reinsurer losses recovered in an aggregate amount equal to 52% of the original premiums ceded (55% less 3%). Any additional losses are immediately charged back to the ceding company as “return commissions” on a “1 for 1” basis. On the other hand, any saving under 52% is returned to the ceding company in the form of additional commissions. The ultimate effect on the ceding company is the loss of 3% of its ceded premiums. The ceding company actually carries its own full risk throughout the entire period with respect to its gross business.)

Salvage and subrogation may be allocated as follows:

a. Where attention is given to salvage or subrogation matters at the same time as the adjustment of the loss is proceeding, no attempt will be made to allocate any portion of the adjuster’s time to salvage (or subrogation) expense.

b. Where the salvage or subrogation activity follows the adjustment of the loss such additional time as may be required will be treated as salvage expense.

c. Any items of outside service such as advertising, expenses of outside organizations or rewards where paid by and billed to the company will be treated as salvage expense.

d. Cost of recovering stolen goods incurred by and billed to the company will be treated as salvage expense.

e. Where salvage is handled by outside agencies and their billing is made directly to the company, sufficient information should be given for proper classification of the related expenses.

f. It is understood that the classification of expenses as salvage expense is not dependent upon any salvage recovery.

a. The following employee activities should be allocated to expense groups on the basis of the purposes for which the tabulating, listing, filing or other jobs were performed: Cutting and verifying punched cards, sorting and tabulating punched cards, maintaining punched card files, and supervision thereof.

b. The salaries of the employees in service units, such as the following, providing services to other employees may be allocated to expense groups as overhead on the salaries of employees in all other departments except executive officers: Mailroom, Personnel, First aid, Telephone operation, Office maintenance and Receptionists.

c. If an appreciable part of the time of employees handling purchases and supplies is devoted to furnishing supplies to agents, such salaries may be allocated to expense groups on the basis of a time estimate. Allocate to General Expenses that part of the time spent in working on supplies for agents; allocate remainder as Overhead on Salaries of employees in all other departments except executives.

d. When files are maintained and serviced in a separate department or at a central location, the salaries of employees engaged in this activity may be allocated to expense groups on the basis of a time estimate. That portion of time spent on policy files (daily reports, applications, endorsements, etc.) and that portion of time spent on general correspondence files may be allocated to General Expenses; that portion of time spent on active claim files may be allocated to Loss Adjustment Expenses; that portion of time on inactive claim files (dead files) may be allocated to General Expenses.

e. When a central abstract department is maintained for the mechanical reproduction of premium abstracts and claim abstracts for use by other departments, the salaries of these employees may be charged on the basis of a time estimate. That portion of time spent on claim abstracts may be allocated to Loss Adjustment Expenses and that portion of time spent on premium abstracts to General Expenses.

f. If a company maintains a general accounting unit and a cashier’s unit (the duties of which include keeping the general ledger, general journal and general cash books) and no apportionment to Investment Expenses, to Loss Adjustment Expenses, or to Acquisition, Field Supervision and Collection Expenses is possible, except by using a rough estimation which is little better than a guess, the company may allocate the total expenses of these units to General Expenses in view of the impossibility of making reasonably accurate apportionments to expense groups.

If the salary of a non-supervisory employee predominantly pertains to the activities of one expense group, the whole of such salary may be allocated to that expense group.

(Note: By this interpretation, many salaries may be allocated directly and without fractional apportionment. As examples: a branch office or home office employee who is primarily concerned with the collection of premiums may be allocated wholly to Acquisition, Field Supervision and Collection Expenses, even though a lesser part of the activities may pertain to General Expenses; a branch office or home office underwriter who is primarily concerned with the acceptability of risks, net retentions, quoting of rates, etc., may be allocated wholly to General Expenses, although he or she may also engage, in a lesser extent, in production work, pertaining to Acquisition. Field Supervision and Collection Expenses; a special agent working on the development and maintenance of the sales field may be allocated wholly to Acquisition, Field Supervision and Collection Expenses, although he or she may also be concerned, to a lesser extent, in the adjustment of losses; key punch and tabulating machine operators, whose work is primarily statistical, may be allocated wholly to General Expenses, although the cards and tabulations may be used to some extent in collection and loss adjustment activities.)

The following describes an acceptable method of allocating to expense groups and lines of business the salaries of employees engaged in administrative and/or supervisor activities:

a. Salaries of executive heads, such as the president of a company, the chairperson of a company’s board, and their secretaries, ordinarily should be distributed to expense groups and lines of business as an Overhead on Salaries of supervised personnel, after an apportionment to Investment Expenses. If any other methods are used, the allocations must be supported by detailed analyses of activities.

b. Salaries of other executive officers, department heads and supervisors ordinarily should be allocated on the basis of a study of time spent on the affairs of each of the departments or units supervised and then these salaries should be allocated to expense groups and lines of business as Overhead on Salaries of the employees in the respective departments or units. If any other methods are used, the allocations must be supported by detailed analyses of activities.

Includable in the operating expense classification, Boards, Bureaus and Associations, are the following: “Dues, assessments, fees and charges of:...underwriting syndicates, pools and associations such as Factory Insurance Association, Oil Insurance Association, assigned risk plans (except Commission and Brokerage; Claim Adjustment Services; and Taxes, Licenses and Fees);...”
Dues or assessments of organizations includable in Boards, Bureaus and Associations, or in Surveys and Underwriting Reports, directly related to loss work are properly chargeable to the expense group, Loss Adjustment Expenses.

History

Cr. Register, July, 1959, No. 43, eff. 8-1-59.

Wis. Admin. Code § Ins 6.35 Petroleum storage environmental cleanup fund; exclusions from reimbursement {#sec-ins-6.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.35}

(1) Purpose. This section interprets s. 292.63 (1) (ad) and (gm) and (4) (b) 15., Stats., by defining the liabilities that are excluded from coverage in liability insurance policies for bodily injury and property damage for the purpose of specifying costs paid by an owner or operator to a 3rd party which are ineligible for reimbursement from the fund.

(2) Definitions. In this section:

(a) “Discharge” has the meaning given in s. 292.01 (3), Stats.

(b) “Fund” means the petroleum storage environmental cleanup fund under s. 25.47, Stats.

(d) “Owner” has the meaning given in s. 292.63 (1) (e), Stats.

(e) “Petroleum product storage system” has the meaning given in s. 292.63 (1) (fg), Stats.

(3) Exclusions. In addition to the exclusions specified in s. 292.63 (4) (c), Stats., and the claims which shall be denied under s. 292.63 (4) (g), Stats., an owner or operator is not eligible for reimbursement under s. 292.63 (4) (b) 15., Stats., for compensation paid by the owner or operator to a 3rd party for any of the following:

(a) Costs for which the owner or operator is not legally liable.

(b) Bodily injury or property damage arising out of any of the following:

A discharge expected or intended from the standpoint of the owner or operator.
A discharge based on or attributable to a criminal act by the owner or operator.
The owner’s or operator’s intentional, willful or deliberate noncompliance with any statute or administrative rule administered by the department of safety and professional services or the department of natural resources which directly relates to the storage and handling of flammable liquid or combustible liquid, as defined by the department of safety and professional services by rule.

Note: The responsibility for this aspect of petroleum tank storage oversight was transferred from the Department of Safety and Professional Services to the Department of Agriculture, Trade and Consumer Protection. See s. ATCP 93.050 (30) and (49)for definitions of combustible and flammable liquid.

The owner’s or operator’s assumption of the liability of a 3rd party under a contract or agreement, unless the owner or operator would have had the liability in the absence of the contract or agreement.
The ownership, maintenance, use, operation or entrustment to another person of an automobile, aircraft, watercraft or rolling stock belonging to the owner or operator, except that this exclusion does not apply if the bodily injury or property damage is caused by the use of the automobile, aircraft, watercraft or rolling stock during the loading or unloading of the owner’s or operator’s petroleum products storage system.
War, invasion, act of a foreign enemy, hostilities, civil war, rebellion, revolution, insurrection, military or usurped power, strike, riot or civil commotion.

(c) Bodily injury to any of the following, whether the owner or operator is liable as an employer or in any other capacity, and regardless of whether the owner or operator is obligated to share damages with or to repay someone else who must pay damages because of the bodily injury:

An employee of the owner or operator for an injury occurring during and in the course of the employment.
The spouse, child, parent, brother or sister of an employee of the owner or operator arising as a consequence of the bodily injury to the employee under subd. 1.

(d) Property damage to any of the following:

Property owned or occupied by or rented or lent to the owner or operator.
Personal property in the care, custody or control of the owner or operator.

(e) An obligation of the owner or operator under a workers’ compensation, disability benefits, unemployment compensation or other similar law.

(f) Punitive or exemplary damages.

(g) Federal, state or local fines, forfeitures or other penalties.

(h) Amounts recoverable by the owner or operator under s. 292.63 (4) (b) 1. to 14., Stats., or by a 3rd party as a claimant under s. 292.63, Stats.

History

Cr. Register, April, 1991, No. 424, eff. 5-1-91; corrections in (2) (a) and (b), (3) (b) 3., made under s. 13.93 (2m) (b) 6. and 7., Stats., Register, February, 2000, No. 530; correction in (3) (b) 3. made under s. 13.92 (4) (b) 6., Stats., Register January 2012 No. 673; corrections in (1), (2) (c) to (e), (3) (intro.), (h) made under s. 13.92 4. (b) 7., Stats., Register August 2014 No. 704.

Wis. Admin. Code § Ins 6.40 Proxies, consents and authorizations of domestic stock insurers {#sec-ins-6.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.40}

(1) Application of rule. This rule is applicable to all domestic stock insurers having 100 or more stockholders; provided, however, that this rule shall not apply to any insurer if 95% or more of its stock is owned or controlled by a parent or an affiliated insurer and the remaining shares are held by less than 500 stockholders. A domestic stock insurer which files with the securities and exchange commission forms of proxies, consents and authorizations complying with the requirements of the Securities and Exchange Act of 1934 and the Securities and Exchange Acts amendments of 1964 and Regulation X-14 of the securities and exchange commission promulgated thereunder shall be exempt from the provisions of this rule.

(2) Proxies, consents and authorizations. No domestic stock insurer, or any director, officer or employee of such insurer subject to sub. (1), or any other person, shall solicit, or permit the use of his or her name to solicit, by mail or otherwise, any proxy, consent or authorization in respect of any stock of such insurer in contravention of this rule.

(3) Disclosure of equivalent information. Unless proxies, consents or authorizations in respect of a stock of a domestic insurer subject to sub. (1) are solicited by or on behalf of the management of such insurer from the holders of records of stock of such insurer in accordance with this rule prior to any annual or other meeting such insurer shall, in accordance with this rule and/or such further rules as the commissioner may adopt, file with the commissioner and transmit to all stockholders of record information substantially equivalent to the information which would be required to be transmitted if a solicitation were made.

(4) Definitions.

(a) The definitions and instructions set out in schedule SIS — Stockholder Information Supplement (s. Ins 7.02) shall be applicable for purposes of this rule.

(b) The terms “solicit” and “solicitation” for purposes of this rule shall include:

Any request for a proxy, whether or not accompanied by or included in a form of proxy; or
Any request to execute or not to execute, or to revoke, a proxy; or
The furnishing of a proxy or other communication to stockholders under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy.

Any solicitation by a person in respect of stock of which he or she is the beneficial owner;
Action by a broker or other person in respect to stock carried in his or her name or in the name of the nominee in forwarding to the beneficial owner of such stock soliciting material received from the company, or impartially instructing such beneficial owner to forward a proxy to the person, if any, to whom the beneficial owner desires to give a proxy, or impartially requesting instructions from the beneficial owner with respect to the authority to be conferred by the proxy and stating that a proxy will be given if the instructions are received by a certain date;
The furnishing of a form of proxy to a stockholder upon the unsolicited request of such stockholder, or the performance by any person of ministerial acts on behalf of a person soliciting a proxy.

(5) Information to be furnished to stockholders.

(a) No solicitation subject to this rule shall be made unless each person solicited is concurrently furnished or has previously been furnished with a written proxy statement containing the information specified in sub. (12).

(b) If the solicitation is made on behalf of the management of the insurer and relates to an annual meeting of stockholders at which directors are to be elected, each proxy statement furnished pursuant to sub. (5) (a) shall be accompanied or preceded by an annual report (in preliminary or final form) to such stockholders containing such financial statements for the last fiscal year as are referred to in Schedule SIS — Stockholder Information Supplement (s. Ins 7.02) under the heading “Financial Reporting to Stockholders.” Subject to the foregoing requirements with respect to financial statements, the annual report to stockholders may be in any form deemed suitable by the management.

(c) Two copies of each report sent to the stockholders pursuant to sub. (5) shall be mailed to the commissioner not later than the date on which such report is first sent or given to stockholders or the date on which preliminary copies of solicitation material are filed with the commissioner pursuant to sub. (7) (a), whichever date is later.

(6) Requirements as to proxy.

(a) The form of proxy: 1) shall indicate in bold-face type whether or not the proxy is solicited on behalf of the management, 2) shall provide a specifically designated blank space for dating the proxy, and 3) shall identify clearly and impartially each matter or group of related matters intended to be acted upon, whether proposed by the management, or stockholders. No reference need be made to proposals as to which discretionary authority is conferred pursuant to par. (c).

(b) Means shall be provided in the proxy for the person solicited to specify by ballot a choice between approval or disapproval of each matter or group of related matters referred to therein, other than elections to office. A proxy may confer discretionary authority with respect to matters as to which a choice is not so specified if the form of proxy states in bold-face type how it is intended to vote the shares or authorization represented by the proxy in each such case.

(c) A proxy may confer discretionary authority with respect to other matters which may come before the meeting, provided the persons on whose behalf the solicitation is made are not aware a reasonable time prior to the time the solicitation is made that any other matters are to be presented for action at the meeting and provided further that a specific statement to that effect is made in the proxy statement or in the form of proxy.

(d) No proxy shall confer authority

To vote for the election of any person to any office for which a bona fide nominee is not named in the proxy statement, or
To vote at any annual meeting other than the next annual meeting (or any adjournment thereof) to be held after the date, on which the proxy statement and form of proxy are first sent or given to stockholders.

(e) The proxy statement or form of proxy shall provide, subject to reasonable specified conditions, that the proxy will be voted and that where the person solicited specifies by means of ballot provided pursuant to par. (b) a choice with respect to any matter to be acted upon, the vote will be in accordance with the specifications so made.

(f) The information included in the proxy statement shall be clearly presented and the statements made shall be divided into groups according to subject matter, with appropriate headings. All printed proxy statements shall be clearly and legibly presented.

(7) Material required to be filed.

(a) Two preliminary copies of the proxy statement and form of proxy and any other soliciting material to be furnished to stockholders concurrently therewith shall be filed with the commissioner at least 10 days prior to the date definitive copies of such material are first sent or given to stockholders, or such shorter period prior to that date as the commissioner may authorize upon a showing of good cause therefor.

(b) Two preliminary copies of any additional soliciting material relating to the same meeting or subject matter to be furnished to stockholders subsequent to the proxy statements shall be filed with the commissioner at least 2 days (exclusive of Saturdays, Sundays or holidays) prior to the date copies of this material are first sent or given to stockholders or a shorter period prior to such date as the commissioner may authorize upon a showing of good cause therefor.

(c) Two definitive copies of the proxy statement, form of proxy and all other soliciting material, in the form in which this material is furnished to stockholders, shall be filed with, or mailed for filing to, the commissioner not later than the date such material is first sent or given to the stockholders.

(d) Where any proxy statement, form of proxy or other material filed pursuant to these rules is amended or revised, 2 of the copies shall be marked to clearly show such changes.

(e) Copies of replies to inquiries from stockholders requesting further information and copies of communications which do no more than request that forms of proxy theretofore solicited be signed and returned need not be filed pursuant to sub. (7).

(f) Notwithstanding the provisions of subs. (7) (a) and (b) and (11) (e), copies of soliciting material in the form of speeches, press releases and radio or television scripts may, but need not, be filed with the commissioner prior to use or publication. Definitive copies, however, shall be filed with or mailed for filing to the commissioner as required by sub. (7) (c) not later than the date such material is used or published. The provisions of subs. (7) (a) and (b) and (11) (e) shall apply, however, to any reprints or reproductions of all or any part of such material.

(9) False or misleading statements. No solicitation subject to this rule shall be made by means of any proxy statement, form of proxy, notice of meeting, or other communication, written or oral, containing any statement which at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading.

(10) Prohibition of certain solicitations. No person making a solicitation which is subject to this rule shall solicit any undated or postdated proxy or any proxy which provides that it shall be deemed to be dated as of any date subsequent to the date on which it is signed by the stockholder.

(11) Special provisions applicable to election contests.

(a) Applicability. Subsection (11) shall apply to any solicitation subject to this rule by any person or group for the purpose of opposing a solicitation subject to this rule by any other person or group with respect to the election or removal of directors at any annual or special meeting of stockholders.

(b) Participant or participant in a solicitation.

For purposes of sub. (11) the terms “participant” and “participant in a solicitation”include:

a. The insurer;

b. Any director of the insurer, and any nominee for whose election as a director proxies are solicited; or

c. Any other person, acting alone or with one or more other persons, committees or groups, in organizing, directing or financing the solicitation.

For the purposes of sub. (11) the terms “participant” and “participant in a solicitation” do not include:

a. A bank, broker or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or sale of stock and who is not otherwise a participant;

b. Any person or organization retrained or employed by a participant to solicit stockholders or any person who merely transmits proxy soliciting material or performs ministerial or clerical duties;

c. Any person employed in the capacity of attorney, accountant, or advertising, public relations or financial adviser, and whose activities are limited to the performance of his or her duties in the course of such employment;

Any person regularly employed as an officer or employee of the insurer or any of its subsidiaries or affiliates who is not otherwise a participant; or

e. Any officer or director of, or any person regularly employed by any other participant, if such officer, director or employee is not otherwise a participant.

No solicitation subject to sub. (11) shall be made by any person other than the management of an insurer unless at least 5 business days prior thereto, or such shorter period as the commissioner may authorize upon a showing of good cause therefor, there has been filed, with the commissioner by or on behalf of each participant in such solicitation, a statement in duplicate containing the information specified by sub. (13) and a copy of any material proposed to be distributed to stockholders in furtherance of such solicitation. Where preliminary copies of any materials are filed, distribution to stockholders should be deferred until the commissioner’s comments have been received and complied with.
Within 5 business days after a solicitation subject to sub. (11) is made by the management of an insurer, or such longer period as the commissioner may authorize upon a showing of good cause therefor, there shall be filed with the commissioner by or on behalf of each participant in such solicitation, other than the insurer, and by or on behalf of each management nominee for director, a statement in duplicate containing the information specified by sub. (13).
If any solicitation on behalf of management or any other person has been made, or if proxy material is ready for distribution, prior to a solicitation subject to sub. (11) in opposition thereto, a statement in duplicate containing the information specified in sub. (13) shall be filed with the commissioner, by or on behalf of each participant in such prior solicitation, other than the insurer, as soon as reasonably practicable after the commencement of the solicitation in opposition thereto.
If, subsequent to the filing of the statements required by subds. 1., 2., and 3., additional persons become participants in a solicitation subject to this rule, there shall be filed with the commissioner, by or on behalf of each such person, a statement in duplicate containing the information specified by sub. (13) within 3 business days after such person becomes a participant, or such longer period as the commissioner may authorize upon a showing of good cause therefor.
If any material change occurs in the facts reported in any statement filed by or on behalf of any participant, an appropriate amendment to such statement shall be filed promptly with the commissioner.
Each statement and amendment thereto filed pursuant to par. (c) shall be part of the public files of the commissioner.

(d) Solicitations prior to furnishing required written proxy statement. Notwithstanding the provisions of sub. (5) (a), a solicitation subject to sub. (11) may be made prior to furnishing stockholders a written proxy statement containing the information specified in sub. (12) with respect to such solicitation, provided that:

The statements required by par. (c) are filed by or on behalf of each participant in such solicitation.
No form of proxy is furnished to stockholders prior to the time the written proxy statement required by sub. (5) (a) is furnished to such persons; provided, however, that subd. 2. shall not apply where a proxy statement then meeting the requirements of sub. (12) has been furnished to stockholders.
At least the information specified in par. (c) 2. and 3. of the statements required by par. (c) to be filed by each participant, or an appropriate summary thereof, are included in each communication sent or given to stockholders in connection with the solicitation.
A written proxy statement containing the information specified in sub. (12) with respect to a solicitation is sent or given stockholders at the earliest practicable date.

(e) Solicitations prior to furnishing required written proxy statement — filing requirements. Two copies of any soliciting material proposed to be sent or given to stockholders prior to the furnishing of the written proxy statement required by sub. (5) (a) shall be filed with the commissioner in preliminary form at least 5 business days prior to the date definitive copies of such material are first sent or given to such persons, or shorter period as the commissioner may authorize upon a showing of good cause therefor.

(f) Application of sub. (11) to report. Notwithstanding the provisions of sub. (5) (b) and (c), 2 copies of any portion of the report referred to in sub. (5) (b) which comments upon or refers to any solicitation subject to sub. (11) or to any participant in any such solicitation, other than the solicitation by the management, shall be filed with the commissioner as proxy material subject to this regulation. Such portion of the report shall be filed with the commissioner in preliminary form at least 5 business days prior to the date copies of the report are first sent or given to stockholders.

(12) Information required in proxy statement.

(a) Revocability of proxy. State whether or not the person giving the proxy has the power to revoke it. If the right of revocation before the proxy is exercised is limited or is subject to compliance with any formal procedure, briefly describe such limitation or procedure.

(b) Dissenters’ rights of appraisal. Outline briefly the rights of appraisal or similar rights of dissenting stockholders with respect to any matter to be acted upon and indicate any statutory procedure required to be followed by such stockholders in order to perfect their rights. Where such rights may be exercised only within a limited time after the date of the adoption of a proposal, the filing of a charter amendment, or other similar act, state whether the person solicited will be notified of such date.

If the solicitation is made by the management of the insurer, so state. Give the name of any director of the insurer who has informed the management in writing that he or she intends to oppose any action intended to be taken by the management and indicate the action which he or she intends to oppose.
If the solicitation is made otherwise than by the management of the insurer, state the names and addresses of the persons by whom and on whose behalf it is made and the names and addresses of the persons by whom the cost of solicitation has been or will be borne, directly or indirectly.
If the solicitation is to be made by specially engaged employees or paid solicitors, state:

a. The material features of any contract or arrangement for such solicitation and identify the parties, and

b. The cost or anticipated cost thereof.

(d) Interest of certain persons in matters to be acted upon. Describe briefly any substantial interest, direct or indirect, by stockholdings or otherwise, of any director, nominee for election for director, officer and, if the solicitation is made otherwise than on behalf of management, each person on whose behalf the solicitation is made, in any matter to be acted upon other than elections to office.

(e) Stocks and principal stockholders.

State, as to class of voting stock of the insurer entitled to be voted at the meeting, the number of shares outstanding and the number of votes to which each class is entitled.
Give the date as of which the record list of stockholders entitled to vote at the meeting will be determined. If the right to vote is not limited to stockholders of record on that date, indicate the conditions under which other stockholders may be entitled to vote.

(f) Nominees and directors. If action is to be taken with respect to the election of directors furnish the following information, in tabular form to the extent practicable, with respect to each person nominated for election as a director and each other person whose term of office as a director will continue after the meeting:

Name each such person, state when his or her term of office or the term of office for which he or she is a nominee will expire, and all other positions and offices with the insurer presently held by him or her, and indicate which persons are nominees for election as directors at the meeting.
State his or her present principal occupation or employment and give the name and principal business of any corporation or other organization in which such employment is carried on. Furnish similar information as to all of his or her principal occupations or employments during the last 5 years, unless he or she is now a director and was elected to his or her present term of office by a vote of stockholders at a meeting for which proxies were solicited under this regulation.
If he or she is or has previously been a director of the insurer, state the period or periods during which he or she has served as such.
State, as of the most recent practicable date, the approximate amount of each class of stock of the insurer or any of its parents, subsidiaries or affiliates other than directors’ qualifying shares, beneficially owned directly or indirectly by him or her. If he or she is not the beneficial owner of any such stocks make a statement to that effect.

(g) Remuneration and other transactions with management and others. Furnish the information reported or required in item 1. of Schedule SIS — Stockholder Information Supplement (s. Ins 7.02) under the heading “Information Regarding Management and Directors” if action is to be taken with respect to: 1) the election of directors, 2) any remuneration plan, contract or arrangement in which any director, nominee for election as a director, or officer of the insurer will participate, 3) any pension or retirement plan in which any such person will participate, or 4) the granting or extension to any such person of any options, warrants or rights to purchase any stocks, other than warrants or rights issued to stockholders, as such, on a pro rata basis. If the solicitation is made on behalf of persons other than the management, information shall be furnished only as to item 1.A. of the aforesaid heading of Schedule SIS.

(h) Bonus, profit sharing and other remuneration plans. If action is to be taken with respect to any bonus, profit sharing, or other remuneration plan of the insurer, furnish the following information:

A brief description of the material features of the plan, each class of persons who will participate therein, the approximate number of persons in each such class, and the basis of such participation.
The amounts which would have been distributable under the plan during the last calendar year to

a. Each person named in par. (g),

b. Directors and officers as a group, and

c. To all other employees as a group, if the plan had been in effect.

If the plan to be acted upon may be amended (other than by a vote of stockholders) in a manner which would materially increase the cost thereof to the insurer or to materially alter the allocation of the benefits as between the groups specified in subd. 2., the nature of such amendments should be specified.

(i) Pension and retirement plan. If action is to be taken with respect to any pension or retirement plan of the insurer, furnish the following information:

A brief description of the material features of the plan, each class of persons who will participate therein, the approximate number of persons in each such class, and the basis of such participation.
State:

a. The approximate total amount necessary to fund the plan with respect to past services, the period over which such amount is to be paid, and the estimated annual payments necessary to pay the total amount over such period;

b. The estimated annual payment to be made with respect to current services; and

c. The amount of such annual payments to be made for the benefit of each person named in par. (g), directors and officers as a group, and employees as a group.

If the plan to be acted upon may be amended (other than by a vote of stockholders) in a manner which would materially increase the cost thereof to the insurer or to materially alter the allocation of the benefits as between the groups specified in par. (h) 2. c., the nature of such amendments should be specified.

(j) Options, warrants, or rights. If action is to be taken with respect to the granting or extension of any options, warrants or rights (all referred to herein as “warrants”) to purchase stock of the insurer or any subsidiary or affiliate, other than warrants issued to all stockholders on a pro rata basis, furnish the following information:

The title and amount of stock called for or to be called for, the prices, expiration dates and other material conditions upon which the warrants may be exercised, the consideration received or to be received by the insurer, subsidiary or affiliate for the granting or extension of the warrants and the market value of the stock called for or to be called for by the warrants, as of the latest practicable date.
If known, state separately the amount of stock called for or to be called for by warrants received or to be received by the following persons, naming each such person:

a. Each person named in par. (g), and

b. Each other person who will be entitled to acquire 5% or more of the stock called for or to be called for by such warrants.

If known, state also the total amount of stock called for or to be called for by such warrants, received or to be received by all directors and officers of the company as a group and all employees, without naming them.

(k) Authorization or issuance of stock.

If action is to be taken with respect to the authorization or issuance of any stock of the insurer, furnish the title, amount and description of the stock to be authorized or issued.
If the shares of stock are other than additional shares of common stock of a class outstanding, furnish a brief summary of the following, if applicable: dividend, voting, liquidation, preemptive, and conversion rights, redemption and sinking fund provisions, interest rate and date of maturity.
If the shares of stock to be authorized or issued are other than additional shares of common stock of a class outstanding, the commissioner may require financial statements comparable to those contained in the annual report.

(L) Mergers, consolidations, acquisitions and similar matters.

If action is to be taken with respect to a merger, consolidation, acquisition, or similar matter, furnish in brief outline the following information:

a. The rights of appraisal or similar rights of dissenters with respect to any matters to be acted upon. Indicate any procedure required to be followed by dissenting stockholders in order to perfect such rights.

b. The material features of the plan or agreement.

c. The business done by the company to be acquired or whose assets are being acquired.

d. If available, the high and low sales prices for each quarterly period within 2 years.

e. The percentage of outstanding shares which must approve the transaction before it is consummated.

For each company involved in a merger, consolidation or acquisition, the following financial statements should be furnished:

a. A comparative balance sheet as of the close of the last 2 fiscal years.

b. A comparative statement of operating income and expenses for each of the last 2 fiscal years and, as a continuation of each statement, a statement of earning per share after related taxes and cash dividends paid per share.

c. A pro forma combined balance sheet and income and expenses statement for the last fiscal year giving effect to the necessary adjustments with respect to the resulting company.

(m) Restatement of accounts. If action is to be taken with respect to the restatement of any asset, capital, or surplus of the insurer, furnish the following information:

State the nature of the restatement and the date as of which it is to be effective.
Outline briefly the reasons for the restatement and for the selection of the particular effective date.
State the name and amount of each account affected by the restatement and the effect of the restatement thereon.

(n) Matters not required to be submitted. If action is to be taken with respect to any matter which is not required to be submitted to a vote of stockholders, state the nature of such matter, the reason for submitting it to a vote of stockholders and what action is intended to be taken by the management in the event of a negative vote on the matter by the stockholders.

(o) Amendment of charter, by-laws, or other documents. If action is to be taken with respect to any amendment of the insurer’s charter, by-laws or other documents as to which information is not required above, state briefly the reasons for and general effect of such amendment and the vote needed for its approval.

(13) Information to be included in statements filed by or on behalf of a participant (other than the insurer) in a proxy solicitation in an election contest.

(a) Insurer. State the name and address of the insurer.

(b) Identity and background.

State the following:

a. Your name and business address.

b. Your present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is carried on.

State the following:

a. Your residence address.

b. Information as to all material occupations, positions, offices or employments during the last 10 years, giving starting and ending dates of each and the name, principal business and address of any business corporation or other business organization in which each such occupation, position, office or employment was carried on.

State whether or not you are or have been a participant in any other proxy contest involving this company or other companies within the past 10 years. If so, identify the principals, the subject matter and your relationship to the parties and the outcome.
State whether or not, during the past 10 years, you have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give dates, nature of conviction, name and location of court, and penalty imposed or other disposition of the case. A negative answer to this subparagraph need not be included in the proxy statement or other proxy soliciting material.

State the amount of each class of stock of the insurer which you own beneficially, directly or indirectly.
State the amount of each class of stock of the insurer which you own of record but not beneficially.
State with respect to the stock specified in subds. 1. and 2. the amounts acquired within the past 2 years and the dates of acquisition and the amounts acquired on each date.
If any part of the purchase price or market value of any of the stock specified in subd. 3. is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such stock, so state and indicate the amount of the indebtedness as of the latest practicable date. If such funds were borrowed or obtained otherwise than pursuant to a margin account or bank loan in the regular course of business of a bank, broker or dealer, briefly describe the transaction, and state the names of the parties.
State whether or not you are a party to any contracts, arrangements or understandings with any person with respect to any stock of the insurer, including but not limited to joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. If so, name the persons with whom such contracts, arrangements, or understandings exist and give the details thereof.
State the amount of stock of the insurer owned beneficially, directly or indirectly, by each of your associates and the name and address of each such associate.
State the amount of each class of stock of any parent, subsidiary or affiliate of the insurer which you own beneficially, directly or indirectly.

(d) Further matters.

Describe the time and circumstances under which you became a participant in the solicitation and state the nature and extent of your activities or proposed activities as a participant.
Describe briefly, and where practicable state the approximate amount of, any material interest, direct or indirect, of yourself and of each of your associates in any material transactions since the beginning of the company’s last fiscal year, or in any material proposed transactions, to which the company or any of its subsidiaries or affiliates was or is to be a party.
State whether or not you or any of your associates have any arrangement or understanding with any person.

a. With respect to any future employment by the insurer or its subsidiaries or affiliates; or

b. With respect to any future transactions to which the insurer or any of its subsidiaries or affiliates will or may be a party. If so, describe such arrangement or understanding and state the names of the parties thereto.

(e) Signature. The statement shall be dated and signed in the following manner:

History

Cr. Register, November, 1965, No. 119, eff. 12-1-65; corrections in (4) (a) and (12) (g) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; correction in (5) (b) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610.

Wis. Admin. Code § Ins 6.41 Insider trading of equity securities of domestic stock insurers {#sec-ins-6.41 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.41}

(1) Definitions.

(a) “Insurer” means any domestic insurance company with an equity security subject to the provisions of s. 611.31, Stats., and not exempt thereunder.

(b) “Officer” means a president, vice president, treasurer, actuary, secretary, controller and any other person who performs for the insurer functions corresponding to those performed by the foregoing officers.

(c) “Equity security” means any stock or similar security; or any voting trust certificate or certificate of deposit for such a security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right.

(d) Securities held of record.

For the purpose of determining whether the equity securities of an insurer are held of record by 100 or more persons, securities shall be deemed to be “held of record” by each person who is identified as the owner of such securities on records of security holders maintained by or on behalf of the insurer, subject to the following:

a. In any case where the records of security holders have not been maintained in accordance with accepted practice, any additional person who would be identified as such an owner on such records if they had been maintained in accordance with accepted practice shall be included as a holder of record.

b. Securities identified as held of record by a corporation, a partnership, a trust whether or not the trustees are named, or other organization shall be included as so held by one person.

c. Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians or in other fiduciary capacities with respect to a single trust, estate or account shall be included as held of record by one person.

d. Securities held by 2 or more persons as co-owners shall be included as held by one person.

e. Each outstanding unregistered or bearer certificate shall be included as held of record by a separate person, except to the extent that the insurer can establish that, if such securities were registered, they would be held of record, under the provisions of this rule, by a lesser number of persons.

f. Securities registered in substantially similar names where the insurer has reason to believe because of the address or other indications that such names represent the same person, may be included as held of record by one person.

Notwithstanding subd. 1.:

a. Securities held, to the knowledge of the insurer, subject to a voting trust, deposit agreement or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts or similar evidences of interest in such securities; provided, however, that the insurer may rely in good faith on such information as is received in response to its request from a nonaffiliated insurer of the certificates or evidences of interest.

b. If the insurer knows or has reason to know that the form of holding securities of record is used primarily to circumvent the provisions of s. 611.31, Stats., the beneficial owners of such securities shall be deemed to be the record owners thereof.

(e) “Class” means all securities of an insurer which are of substantially similar character and the holders of which enjoy substantially similar rights and privileges.

(2) Transactions exempted from the operation of s. 611.31 (4) (b), Stats. Any acquisition or disposition of any equity security by a director or officer of an insurer within 6 months prior to June 27, 1965 shall not be subject to the operation of s. 611.31 (4) (b), Stats.

(3) Rules under s. 611.31 (4) (a), Stats.

(a) Filing of statements. Initial statements of beneficial ownership of equity securities required by s. 611.31 (4) (a), Stats., shall be filed on the form prescribed by s. Ins 6.42. Statements of changes in such beneficial ownership required by s. 611.31 (4) (a), Stats., shall be filed on the form prescribed by s. Ins 6.43. All such statements shall be prepared and filed in accordance with the requirements of the applicable form.

(b) Ownership of more than 10% of an equity security. In determining, for the purpose of s. 611.31 (4) (a), Stats., whether a person is the beneficial owner, directly or indirectly, of more than 10% of any class of any equity security, such class shall be deemed to consist of the total amount of such class outstanding, exclusive of any securities of such class held by or for the account of the insurer or a subsidiary of the insurer; except that for the purpose of determining percentage ownership of voting trust certificates or certificates of deposit for equity securities, the class of voting trust certificates or certificates of deposit shall be deemed to consist of the amount of voting trust certificates or certificates of deposit issuable with respect to the total amount of outstanding equity securities of the class which may be deposited under the voting trust agreement or deposit agreement in question, whether or not all of such outstanding securities have been so deposited. For the purpose of this par. (b) a person acting in good faith may rely on the information contained in the latest annual statement form, prescribed by s. Ins 7.02, filed with the commissioner with respect to the amount of securities of a class outstanding or in the case of voting trust certificates or certificates of deposit the amount thereof issuable.

(c) Disclaimer of beneficial ownership. Any person filing a statement may expressly declare therein that the filing of such statement shall not be construed as an admission that such person is, for the purpose of s. 611.31, Stats., the beneficial owner of any equity securities covered by the statement.

(d) Exemptions from s. 611.31 (4) (a) and (b), Stats.

During the period of 12 months following their appointment and qualification, securities held by the following persons shall be exempt from s. 611.31 (4) (a) and (b), Stats.:

a. Executors or administrators of the estate of a decedent;

b. Guardians or committees for an incompetent; and

c. Receivers, trustees in bankruptcy, assignees for the benefit of creditors, conservators, liquidating agents, and other similar persons duly authorized by law to administer the estate or assets of other persons.

After the 12-month period following their appointment or qualification the foregoing persons shall be required to file reports with respect to the securities held by the estates which they administer under s. 611.31 (4) (a), Stats., and shall be liable for profits realized from trading in such securities pursuant to s. 611.31 (4) (b), Stats., only when the estate being administered is a beneficial owner of more than 10% of any class of equity security of an insurer subject to s. 611.31, Stats.
Securities reacquired by or for the account of an insurer and held by it for its account shall be exempt from s. 611.31 (4) (a) and (b), Stats., during the time they are held by the insurer.

(e) Exemption from s. 611.31, Stats., of securities purchased or sold by odd-lot dealers. Securities purchased or sold by an odd-lot dealer in odd lots so far as reasonably necessary to carry on odd-lot transactions or in round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business, shall be exempt from the provisions of s. 611.31, Stats., with respect to participation by such odd-lot dealer in such transactions.

(f) Certain transactions subject to s. 611.31 (4) (a), Stats. The acquisition or disposition of any transferable option, put, call, spread or straddle shall be deemed such a change in the beneficial ownership of the security to which such privilege relates as to require the filing of a statement reflecting the acquisition or disposition of such privilege. Nothing in this par. (f), however, shall exempt any person from filing the statements required upon the exercise of such option, put, call, spread or straddle.

(g) Ownership of securities held in trust.

Beneficial ownership of a security for the purpose of s. 611.31 (4) (a), Stats., shall include:

a. The ownership of securities as a trustee where either the trustee or members of his or her immediate family have a vested interest in the income or corpus of the trust,

b. The ownership of a vested beneficial interest in a trust, and

c. The ownership of securities as a settlor of a trust in which the settlor has the power to revoke the trust without obtaining the consent of all the beneficiaries.

Except as provided in subd. 3., beneficial ownership of securities solely as a settlor or beneficiary of a trust shall be exempt from the provisions of s. 611.31 (4) (a), Stats., where less than 20% in market value of the securities having a readily ascertainable market value held by such trust, determined as of the end of the preceding fiscal year of the trust, consists of equity securities with respect to which reports would otherwise be required. Exemption is likewise accorded from s. 611.31 (4) (a), Stats., with respect to any obligation which would otherwise be imposed solely by reason of ownership as settlor or beneficiary of securities held in trust, where the ownership, acquisition, or disposition of such securities by the trust is made without prior approval by the settlor or beneficiary. No exemption pursuant to this subdivision shall, however, be acquired or lost solely as a result of changes in the value of the trust assets during any fiscal year or during any time when there is no transaction by the trust in the securities otherwise subject to the reporting requirements of s. 611.31 (4) (a), Stats.
In the event that 10% of any class of any equity security of an insurer is held in a trust, that trust and the trustees thereof as such shall be deemed a person required to file the reports specified in s. 611.31 (4) (a), Stats.
Not more than one report need be filed to report any holdings or with respect to any transaction in securities held by a trust, regardless of the number of officers, directors or 10% stockholders who are either trustees, settlors, or beneficiaries of a trust, provided that the report filed shall disclose the names of all trustees, settlors and beneficiaries who are officers, directors or 10% stockholders. A person having an interest only as a beneficiary of a trust shall not be required to file any such report so long as he or she relies in good faith upon an understanding that the trustee of such trust will file whatever reports might otherwise be required of such beneficiary.
As used in this par. (g) the “immediate family” of a trustee means:

a. A son or daughter of the trustee, or a descendant of either,

b. A stepson or stepdaughter of the trustee,

c. The father or mother of the trustee, or an ancestor of either,

d. A stepfather or stepmother of the trustee,

e. A spouse of the trustee. For the purpose of determining whether any of the foregoing relations exists, a legally adopted child of a person shall be considered a child of such person by blood.

In determining, for the purposes of s. 611.31 (4) (a), Stats., whether a person is the beneficial owner, directly or indirectly, of more than 10% of any class of any equity security, the interest of such person in the remainder of a trust shall be excluded from the computation.
No report shall be required by any person, whether or not otherwise subject to the requirement of filing reports under s. 611.31 (4) (a), Stats., with respect to an indirect interest in portfolio securities held by:

a. A pension or retirement plan holding securities of an insurer whose employees generally are the beneficiaries of the plan,

b. A business trust with over 25 beneficiaries.

Nothing in this par. (g) shall be deemed to impose any duties or liabilities with respect to reporting any transaction or holding prior to its effective date.

(h) Exemption for small transactions.

Any acquisition of securities shall be exempt from s. 611.31 (4) (a), Stats., where:

a. The person effecting the acquisition does not within 6 months thereafter effect any disposition, otherwise than by way of gift, of securities of the same class, and

b. The person effecting such acquisition does not participate in acquisitions or in dispositions of securities of the same class having a total market value in excess of $3,000 for any 6 months’ period during which the acquisition occurs.

Any acquisition or disposition of securities by way of gift, where the total amount of such gifts does not exceed $3,000 in market value for any 6 months’ period, shall be exempt from s. 611.31 (4) (a), Stats., and may be excluded from the computations prescribed in subd. 1. b.
Any person exempted by subd. 1. or 2. shall include in the first report filed by him or her after a transaction within the exemption a statement showing acquisitions and dispositions for each 6 months’ period or portion thereof which has elapsed since the last filing.

(i) Exemption from s. 611.31 (4) (b), Stats. Any transaction which has been or shall be exempted from the requirements of s. 611.31 (4) (a), Stats., shall, insofar as it is otherwise subject to the provisions of s. 611.31 (4) (b), Stats., be likewise exempted from s. 611.31 (4) (b), Stats.

(4) Rules under s. 611.31 (4) (b), Stats.

(a) Exemption from s. 611.31 (4) (b), Stats., of certain transactions effected in connection with a distribution.

Any transaction of purchase and sale, or sale and purchase, of a security which is effected in connection with the distribution of a substantial block of securities shall be exempt from the provisions of s. 611.31 (4) (b), Stats., to the extent specified in par. (a) as not comprehended within the purpose of s. 611.31 (4) (b), Stats., upon the following conditions:

a. The person effecting the transaction is engaged in the business of distributing securities and in participating in good faith, in the ordinary course of such business, in the distribution of such block of securities;

b. The security involved in the transaction is a part of such block of securities and is acquired by the person effecting the transaction, with a view to the distribution thereof, from the insurer or other person on whose behalf such securities are being distributed or from a person who is participating in good faith in the distribution of such block of securities; or a security purchased in good faith by or for the account of the person effecting the transaction for the purpose of stabilizing the market price of securities of the class being distributed or to cover an over-allotment or other short position created in connection with such distribution; and

c. Other persons not within the purview of s. 611.31 (4) (b), Stats., are participating in the distribution of such block of securities on terms at least as favorable as those on which such person is participating and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of s. 611.31 (4) (b), Stats., by this par. (a). However, the performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing such functions shall not preclude an exemption which would otherwise be available under this par. (a).

The exemption of a transaction pursuant to this par. (a) with respect to the participation therein of one party thereto shall not render such transaction exempt with respect to participation of any other party therein unless such other party also meets the conditions of this par. (a).

(b) Exemption from s. 611.31 (4) (b), Stats., of acquisitions of shares of stock and stock options under certain stock bonus, stock option or similar plans. Any acquisition of shares of stock (other than stock acquired upon the exercise of an option, warrant or right) pursuant to a stock bonus, profit sharing, retirement, incentive, thrift, savings or similar plan, or any acquisition of a qualified or a restricted stock option pursuant to a qualified or a restricted stock option plan, or a stock option pursuant to an employee stock purchase plan, by a director or officer of an insurer issuing such stock or stock option shall be exempt from the operation of s. 611.31 (4) (b), Stats., if the plan meets the following conditions:

The plan has been approved, directly or indirectly,

a. By the affirmative votes of the holders of a majority of the securities of such insurer present, or represented, and entitled to vote at a meeting held in accordance with the applicable laws of the state of Wisconsin, or

b. By the written consent of the holders of a majority of the securities of such insurer entitled to vote: provided, however, that if such vote or written consent was not solicited substantially in accordance with s. Ins 6.40 in effect at the time of such vote or written consent, the insurer shall furnish in writing to the holders of record of the securities entitled to vote for the plan substantially the same information concerning the plan which would be required by any such rules and regulations so prescribed and in effect at the time such information is furnished, if proxies to be voted with respect to the approval or disapproval of the plan were then being solicited, on or prior to the date of the first annual meeting of security holders held subsequent to the later of the date s. 611.31, Stats., first applies to such insurer; or the acquisition of an equity security for which exemption is claimed. Such written information may be furnished by mail to the last known address of the security holders of record within 30 days prior to the date of mailing. Four copies of such written information shall be filed with, or mailed for filing to, the commissioner not later than the date on which it is first sent or given to security holders of the insurer. For the purposes of subd. 1. b., the term “insurer” includes a predecessor corporation if the plan or obligations to participate thereunder were assumed by the insurer in connection with the succession.

If the selection of any director or officer of the insurer to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan, or the determination of the number or maximum number of shares of stock which may be allocated to any such director or officer or which may be covered by qualified, restricted or employee stock purchase plan stock options granted to any such director or officer, is subject to the discretion of any person, then such discretion shall be exercised only as follows:

a. With respect to the participation of directors: 1) By the board of directors of the insurer, a majority of which board and a majority of the directors acting in the matter are disinterested persons; 2) By, or only in accordance with the recommendations of, a committee of 3 or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons; or 3) Otherwise in accordance with the plan, if the plan specifies the number or maximum number of shares of stock which directors may acquire or which may be subject to qualified, restricted or employee stock purchase plan stock options granted to directors and the terms upon which, and the times at which, or the periods within which, such stock may be acquired or such options may be acquired and exercised; or sets forth, by formula or otherwise, effective and determinable limitations with respect to the foregoing based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors.

b. With respect to the participation of officers who are not directors: 1) By the board of directors of the insurer or a committee of 3 or more directors; or 2) By, or only in accordance with the recommendations of, a committee of 3 or more persons having full authority to act in the matter, all of the members of which committee are disinterested persons. For the purpose of this subd. 2., a director or committee member shall be deemed to be a disinterested person only if such person is not at the time such discretion is exercised eligible and has not at any time within one year prior thereto been eligible for selection as a person to whom stock may be allocated or to whom qualified, restricted or employee stock purchase plan stock options may be granted pursuant to the plan or any other plan of the insurer or any of its affiliates entitling the participants therein to acquire stock or qualified, restricted or employee stock purchase plan stock options of the insurer or any of its affiliates.

c. The provisions of this subd. 2. shall not apply with respect to any option granted, or other equity security acquired, prior to June 27, 1965.

As to each participant or as to all participants the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock which may be allocated, or which may be subject to qualified, restricted, or employee stock purchase plan stock options granted, pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date; and may be determined either by fixed or maximum dollar amounts or fixed or maximum numbers of shares or by formulas based upon earnings of the insurer, dividends paid, compensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors which will result in an effective and determinable limitation. Such limitations may be subject to any provisions for adjustment of the plan or of stock allocable or options outstanding thereunder to prevent dilution or enlargement of rights.
Unless the context otherwise requires, all terms used in this par. (b) shall have the same meaning as in s. 611.31, Stats., and in sub. (1). In addition, the following definitions apply:

a. The term “plan” includes any plan, whether or not set forth in any formal written document or documents and whether or not approved in its entirety at one time.

b. The definition of the terms “qualified stock option” and “employee stock purchase plan” that are set forth in sections 442 and 423 of the Internal Revenue Code of 1954, as amended, are to be applied to those terms where used in par. (b). The term “restricted stock option” as defined in section 424(b) of the Internal Revenue Code of 1954, as amended, shall be applied to that term as used in par. (b), provided, however, that for the purposes of par. (b) an option which meets all of the conditions of section 424(b) of the Internal Revenue Code of 1954, as amended, other than the date of issuance shall be deemed to be a “restricted stock option.”

(c) Exemption from s. 611.31 (4) (b), Stats., of certain transactions in which securities are received by redeeming other securities. Any acquisition of an equity security (other than a convertible security or right to purchase a security) by a director or officer of the insured issuing such security shall be exempt from the operation of s. 611.31 (4) (b), Stats., upon condition that

The equity security is acquired by way of redemption of another security of an insurer substantially all of whose assets other than cash (or government bonds) consist of securities of the insurer issuing the equity security so acquired, and which

a. Represented substantially and in practical effect a stated or readily ascertainable amount of such equity security,

b. Had a value which was substantially determined by the value of such equity security, and

c. Conferred upon the holder the right to receive such equity security without the payment of any consideration other than the security redeemed;

No security of the same class as the security redeemed was acquired by the director or officer within 6 months prior to such redemption or is acquired within 6 months after such redemption;
The insurer issuing the equity security acquired has recognized the applicability of subd. 1. by appropriate corporate action.

(d) Exemption of long term profits incident to sales within 6 months of the exercise of an option.

To the extent specified in subd. 2., the commissioner hereby exempts as not comprehended within the purposes of s. 611.31 (4) (b), Stats., any transaction or transactions involving the purchase and sale, or sale and purchase, of any equity security where such purchase is pursuant to the exercise of an option or similar right either acquired more than 6 months before its exercise; or acquired pursuant to the terms of an employment contract entered into more than 6 months before its exercise.
In respect of transactions specified in subd. 1. the profits inuring to the insurer shall not exceed the difference between the proceeds of sale and the lowest market price of any security of the same class within 6 months before or after the date of sale. Nothing in this par. (d) shall be deemed to enlarge the amount of profit which would inure to such insurer in the absence of this par. (d).
The commissioner also hereby exempts, as not comprehended within the purposes of s. 611.31 (4) (b), Stats., the disposition of a security, purchased in a transaction specified in subd. 1., pursuant to a plan or agreement for merger or consolidation, or reclassification of the insurer’s securities, or for the exchange of its securities for the securities of another person which has acquired its assets, or which is in control, as defined in section 368(c) of the Internal Revenue Code of 1954, of a person which has acquired its assets, where the terms of such plan or agreement are binding upon all stockholders of the insurer except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings.
The exemptions provided by this par. (d) shall not apply to any transaction made unlawful by s. 611.31 (4) (c), Stats., or by any rules and regulations thereunder.
The burden of establishing market price of a security for the purpose of this par. (d) shall rest upon the person claiming the exemption.

(e) Exemption from s. 611.31 (4) (b), Stats., of certain acquisitions and dispositions of securities pursuant to merger or consolidations.

The following transactions shall be exempt from the provisions of s. 611.31 (4) (b), Stats., as not comprehended within its purpose:

a. The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to said merger or consolidation, owned 85% or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company;

b. The disposition of a security, pursuant to a merger or consolidation of an insurer which, prior to said merger or consolidation, owned 85% or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company:

c. The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to said merger or consolidation, held over 85% of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to the merger or consolidation as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.

d. The disposition of a security, pursuant to a merger or consolidation, of an insurer which, prior to said merger or consolidation, held over 85% of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to merger or consolidation, as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.

A merger within the meaning of this par. (e) shall include the sale or purchase of substantially all the assets of one insurer by another in exchange for stock which is then distributed to the security holders of the insurer which sold its assets.
Notwithstanding the foregoing, if an officer, director or stockholder shall make any purchase (other than a purchase exempted by this par. (e)) of a security in any company involved in the merger or consolidation and any sale (other than a sale exempted by this par. (e)) of a security in any other company involved in the merger or consolidation within any period of less than 6 months during which the merger or consolidation took place, the exemption provided by this par. (e) shall be unavailable to such officer, director, or stockholder.

(f) Exemption from s. 611.31 (4) (b), Stats., of certain securities received upon surrender of similar equity securities. Any receipt by a person from an insurer of shares of stock of a class having general voting power, upon the surrender by such person of an equal number of shares of stock of the insurer of a class which does not have general voting power, pursuant to provisions of the insurer’s certificate of incorporation, for the purpose of and accompanied simultaneously or followed immediately by the sale of the shares so received, shall be exempt from the operation of s. 611.31 (4) (b), Stats., as a transaction not comprehended within its purpose, if the following conditions exist:

The person so receiving such shares is not an officer or director, or the beneficial owner, directly or indirectly, immediately prior to such receipt, of more than 10% of an equity security of the insurer;
The shares surrendered and the shares issued upon such surrender shall be of classes which are freely transferable and entitle the holders thereof to participate equally per share in all distributions of earnings and assets;
The surrender and issuance are made pursuant to provisions of a certificate of incorporation which requires that the shares issued upon such surrender shall be registered upon issuance in the name of a person or persons other than the holder of the shares surrendered and may be required to be issued as the right only in connection with the public offering, sale and distribution of such shares and the immediate sale by such holder of such shares for that purpose, or in connection with a gift of such shares;
Neither the shares so surrendered nor any shares of the same class, nor other shares of the same class as those issued upon such surrender, have been or are purchased (otherwise than in a transaction exempted by this par. (f)), by the person surrendering such shares, within 6 months before or after such surrender or issuance.

(g) Exemption from s. 611.31 (4) (b), Stats., of certain transactions involving an exchange of similar securities. Any acquisition or disposition of securities made in an exchange of shares of a class (or series thereof) of stock of an insurer for an equivalent number of shares of another class (or series thereof) of stock of the same insurer, pursuant to a right of conversion under the terms of the insurer’s articles of incorporation or other governing instruments shall be exempt from the operation of s. 611.31 (4) (b), Stats., if:

The shares surrendered and those acquired in exchange therefor evidence substantially the same rights and privileges except that, pursuant to the provisions of the insurer’s articles of incorporation or other governing instruments, the board of directors may declare and pay a lesser dividend per share on shares of the class surrendered than on shares of the class acquired in exchange therefor, or may declare and pay no dividend on shares of the class surrendered; and
The transaction was effected in contemplation of a public sale of the shares acquired in the exchange; provided that par. (g) shall not be construed to exempt from the operation of s. 611.31 (4) (b), Stats., any purchase or sale of shares of the class surrendered and any sale or purchase of shares of the class acquired in the exchange (otherwise than in the transaction of exchange exempted by par. (g)) within a period of less than 6 months.

(5) Rules under s. 611.31 (4) (c), Stats.

(a) Exemption of certain securities from s. 611.31 (4) (c), Stats. Any security shall be exempt from the operation of s. 611.31 (4) (c), Stats., to the extent necessary to render lawful under such section the execution by a broker of an order for an account in which he or she has no direct or indirect interest.

(b) Exemption from s. 611.31 (4) (c), Stats., of certain transactions effected in connection with a distribution. Any security shall be exempt from the operation of s. 611.31 (4) (c), Stats., to the extent necessary to render lawful under such section any sale made by or on behalf of a dealer in connection with a distribution of a substantial block of securities, upon the following conditions:

The sale is represented by an over-allotment in which the dealer is participating as a member of an underwriting group, or the dealer or a person acting on his or her behalf intends in good faith to offset such sale with a security to be acquired by or on behalf of the dealer as a participant in an underwriting, selling or soliciting-dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders or some other class of persons; and
Other persons not within the purview of s. 611.31 (4) (c), Stats., are participating in the distribution of such block of securities on terms at least as favorable as those on which such dealer is participating and to an extent at least equal to the aggregate participation of all persons exempted from the provisions of s. 611.31 (4) (c), Stats., by this par. (b). However, the performance of the functions of manager of a distributing group and the receipt of a bona fide payment for performing such functions shall not preclude an exemption which would otherwise be available under this par. (b).

Whenever any person is entitled, as an incident to ownership of an issued security and without the payment of consideration, to receive another security “when issued” or “when distributed,” the security to be acquired shall be exempt from the operation of s. 611.31 (4) (c), Stats., provided that:

a. The sale is made subject to the same conditions as those attaching to the right of acquisition, and

b. Such person exercises reasonable diligence to deliver such security to the purchaser promptly after the right of acquisition matures, and

c. Such person reports the sale on the appropriate form for reporting transactions by persons subject to s. 611.31 (4) (a), Stats.

This par. (c) shall not be construed as exempting transactions involving both a sale of a security “when issued” or “when distributed” and a sale of the security by virtue of which the seller expects to receive the “when-issued” or “when-distributed” security, if the 2 transactions combined result in a sale of more units than the aggregate of those owned by the seller plus those to be received by him or her pursuant to the right of acquisition.

(6) Regulation under s. 611.31 (4) (e), Stats.

(a) Arbitrage transactions under s. 611.31 (4) (e), Stats. It shall be unlawful for any director or officer of an insurer to effect any foreign or domestic arbitrage transaction in any equity security of such insurer, unless he or she shall include such transaction in the statements required by s. 611.31 (4) (a), Stats., and shall account to such insurer for the profits arising from such transaction, as provided in s. 611.31 (4) (b), Stats. The provision of s. 611.31 (4) (c), Stats., shall not apply to such arbitrage transactions. The provisions of s. 611.31, Stats., shall not apply to any bona fide foreign or domestic arbitrage insofar as it is effected by any person other than such director or officer of the insurer.

Note: Copies of UNITED STATES CODE, title 26, Internal Revenue Code of 1954 as amended to date of adoption of the above section sections 368(c), 422, 423 and 424(b), are available for inspection at the office of the Insurance Department, the Secretary of State, and the Legislative Reference Bureau, or the code may be procured for personal use from the U.S. Government Printing Office, Washington, D. C.

History

Cr. Register, August, 1966, No. 128, eff. 9-1-66; am. Register, December, 1977, No. 264, eff. 1-1-78; am. (1) (d) 2., Register, March, 1979, No. 279, eff. 4-1-79; corrections made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436; correction in (3) (b) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; correction in (3) (i) (title) made under s. 13.92 (4) (b) 2., Stats., Register, January, 2012 No. 673.

Wis. Admin. Code § Ins 6.42 Initial statement of beneficial ownership of securities {#sec-ins-6.42 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.42}

(1) Persons required to file statements. A statement on Form 3 (shown at the end of this rule) of initial statement of beneficial ownership of securities is required to be filed by every person who is directly or indirectly the beneficial owner of more than 10% of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such a company.

(2) When statements are to be filed.

(a) Beginning September 1, 1966, persons who hold any of the relationships specified in sub. (1) are required to file a statement within 10 days after assuming such relationship. Statements are not deemed to have been filed with the commissioner until they have actually been received by him or her.

(b) Persons who held any of the relationships specified in sub. (1) as of January 31, 1966, or who assumed such relationship(s) during the period of January 31, 1966 through August 31, 1966, are required to file such initial statement of beneficial ownership of securities by September 10, 1966.

(3) Where statements are to be filed. One signed copy of each statement shall be filed with the commissioner of insurance, P.O. Box 7873, Madison, Wisconsin 53707-7873.

(4) Separate statement for each company. A separate statement shall be filed with respect to the securities of each company.

(5) Relation of reporting person to company. Indicate clearly the relationship of the reporting person to the company; for example, “Director”, “Director and Vice President”, “Beneficial owner of more than 10% of the company’s stock”, etc.

(6) Date as of which beneficial ownership is to be given. The information as to beneficial ownership of securities shall be given as of January 31, 1966, or, in the case of persons who subsequently assume any of the relationships specified in sub. (1), as of the date that relationship was assumed.

(7) Title of security. The statement of the title of a security shall be such as clearly to identify the security even though there may be only one class; for example, “Class A Common Stock”.

(8) Nature of ownership. Under “Nature of ownership”, state whether ownership of the securities is “direct” or “indirect”. If the ownership is indirect, i.e., through a partnership, corporation, trust or other entity, indicate, in a footnote or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and also from those owned through a different type of indirect ownership.

(9) Statement of amount owned. In stating the amount of securities beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, the entire amount of securities owned by the partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he or she so desires, also indicate in a footnote, or other appropriate manner, the extent of his or her interest in the partnership, corporation, trust or other entity.

(10) Inclusion of additional information. A statement may include any additional information or explanation deemed relevant by the person filing the statement.

(11) Signature. If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or her or specifically on his or her behalf by a person authorized to sign for him or her.

History

Cr. Register, August, 1966, No. 128, eff. 9-1-66; am. Register, September, 1976, No. 249, eff. 10-1-76; corrections made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436.

Wis. Admin. Code § Ins 6.43 Statement of changes in beneficial ownership of securities {#sec-ins-6.43 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.43}

(1) Persons required to file statements. Statements on Form 4 (shown at the end of this rule) of changes in beneficial ownership of securities are required to be filed by every person who at any time during any calendar month was directly or indirectly the beneficial owner of more than 10% of any class of equity security of a domestic stock insurance company, or by a director or officer of the company which is the issuer of such securities, and who during such month had any change in his or her beneficial ownership of any class of equity security of such company.

(2) When statements are to be filed.

(a) Beginning September 1, 1966, statements are required to be filed on or before the 10th day after the end of each month in which any change in beneficial ownership has occurred. Statements are not deemed to have been filed with the commissioner until they have actually been received by him or her.

(b) Statements for each month for the period January 31, 1966, through August 31, 1966, in which any changes in beneficial ownership have occurred shall be filed by September 10, 1966.

(3) Where statements are to be filed. One signed copy of each statement shall be filed with the commissioner of insurance, P.O. Box 7873, Madison, Wisconsin 53707-7873.

(4) Separate statements for each company. A separate statement shall be filed with respect to the securities of each company.

(5) Relationship of reporting person to company. Indicate clearly the relationship of the reporting person to the company; for example, “Director”, “Director and Vice President”, “Beneficial owner of more than 10% of the company’s common stock”, etc.

(6) Transactions and holdings to be reported. Every transaction shall be reported even though purchases and sales during the month are equal or the change involves only the nature of ownership; for example, from direct to indirect ownership. Beneficial ownership at the end of the month of all classes of securities required to be reported shall be shown even though there has been no change during the month in the ownership of securities of one or more classes.

(7) Title of security. The statement of the title of the security shall be such as clearly to identify the security even though there may be only one class; for example, “Class A Common Stock”.

(8) Date of transaction. The exact date (month, day and year) of each transaction shall be stated opposite the amount involved in the transaction.

(9) Statement of amounts of securities. In stating the amount of the securities acquired, disposed of, or beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, i.e., through a partnership, corporation, trust or other entity, the entire amount of securities involved in the transaction or owned by the partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he or she so desires, also indicate in a footnote, or other appropriate manner, the extent of his or her interest in the transaction or holdings of the partnership, corporation, trust or other entity.

(10) Nature of ownership. Under “Nature of ownership”, state whether ownership of the securities is “direct” or “indirect”. If the ownership is indirect, i.e., through a partnership, corporation, trust or other entity, indicate in a footnote, or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and from those owned through a different type of indirect ownership.

(11) Character of transaction. If the transaction was with the issuer of the securities, so state. If it involved the purchase of securities through the exercise of options, so state and give the exercise price per share. If any other purchase or sale was effected otherwise than in the open market, that fact shall be indicated. If the transaction was not a purchase or sale, indicate its character; for example, gift, 5% stock dividend, etc., as the case may be. The foregoing information may be appropriately set forth in the table or under “Remarks” at the end of the table.

(12) Inclusion of additional information. A statement may include any additional information or explanation deemed relevant by the person filing the statement.

(13) Signature. If the statement is filed for a corporation, partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or her or specifically on his or her behalf by a person authorized to sign for him or her.

History

Cr. Register, August, 1966, No. 128, eff. 9-1-66; am. Register, September, 1976, No. 249, eff. 10-1-76.

Wis. Admin. Code § Ins 6.50 Kinds of individual intermediary or agent licenses {#sec-ins-6.50 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.50}

(1) Purpose. This rule sets forth the kinds of individual intermediary-agents, reinsurance intermediary and managing general agent licenses which may be issued.

(2) Lines of licenses. The following individual licenses may be issued, each authorizing the solicitation of the line of insurance or the function indicated:

(a) Major lines are all of the following:

Life insurance — insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income.
Accident and health insurance — insurance coverage for sickness, bodily injury or accidental death and may include benefits for disability income.
Property insurance — insurance coverage for the direct or consequential loss or damage to property of every kind.
Casualty insurance — insurance coverage against legal liability, including that for death, injury or disability or damage to real or personal property.
Personal lines insurance — property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes.
Variable life and variable annuity products — insurance coverage provided under variable life insurance contracts and variable annuities.

(b) Limited lines are all of the following:

Credit insurance — credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (gap) insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the insurance commissioner determines should be designated a form of limited line credit insurance.
Title insurance — as described in s. Ins 6.75 (2) (h);
Legal expense insurance — insurance that covers only legal expenses incurred by or provided to an individual or business
Miscellaneous Limited Line insurance — insurance for an insurer authorized to do business in Wisconsin which is permitted as a limited line of insurance in a Wisconsin nonresident intermediary’s home state and is not described in this section shall have the same scope of authority as granted under the limited license issued by the producer’s resident state which shall be briefly described on the license issued.

Note: All intermediaries holding the limited line automobile authority on the effective date of this rule and all intermediaries holding the limited line town mutual non-property insurance on May 1, 1991 are grandfathered for these authorities.

Travel insurance — insurance coverage for trip cancellation, trip interruption, baggage, life, sickness and accident, disability and personal effects when limited to a specific trip and sold in connection with transportation provided by a common carrier.
Crop — Insurance providing protection against damage to crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease or other yield-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including Multi-Peril Crop Insurance.
Surety — Insurance or bond that covers obligations to pay the debts of, or answer for the default of another, including faithlessness in a position of public or private trust.

(3) Other Licenses issued to individuals are:

(a) Reinsurance intermediary–broker–activities only as described in ch. Ins 47.

(b) Reinsurance intermediary–manager–activities only as described in ch. Ins 47.

History

Cr. Register, December, 1967, No. 144, eff. 1-1-68; r. and recr. (3) (d), Register, November, 1971, No. 191, eff. 12-1-71: am. (2) (e), Register, February, 1973, No. 206, eff. 3-1-73; am. (2) (h), Register, September, 1973, No. 213, eff. 10-1-73: cr. (2) (o), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (1), (2), (3) (a) and (c), eff. 6-22-76; am. (1), (2), (3) (a) and (c), Register, September, 1976, No. 249, eff. 10-1-76; r. and recr., Register, August, 1977, No. 260, eff. 9-1-77; r. (2) (f), Register, October, l981, No. 310, eff. 11-1-81; r. (2) (i), Register, July, 1991, No. 427, eff. 8-1-91; emerg. am. (1) and (2) (intro.), cr. (2) (i) to (k), eff. 3-12-93; emerg. am. (2) (b) and (e), eff. 7-1-93; am. (1) and (2) (intro.), (b) and (e), cr. (2) (i) to (k), Register, July, 1993, No. 451, eff. 8-1-93; CR 01-074: r. and recr. (2), Register January 2002 No. 553, eff. 2-1-02; CR 07-096: cr. (2) (b) 5. Register March 2008 No. 627, eff. 4-1-08; CR 09-022: cr. (2) (a) 6., (b) 6. and 7. Register August 2009 No. 644, eff. 9-1-09; correction to numbering of (2) (b) 6. and 7. made under s. 13.92 (4) (b) 1., Stats., Register August 2009 No. 644.

Wis. Admin. Code § Ins 6.51 Group life and disability coverage termination and replacement {#sec-ins-6.51 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.51}

(1) Purpose. This section is intended to promote the fair and equitable treatment of group policyholders, insurers, employees and dependents, and the general public by setting out procedures to be followed when a group life or disability insurance policy is terminated or replaced, and to interpret ss. 632.79 and 632.897, Stats.

(2) Scope. This section shall apply to all group life and group disability policies covering employees or employees and dependents, issued by insurers providing insurance as defined in s. Ins 6.75 (1) (a) or (c) or (2) (c). It shall apply to blanket policies only if they provide 24-hour coverage for both injury and sickness; any blanket policy, covering any type of group, which provides for renewal shall be subject to subs. (4) and (5); any blanket policy covering students of a college or university, regardless of whether it provides for renewal, shall be subject to subs. (6) and (7). Subsection (4) (a) shall apply only to group policies as defined in sub. (3) (c) 2. Subsections (6) and (7) do not apply to excess or stop-loss insurance purchased under s. 120.13 (2) (c), Stats., by a county or school district that self-insures employee health benefits.

(3) Definitions.

(a) “Blanket policy” has the meaning in s. 600.03 (4), Stats.

(b) “Employee” means an employee of an employer or a member of a union or association or a student of a college or university.

Means a policy or contract covering employees issued by an insurer to an employer, labor union, association or trust fund or, in the case of a blanket policy, a college or university, or a group type plan, except that;
In sub. (4) (a), means only a policy or contract issued by an insurer or a s. 185.981, Stats., co-operative or a group type plan issued by a ch. 613, Stats., corporation, providing hospital, surgical or medical expense coverage to or on behalf of an employer.

(d) A “group policy providing medical expense coverage” does not include a policy providing coverage for dental, vision care, hearing care or prescription drug expense coverage only.

(e) “Group policyholder” means an employer, labor union, association, trust fund or other entity responsible for making group policy premium payments to an insurer.

(f) “Group type plan” means an insurance plan using individual policies which meets the following conditions:

Coverage is provided to classes of employees defined in terms of conditions pertaining to employment or membership.
The coverage is not available to the general public and can be obtained and maintained only because of the covered person’s connection with the particular organization or group.
Premiums are paid by the group policyholder to the insurer on behalf of covered employees, and
An employer, union, association or trust fund sponsors or authorizes the plan.

(g) “Individual policy” means an individual or family policy or subscriber contract issued by an insurer.

(h) “Insurer” means an insurance company subject to chs. 631 and 632, Stats., or a service insurance corporation subject to ch. 613, Stats.

(i) “Premium” means a policy premium or a subscriber contract subscription fee.

(j) “Pre-existing condition” means a disease or physical condition including pregnancy which manifested itself prior to the effective date of coverage through medical diagnosis or treatment or the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis or treatment.

(k) “Validly covered” means that the individual involved was covered and met all policy requirements regarding eligibility for coverage, as opposed to an individual who was covered without having met all such requirements.

(4) Effective date of termination for non-payment of premium; Notice of termination; liability of insurer.

(a) A group policy subject to s. 632.79, Stats., as defined in sub. (3) (c) 2. may not be terminated by the insurer unless it has provided the termination notices required by s. 632.79 (2), Stats., except as provided in s. 632.79 (5), Stats. The insurer shall be liable for valid claims for covered losses as provided in s. 632.79 (3), Stats.

(b) Under a group policy other than one subject to s. 632.79, Stats., the insurer shall be liable for valid claims for covered losses incurred prior to the end of the grace period provided in the policy. This provision does not prevent a group policyholder from giving written notice of termination of the group policy, prior to the termination date, in accordance with the group policy terms, to reduce or eliminate the grace period.

(c)

The insurer shall also be liable for valid claims for covered losses beginning prior to the effective date of written notice of termination to the group policyholder if, after the end of the grace period provided in the policy:

a. It continues to recognize claims subsequently incurred for which recognition is not required by an applicable extension of coverage provision, or

b. It fails to request that the group policyholder notify covered employees of the termination and, except for life and disability income coverages, describe their rights, if any, upon termination.

The effective date of termination shall not be prior to midnight at the end of the third scheduled work day after the date on which the notice is delivered.
This paragraph shall not apply if a group policy is terminated and immediately replaced by another group policy providing similar coverage.

(5) Content of notice of termination.

(a) A notice of termination given by an insurer to a group policyholder in accordance with sub. (4) (a) or (c) shall include:

The date as of which the group policy will be terminated,
A request to notify covered employees of the termination and, except for life and disability income coverages, the rights, if any, available to them under the group policy,
A statement that, unless otherwise provided in the group policy, the insurer will not be liable for claims for losses incurred after the termination date, and
If the group policy involves employee contributions, a statement that, if the group policyholder continues to collect contributions for the coverage beyond the date of termination, the group policyholder may be held solely liable for the benefits with respect to which the contributions have been collected.

(b) At the same time, the insurer shall furnish to the group policyholder for distribution to covered employees a supply of a notice form indicating the termination, its effective date and the rights, if any, available to them upon termination, except that, for life and disability income coverages, the notice need only urge the covered employees to refer to their certificate or individual policy to determine what rights, if any, are available upon termination.

(6) Extension of coverage.

(a) A group policy shall, if a covered employee or dependent is totally disabled at the date of termination of the policy, provide an extension of coverage for the individual, beginning at the date of termination of the group policy and continuing during the period of total disability as provided in this subsection.

(b) Under a group life policy which contains a disability benefit extension of any type, such as premium waiver extension, extended death benefit in event of total disability, or payment of income for a specified period during total disability, the termination of the group policy shall not operate to terminate the extension.

(c) Under a group policy providing benefits for loss of time from work or a specific indemnity during hospital confinement, termination of the group policy during a period of total disability or confinement shall have no effect on benefits payable for the condition or conditions causing continuing total disability or continuing confinement. The extension of coverage provision for loss of time benefits may provide for the integration of social security disability or retirement benefit increases which occur after the date of termination of the group policy only if integration of these benefit increases is also applicable prior to termination of the group policy.

(d) Under a group policy providing hospital, surgical or medical expense coverages, the extension of coverage shall be at least 12 months under major medical or comprehensive medical coverage and at least 90 days under other hospital, surgical or medical expense coverage, subject to the following:

Coverage need not be extended beyond the date on which:

a. Total disability terminates,

b. The benefit period specified in the policy ends,

c. The maximum benefit is paid or

d. Coverage for the condition or conditions causing total disability is provided under similar coverage, other than temporary coverage under sub. (7m) (b) 2., under the succeeding insurer’s group policy.

Extended coverage need not cover dental or uncomplicated pregnancy expenses or a condition other than the condition or conditions causing total disability.
The extension of coverage is not required where the succeeding insurer agrees, or the prior and succeeding insurers agree, to provide coverage, for individuals who are totally disabled at the date of termination of the group policy, which is not less favorable to them than would otherwise be required by this paragraph.
After the termination of extended basic hospital, surgical or medical expense coverage, extended major medical expense coverage shall cover expenses eligible under the major medical expense coverage which are normally covered under the basic coverage, subject to subd. 1.
A policy providing hospital, surgical or medical expense coverage which covers only expenses in excess of those covered by basic hospital-surgical-medical expense coverage and major medical coverage or comprehensive medical coverage, issued to the same group policyholder, need not provide extended coverage if the underlying coverage provides extended coverage.

Note: The effect of sub. (6) (d), with respect to pregnancy expense coverage, is to require that extended coverage provide benefits only for pregnancy complication expenses, to be consistent with s. Ins 6.55 (4) (b) 5. However, employers and insurers may wish to consider the provisions of federal public law 95-555 enacted October 31, 1978, which requires that employers subject to it provide benefits for pregnancy, including extended benefits, under employee benefit programs to the same extent that benefits are provided for injury and sickness. Also, the equal rights division of the Wisconsin department of workforce development has taken the position, based on Wisconsin case law, that the Wisconsin fair employment act, ss. 111.31 to 111.37, Stats., applies to temporary disability resulting from pregnancy and requires that employee benefit programs provide loss of time benefits for temporary disability resulting from pregnancy, including extended benefits, to the same extent that such benefits are provided for injury and sickness.

(e) A provision for extending coverage shall be contained in each group policy as well as in corresponding certificates.

(f) The benefits payable during any period of extended coverage shall be subject to the group policy’s regular coverage limits. The extended coverage shall terminate at the end of a normal benefit period or when the maximum benefit amount has been paid.

(7) Liability of prior insurer. The prior insurer shall be liable only to the extent of its extensions of coverage. Its liability shall be the same whether the group policyholder secures replacement coverage from another insurer, self-insures or declines to provide the group with insurance.

(7m) Liability of succeeding insurer. The succeeding insurer shall be liable as provided in this paragraph where its group policy replaces another providing similar coverage:

(a) Regular coverage. Regular coverage shall be provided under the succeeding insurer’s group policy to:

Each employee who is eligible for coverage in accordance with the succeeding insurer’s group policy provisions regarding classes eligible and actively at work requirements.
Each dependent who is eligible for coverage in accordance with the succeeding insurer’s group policy provisions regarding classes eligible and non-hospital confinement requirements.
A dependent of a disabled employee if the dependent is eligible for coverage in accordance with the succeeding insurer’s group policy provisions regarding classes eligible and non-hospital confinement requirements and if the disabled employee is covered under the succeeding insurer’s group policy, and
Each terminated insured who has elected to continue coverage under s. 632.897 (3), Stats.

(b) Temporary coverage. Each employee or dependent not covered under the succeeding insurer’s group policy in accordance with par. (a) shall be provided with temporary coverage by the succeeding insurer, for losses occurring or beginning under the replacement policy, subject to:

Temporary coverage need be provided only if the individual was validly covered under the prior group policy on the date of its termination and meets the requirements necessary to be a member of an eligible class under the succeeding insurer’s group policy, other than requirements for working full time, part time or a stated number of hours.
The coverage to be provided by the succeeding insurer shall be the coverage of the prior group policy reduced by any benefits payable under such policy. The benefits of the succeeding insurer’s group policy shall be determined after the benefits of the prior group policy have been determined.
Temporary coverage shall be provided by the succeeding insurer until the first of:

a. The date the individual becomes eligible under the coverage and under the circumstances described in par. (a).

b. For each type of coverage, the date the individual’s coverage would terminate in accordance with the succeeding insurer’s group policy provisions regarding individual termination of coverage, such as at termination of employment or when ceasing to be an eligible dependent.

c. For an individual who is totally disabled on the effective date of the succeeding group policy, under a type of coverage for which sub. (6) requires an extension of coverage, the end of any period of extended coverage required of the prior insurer or, if the prior insurer’s group policy was not subject to sub. (6), would have been required of the prior insurer had its group policy been so subject.

(c) Pre-existing conditions. If the succeeding insurer’s group policy contains a pre-existing condition limitation, the coverage for these conditions of persons becoming covered by the succeeding group policy under par. (a) or (b), during the period the limitation applies under that group policy, shall be the lesser of:

The coverage of the succeeding group policy determined without application of the limitation and
The coverage of the prior group policy determined after application of any such limitation contained in the policy.

(d) Deductibles and waiting periods. The succeeding insurer, in applying any deductibles or waiting periods contained in its group policy, including pre-existing condition waiting periods, shall give credit for the satisfaction or partial satisfaction of the same or similar provisions under the prior group policy, to the extent that the prior and succeeding group policies provide similar coverage. Deductible provision credit shall be given for the same or overlapping benefit periods for expenses incurred and applied against the deductible provisions of the prior group policy during the 90 days preceding the effective date of the succeeding group policy, but only to the extent that these expenses are recognized under the succeeding group policy and are subject to a similar deductible provision.

(e) Determination of prior insurer’s coverage. Where a determination of the prior insurer’s coverage is required by the succeeding insurer, the prior insurer, at the succeeding insurer’s request, shall furnish a statement of the coverage available and a copy of pertinent group policy provisions to permit the succeeding insurer to verify the coverage statement or make its own coverage determination. Coverage of the prior group policy shall be determined in accordance with the definitions, conditions and covered expense provisions of that group policy rather than those of the succeeding group policy. The coverage determination shall be made as if coverage had not been replaced by the succeeding insurer.

(8) More favorable provisions permitted. This section sets out minimum requirements. It does not prohibit a group policyholder and an insurer from agreeing to policy provisions which are more favorable to insured persons.

(9) Effective date. As provided in s. 227.22, Stats., this section shall take effect on the first day of the month following its publication.

History

Cr. Register, October, 1972, No. 202, eff. 11-1-72; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), (2) and (7) (c), Register, March, 1979, No. 279, eff. 4-1-79; r. and recr., Register, March 1982, No. 315, eff. 4-1-82; am. (2), Register, April, 1988, No. 388, eff. 5-1-88; corrections in (7) made under s. 13.93 (2m) (b) 1. and 7., Stats., Register, June, 1997, No. 498; corrections in (3) (a) and (9) made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530; corrections in (7m) (b) (intro.), 3. a. and (c) (intro.) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610.

Wis. Admin. Code § Ins 6.52 Biographical data relating to company officers and directors {#sec-ins-6.52 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.52}

(1) Purpose. This rule is intended to implement and interpret ss. 611.13 (2), 611.54 (1) (a), 611.57, 618.11 (4) and 618.21 (1) (b), Stats., for the purpose of setting standards for the reporting of biographical data relating to company officers, directors, promoters and incorporators, or other persons similarly situated.

(2) Scope. This rule shall apply to all persons proposing to form an insurer under the laws of this state and to all nondomestic insurers applying for admission to this state and to all insurers authorized to do business in this state except as follows:

(b) Domestic fraternal benefit societies.

(c) Nonprofit service plans, cooperative sickness care plans organized or operating under ss. 185.981 to 185.985, Stats., voluntary benefit plans organized or operating under s. 185.991, 1977 Stats., and motor club service companies organized or operating under ss. 616.71 to 616.74 and 616.76 to 616.82, Stats., and donor annuity societies.

(3) Report of organization of a domestic insurer or admission of a nondomestic insurer. Biographical information in form and substance substantially in accordance with Form A, shown at the end of this rule, shall be furnished to the commissioner of insurance by all promoters, incorporators, directors, trustees and principal officers or proposed directors and principal officers, as the case may be, of an insurer being organized or of an insurer applying for admission. Financial and character reports of any such persons may be ordered by the commissioner and the cost or expense of such reports shall be paid by the incorporators as an organization expense or by the insurer applying for admission.

(4) Definition. The term “officer” as used in this rule shall include the president, one or more vice presidents, secretary, treasurer, chief actuary, general counsel, comptroller and any person, however described, who enjoys in fact the executive authority of any such officers.

(5) Reporting with respect to new officers and directors subsequent to organization or admission. A report shall be provided by each domestic insurer to which this rule applies with respect to the appointment or election of any new director, trustee or officer elected or appointed within 15 days after such appointment or election. Such report shall be prepared by the company in form and substance substantially in accordance with Form A, shown at the end of this rule.

(6) Subsequent reports. When such a report has been provided to the commissioner by a company in accordance with subs. (3) and (5) of this rule, no further report concerning subsequent changes in his or her status as an officer or director of such company need be reported to the commissioner provided, however, the company shall promptly report to the commissioner any information concerning the conviction of an officer or director for a felony or the naming of a director, trustee or officer, other than as a party plaintiff or complainant, in any criminal action or in a civil action in which fraud was an issue.

(7) Additional information. The commissioner may request from any company such additional information with respect to any of its officers or directors as he or she may deem necessary and such request shall be promptly complied with by the company to which such request is directed.

History

Cr. Register, June, 1973, No. 210, eff. 7-1-73; emerg. r. (2) (a), eff. 6-22-76; r. (2) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (c), Register, March, 1979, No. 279, eff. 4-1-79; am. (5), Register, March, 1981, No. 303, eff. 4-1-81; CR 17-015: am. (5), r. Form B Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 6.54 Prohibited classification of risks for rating purposes {#sec-ins-6.54 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.54}

(1) Purpose. This rule interprets and implements ss. 601.01 (2), 625.02, 625.11, 625.12 (2), 625.13, and 625.21 (2), Stats., and ch. 628, Stats., for the purpose of prohibiting certain practices.

(2) Scope. This rule applies to all contracts issued, renewed or amended in Wisconsin affording automobile insurance coverage and all contracts issued, renewed or amended in Wisconsin affording coverage for loss or damage to real property used for residential purposes for not more than 4 living units or affording coverage for loss or damage to personal property used for residential purposes.

(3) Prohibited practices.

(a) No insurance company shall refuse, cancel or deny insurance coverage to a class of risks solely on the basis of any of the following factors (taken individually or in combination), nor shall it place a risk in a rating classification on the basis of any of the following factors without credible information supporting such a classification and demonstrating that it equitably reflects differences in past or expected losses and expenses and unless such information is filed in accordance with ss. 625.12, 625.13 and 625.21 (2), Stats.:

The applicant’s or insured’s past criminal record;
The applicant’s or insured’s physical condition or developmental disability as defined in s. 51.01 (5) (a), Stats.;
The applicant’s or insured’s past mental disability;
The applicant’s or insured’s age;
The applicant’s or insured’s marital status;
The applicant’s or insured’s sexual preference;
The applicant’s or insured’s “moral” character.

(b) Nothing in par. (a) shall be construed as including within the definition of prohibited practices any of the following:

Denying, cancelling or non-renewing the automobile or property insurance of a person convicted of an offense if the offense which resulted in the conviction is directly related to the risk to be insured;
Establishing a classification system merely for the purpose of developing statistical data;
Underwriting only the class of risks which are specified in the insurer’s articles of incorporation;
Establishing a rate based on the record of all drivers of an insured automobile;
Establishing a rate based on the number of people residing in a household.

(c) Nothing in par. (a) or (b) shall be interpreted in any way as limiting the prohibitions contained in ss. 106.52 (3) (a) 4. and 632.35, Stats.

(d) No insurer shall require an applicant or insured to undergo a physical examination to obtain or continue coverage unless the cost of such physical examination is borne by the insurer.

(4) Penalty. Violation of this rule may subject the insurer to the penalties set forth in s. 601.64, Stats.

History

Cr. Register, March, 1976, No. 243, eff. 4-1-76; emerg. am. (1) and (3) (c), eff. 6-22-76; am. (1) and (3) (c), Register, September, 1976, No. 249, eff. 10-1-76; am. (3) (a) 2., Register, April, 1977, No. 256, eff. 5-1-77; am. (3) (a) 2., and cr. (3) (d), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (1) and (3) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530; correction in (3) (c) made under s. 13.93 (2m) (b) 7., Stats., Register January 2002 No. 553.

Wis. Admin. Code § Ins 6.55 Discrimination based on sex, unfair trade practice {#sec-ins-6.55 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.55}

(1) Purpose. The purpose of this rule is to eliminate the act of denying benefits or refusing coverage on the basis of sex, to eliminate unfair discrimination in underwriting criteria based on sex, and to eliminate any differences in rates based on sex which cannot be justified by credible supporting information. This rule interprets and implements s. 601.01 (3), Stats., and ch. 628, Stats.

(2) Definitions.

(a) Insurer has the meaning defined in s. 600.03 (27), Stats., and in addition includes nonprofit service plans or service insurance corporations.

(b) Contract means any insurance policy, plan, certificate, subscriber agreement, statement of coverage, binder, rider or endorsement offered by an insurer subject to Wisconsin insurance law.

(3) Applicability and scope.

(a) This rule shall apply to all contracts delivered in Wisconsin, or issued for delivery in Wisconsin on or after the effective date of this rule and to all existing group contracts subject to Wisconsin insurance law which are amended or renewed on or after the effective date of this rule.

(b) This rule shall not affect the right of fraternal benefit societies to determine eligibility requirements for membership.

(4) Availability requirements.

(a) It is an unfair trade practice for an insurer to:

Refuse or cancel coverage or deny benefits on the basis of the sex of the applicant or insured;
Restrict, modify, or reduce the benefits, term, or coverage on the basis of the sex of the applicant or insured.

(b) Examples of unfair trade practices defined by par. (a) and prohibited by this rule are:

Denying coverage to females gainfully employed at home, employed part-time, or employed by relatives when coverage is offered to males similarly employed;
Denying benefits offered by policy riders to females when the riders are available to males;
Denying, under group contracts, dependent coverage to husbands of female employees, when dependent coverage is available to wives of male employees;
Denying disability income coverage to employed women when coverage is offered to men similarly employed;
Treating complications of pregnancy differently from any other illness or sickness under a contract;
Restricting, reducing, modifying, or excluding benefits payable for treatment of the genital organs of only one sex;
Offering lower maximum monthly benefits to women than to men who are in the same underwriting, earnings or occupational classification under a disability income contract;
Offering more restrictive benefit periods and more restrictive definitions of disability to women than to men in the same underwriting, earnings or occupational classification under a disability income contract;
Establishing different conditions by sex under which the policyholder may exercise benefit options contained in the contract.

(5) Rates. When rates are differentiated on the basis of sex, the insurer must:

(a) File a brief letter of explanation along with a rate filing.

(b) Maintain written substantiation of such rate differentials in its home office.

(d) Base all such rates on sound actuarial principles or a valid classification system and actual experience statistics.

(6) Penalty. Violation of this rule shall subject the insurer to the penalties set forth in s. 601.64, Stats.

History

Cr. Register, May, 1976, No. 245, eff. 6-1-76; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76.

Wis. Admin. Code § Ins 6.57 Appointment of insurance agents by insurers {#sec-ins-6.57 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.57}

(1) Submission of an intermediary-agent appointment request shall initiate the appointment of an agent in accordance with s. 628.11, Stats. The appointment request shall be made in a manner prescribed by the commissioner within 15 days of the date the agent contract is executed or the date the first insurance application is submitted and shall show the lines of authority being requested for that agent. An appointment is valid only for the lines of insurance requested. The effective date of a valid appointment is the date on which the appointment request is submitted electronically in the format specified by the commissioner. Billing for the initial appointment shall be done at the time of appointment.

(2) Notice of termination of appointment of an individual intermediary in accordance with s. 628.11, Stats., shall be filed prior to or within 30 calendar days of the termination date in a manner prescribed by the commissioner. Prior to or within 15 days of filing this termination notice, the insurer shall provide the agent written notice that the agent is no longer appointed as a representative of the company and that he or she may not act as its representative. This notice shall also include a formal demand for the return of all indicia of agency. “Termination date” means the date on which the insurer effectively severs the agency relationship with its intermediary-agent and withdraws the agent’s authority to represent the insurer in any capacity.

(a) If the reason for termination is one of the reasons listed as other criteria in s. Ins 6.59 (5) (d) or if the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities listed in s. Ins 6.59 (5) (d), the insurer must submit complete explanations and documentation in writing to OCI within 30 days of the termination.

(b) If the insurer has knowledge of complaints received or problems experienced by the intermediary or the intermediary’s agency involving indebtedness, forgery, altering policies, fraud, misappropriation, misrepresentation, failure to promptly submit applications or premiums, or poor policyholder service that involved the intermediary being terminated, the insurer must submit complete explanations and documentation in writing to OCI within 30 days of the termination. This documentation need not prove violations, but should include any situation where possible violations exist. The Office of the Commissioner of Insurance will investigate these situations and take appropriate action based upon the investigation.

(c) The insurer or the authorized representative of the insurer shall promptly notify the insurance commissioner in writing if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the insurance commissioner under par. (a) or (b) had the insurer then known of its existence.

(3) In addition each insurer shall pay once each year, in accordance with an assigned billing schedule and in a payment type prescribed by the commissioner, the annual appointment fee defined in sub. (4). A billing schedule shall be adopted by the commissioner under which appointment invoices shall be available to insurers.

(4) Fees applicable for listing of insurance agents under s. 628.11, Stats., are set forth by statute in s. 601.31 (1) (n), Stats.

(5) No insurer shall accept business directly from any intermediary or enter into an agency contract with an intermediary unless that intermediary is a licensed agent appointed with that insurer within 15 days of the date the agent contract is executed or the first insurance application is submitted, and the appointment shall show the lines of authority being requested for that agent.

(6) No intermediary shall submit an application for insurance directly to an insurer or solicit insurance on behalf of a particular insurer or enter into an agency contract unless the agent is appointed with that insurer within 15 days of the date the agent contract is executed or the first insurance application is submitted, and the appointment shall show the lines of authority being requested for that agent.

History

Cr. Register, December, 1976, No. 252, eff. 1-1-77; r. and recr. Register, March, 1978, No. 267, eff. 4-1-78; cr., (5) and (6), Register, March, 1979, No. 279, eff. 4-1-79; am. (1) and (3), Register, September, 1981, No. 309, eff. 1-1-82; am. (5), Register, December, 1984, No. 348, eff. 1-1-85; am. (1), Register, April, 1986, No. 364, eff. 5-1-86; am. (1) and (2), Register, January, 1992, No. 433, eff. 2-1-92; emerg. am. (4), eff. 10-9-95; am. (4), Register, February, 1996, No. 482, eff. 3-1-96; am. (4), Register, June, 2000, No. 534, eff. 7-1-00; CR 01-074: am. (1), (2), (5) and (6), cr. (2) (a) to (c), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (1), (2) (intro.) and (3) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (3), (5) and (6) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (1), (2) (intro.), (a), (b), (3) to (6) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.58 Licensing of insurance intermediary firms as insurance agents {#sec-ins-6.58 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.58}

(1) Purpose. The purpose of this rule is to establish procedures for licensure of insurance intermediary firms as insurance intermediaries, reinsurance intermediaries, travel insurance agents or managing general agents.

(1m) Definition. In this section “firm” means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.

(2) License. Any firm may obtain an insurance intermediary firm license under this section.

(3) Procedure.

(a) Application for a permanent intermediary license, reinsurance intermediary license, travel insurance agent license or managing general agent license for a corporation or partnership shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. The application shall include:

A licensing fee of $100.00;
A completed NAIC Uniform Application;
Certification that the insurance intermediary firm will transact business in such a way that all acts that may only be performed by a licensed intermediary are performed exclusively by natural persons who are licensed under s. 628.04, Stats., and functioning within the scope of the license, and a list of such persons;
If the insurance intermediary firm is domiciled outside of Wisconsin, an agreement to be subject to the jurisdiction of the commissioner and the courts of this state on any matter related to the insurance intermediary firm’s insurance activities in this state, on the basis of service of process under ss. 601.72 and 601.73, Stats.; and
A list of all partners, directors or principal officers or persons in fact having comparable power.
In the case of a corporation, the application must be signed or submitted by an officer. In the case of a partnership, the application must be signed or submitted by a partner.
Any bond, policy, designation or information required under s. Ins 47.02 (3) or (5).
A Designated Responsible Licensed Producer, DRLP, assigned by the intermediary firm.

(b) Determination of the acceptance or rejection of a completed application shall be made within 90 days.

(4) Standards of competence and trustworthiness.

(a) For partners, directors or principal officers who are licensed at the time of application under sub. (4) as insurance intermediaries, reinsurance intermediaries, travel insurance agents or managing general agents, those standards as set forth in s. Ins 6.59 (5) shall apply in lieu of the standards set forth in this section.

(b) For partners, directors or principal officers who are not licensed at the time of application under sub. (4) as insurance intermediaries, reinsurance intermediaries, travel insurance agents or managing general agents, the following criteria may be used in assessing trustworthiness and competence:

‘Criminal record.’ The conviction for crimes which are substantially related to insurance. “Conviction” includes having been found guilty by judge or jury, having entered a plea of guilty or nolo contendere or no contest, or having been given probation, a suspended sentence, or a fine.
‘Accuracy of information.’ Any material misrepresentation in the information submitted in the application.
‘Regulatory action.’ Any regulatory action taken with regard to any license held, such as insurance licenses in other states, real estate licenses and security licenses.
Other criteria which the commissioner considers evidence of untrustworthiness or incompetence.

(5) Fees.

(a) Biennially, at least 60 days prior to February 15 of each even numbered year, a regulation fee notice of $35.00 for resident and $70.00 for nonresident insurance intermediary firms, reinsurance intermediaries, travel insurance firms, and managing general agents will be issued in a manner prescribed by the commissioner.

(b) If payment of the biennial regulation fee is not made prior to February 15 of the year in which it is due, in a payment type prescribed by the commissioner, the license shall terminate.

(6) Notification of changes. Each insurance intermediary firm licensed or applying for a license shall, within 30 days, notify the commissioner of insurance in writing of any change in its business mailing address, business address, contact email address, location of the business records, or a change in the name or address of the designated representative.

Note: Intermediary corporations and partnerships are subject to the recordkeeping requirements as set forth in s. Ins 6.61 (1).

History

Cr. Register, August, 1980, No. 296, eff. 9-1-80; am. (5) (a), Register, September, 1981, No. 309, eff. 10-1-81; cr. (6), Register, September, 1981, No. 309, eff. 1-1-82; r. and recr. (2), r. (3) and (8), renum. (4) to (7) to be (3) to (6), Register, April, 1982, No. 316, eff. 5-1-82; r. form 11-50, Register, October, 1982, No. 322, eff. 11-1-82; am. (3) (a) to (f), Register, December, 1984, No. 348, eff. 1-1-85; correction in (5) made under s. 13.93 (am) (b) 7., Stats., Register, December, 1984, No. 348; emerg. am. (1), (3) (intro.), (a) 1. and 2., (4) (a), (b) (intro.) and 1., (5) (a) and (6), cr. (3) (a) 7., eff. 3-12-93; am (1), (3) (intro.), (a) 1. and 2., (4) (a), (b) (intro.) and 1., (5) (a) and (6), cr. (3) (a) 7., Register, July, 1993, No. 451, eff. 8-1-93; emerg. am. (5) (a), eff. 10-9-95; am. (5) (a), Register, February, 1996, No. 482, eff. 3-1-96; cons. and renum. (3) (intro.) and (a) (intro.) to be (3) (a) (intro.) and am., am. (3) (b), Register, January, 1999, No. 517, eff. 2-1-99; CR 01-074: am. (1), (2), (3) (a) 3. and 4., (5) and (6), Register January 2002 No. 553 eff. 2-1-02; CR 05-111: am. (3) (b) and (5) (a) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (5) (a) and (b) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (1), (3) (a) (intro.), 2., 6., cr. (3) (a) 8., am. (3) (b), (4) (a), (b) (intro.), 1., 2., (5) (a), (b), r. (5) (c), am. (6) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.59 Licensing of individuals as agents, reinsurance intermediaries, or managing general agents (s. 628.04, Stats.) {#sec-ins-6.59 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.59}

(1) Purpose. The purpose of this rule is to establish procedures for original licensure and license enlargement of an individual as an insurance agent, reinsurance intermediary or managing general agent.

(2) Examination. An examination is required of each resident applicant for each kind of license authority listed in s. Ins 6.50, except a reinsurance intermediary license, managing general agent, variable life or variable annuity and the limited line travel, crop and surety insurance licenses. Each examination will test the applicant’s basic knowledge of the kinds of insurance to be solicited or function to be performed and the applicant’s basic understanding of the applicable laws and regulations.

(3) Fees. The following fee schedule is established for residents and non-residents:

(4) Procedure.

(a) Application for resident intermediary agents. Application for a permanent resident agent license or an enlargement of authority requiring an examination shall be made in a manner prescribed by the commissioner following successful completion of any required prelicensing education and the examination. A completed application shall include: the NAIC Uniform Application; fingerprints provided in a format specified by the commissioner in order to complete an electronic confirmation of criminal history from the Wisconsin department of justice, the crime information bureau, and the federal bureau of investigation completed not more than 180 days prior to the test date; payment of the fees to the testing vendor and an electronic photograph of the applicant taken by the test service at the time of testing; a certified certificate of prelicensing from the prelicensing school that was presented to the exam proctor prior to sitting for the exam; confirmation of previous license in another state, if applicable; and any documentation required in answer to questions on the application.

(am) Application for nonresident intermediary agents. Application for a permanent nonresident agent license or an enlargement of authority shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application for Individual Nonresident License form. A completed application shall include: the NAIC Uniform Application; payment of the fees; and any documentation required in answer to questions on the application. If confirmation of license status is not attainable from the National Insurance Producer Registry, evidence of licensing from the home state, as defined by s. Ins 28.03 (3m), is required.

(an) Application for variable life and variable annuity products. Application for a permanent resident agent variable life and variable annuity products license or an enlargement of authority to include variable life and variable annuity products license shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. A completed application shall include: the NAIC Uniform Application; payment of the fees; any documentation required in answer to questions on the application; and verification of required registration by the Financial Industry Regulatory Authority (FINRA) registered for Series 6 or Series 7.

(ap) Application for limited travel, crop, legal expense or surety agent license. Application for a permanent resident agent travel, crop, legal expense or surety agent limited license or an enlargement of authority to include travel, crop, legal expense or surety limited license shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. A completed application shall include: the NAIC Uniform Application; payment of the fees; and any documentation required in answer to questions on the application.

(as) Application for reinsurance intermediary-broker, reinsurance intermediary-manager or managing general agent. Application for a reinsurance intermediary broker or reinsurance intermediary manager or managing general agent license shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. A completed application shall include: the NAIC Uniform Application; payment of the fees; and any documentation required in answer to questions on the application.

(av) Application for a title insurance limited license by Wisconsin licensed attorneys. Application for a permanent resident agent title insurance limited license or an enlargement of authority to include title insurance limited license shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. A completed application shall include: the NAIC Uniform Application; an original certificate signed by the provider showing completion of at least 6 hours of continuing legal education approved by the Wisconsin Board of Bar Examiners dealing solely with title insurance and completed within 1 year of the application date; a copy of the applicant’s current State Bar of Wisconsin membership card if membership cannot be verified by the commissioner; payment of the fees; and any documentation required in answer to questions on the application.

(ax) Application for surplus lines agent license. Application for a surplus lines insurance license shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. A completed application shall include: the NAIC Uniform Application; payment of the fees; and any documentation required in answer to questions on the application.

(c) Issuance of license. An applicant for an original license or an enlargement of authority who passes the examination, if required, satisfies the requirements in par. (a), (am) or (as) and meets the standards of competence and trustworthiness as described in sub. (5) shall be issued a license for those kinds of authority for which the applicant is qualified. Examination scores are valid for 180 days. Failure to apply for a license within 180 days will require candidate to re-take the examination. Determination of the acceptance or rejection of a completed application shall be made within 90 days of receipt by the office of the commissioner of insurance of the completed application including any documentation required.

(5) Competence and trustworthiness. The following criteria may be used in assessing trustworthiness and competence:

(a) Criminal record. The conviction for crimes which are substantially related to the circumstances of holding an insurance license. “Conviction” includes having been found guilty by judge or jury, having entered a plea of guilty or nolo contendere or no contest, or having been given probation, a suspended sentence, or a fine.

(b) Accuracy of information. Any material misrepresentation in the information submitted on the application form.

(c) Regulatory action. Any regulatory action taken with regard to any occupational license held, such as insurance licenses in other states, real estate licenses and security licenses.

(d) Other criteria. Other criteria which the commissioner considers evidence of untrustworthiness or incompetence, including but not limited to:

Providing incorrect, misleading, incomplete or materially untrue information in the license application.
Violating any insurance laws, or violating any regulation, subpoena or order of the insurance commissioner or of another state’s insurance commissioner.
Obtaining or attempting to obtain a license through misrepresentation or fraud;
Improperly withholding, misappropriating or converting any monies or properties received in the course of doing insurance business.
Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance.
Having been convicted of a felony or misdemeanor substantially related to the circumstances of holding an insurance license.
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere.
Having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory.
Forging another’s name to an application for insurance or to any document related to an insurance transaction.
Improperly using notes or any other reference material to complete an examination for an insurance license.
Knowingly accepting insurance business from an individual who is not licensed.
Failing to comply with an administrative or court order imposing a child support obligation.
Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

(e) Age. Is at least eighteen (18) years of age.

(6) Frequency and location. Examinations for each kind of agent authority will be administered at least once a month in accordance with a schedule adopted by the commissioner.

(8) Change in residency status.

(a) A licensed nonresident agent, after becoming a Wisconsin resident, may retain authority under the nonresident agent license for a maximum of 60 days, at which time all authority granted under the nonresident license shall cease.

(b) A licensed resident agent after becoming a resident of another state, may retain authority under the resident license for a maximum of 60 days, at which time all authority granted under the resident license shall cease.

(c) If an agent changes residency status and becomes licensed under the new status, all authority granted by the license issued under the former status shall terminate on the date the new license is issued.

(d) Criteria used by the insurance commissioner to establish residency shall include, but not be limited to:

Jurisdiction for payment of state taxes.
Jurisdiction for automobile driver’s license and motor vehicle registration.
Location of voter registration.
Location of principal residence, such as owned or rented dwelling, condominium or apartment.

(e) A licensed nonresident agent, after becoming a resident of a state other than Wisconsin, may retain licensing authority under the nonresident license for a maximum of 60 days, at which time all authority granted under the nonresident license shall terminate if licensure in the new home state, as defined by s. Ins 28.03 (3m), cannot be verified by the commissioner, unless a letter of certification or other comparable evidence from the new home state is provided to the commissioner.

History

Cr. Register, March, 1977, No. 255, eff. 4-1-77; am. (8), Register, June, 1978, No. 270, eff. 7-1-78; cr. (10), Register, September, 1978, No. 273, eff. 10-1-78; am. (3) and (7), Register, February, 1980, No. 290, eff. 3-1-80; r. (6) and (9), renum. (7), (8) and (10) to be (6), (7) and (8), Register, August, 1980, No. 296, eff. 9-1-80; r. and recr. Register, September, 1981, No. 309, eff. 10-1-81; am. (4), cr. (8), Register, December, 1984, No. 348, eff. 1-1-85; am. (2), (3), (4) (a) and (b) and (6), Register, May, 1987, No. 377, eff. 7-1-87; am. (4) (a) and (5) (b), Register, January, 1992, No. 433, eff. 2-1-92; cr. (8) (e), Register, April, 1992, No. 436, eff. 5-1-92; am. (4) (a) and (c), Register, June, 1992, No. 438, eff. 7-1-92; emerg. am. (1), (2), (4) (a), (c), (5) (a), (8) (a) to (c) and (e), cr. (9), eff. 3-12-93; emerg. am. (3), (4) (b), (c) and (6), r. and recr. (4) (a), cr. (4) (am) and (as), eff. 7-1-93; am. (1), (2), (3), (c), (5) (a), (8) (a) to (c) and (e), cr. (4) (am), (as), (9), r. and recr. (4) (a), Register, July, 1993, No. 451, eff. 8-1-93; emerg. am. (4) (a), eff. 10-9-95; am. (4) (a) and (am), Register, February, 1996, No. 482, eff. 3-1-96; am. (4) (a), (am) and (as), Register, January, 1999, No. 517, eff. 2-1-99; cr. (4) (av), Register, October, 2000, No. 538, eff. 11-1-00; CR 01-074: am. (4) (am), (5) (a), (c) and (d), cr. (5) (d) 1. to 14. and (5) (e), r. (7) and (9), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (3) and (4) (a) to (av), cr. (4) (ax) Register October 2006 No. 610, eff. 11-1-06; CR 07-096: am. (2) and (4) (a) Register March 2008 No. 627, eff. 4-1-08; CR 09-022: am. (2), (3), (4) (a), (b), (c), (8) (a), (b), (c) and (e), cr. (4) (an) and (ap) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (4) (a), (am), (an), (ap), (as), (av), (ax), r. (4) (b.), am. (4) (c), (5) (a), (8) (e) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.595 Exemption of licensing of individuals as intermediaries {#sec-ins-6.595 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.595}

(1) Definitions. In this section:

(a) “Negotiate” means to confer directly with or offer advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.

(am) “Producer” means an insurance marketing intermediary as defined in s. 628.02, Stats.

(b) “Sell” or “Place” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.

(c) “Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.

(2) Exemptions. The following persons are not required to obtain an intermediary license:

(a) A town mutual agent exempt from licensing under s. 628.03 (1), Stats., by s. 628.05 (1), Stats., includes an agent for a town mutual not authorized to insure members against loss to property by windstorm or hail insurance as provided in ss. 612.31 (2) (a) 3. and 612.33 (2) (a), Stats., who provides windstorm or hail insurance to the town mutual’s members through an insurance policy issued by another authorized insurer operating on an assessment plan. The town mutual agent need not be licensed but the other insurer must list the agent and pay the listing fee in accordance with s. Ins 6.57.

(b) An officer, director or employee of an insurer or of an insurance producer, provided that the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in this state and any of the following apply:

The officer, director or employee’s activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance.
The officer, director or employee’s function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance.
The officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person’s activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance.

(c) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans or otherwise assisting in administering plans; or performs administrative services related to mass marketed property and casualty insurance; where no commission is paid to the person for the service;

(d) An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director or trustees are engaged in the administration or operation of a program of employee benefits for the employer’s or association’s own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;

(e) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance;

(f) A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, provided that the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state;

(g) A person who is not a resident of this state who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that that person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or

(h) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer provided that the employee does not sell or solicit insurance or receive a commission.

(i) Persons selling rental car insurance which is provided in connection with and incidental to the lease or rental of a motor vehicle which do not require a commercial license to operate for a total period of 90 consecutive days or less and not exceeding the lease or rental period. This exemption does not relieve the person of the requirement to reply to the commissioner under s. 601.42, Stats.

History

CR 01-074: cr. Register January 2002 No. 553, eff. 2-1-02; CR 19-025: cr. (1) (am) Register August 2020 No. 776, eff. 9-1-20; correction in (1) (am) made under s. 35.17, Stats., Register August 2020 No. 776.

Wis. Admin. Code § Ins 6.60 Prohibited business practices {#sec-ins-6.60 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.60}

(1) In this section:

(a) “Affiliate” means any person who is under the control of or acts at the direction of the agent.

(b) “Agent” means an intermediary as defined in s. 628.02, Stats.

(c) “Customer” means a natural person with whom the agent or affiliate is doing or has, within 3 years from the act or transaction regulated by this section, done an insurance business as that term is defined in s. 618.02 (2) and (3), Stats.

(d) “Personal financial transaction” includes a transaction in which the agent or an affiliate of the agent borrows money, property or securities from a customer; loans money, property or securities to a customer; acts as custodian for money, property or securities of a customer; obtains power of attorney over money, property or securities of a customer; obtains a guarantee of any loan from a customer; shares directly or indirectly in profits or losses with a customer; or without furnishing equal consideration obtains title to or ownership of any property of a customer. In this section “personal financial transaction” does not include transactions conducted by an agent or affiliate in the normal course of doing an insurance business such as holding an insurance policy for analysis or servicing, or receiving an insurance premium from a customer provided the transaction is properly recorded on the records of the agent or affiliate as required by s. Ins 6.61, including the name of the insurer for whom the premium was received, and the agent or affiliate immediately issues a written receipt to the customer for the policy or premium.

(2) The following are deemed to be unfair trade practices by an agent or affiliate pursuant to s. 628.34 (12), Stats., without limiting those terms to the practices specified in this section:

(a) Effecting or attempting to effect a personal financial transaction with a customer unless any of the following apply:

The customer is a relative of the agent or affiliate as defined in s. 13.62 (12g), Stats.
The customer is a person residing in the household of the agent or affiliate at the time of the transaction.
The transaction is a bona fide arm’s length business transaction where the customer is either qualified to understand and assess the transaction or has been advised or represented in the transaction by a qualified individual who is not the agent or affiliate.
The agent or affiliate is acting lawfully pursuant to authority given under federal or state law governing the securities or investment advisory business.

(b) Knowingly being listed as a beneficiary of any proceeds of a life insurance policy or annuity issued to a customer unless the agent or affiliate has an insurable interest in the life of the customer.

(c) Engaging in transactions with a customer in violation of ch. 551, Stats., the Wisconsin uniform securities law, ch. 553, Stats., the Wisconsin franchise investment law, the U.S. securities act of 1933 (15 USCS 77a et seq), the U. S. securities exchange act of 1934 (15 USCS 78a-78kk), the U. S. investment company act of 1940 (15 USCS 80 a-1 – 80a-52), or any rules or regulations promulgated under any of such laws.

(d) Making misleading statements to a customer regarding or otherwise misrepresenting one’s qualifications or services. This includes using terms such as “financial”, “investment” or “retirement” in conjunction with terms such as “planner”, “planning” or “consulting” when, under the circumstances, the statements, representations or use of these terms do not accurately describe the nature of the services offered or the qualifications of the person offering the services.

(e) Selling, soliciting the sale, or assisting the sale, of health coverage that is:

Provided by a person who is not licensed as an insurer in this state; and
Represented to be authorized under, or exempt from state insurance regulation under, the federal employee retirement income security act (29 USCS 1001 et seq).

(3)

(a) For the purpose of s. 618.39 (1), Stats., an agent should know that placement of insurance is illegal if the agent:

Sells, solicits the sale, or assists in the sale, of health coverage offered by a person not licensed as an insurer in this state; and
Knows that the health coverage is represented to be authorized, or exempt from state insurance regulation, under the federal employee retirement income security act (29 USCS 1001 et seq).

(b) An agent’s lack of knowledge of any of the following is not a defense to a violation of s. 618.39 (1), Stats.:

That the person providing the coverage is not licensed in this state.
That the person is an insurer as defined under s. 600.03 (27), Stats.
That the represented authorization or exemption under the federal employee retirement income security act is false (29 USCS 1001 et seq).

(4) The commissioner shall order, for any agent who violates s. 618.39, Stats., not less than revocation of the agent’s license and that the agent pay any claims not paid within 60 days by the unauthorized insurer. An agent may establish the basis for a lesser penalty for a violation of s. 618.39, Stats., only if the agent shows all of the following:

(a) Substantial mitigating factors.

(b) The agent made, and solicited to make, only a few sales of the coverage.

(c) The agent did not serve as a general agent, was not eligible for override commissions, and was not responsible for recruiting, and did not recruit, other agents to sell the coverage.

(5) A violation of sub. (2) is a cause for denial of an agent license application under s. 628.04 (1), Stats., and a cause for agent license suspension, revocation or limitation under s. 628.10 (2) (b), Stats.

History

CR 01-072: cr. Register January 2002 No. 553, eff. 2-1-02.

Wis. Admin. Code § Ins 6.61 Intermediary records {#sec-ins-6.61 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.61}

(1) Purpose. This section protects insurance policyholders by prescribing minimum standards and techniques of accounting and data handling of intermediaries to ensure that timely and reliable information will exist and be available to the commissioner. This section implements and interprets ss. 601.42 and 628.34, Stats., by establishing minimum records to be maintained by intermediaries.

(2) Scope. This section applies to all intermediaries transacting insurance business in this state and to Wisconsin insurance transactions of nonresident intermediaries unless the nonresident is required to maintain records in a similar specified manner by the intermediary’s state of domicile.

(3) Definitions. As used in this section:

(a) “Business checking account” means any account utilized by an intermediary for insurance-related transactions.

(b) “Cash disbursed record” means a record showing all monies paid out by the intermediary in connection with insurance.

(d) “Commission statements” means records or statements which show the commissions and fees allocated to the intermediary for insurance transactions.

(e) “Formal administrative action” means consent decrees, cease and desist orders, stipulations, suspensions, revocations, license denials, fines, forfeitures, settlement agreements, license restrictions or actions limiting the intermediary’s method of conducting an insurance business but does not include administrative actions based solely on failing to comply with continuing education requirements or solely on failing to pay a regulation fee for licensing.

(f) “Intermediary” means an agent, broker or producer and any person, partnership or corporation requiring a license under the provisions of ch. 628, Stats.

(g) “Personnel records” means those records pertaining to anyone who is directly retained or employed by an intermediary in connection with insurance including subagents, secretaries, phone solicitors, and independent contractors.

(h) “Policyholder records” means all records, applications, request for changes, claims, and complaints associated with a policy generated by or through the intermediary.

(4) Cash disbursed record. The cash disbursed record shall show the name of the party to whom the payment was made, date of payment, and reason for payment.

(5) Cash receipts record. The cash receipts record shall show the name of the party who remitted the money, date of receipt, and reason for payment.

(6) Commission statements. The commission statements shall show the insured name, policy number, premium, amount of commission, and date allocated or paid or both.

(7) Personnel records. Personnel records shall include dates of employment, position, description of principal duties, name of employee, and last known address and phone number of employee.

(8) Recordkeeping requirements. Beginning on January 1, 1988, each intermediary shall maintain, for a 3-year period, unless a specific period is provided elsewhere, the following records:

(a) Cash receipts record.

(b) Cash disbursed record.

(d) Policyholder records.

(e) Business checking account.

(f) Personnel records.

(9) Special requirements for newly issued contracts. Each intermediary shall maintain records for a 3-year period giving the effective date of the coverage on all newly issued contracts.

(10) Special requirements for individually-issued life and accident and health contracts. Each intermediary shall maintain records for a 3-year period indicating that the necessary suitability inquiry and replacement procedures required by ss. Ins 2.07, 2.14 (5) (f), 2.15 (9) (f), 3.27 (7), and 3.29 were followed for each individually-issued life and accident and health contract written or replaced or both.

(11) Special requirements for title insurance. Each intermediary who is employed by, or is, an affiliate of a producer of title insurance shall maintain records for 3 years for each application or order for title insurance accepted in this state. The records shall state whether the application or order was directly or indirectly referred as provided by s. Ins 3.32 (5) by a producer of title insurance which is an affiliate as defined by s. Ins 3.32 (3) (a), (bm) and (c) and the name of each producer of title insurance who is an affiliate and acts as broker, agent, lender, representative or attorney in the transaction which resulted in the application or order. Each intermediary who is an affiliate of a producer of title insurance shall maintain a record of gross revenue from operations in this state from title insurance by quarter calendar year which shall separately show gross revenue from operations in this state derived from applications or orders for title insurance directly or indirectly referred by the affiliate.

(12) Place of maintaining records. The intermediary shall maintain records required by subs. (8), (9), (10) and (11) at the business address of the intermediary or the insurer recorded with the commissioner of insurance, or at another location only if the intermediary provides written notice of the other location to the commissioner of insurance.

(13) Updating records. The intermediary shall update all intermediary records at reasonable intervals or as necessary and shall maintain all financial intermediary records according to accepted accounting principles.

(14) Maintaining policyholder records. The intermediary shall retain policyholder records for a period of at least 3 years after termination or lapse of the policy.

(15) Change of name or address. Each intermediary shall, within 30 days, notify the commissioner of insurance in writing in a manner prescribed by the commissioner of any change in the intermediary’s name, residence address, contact email address, business address or mailing address.

(16) Notification of formal administrative actions, criminal proceedings and lawsuits. Each intermediary shall notify the commissioner in writing of the following within 30 days:

(a) Except for action taken by the Wisconsin office of the commissioner of insurance, any formal administrative action against the intermediary taken by any state’s insurance regulatory agency, commission or board or other regulatory agency which licenses the person for any occupational activity. The notification shall include a description of the basis for the administrative action and any action taken as a result of the proceeding, a copy of the notice of hearing and other documents describing the problem, a copy of the order, consent to order, stipulation, final resolution and other relevant documents.

(b) Any initial pretrial hearing date related to any criminal prosecution of the intermediary taken in any jurisdiction, other than a misdemeanor charge related to the use of a motor vehicle or the violation of a fish and game regulation. The notification shall include a copy of the initial criminal complaint filed, the order resulting from the hearing and any other relevant legal documents.

(c) Any felony conviction or misdemeanor conviction in any jurisdiction, other than a misdemeanor conviction related to the use of a motor vehicle or the violation of a fish and game regulation. The notification shall include a copy of the initial criminal complaint or criminal charging document filed, the judgement of conviction, the sentencing document, the intermediary’s explanation of what happened to cause criminal proceedings, the intermediary’s reasons why no action should be taken regarding the intermediary’s license and any other relevant legal documents.

(d) Any lawsuit filed against the licensee or the licensee’s business in which there are allegations of misrepresentation, fraud, theft or embezzlement involving the licensee or the licensee’s business. The notification shall include a copy of the initial suit documents, the intermediary’s explanation of what happened to cause the civil proceedings, the intermediary’s reasons why no action should be taken regarding the intermediary’s license and any other relevant legal documents.

(17) Records maintained by insurers. An insurer shall inform its intermediaries in writing of the requirements of this section and may, by written agreement, assume the responsibility to maintain these records for an individual intermediary if the records can be made immediately available to the commissioner of insurance on demand.

History

Cr. Register, March, 1977, No. 255, eff. 4-1-77; am., Register, March, 1979, No. 279, eff. 4-1-79; cr. (5), Register, September, 1981, No. 309, eff. 10-1-81; cr. (2m), Register, November, 1986, No. 371, eff. 12-1-86; r. and recr. Register, December, 1987, No. 384, eff. 1-1-88; am. (16), Register, August, 1988, No. 392, eff. 9-1-88; am. (16), Register, April, 1992, No. 436, eff. 5-1-92; am. (15), Register, January, 1999, No. 517, eff. 2-1-99; CR 01-074; am. (3) (e), r. and recr. (16), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (3) (f) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (15) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (15) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.62 Filing requirements for multiple employer trusts and associations {#sec-ins-6.62 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.62}

(1) In this section:

(a) “Intermediary” has the meaning provided under s. 628.02 (1), Stats.

(b)

“Multiple employer trust or association,” except as provided by subd. 2., means a trust, association or other person which provides or offers to provide health care benefits or coverage to employees of 2 or more employers and which is:

a. A multiple employer welfare arrangement as defined by 29 USC 1002 (40);

b. Represented as an employee welfare benefit plan which is subject to the Employee Retirement Income Security Act, 29 USC 1001 to 1461; or

c. Located outside this state and is not organized and regulated as an insurer domiciled in the United States.

“Multiple employer trust or association” does not include a person which:

a. Provides benefits or coverage under or pursuant to a collective bargaining agreement;

b. Is, or which provides benefits or coverage which are fully insured by, an insurer licensed to do business in this state;

c. Provides health care benefits or coverage solely to employees of governmental units;

d. Is an individual; or

e. The commissioner exempts in writing.

(2) No intermediary may solicit, advertise, or market in this state or accept an application or place coverage for a person who resides in this state with a multiple employer trust or association unless prior to solicitation, advertising, marketing, acceptance of the application, or placing the coverage:

(a) The multiple employer trust or association files with the office the information required under sub. (5); or

(b) The intermediary files the information required under sub. (5).

(3) No multiple employer trust or association may solicit, advertise, or market in this state or accept an application for coverage from a person who is a resident, or who has employees who are residents, of this state unless prior to soliciting, advertising, marketing, or accepting an application it files with the office the information required under sub. (5).

(4) If subsequent to a filing under sub. (2) or (3) changes occur so that the information contained in the filing is no longer accurate, the multiple employer trust or association or intermediary which made the filing shall within 15 days of the date the change is effective make a filing under sub. (5) with the correct information.

(5) A multiple employer trust or association or intermediary required to file information under sub. (2), (3), or (4) shall file a properly completed form prescribed by the commissioner and shall attach:

(a) A copy of any insurance policy or contract covering benefits or coverage offered by the multiple employer trust or association;

(b) A copy of the organizational documents of the multiple employer trust or association, including the articles of incorporation, bylaws or trust instrument; and

(c) A statement that the benefits or coverage are fully insured or a description of the extent to which they are not fully insured.

(6) A violation of sub. (2), (3), or (4) is an unfair and deceptive trade practice under s. 628.34 (12), Stats., constitutes a method or practice in the conduct of business which endangers the legitimate interests of customers and the public under s. 628.10 (2), Stats., and, if the multiple employer trust or association is an unauthorized insurer, establishes that the person violating the rule should have known that the multiple employer trust or association is an unauthorized insurer for the purpose of ss. 618.39 and 618.44, Stats.

(7) This section is in addition to any provision of chs. 600 to 646, Stats.

Note: This rule requires use of a reporting form “Multiple Employer Trust Filing” which may be obtained from the Office of the Commissioner of Insurance, 121 E. Wilson Street, P.O. Box 7873, Madison, Wisconsin, 53707-7873.

History

Emerg. cr. eff. 1-1-90; cr. Register, May, 1990, No. 413, eff. 6-1-90.

Wis. Admin. Code § Ins 6.63 Regulation charge {#sec-ins-6.63 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.63}

(1) The renewal fee to be paid biennially in a payment type prescribed by the commissioner, by each licensed individual intermediary-agent is:

(2) Renewal fees are due on the last day of the intermediary’s birth month every other year. OCI will send a renewal fee notice in a manner prescribed by the commissioner at least 60 days prior to the fee due date to each intermediary.

(3) Any resident individual intermediary whose license is terminated for failing to pay renewal fees or failing to complete required continuing education or revoked for failing to pay unemployment insurance contributions or failing to pay delinquent taxes may, within 12 months from the termination or revocation date, apply to be relicensed for the same license without completing prelicensing education or passing a written examination. Resident licensees who are required to complete continuing education must have all previous requirements met. The application fee shall be as specified in s. 628.10 (5) (a), Stats. If a resident license has been terminated or revoked for more than 12 months, the intermediary shall, in order to be relicensed, satisfy the examination and licensing requirements established by s. Ins 6.59.

(4) Intermediaries with a Surplus Lines license shall pay an annual renewal fee of $100.00 on or before the assigned expiration date each year. OCI will send a renewal fee notice in a manner prescribed by the commissioner at least 60 days prior to the fee due date to each intermediary surplus lines agent at the address on file with the office of the commissioner of insurance. Any resident individual intermediary whose surplus lines license is terminated for failing to pay renewal fees or revoked for failing to pay unemployment insurance contributions or failing to pay delinquent taxes must apply to be relicensed.

History

Cr. Register, December, 1977, No. 264, eff. 1-1-78; am. (1) to (3), Register, September, 1981, No. 309, eff. 1-1-82; r. and recr. (4) to (6), Register, October, 1981, No. 310, eff. 11-1-81; am. (1), Register, November, 1995, No. 479, eff. 12-1-95; CR 01-074: am. (3) to (5), r. (2), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: r. and recr. Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (1) (a), (2) and (3), r. (1) (b) Register August 2009 No. 644, eff. 9-1-09; renumber of (1) (a) to (1) made under s. 13.92 (4) (b) 1., Stats., Register August 2009 No. 644; CR 19-025: am. (2) to (4) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.66 Proper exchange of business {#sec-ins-6.66 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.66}

(1) The purpose of this rule is to interpret s. 628.61, Stats., regarding the proper exchange of business between agent intermediaries.

(2) Proper exchange of business means the forwarding of insurance business from one agent who cannot, after due consideration, place the business with any of the insurers for which the agent is listed because of capacity problems, the refusal of the company to accept the risk or the onerous conditions it imposes on the insured, to another agent licensed for those lines of insurance whose insurers are able to accommodate the risk under conditions more favorable to the insured. The agent forwarding the business is entitled to split the commission involved. Proper exchange of business is not the regular course of business and such forwarding of business is thereby distinguished from brokerage by its occasional and exceptional nature.

(3) No agent may properly exchange business with another agent, unless:

(a) The agent forwarding the business to a listed agent is licensed for the lines of business that are being exchanged;

(b) The agent who receives the business and agrees to place it is licensed in the line or lines of insurance involved in the exchange; and

(c) Both the agent forwarding the business and the agent who places the business with the insurer sign the insurance application, or if no application is completed, the names of the agents involved in the transaction appear on the policy issued.

(4) No agent shall accept business solicited by another intermediary-agent which he or she knows, or has reason to know, is not exchanged in compliance with the provisions of this rule.

(5)

(a) In the absence of evidence to the contrary, an intermediary-agent shall be presumed to have exceeded the occasional exchange of business if he or she places more than 5 insurance risks per calendar year with any single insurer with which he or she is not listed as an intermediary-agent, or exchanges in total more than 25 insurance risks per calendar year.

(b) The burden of showing that specialty lines, non-standard and professional liability business placed through surplus lines intermediaries in accordance with s. 618.41, Stats., or written on an excess rate or other individually rated risk basis beyond the limits prescribed for other exchanges of business in par. (a) is occasional and otherwise in compliance with this rule, shall be upon the intermediary-agent soliciting and forwarding such business.

(6) The exchange of business among intermediary-agents and participation by intermediaries in risk sharing plans approved according to ch. 619, Stats., shall not be limited in any way by this section.

History

Cr. Register, March, 1979, No. 279, eff. 4-1-79; am. (4) (d), Register, May, 1979, No. 281, eff. 6-1-79; am. (1), (2) (intro.) and (3), r. (2) (a) and (4), renum. (2) (b), to (d) to be (2) (a) to (c) and am., Register, September, 1982, No. 321, eff. 10-1-82; renum. (1) to (3) and (7) to be (2) to (4) and (6) and am. (6), cr. (1), r. (6), Register, August, 1988, No. 392, eff. 9-1-88.

Wis. Admin. Code § Ins 6.67 Unfair discrimination in life and disability insurance {#sec-ins-6.67 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.67}

(1) Purpose. The purpose of this rule is to identify specific acts or practices in life and disability insurance found to be unfairly discriminatory under s. 628.34 (3) (b), Stats.

Note: The need for a rule has arisen because of questions as to whether life and disability insurers are in all cases fairly “charging different premiums or offering different terms of coverage except on the basis of classifications related to the nature and degree of the risk covered.” (s. 628.34 (3), Stats.) The main purpose of the rule is to make clear that life and disability insurers cannot classify individuals arbitrarily—without a rational basis for each decision.

(2) Applicability and scope. This rule shall apply to all life and disability insurance policies delivered or issued for delivery in Wisconsin on or after January 1, 1980 and to all existing life and disability group, blanket and franchise insurance policies subject to Wisconsin insurance law which are amended or renewed on or after January 1, 1980.

(2m) Definitions. In this section:

(a) “Disability insurance” has the meaning given under s. Ins 6.75 (1) (c).

(b) “Territorial classification” means an arrangement of persons into categories based upon geographic characteristics other than zip code.

(3) Specific examples. The following are specific examples of unfair discrimination under s. 628.34 (3) (b), Stats.

(a) Refusing to insure, or refusing to continue to insure, or limiting the amount, extent or kind of coverage available to an individual or charging a different rate for the same coverage solely because of physical or mental impairment, other than blindness or partial blindness, except where the refusal, limitation or rate differential is based on sound actuarial principles or is related to actual or reasonably anticipated experience.

(b) Except as provided in subds. 1. and 2., refusing to insure, or refusing to continue to insure, or limiting the amount, extent or kind of coverage available to an individual, or charging an individual a different rate for the same coverage solely because of blindness or partial blindness.

Individuals who are blind or partially blind may be subject to standards based on sound actuarial principles or actual or reasonably anticipated experience with respect to any other condition they may have, including a condition which is the cause of the blindness or partial blindness.
Refusal to insure under sub. (3) includes a denial of disability insurance on the basis that the policy presumes disability if the insured loses his or her eyesight. However, an insurer may exclude from coverage, or apply a waiting period, to coverage of treatment of blindness or partial blindness if that condition exists at the time the policy is issued.

(4) Insurer responsibility. An insurer has the burden of proof to show that an act, standard or practice of the insurer is based on sound actuarial principles or is related to actual or reasonably anticipated experience in any action to enforce s. 628.34 (3) (b), Stats. For the anticipated experience to be reasonable it must be based on medical or actuarial research on morbidity or mortality.

(5) Sexual orientation.

(a) An insurer may not use sexual orientation in the underwriting process or in the determination of insurability, premium, terms of coverage, or nonrenewal.

(b) No insurer may include any inquiry about the applicant’s or insured’s sexual orientation in an application for disability or life insurance coverage or directly or indirectly investigate in connection with an application for disability or life insurance coverage the applicant’s or insured’s sexual orientation.

(c) No insurer may use the marital status, occupation, gender, medical history, beneficiary designation, or the zip code or territorial classification of an applicant or insured or any other factor to establish, or aid in establishing, the applicant’s or insured’s sexual orientation.

History

Cr. Register, December, 1979, No. 288, eff. 1-1-80; r. (4) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; am. (1), r. and recr. (3), cr. (4), Register, April, 1987, No. 376, eff. 5-1-87; correction in (2), (3) (b) 2. and (4) made under s. 13.93 (2m) (b) 14., 12. and 1., Stats., Register, April, 1987, No. 376; cr. (5), Register, May, 1987, No. 377, eff. 6-1-87.

Wis. Admin. Code § Ins 6.68 Unfair discrimination based on geographic location or age of risk {#sec-ins-6.68 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.68}

(1) Purpose. The purpose of this rule is to identify specific acts or practices found to be unfair trade practices that are unfairly discriminatory under s. 628.34, Stats.

(2) Applicability and scope. This rule shall apply to property and casualty insurance contracts delivered or issued for delivery in Wisconsin on or after the effective date of the rule.

(3) Specific examples of unfair trade practices under s. 628.34, Stats. The following are hereby identified as specific acts or practices which are unfairly discriminatory.

(a) Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, cancelling or limiting the amount of insurance coverage on a property or casualty risk because of the geographic location of the risk, unless:

The refusal, cancellation or limitation is for a business purpose which is not a mere pretext for unfair discrimination, or
The refusal, cancellation or limitation is required by law or regulatory mandate.

Note: Paragraph (a) is intended to prohibit insurance underwriting shortcuts which unfairly label risks as poor risks because of their geographic location. A refusal, nonrenewal, cancellation or limitation of insurance coverage is prohibited if the reason for such refusal, nonrenewal, cancellation or limitation is the geographic location of the risk. An exception to this general rule is provided, however, in situations where the refusal, nonrenewal, cancellation or limitation is based upon a legitimate business need and the refusal, nonrenewal, cancellation or limitation is not a mere pretext for unfair discrimination. Examples of such situations include refusals to insure when the risk is located in areas prone to natural catastrophes, i.e., earthquakes, floods, hurricanes, and refusals to insure because the insurer already has a very high concentration of risks in a particular geographic area. It is intended that the person charged with a violation of this rule be given the burden of proof in establishing any “business purpose” exception. The burden of proving that a refusal, nonrenewal, cancellation or limitation of insurance coverage is not subterfuge for unfair discrimination should likewise fall upon the person charged with a violation of this rule.

(b) Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, cancelling or limiting the amount of insurance coverage on a residential property risk of 4 units or less, or the personal property contained therein, because of the age of the residential property, unless:

The refusal, cancellation or limitation is for a business purpose which is not a mere pretext for unfair discrimination, or
The refusal, cancellation or limitation is required by law or regulatory mandate.

(c) Refusing to insure a risk solely because the applicant was previously denied coverage, terminated by another insurer or had obtained coverage in a residual market.

History

Cr. Register, September, 1979, No. 285, eff. 10-1-79; r. (4) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348.

Wis. Admin. Code § Ins 6.70 Combinations of lines and classes of insurance {#sec-ins-6.70 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.70}

This rule defines and delimits the permissible combinations of the lines and classes of insurance defined and delimited by s. Ins 6.75 which may be written in the same policy. Except as provided in this rule, lines and classes of insurance may not be combined in the same policy.

(1) Combination with separate premium charges. Subject to s. Ins 2.05, any combination of the lines and classes of insurance defined and delimited by s. Ins 6.75, except for those described in s. Ins 6.75 (2) (h), (i) and (k), may be written in the same policy if a statement of separate premium charge is shown on the declarations page or on the face of the policy or in a separate written statement furnished to the policyholder. The requirement for a statement of separate premium charge does not prohibit such charges equitably reflecting differences in expected losses or expenses as contemplated by s. 625.11 (4), Stats.

(2) Combination with or without separate premium charges. Any combination of the lines and classes of insurance defined and delimited by s. Ins 6.75 (2) (a), (b), (d), (e), (f) and (j) may be written in the same policy with or without showing separate premium charges.

History

Emerg. cr. eff. 6-22-76; cr. Register, September, 1976, No. 249, eff. 10-1-76; r. and recr. Register, August, 1977, No. 260, eff. 9-1-77.

Wis. Admin. Code § Ins 6.72 Risk limitations {#sec-ins-6.72 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.72}

(1) Except as otherwise provided by law or by order of the commissioner, no single risk assumed by any insurance company shall exceed 10% of surplus as regards policyholders, except that in an assessable mutual company it may be a greater amount not exceeding 3 times the average policy or 1/4 of 1% of the insurance in force, whichever is the greater. Upon the business mentioned in s. Ins 6.75 (2) (h), the maximum single risk may be a greater amount not exceeding 50% of the admitted assets. Any reinsurance taking effect simultaneously with the policy shall be deducted from the original risk assumed in determining compliance with this subsection.

(2) In a mutual company organized for the insurance or guaranty of depositors or deposits in banks or trust companies, the maximum single risk may be fixed at a higher amount by the bylaws. Any such company may effect reinsurance in any authorized or unauthorized company that complies with s. 627.23, Stats. Insurance in any unauthorized company shall be reported annually and the same taxes paid upon the premiums as are paid by authorized companies.

History

Emerg. cr. eff. 6-22-76; cr. Register, September, 1976, No. 249, eff. 10-1-76; r. and recr. Register, August, 1981, No. 308, eff. 9-1-81; am. (1), Register, January, 1992, No. 433, eff. 2-1-92.

Wis. Admin. Code § Ins 6.74 Suretyship and risk limitations of surety obligations {#sec-ins-6.74 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.74}

(1) Purpose. The purpose of this rule is to establish minimum requirements for the transaction of surety obligations.

(2) Scope. This rule shall apply to the limitations on bond penal amounts imposed on insurers engaged in the business of suretyship. This section shall not apply to insurers issuing only that type of surety insurance known as municipal bond insurance.

(3) Definitions.

(a) For purposes of this rule suretyship shall be construed to be insurance.

(b) An insurance corporation authorized to write fidelity insurance may guarantee the fidelity of, or become the surety for: 1. persons holding positions of public or private trust; 2. the performance of any act, duty or obligation or the refraining from any act; 3. the performance of any contract; 4. bonds of insurance companies required by law as a condition of transacting business; 5. indemnifying banks, brokers and other financial or moneyed associations or corporations, against the loss of documents and money, except against loss caused by marine risks or risks of transportation or navigation; 6. indemnifying any federal land bank against loss by reason of defective title to or incumbrances on real property on which such bank may have a mortgage.

(4) Risk limitations on surety obligations.

(a) No corporation shall execute any suretyship obligation or expose itself to any loss on any one surety bond in an amount in excess of one-tenth of its capital and surplus as reported in its most recent filed annual statement, unless it shall be protected in the excess of that amount:

By reinsurance in a corporation licensed to transact surety business where the risk is located; or
By the cosuretyship of a surety corporation likewise licensed.

(b) A surety corporation may execute transportation or warehousing bonds for the United States internal revenue taxes to an amount equal to 5 times the underwriting limitation specified in par. (a) of this rule.

(c) No corporation writing surety shall guarantee the deposits of any single financial institution in an aggregate amount in excess of the underwriting limitation set forth in par. (a) unless it shall be protected in excess of that amount by reinsurance or cosuretyship as specified in par. (a).

(d) A surety corporation shall not issue multiple bonds on a single contract (splitting bonds) and a surety corporation’s liability on a single contract shall not be in excess of the limitations established in par. (a).

(e) No domestic corporation writing surety business shall execute, reinsure or be cosurety on a suretyship obligation in favor of the U.S. governments, or any other obligee, whereby a surety issues a bond to an obligee for a penal amount which is 10%, or an amount substantially less than, the total contract amount, unless the surety reinsures or obtains a cosurety for at least 50% of the bond penal amount with a corporation licensed to transact surety business where the risk is located. This is tantamount to a maximum exposure for any single loss on any one surety bond of this type of not more than one-twentieth of a domestic surety corporation’s capital and surplus.

History

Emerg. cr. eff. 6-22-76; cr. Register, September, 1976, No. 249, eff. 10-1-76; emerg. am. (2), eff. 6-5-84; am. (2) Register, October, 1984, No. 346, eff. 11-1-84.

Wis. Admin. Code § Ins 6.75 Classifications of insurance {#sec-ins-6.75 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.75}

This rule defines and delimits lines and classes of insurance for any purposes within the commissioner’s regulatory power unless the language or context of a statute or rule otherwise provides.

(1) Life and disability insurance. Life and disability insurance includes the following:

(a) Life insurance and annuities — except insurance or annuities included in par. (b), insurance or annuities upon the lives of persons, and annuity contracts without life contingencies, as provided in s. 632.66, Stats.;

Credit life insurance — insurance on the lives of borrowers or purchasers of goods in connection with specific loans or credit transactions when all or a portion of the insurance is payable to the creditor to reduce or extinguish the debt;

(b) Variable life insurance and variable annuities — insurance or annuities which provide for immediate or future benefits, the cost of which is funded and the payment of which is computed on the basis of experience factors derived from one or more segregated investments accounts established and managed as provided in ss. 611.24, 611.25, and 620.02, Stats.;

(c) Disability insurance — insurance covering injury or death of persons caused by accident, or insurance covering health of persons;

Credit accident and sickness insurance — insurance in connection with specific loans or credit transactions against loss of time of debtors resulting from accident or sickness when all or a portion of the insurance is payable to the creditor to reduce or extinguish the debt;

(2) Property and casualty insurance. Property and casualty includes all lines or classes of insurance which may lawfully be the subject of insurance other than those classes defined in sub. (1) (a) or (b), including but not limited to the following:

(a) Fire, inland marine and other property insurance — insurance against loss or damage to real and personal property, while stationary or in transit, arising out of fire or any other peril but not including any insurance defined in any other paragraph of this rule;

(b) Ocean marine insurance — insurance against the perils of seas and other related perils usually insured against by ocean marine insurance.

(c) Disability insurance — insurance covering injury or death of persons caused by accident, or insurance covering health of persons;

Credit accident and sickness insurance — insurance in connection with specific loans or credit transactions against loss of time of debtors resulting from accident or sickness when all or a portion of the insurance is payable to the creditor to reduce or extinguish the debt;

(d) Liability and incidental medical expense (other than automobile) insurance — insurance against liability for damages to persons or property, and incidental insurance for medical expenses when written in the same policy, but not including any liability insurance defined in other paragraphs of this rule;

(e) Automobile insurance — insurance against loss, medical or other expense, and liability for damages arising out of the ownership, maintenance or use of and automobile or other motor vehicle;

(f) Fidelity insurance — insurance against loss arising out of the acts or defaults of persons in positions of trust, excluding commercial bail bond insurance except as a surety under s. 345.61, Stats.

(g) Surety insurance — payment for loss arising out of failure to perform contracts or obligations, excluding commercial bail bond insurance except as a surety under s. 345.61, Stats.

(h) Title insurance — insurance against loss by reason of defects in titles to property;

(i) Mortgage guaranty insurance — insurance against loss arising from failure of:

Debtors to meet financial obligations to creditors under evidences of indebtedness which are secured by either:

a. A first lien or charge on residential real estate designed for occupancy by not more than four families; or

b. i. A first lien or charge on residential real estate designed for occupancy by 5 or more families; or

c. A stock or membership certificate issued to the tenant stockholders or resident members of a completed fee simple cooperative housing corporation as defined in 26 U.S.C. s. 216 (b) (1); or

d. A junior lien or charge on residential real estate.

Lessees to make payment of rentals under leases of real estate in which the lease extends for 3 years or longer.

(j) Credit insurance — insurance against loss arising from failure of debtors to meet financial obligations to creditors, except as defined in par. (i) 1. a., b., c., and 2.;

(k) Worker’s compensation insurance — insurance against obligations under ch. 102, Stats., or any similar law, and including employers’ liability insurance when written in the same policy;

(L) Legal expense insurance — insurance against expense for the professional services of licensed lawyers;

(m) Credit unemployment insurance — insurance against loss of income of debtors resulting from either labor disputes or involuntary unemployment;

(n) Miscellaneous — insurance against any other property or casualty insurance risk which lawfully may be the subject of insurance not specifically defined in any other paragraph of this rule;

(o) Aircraft insurance — insurance against loss, medical or other expense, and liability for damages arising out of the ownership, maintenance or use of any aircraft.

History

Cr. Register, August, 1977, No. 260, eff. 9-1-77; am. (2) (f) and (g), Register, March, 1980, No. 291, eff. 4-1-80; am. (2) (i) and (j), Register, October, 1982, No. 322, eff. 11-1-82; emerg. am. (1) (a), eff. 10-4-88, am. (1) (a) (intro.), Register, December, 1988, No. 396, eff. 1-1-89; CR 01-074: am. (2) (e) and (n), cr. (2) (o), Register January 2002 No. 553, eff. 2-1-02.

Wis. Admin. Code § Ins 6.76 Grounds for disapproval of and authorized clauses for fire, inland marine and other property insurance forms {#sec-ins-6.76 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.76}

(1) Purpose. The purpose of this rule is to set out characteristics and provision of fire, inland marine and other property insurance forms, as defined by s. Ins 6.75 (2) (a), which may constitute grounds for disapproval of such forms under the provisions of s. 631.20 (2), Stats., and to promulgate authorized clauses for such forms under s. 631.23, Stats., because it has been found that:

(a) Price or coverage competition is ineffective because diversity in language or content makes comparison difficult;

(b) Provision of language, content or form of these specific clauses is necessary to provide certainty of meaning of them;

(c) Regulation of contract forms will be more effective and litigation will be substantially reduced if there is increased standardization of certain clauses; and

(d) Reasonable minimum standards of insurance protection are needed for policies to serve a useful purpose.

(2) Grounds for disapproval. A fire, inland marine or other property insurance form may be considered misleading, deceptive or obscure within the meaning of s. 631.20 (2), Stats., if it does not clearly state the perils covered, the limitations, and the conditions, or if it contains provisions contrary to the law, or if it does not include clauses covering the following provisions where appropriate:

(a) Location and description of the property covered;

(b) Effect of other insurance on the coverage provided;

(e) Termination of the contract;

(f) Mortgagee interests and obligations;

(g) Obligations in case loss occurs.

(3) Authorized clauses. The following clauses, or any of them, shall be considered authorized clauses pursuant to s. 631.23, Stats. Appropriate liberalization of the prescribed language shall also be permitted.

(a) Insuring clause.

(b) Uninsurable and excepted property. This policy shall not cover accounts, bills, currency, deeds, evidences of debt, money or securities; nor, unless specifically named hereon in writing, bullion or manuscripts.

(c) Perils not included. This company shall not be liable for loss by fire or other perils insured against in this policy caused, directly or indirectly, by: 1. enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; 2. invasion; 3. insurrection; 4. rebellion; 5. revolution; 6. civil war; 7. usurped power; 8. order of any civil authority except acts of destruction at the time of and for the purpose of preventing the spread of fire, provided that such fire did not originate from any of the perils excluded by this policy; 9. neglect of the insured to use all reasonable means to save and preserve the property at and after a loss, or when the property is endangered by fire in neighboring premises; 10. nor shall this company be liable for loss by theft.

(d) Other insurance. Other insurance may be prohibited or the amount of insurance may be limited by endorsement attached hereto.

(e) Conditions suspending or restricting insurance. Unless otherwise provided in writing added hereto this Company shall not be liable for loss occurring:

While the hazard is increased by any means within the control or knowledge of the insured; or
While a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of sixty consecutive days; or
As a result of explosion or riot, unless fire ensue, and in that event for loss by fire only.

(f) Other perils or subjects. Any other peril to be insured against or subject of insurance to be covered in this policy shall be by endorsement in writing hereon or added hereto.

(g) Added provisions. The extent of the application of insurance under this policy and of the contribution to be made by this Company in case of loss, and any other provision or agreement not inconsistent with the provisions of this policy, may be provided for in writing added hereto, but no provision may be waived except such as by the terms of this policy is subject to change.

(h) Waiver provisions. No permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto. No provision, stipulation or forfeiture shall be held to be waived by any requirement or proceeding on the part of this Company relating to appraisal or to any examination provided for herein.

(i) Mortgagee interests and obligations. If loss hereunder is made payable, in whole or in part, to a designated mortgagee not named herein as the insured, such interest in this policy may be cancelled by giving to such mortgagee a ten days’ written notice of cancellation. If the insured fails to render proof of loss such mortgagee, upon notice, shall render proof of loss in the form herein specified within sixty (60) days thereafter and shall be subject to the provisions hereof relating to appraisal and time of payment and of bringing suit. If this Company shall claim that no liability existed as to the mortgagor or owner, it shall, to the extent of payment of loss to the mortgagee, be subrogated to all mortgagee’s rights of recovery, but without impairing mortgagee’s right to sue; or it may pay off the mortgage debt and require an assignment thereof and of the mortgage. Other provisions relating to the interests and obligations of such mortgagee may be added hereto by agreement in writing.

(j) Pro rata liability. This company shall not be liable for a greater portion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible or not.

(k) Requirements in case loss occurs. The insured shall give written notice as soon as reasonably possible to this Company of any loss, protect the property from further damage, forthwith separate the damaged and undamaged personal property, put it in the best possible order, furnish a complete inventory of the destroyed, damaged and undamaged property, showing in detail quantities, costs, actual cash value and amount of loss claimed; and within sixty days after the loss, unless such time is extended in writing by this Company, the insured shall render to this Company a proof of loss signed and sworn to by the insured, stating the knowledge and belief of the insured as to the following: the time and origin of the loss, the interest of the insured and of all others in the property, the actual cash value of each item thereof and the amount of loss thereto, all encumbrances thereon, all other contracts of insurance, whether valid or not, covering any of said property, any changes in the title, use, occupation, location, possession or exposures of said property since the issuing of this property, by whom and for what purpose any building herein described and the several parts thereof were occupied at the time of loss and whether or not it then stood on leased ground, and shall furnish a copy of all the descriptions and schedules in all policies and, if required, verified plans and specifications of any building, fixtures or machinery destroyed or damaged. The insured, as often as may be reasonably required, shall exhibit to any person designated by this Company all that remains of any property herein described, and submit to examinations under oath by any person named by this Company, and subscribe the same; and, as often as may be reasonably required, shall produce for examination all books of account, bills, invoices and other vouchers, or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by this Company or its representative, and shall permit extracts and copies thereof to be made.

(L) Appraisal. In case the insured and this Company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of the insured or this Company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him or her and the expenses of appraisal and umpire shall be paid by the parties equally.

(m) Company’s options. It shall be optional with this Company to take all, or any part, of the property at the agreed or appraised value, and also to repair, rebuild or replace the property destroyed or damaged with other of like kind and quality within a reasonable time, on giving notice of its intention so to do within thirty days after the receipt of the proof of loss herein required.

(n) Abandonment. There can be no abandonment to this Company of any property.

(o) When loss payable. The amount of loss for which this Company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by this Company and ascertainment of the loss is made either by agreement between the insured and this Company expressed in writing or by the filing with this Company of an award as herein provided.

(p) Suit. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss.

(q) Subrogation. This Company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment therefor is made by this Company.

History

Cr. Register, November, 1977, No. 263, eff. 12-1-77; am. (3) (a), Register, November, 1978, No. 275, eff. 12-1-78.

Wis. Admin. Code § Ins 6.77 Exemption from mid-term cancellation requirements {#sec-ins-6.77 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.77}

(1) Purpose. This section is intended to exempt certain classes of insurance contracts from s. 631.36 (2) (a), (b) and (c), Stats. This section implements the provisions of ss. 631.01 (5) and 631.36 (1) (c), Stats.

(2) Scope. This section applies to all insurers authorized to write umbrella or excess liability insurance policies in Wisconsin and to all insurers authorized to write aircraft insurance policies in Wisconsin.

(3) Definitions.

(a) “Aircraft insurance” has the meaning given in s. Ins 6.75 (2) (e).

(ac) “Application form” means a policy form that is designated an application by the insurer and that is filed with the office of the commissioner of insurance under s. 631.20, Stats.

(b) “Excess liability policy” means an insurance contract providing at least $1,000,000 of liability coverage per person or per occurrence in excess of certain required underlying liability insurance coverage.

(c) “Umbrella liability policy” means an insurance contract providing at least $1,000,000 of liability coverage per person or per occurrence in excess of certain required underlying liability insurance coverage or a specified amount of self-insured retention.

(d) “War risks coverage” means insurance coverage provided under an aircraft insurance policy for bodily injury, mental anguish, medical expense, or damage or loss to the covered aircraft or a third party’s property caused by declared or undeclared war, invasion, rebellion, insurrection or warlike operations or by an attempt to or the actual seizure or detention of an aircraft by any government, military, naval, or usurped power.

(4) Exemption.

(a) Any umbrella liability or excess liability insurance policy is exempt from the requirements of s. 631.36 (2) (a), Stats.

Note: Section 632.32 (4), Stats., refers to the requirements as amended by 2009 Wisconsin Act 28.

(d) A war risks coverage provision of an aircraft insurance policy is exempt from the requirements of s. 631.36 (2) (b) and (c), Stats.

(5) Notice.

(a) An insurer cancelling any umbrella liability policy or excess liability policy shall notify the commissioner of the grounds for such cancellation not later than the time at which the insurer notifies the policyholder of such cancellation. Insurers shall provide notice to the insured as set forth in s. 631.36 (2) (b), Stats.

(b) No cancellation under s. 631.36 (2) (a), Stats., of any war risks coverage contained in an aircraft insurance policy is effective until at least 7 days after the 1st class mailing or delivery of a written notice to the policyholder.

History

Emerg. cr. eff. 7-1-77; cr. Register, November, 1977, No. 263, eff. 12-1-77; am. (1), (4) and (5), Register, May, 1987, No. 377, eff. 6-1-87; am. (1) and (2), renum. (3) (a), (4) and (5) to be (3) (c), (4) (a) and (5) (a), cr. (3) (a) and (d), (4) (b) and (5) (b), Register, July, 1990, No. 415, eff. 8-1-90; CR 06-117: am. (1), (2) and (4) (a), cr. (3) (ac), (ag), (am) and (bm), (4) (b) and (c) and (6), renum. (4) (b) to be (4) (d), Register June 2007 No. 618, eff. 7-1-07; correction in (1) made under s. 13.92 (4) (b) 7., Stats., Register January 2010 No. 649; EmR0918: emerg. am. (1), (2), (4) (a), (b) and (6), r. (3) (ag) and (4) (c), cr. (4) (am), eff. 11-1-09; CR 09-097: am. (1), (2), (4) (a) and (6), r. (3) (ag) and (4) (c), cr. (4) (am) Register April 2010 No. 652, eff. 5-1-10; correction in (1) and (4) (a) made under s. 13.92 (4) (b) 7., Stats., Register, January, 2012 No. 673; CR 15-032: am. (title), (1), (2), r. (3) (am), (bm), (4) (am), (b), and (6) Register November 2015 No. 719, eff. 12-1-15; correction in (1), (2) made under s. 35.17, Stats., Register November 2015 No. 719.

Wis. Admin. Code § Ins 6.78 Exemption from filing of rates {#sec-ins-6.78 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.78}

(1) Purpose. The purpose of this section is to exempt from the filing requirements of s. 625.13, Stats., those rates for risks which have been customarily written on a consent-to-rate basis and certain title insurance rates, it having been determined that such filing is not necessary to protect policyholders and the public. This rule implements and interprets ss. 625.04, 625.13, and 625.15, Stats.

(2) Scope. This section applies to the following lines or classes of insurance:

(a) The classes specified in s. Ins 6.75 (2) (a), (d), (e), (f), (g), (h), (i), (j), (L), (m), and (n).

(b) Individual rate modifications that are a reduction from the filed title insurance rate.

(3) Exempt filings. If a specific risk in a line or class of insurance set forth in sub. (2) (a) is of the type which is customarily written on a consent-to-rate basis wherein the insured agrees to accept a rate that is different from the insurer’s filed rates, the consent-to-rate shall not be filed with the commissioner, provided:

(a) The insurer keeps for at least 1 year after the expiration date of the policy;

Record of the rate development; and
The written application signed by the insured stating the insured’s reason for requesting the rate.

(b) Prior to entering into such insurance agreements in Wisconsin the insurer has notified the commissioner of insurance of its intention so to do, identifying the contemplated lines and classes of insurance.

(4) Exempt filing. If a title insurance rate as set forth in sub. (2) (b) is a downward deviation of an existing filed rate, the rate shall not be filed with the commissioner provided that all of the following apply:

(a) The insurer keeps for at least five years after the inception date of the policy the following information:

The filed rate and premium and the deviated rate and premium;
The effective date of the policy and the location and description of the risk;
The reason for the deviation; and
A record of the deviated rate development.

(b) Prior to entering into such insurance agreements in Wisconsin, the insurer has notified the commissioner of its intentions to do so, identifying the contemplated rate deviation program.

History

Cr. Register, January, 1980, No. 289, eff. 2-1-80; am. (1), (2) and (3) (intro.), cr. (4), Register, February, 1993, No. 446, eff. 3-1-93; reprinted to restore dropped copy in (3), Register, May, 1993, No. 449.

Wis. Admin. Code § Ins 6.785 Exemption from rate and form filing requirements {#sec-ins-6.785 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.785}

(1) Purpose. This section is intended to exempt certain classes of property and casualty rates and commercial property and casualty forms from the rate and form filing requirements. This section implements and interprets ss. 625.04, 625.13, 625.15, and 631.20, Stats.

(2) Scope. This section applies to the lines or classes of insurance which are listed in s. Ins 6.75 (2) (a), (d), (e), (f), (g), (h), (i), (j), (L), (m) and (n) of direct insurance written on risks or operations in this state subject to s. 625.03, Stats., and which are exempted under the consent-to-rate provision of s. Ins 6.78.

(3) Findings. The commissioner of insurance finds that for certain classes of business certain risks within other classes of business and certain situations, the rate filing requirements set forth in s. 625.13, Stats., are unnecessary to achieve the purposes of ch. 625, Stats., and the policy form filing requirements set forth in s. 631.20, Stats., are unnecessary to achieve the purposes of ch. 631, Stats. The commissioner bases this finding on the following reasons:

(a) The manual rate, classification or form is inappropriate because it does not adequately reflect the exposure represented by the risk;

(b) The risk is so different from other risks that no single manual rate or classification could be representative of all such risks;

(c) The risk belongs to a classification that does not develop enough experience to warrant sufficient credibility for rate-making purposes;

(d) The risk involves a new product or coverage as to which there are no appropriate analogous exposures for rate-making purposes;

(e) The risk is a specialty type of insurance where enhanced speed to market for such insurance products will enhance competition and provide commercial policyholders with quicker access to new and innovative products; or

(f) The risk constitutes a business-to-business transaction of a sufficient size or specialized nature as to not warrant filings in order to accomplish the purposes of the statute.

(4) Rate filing exemption. The following rates shall not be filed with the commissioner by the insurer or rate service organization on behalf of the insurer provided the insurer complies with sub. (7):

(a) The rate for an individual risk written under a rating rule class filed with the commissioner which must be accompanied by a certification by a qualified actuary that the rate under the rating rule class cannot be objectively rated for at least one of the following reasons:

The class generates insufficient loss experience to be reliably used in rating;
The class loss experience is so volatile as to make it unreliable;
Prospective losses for this class are likely to change rapidly and unpredictably; or
Risks within the class are so dissimilar that a single rate would not be representative of all risks in the class.

(b) Rates for excess liability insurance provided in an amount not less than $1,000,000 in excess of a specified retained limit provided such retained limit is not less than:

$350,000 per occurrence as respects those exposures covered by underlying insurance; or
$10,000 per occurrence as respects those exposures not covered by underlying insurance.

(c) Rates for risks developing annual products liability and completed operations insurance premiums of $5,000 or more at the basic limit.

(d) Rates for risks developing annual increased limits written premium determined by customary rating procedures of $5,000 or more.

(e) Rates for risks developing $50,000 or more annual manual basic limit premium individually or in any combination of general liability insurance, commercial automobile, crime or glass.

(f) Rates for liability insurance increased limits if the risk is reinsured on a facultative basis.

(g) Rates for an adjustment of the aggregate limit of general liability insurance at any time during the policy period.

(h) Rates for coverage which is materially broader or more restrictive than the coverage upon which the manual rate is based.

(i) Rates for commercial property and casualty risks developing $50,000 or more in annual premium, except for any of the following:

Workers’ compensation insurance.
Medical malpractice liability insurance.
Any coverage issued under an assigned risk plan or through a residual market pool or residual market facility.
Any insurance that provides coverage for primary personal, family, or household purposes.

(5) Utilization of rate filing exemption. An insurer or a rate service organization wishing to utilize the rate filing exemption or modification granted by sub. (4) shall have on file with the commissioner rating rules pertaining to the situations described in sub. (4).

(6) Disapproval of filed rules. If the commissioner determines that a rating rule does not meet the rate standards set forth in s. 625.11, Stats., the commissioner may exercise the authority granted by s. 625.22, Stats., and disapprove the rate.

(6g) Form filing exemption. The commercial property and casualty insurance policy forms identified in pars. (a) and (b) are exempt from the filing requirements set forth in s. 631.20 (1) (a), Stats., provided the insurer complies with any requirements of chs. 600 to 655, Stats., and the Wisconsin Administrative Code that govern the content of such policy forms.

(a) The following commercial property and casualty forms developing $50,000 or more in annual premium are exempt:

Aircraft hull and liability;
Surety;
Fidelity;
Boiler and machinery;
Environmental impairment/pollution liability;
Kidnap and ransom;
Political risk or expropriations; and
Employment practices liability.

(b) The following commercial property and casualty forms developing $75,000 or more in annual premium are exempt:

Commercial inland marine;
Product liability; and
Fiduciary liability.

(6r) Disapproval of exempt forms. If the commissioner determines that a policy form subject to the filing exemption granted by sub. (6g) does not meet the standards set forth in s. 631.20 (2), Stats., the commissioner may disapprove the use of a form.

(7) Insurer records. An insurer using a rate subject to the exemption granted by sub. (4) or a form subject to the filing exemption granted by sub. (6g) shall maintain separate records and documentation for a period of 3 years after the rate or form is no longer used. This documentation shall include all details of the factors used in determining the rate or classification for a particular risk, including conditions used to qualify a rate for an exemption under sub. (4). The insurer shall provide these records to the commissioner upon request.

(8) Policyholder notice. Any policy exempt from filing under sub. (6g) shall include, at the time of issuance, a notice advising the policyholder that the policy includes forms and policy terms that have not been filed with or reviewed by the commissioner of insurance.

History

Emerg. cr. eff. 8-3-92; cr. Register, February, 1993, No. 446, eff. 3-1-93; CR 21-089: am. (title), (1), (3) (intro.), (c), (d), cr. (3) (e), (f), am. (4) (e), cr. (4) (i), (6g), (6r), am. (7), cr. (8) Register July 2022 No. 799, eff. 8-1-22; correction in (6g) made under s. 35.17, Stats., Register July 2022 No. 799.

Wis. Admin. Code § Ins 6.79 Advisory councils and committees {#sec-ins-6.79 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.79}

(1) Purpose. The purpose of this section is to delineate the process by which the commissioner may create advisory councils and committees under s. 15.04 (1) (c), Stats., to assist in dealing with regulatory problems pursuant to s. 601.20, Stats., and may include assistance with rule-making pursuant to s. 227.13, Stats.

(2) Duties. Each council or committee shall advise the commissioner on matters relating to specific issues or subjects presented to the members for study and review by the commissioner of insurance.

(3) Expense reimbursement. Members of the councils and committees shall receive no salary or compensation for service on the councils or committees but shall be reimbursed for their actual and necessary expenses in attending meetings or while performing other duties as directed by the commissioner.

(4) Meetings. The councils or committees shall meet as needed or at such times as requested by the commissioner.

(5) Membership. For each council or committee created by the commissioner, membership may not exceed 15 members and shall be representative of the various interested parties and include persons who possess expertise or interest on the issue or topic of the council or committee.

(6) Chairs. The commissioner shall appoint the chair, unless the commissioner authorizes a different process for selection. The commissioner shall appoint an employee of the office as a non-voting member to assist the council or committee with its duties. The commissioner or a designee shall keep a record of all proceedings, transactions, communications, and other official acts of the councils and committees. The commissioner or a designee appointed by the commissioner shall serve as a voting member when the council or committee is convened in accordance with s. 15.04 (1) (c), Stats. The files and records of the councils and committees shall be maintained at the office of the commissioner of insurance.

(7) Term. Members of the councils and committees serve at the pleasure of the commissioner.

History

Cr. Register, January, 1980, No. 289, eff. 2-1-80; correction in (1) under s. 13.93 (2m) (b) 7., Stats., Register, September, 1984, No. 348; r. (2) (c), Register, November, 1991, No. 431, eff. 12-1-91; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530; CR 08-064: r. and recr. Register December 2008 No. 636, eff. 1-1-09.

Wis. Admin. Code § Ins 6.80 Retention of records {#sec-ins-6.80 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.80}

(1) Purpose. The purpose of this section is to establish standards for record retention by insurers and other persons subject to the regulation of the commissioner.

(2) Scope.

(a) This section shall apply to all insurers licensed under chs. 611, 612, 613, 614, and 618, Stats., and including the Local Property Insurance Fund, the State Life Insurance Fund, and the State Indemnity Fund.

(b) The following sections also apply:

Section Ins 1.01 (3) applies to fraternals.
Sections Ins 2.07 (5) (a) 2. d. and (b) 2. b. apply to life insurance.

Note: Sections Ins 2.07 (5) (a) 2. d. and (b) 2. b. do not exist. Section Ins 2.07 was repealed and recreated eff. 3-1-82.

Section Ins 3.25 (9) (d) applies to credit life and accident and sickness insurance.
Section Ins 3.27 (28) applies to disability insurance.
Section Ins 6.17 (3) (c) and (d) apply to surplus lines.
Sections Ins 6.30 (2) (a) 1. e., 6.30 (3) (a) 3. e., (4) (a) 2. e. and (5) (a) 3. apply to property and casualty insurers.
Section Ins 6.55 (5) (b) applies to all insurers.
Section Ins 6.61 applies to intermediaries.
Section Ins 8.09 applies to employee welfare funds.

Note: Section Ins 8.09 has been repealed.

Sections Ins 8.65 (4) and 8.69 (6) apply to small employer insurers.

(3) Definitions.

(a) “Domestic insurer” has the meaning set forth in s. 600.03 (17), Stats.

(b) “Insurer” has the meaning set forth in s. 600.03 (17), Stats.

(d) “Hard copy” means any information which is procured from an alternate storage facility such as microfilm, microfiche or electronic data processing and reproduced into proper form.

(4) Domestic insurers.

(a) Corporate records such as minute books, articles and by-laws, and stock and membership records shall be retained as permanent records.

General ledgers shall be retained as permanent records.
Rate books, agents’ handbooks, underwriting manuals, specimen forms, and related actuarial material, as well as reinsurance contracts, shall be retained as long as the related insurance coverage remains in force.

(b) Records of insurance company operations and other financial records reasonably related to insurance operations for the preceding 3 years shall be maintained and be available to the commissioner.

(c) Records maintained under par. (b) may be in written form or in any other form capable of being converted to written form within a reasonable period of time.

Original documents, such as claim files, invoices, cancelled checks, underwriting information and other similar materials may be maintained on microfilm or microfiche so long as the records thus maintained are readily available to the commissioner and can be reproduced in hard copy.
Accounting records, policy master files, reserve inventories, and other similar records normally produced in hard copy may be maintained on electromagnetic tape provided such tapes are preserved and that the company can and will reproduce the appropriate hard copy within a reasonable period of time at the request of the commissioner.

(d) The statutes of limitations, escheat laws, and statutes regarding minors of the various jurisdictions in which the insurer does business shall control the retention of pertinent records, other than permanent records, beyond the period mentioned in par. (b). These records may include, but shall not be limited to, claims files, supplementary contract files, records of uncashed checks, and underwriting files.

(e) Subject to this rule and applicable statutes and rules or regulations of this and other jurisdictions in which the insurer is licensed to do business, the insurer may set its retention of records to conform to its storage facilities.

(5) Nondomestic insurers.

(a) Records with regard to insurance company operations in the state of Wisconsin for the preceding 3 years shall be maintained in the form specified under sub. (4) and be available to the commissioner, or the insurance regulatory agency of the insurer’s state of domicile.

(b) The requirements of this rule pertaining to an insurer’s operations in the state of Wisconsin may be met by compliance with the record retention law of its state of domicile. If no such law or regulation exists, an insurer may comply with this rule by presenting a statement attesting to the fact that its record retention system is acceptable to its state of domicile.

(7) Penalty. Violations of this rule by any person shall subject the person to the penalties set forth in s. 601.64, Stats.

(8) Effective date. As provided in s. 227.22 (2) (intro.), Stats., this rule shall take effect on the first day of the month following its publication.

History

Cr. Register, June, 1981, No. 306, eff. 7-1-81; r. (6) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; correction in (8) made under s. 13.93 (2m) (b) 7., Stats., Register, May, 1987, No. 377; cr. (2) (b) 10., Register, November, 1993, No. 455, eff. 2-1-94; corrections in (3) made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530; correction in (2) (b) 5. and 6. made under s. 13.93 (2m) (b) 7., Stats., Register January 2002 No. 553; correction in (2) (a) made under s. 13.92 (4) (b) 7., Stats., Register August 2014 No. 704.

Wis. Admin. Code § Ins 6.85 Notification of a person’s right to file a complaint with the commissioner {#sec-ins-6.85 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.85}

(1) Purpose. This section interprets and implements s. 631.28, Stats., by specifying the contents of a notice insurers must provide to insureds about their right to file a complaint with the office of the commissioner of insurance. This section also describes when and the manner in which such notice must be provided.

(2) Scope. This section applies to all policies or certificates in force, issued or renewed in Wisconsin on or after the effective date of this section.

(3) Definitions. For purposes of this section, “insured” means the policyholder for individual policies and both the group policyholder and certificate holder for group policies.

(4) Notice format. Every insurer shall disclose the insured’s right to contact the office of the commissioner of insurance regarding an insurance problem by providing a notice which shall:

(a) Be in the form as prescribed in Appendix I or for policies subject to sub. (5) (d) in form as prescribed in Appendix 2;

(b) Include the issuer’s address, toll free phone number, if available, and phone number in no less than 12-point type and bold print.

Note: The language in sub. (4) (b) applies to notices sent on or after March 1, 1995.

(d) Have the phrase “KEEP THIS NOTICE WITH YOUR INSURANCE PAPERS,” “PROBLEMS WITH YOUR INSURANCE?” in Appendix I and the “OFFICE OF THE COMMISSIONER OF INSURANCE” in Appendices I and 2 capitalized and in bold lettering.

(5) Notice delivery.

(a) For policies issued prior to the effective date of this section, except for policies included under pars. (c) and (d):

The notice shall be provided on or before the insured’s first renewal date after the effective date of this section or within one year after the effective date of this section, whichever is earlier, with a separate notice to the insured; or
For single premium policies, a separate notice shall be provided on or before the insured’s next anniversary date or within one year after the effective date of this section, whichever is earlier.

(b) For policies or certificates issued on or after the effective date of this section, except for policies included under pars. (c) and (d), a separate notice shall be provided at the time the policy or certificate is issued.

(c) For surety and title insurance policies the notice must be given as a separate notice to each claimant at the time a claim is denied.

(d) For policies subject to s. 632.83, Stats., the insurer shall either give notice in the form as prescribed in Appendix 2 and as specified in pars. (a) and (b) or may include the language in Appendix 2 as part of the grievance procedure language in the policy and certificates issued after the effective date and, for policies issued prior to the effective date, provide a policy or certificate amendment on or before the first renewal date after the effective date or within one year after the effective date of this section, whichever is earlier.

History

Emerg. cr. eff. 2-1-93; cr. Register, February, 1993, No. 446, eff. 3-1-93; correction in (5) (d), Register, April, 1993, No. 448, eff. 5-1-93; am. (4) (b) and Appendix, Register, January, 1995, No. 469, eff. 2-1-95; correction in (5) (d) made under s. 13.93 (2m) (b) 7., Stats., Register January 2002 No. 553.

Wis. Admin. Code § Ins 6.90 Prohibited uses of senior-specific designations {#sec-ins-6.90 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.90}

(1) Purpose. The purpose of this rule is to set forth standards to protect consumers from advertising and trade practices that are deceptive, misleading, or restrain competition unreasonably, with respect to the use of senior-specific certifications and professional designations in the advertising, solicitation, sale or purchase of, or advice made in connection with, life or health insurance, or an annuity product.

(2) Authority.

(a) This rule is adopted pursuant to the Office of the Commissioner of Insurance’s authority under ss. 601.42 (3) and 628.34 (12), Stats.

(b) Nothing in this rule shall limit the commissioner’s authority to enforce existing provisions of law.

(3) Scope. This rule shall apply to any advertising, solicitation, or sale or purchase of, or advice made in connection with, a life or health insurance policy, or annuity product by an insurance producer.

(4) Definitions. In this section:

(a) “Advertising” means all of the following:

Printed and published material, audio visual material and descriptive literature of an insurer or intermediary used in direct mail, newspapers, magazines, other periodicals, radio and television scripts, billboards and similar displays, excluding advertisements prepared for the sole purpose of recruiting employees, intermediaries or agencies.
Descriptive literature and sales aids of all kinds authored, issued, distributed or used by an insurer, intermediary or third party for presentation to members of the public, including circulars, leaflets, booklets, depictions, illustrations and form letters. Descriptive literature and sales aids do not include material in house organs of insurers, communications within an insurer’s own organization not intended for dissemination to the public, individual communications of a personal nature, and correspondence between a prospective group or blanket policyholder and an insurer in the course of negotiating a group or blanket policy, and general announcements from group or blanket policyholders to eligible individuals that a contract has been written.
Prepared sales talks, presentations and material for use by intermediaries and representations made by intermediaries in accordance therewith, excluding materials to be used solely by an insurer for the training and education of its employees or intermediaries; and
Packaging, including envelopes, used in connection with subds. 1., 2., and 3.
“Advertising” does not include a policy summary as defined in s. Ins 2.14 (3) (f), the “life insurance buyer’s guide” as set forth in s. Ins 2.14 (3) (d), an illustration as defined in s. Ins 2.17 (3) (i), a contract summary as defined in s. Ins 2.15 (4) (a), a preliminary contract summary as defined in s. Ins 2.15 (4) (b), and the “Wisconsin Buyer’s Guide to Annuities” as defined in s. Ins 2.15 (4) (c).

(b) “Health insurance” includes any policy of individual or group sickness and accident insurance, long term care insurance, Medicare advantage, Medicare supplement, and Medicare part D.

(c) “Insurance producer” means a person required to be licensed under chs. 600 to 655, Stats., to advertise, sell, solicit or negotiate insurance, including life insurance, health insurance and annuities.

(5) Prohibited uses of senior-specific certifications and professional designations.

(a) It is an unfair and deceptive trade practice under s. 628.34 (12), Stats., for an insurance producer to use a senior-specific certification or professional designation that indicates or implies in such a way as to mislead a purchaser or prospective purchaser that the insurance producer has special certification or training in advising or providing services to seniors in connection with the advertising, solicitation, sale, or purchase of a life or health insurance policy, or annuity product or in the provision of advice as to the value of or the advisability of purchasing or selling a life or health insurance policy or annuity product, either directly or indirectly, through publications or writings, or by issuing or promulgating analyses or reports related to a life or health insurance policy or annuity product as follows:

Use of a certification or professional designation by an insurance producer who has not actually earned or is otherwise ineligible to use such certification or designation.
Use of a nonexistent or self-conferred certification or professional designation.
Use of a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training or experience that the insurance producer using the certification or designation does not have.
Use of a certification or professional designation that was obtained from a certifying or designating organization that:

a. Is primarily engaged in the business of instruction in sales or marketing; or

b. Does not have reasonable standards or procedures for assuring the competency of its certificants or designees; or

c. Does not have reasonable standards or procedures for monitoring and disciplining its certificants or designees for improper or unethical conduct; or

d. Does not have reasonable continuing education requirements for its certificants or designees in order to maintain the certificate or designation.

(b) There is a rebuttable presumption that a certifying or designating organization is not disqualified solely for the purposes of par. (a) 4., when the certification or designation issued from the organization does not primarily apply to sales or marketing and when the organization or the certification or designation in question has been accredited by:

The American National Standards Institute (ANSI);
The National Commission for Certifying Agencies; or
Any organization that is on the U.S. Department of Education’s list entitled “Accrediting Agencies Recognized for Title IV Purposes.”

(c) In determining whether a combination of words or an acronym standing for a combination of words constitutes a certification or professional designation indicating or implying that a person has special certification or training in advising or servicing seniors, factors to be considered shall include:

Use of one or more words such as “senior,” “retirement,” “elder,” or like words combined with one or more words such as “certified,” “registered,” “chartered,” “advisor,” “specialist,” “consultant,” “planner,” or like words, in the name of the certification or professional designation; and
The manner in which those words are combined.

(d)

For purposes of this section, a job title within an organization that is licensed or registered by a state or federal financial services regulatory agency is not a certification or professional designation, unless it is used in a manner that would confuse or mislead a reasonable consumer, when the job title:

a. Indicates seniority or standing within the organization; or

b. Specifies an individual’s area of specialization within the organization.

For the purpose of this paragraph, financial services regulatory agency includes an agency that regulates insurers, insurance producers, broker-dealers, investment advisers, or investment companies as defined under the Investment Company Act of 1940 (15 USC 2d).

(6) Penalties. A violation of this section is an unfair and deceptive trade practice under s. 628.34 (12), Stats., and shall subject the violator to ss. 601.41, 601.62, 601.64, 601.65 and 628.10, Stats.

History

CR 09-038: cr. Register January 2010 No. 649, eff. 2-1-10.

Wis. Admin. Code § Ins 6.91 Definitions {#sec-ins-6.91 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.91}

In addition to the definitions in s. 628.90, Stats., for the purposes of ss. Ins 6.91 to 6.99 the following apply:

(1) “Business checking account” means any account utilized by a navigator, navigator entity, nonnavigator assister or nonnavigator assister entity in their capacity as a navigator, nonnavigator assister or related entity and in transacting of the business of insurance.

(2) “Cash disbursed record” means a record showing all monies paid out by the navigator, navigator entity, nonnavigator assister or nonnavigator assister entity in their capacity as a navigator, nonnavigator assister or related entity in transacting the business of insurance.

(3) “Cash receipts record” means a record showing all monies received by the navigator, navigator entity, nonnavigator assister or nonnavigator assister entity in their capacity as a navigator, nonnavigator assister or related entity and in transacting the business of insurance.

(4) “Certified application counselors” means a person who is a nonnavigator assister who is not an in-person assister and who is employed, supervised or affiliated with a registered nonnavigator assister entity.

(5) “Commissioner” means the commissioner of insurance.

(6) “Formal administrative action” includes consent decrees, cease and desist orders, stipulations, suspensions, revocations, license denials, fines, forfeitures, settlement agreements, navigator license restrictions or other actions limiting the navigator’s method of transacting the business of insurance.

(7) “Insurance agent” means an “intermediary” as defined in s. 628.02 (4), Stats.

(8) “Navigator entity” means an entity or organization that employs, supervises or is affiliated with, one or more licensed navigators; is designated by the exchange as a navigator, works on behalf of the exchange, and receives federal navigator grant funding; and is registered with the commissioner.

(9) “Nonnavigator assister entity” means an entity or organization that employs, supervises or is affiliated with one or more nonnavigator assisters including certified application counselors; is designated by and works on behalf of the exchange, enters into an agreement with the exchange; and is registered with the commissioner.

(10) “Personnel records” means those records pertaining to anyone who is employed by, supervised by or affiliated with a navigator entity or nonnavigator assister entity including independent contractors.

(11) “Policyholder records” means all records, applications, request for coverage changes, and coverage complaints associated with a policy generated by or through the navigator, navigator entity, certified application counselor or nonnavigator assister entity.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14.

Wis. Admin. Code § Ins 6.92 Individual navigators {#sec-ins-6.92 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.92}

(1) Purpose. This section protects insurance consumers by establishing procedures for the licensing of navigators when transacting the business of insurance, prescribing minimum standards and requirements to ensure timely and reliable information will exist and be available to the commissioner. This section implements and interprets ss. 628.095, 628.097, 628.10, 628.90 to 628.95, Stats., as applicable.

(2) Procedure.

(a) Application for navigator license. An individual applying for a navigator license shall submit an application to the office in the form prescribed by the commissioner. A completed application shall include: the navigator’s name; the navigator’s residence; contact email address; mailing and business addresses; confirmation of successful completion of prelicensing training; fingerprints provided in a format specified by the commissioner to complete; an electronic confirmation of criminal history from the Wisconsin department of justice, crime information bureau, and the federal bureau of investigation completed not more than 180 days prior to the licensing examination date; payment of the nonrefundable fees to the testing vendor; an electronic photograph of the applicant taken by the test vendor at the time of testing; confirmation of previous navigator licensure in another state, if applicable; payment of the fee under s. 601.31 (1) (nm), Stats.; proof of financial responsibility under sub. (7); and any documentation required in answer to questions on the application.

Note: A copy of the navigator license application form OCI 11-090, required in par. (a), may be obtained at no cost from the Office of the Commissioner of Insurance at 101 E. Wilson St., Madison WI 53703, or at the Office’s web address: oci.wi.gov.

(b) Prelicensing Training. An individual seeking a navigator license, in addition to any training requirements of the federal government, shall complete at least 16 hours of commissioner-approved navigator prelicensing training. Training required under this subsection must be approved by the commissioner and provided by an education provider that is approved by the commissioner.

(c) Scheduling the navigator licensing examination. An applicant must schedule an examination with the testing vendor at least twenty-four hours prior to the desired navigator licensing examination date. The written examination will test the applicant’s knowledge of the duties and responsibilities of a navigator; the insurance laws and regulations of this state; and the state’s public assistance programs and eligibility. The written examination shall be approved by the commissioner and offered through a commissioner-approved testing vendor.

(d) Exception.

An insurance agent who holds an active resident license with the accident and health line of authority and is in compliance with continuing education requirements may apply to be licensed as a navigator if the currently licensed insurance agent demonstrates all of the following:

a. Compliance as set forth in s. 628.92 (1), Stats., including competence and trustworthiness.

b. Satisfactory completion of 4 hours of navigator training specific to public assistance programs, including Medicaid, in addition to the completion of any federally required navigator training and compliance with federal restrictions and requirements including those set forth in 45 CFR 155.205 (d), 155.210, 155.215 (b) and (c), and 155.260 (b), as amended. The state training required under this subsection must be approved by the commissioner and provided by an education provider that is approved by the commissioner.

A currently licensed insurance agent who is in compliance with subd. 1. is exempt from passing the navigator examination and photograph requirements described in par. (a). The currently licensed insurance agent shall provide new fingerprints unless the office has received current, valid fingerprint results provided in a format specified by the commissioner and an electronic confirmation of criminal history from the Wisconsin department of justice, crime information bureau, and the federal bureau of investigation that were completed not more than 180 days prior to the date of the application. The currently licensed insurance agent shall submit a completed application as described in par. (a) and pay the licensing fee in accordance with s. 601.31 (1) (nm), Stats., to the commissioner.

(e) Issuance of license. The commissioner shall issue a navigator license to an applicant who completes and satisfies the requirements in pars. (a) and (b), in addition to any federal training or requirements including the requirements set forth in 45 CFR 155.205 (d), 155.210, 155.215 (b) and (c), and 155.260 (b), as amended, has passed the commissioner-approved written examination with a satisfactory grade, and meets the standards of competence and trustworthiness as described in sub. (3). Examination scores are valid for 180 days. Failure to apply for a license within 180 days will require the applicant to re-take the examination. Determination of the acceptance or rejection of a completed application shall be made within 90 days of receipt by the commissioner of the completed application, which is tolled until receipt of any additional required or requested documentation.

(3) Competence and trustworthiness. The following criteria may be used by the commissioner in assessing trustworthiness and competence of a navigator; failure to meet trustworthiness and competence is cause for denial, suspension or revocation or a license:

(a) Criminal record. The conviction for crimes which are substantially related to the circumstances of holding an insurance or navigator license, including a felony or misdemeanor conviction under the law of Wisconsin or any other state or under federal law.

(b) Accuracy of information. Any material misrepresentation in the information submitted on the application form.

(c) Regulatory action. Any formal regulatory action taken in any jurisdiction with regard to any occupational license held, such as insurance licenses in other states, real estate licenses and security licenses.

(d) Other criteria. Other criteria which the commissioner considers evidence of untrustworthiness or incompetence, including:

Providing incorrect, misleading, incomplete or materially untrue information in the licensing application.
Violating any insurance laws, or violating any regulation, subpoena or order of the insurance commissioner or of another state’s insurance commissioner, or of the federal government.
Obtaining or attempting to obtain a license through misrepresentation or fraud;
Improperly withholding, misappropriating or converting any monies or properties received in the course of acting as a navigator or insurance agent.
Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance.
Having admitted or been found to have committed any insurance unfair trade practice or fraud.
Using fraudulent, coercive, or dishonest practices in the conduct of business in this state or elsewhere.
Demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of personal financial transactions or professional business in this state or elsewhere.
Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district or territory.
Forging another’s name to an application for insurance or to any document related to an insurance transaction.
Improperly using notes or any other reference material to complete an examination for an insurance or navigator license.
Failing to comply with an administrative or court order imposing a child support obligation.
Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

(e) Minimum Age and Residency. An applicant for navigator licensure shall have attained at least eighteen (18) years of age and shall be a resident of this state or maintain his or her principal place of business in this state.

(4) Change of name or address.

(a) A licensed navigator shall, within 30 days, notify the commissioner in a manner prescribed by the commissioner of any change in the navigator’s name, residence address, principal place of business, contact email address or mailing address.

(b) A navigator who is not employed or supervised by or affiliated with a navigator entity and changes residency to a location outside of this state or changes his or her principal place of business to an address outside this state and is not a resident of this state shall have his or her navigator license terminated effective 60 days after the change of address.

Jurisdiction for payment of state taxes.
Jurisdiction for automobile driver’s license and motor vehicle registration.
Location of voter registration.
Location of principal residence, such as owned or rented dwelling, condominium, or apartment.
Location of principal place of business.

(5) Applicability of other laws. Licensed navigators are subject to the requirements contained at ss. 628.095, 628.097, and 628.10, Stats., as applicable to individual navigators.

(6) License renewals.

(a) The nonrefundable renewal fee of $ 35.00 is due before October 1 of each year. The commissioner shall send notice of the renewal fee in a manner prescribed by the commissioner at least 60 days prior to the fee due date to each navigator. Applications for navigator license renewal shall be submitted before the October 1 renewal deadline. The navigator shall provide proof financial responsibility under sub. (7).

(b) An individual navigator is required to complete at least 8 hours of accident and health insurance continuing education training before October 1 of each year. Training must be completed prior seeking annual renewal of a navigator license. Recurring training shall be completed and reported at a rate of not less than 8 hours each 12 months of each compliance period. Training required under this subsection must be approved by the commissioner and provided by an education provider that is approved by the commissioner.

(c) Any navigator whose license is terminated for failing to pay renewal fees or failing to complete required annual navigator continuing education or revoked for failing to pay unemployment insurance contributions or failing to pay delinquent taxes may, within 12 months from the termination or revocation date, apply to reinstate for the same navigator license without completing prelicensing navigator training or passing a written examination. The navigator must satisfy the requirement of s. 628.10 (2) (a), (am), or (cm), Stats., satisfactorily complete a reinstatement application and pay twice the amount of the license renewal fee under par. (a). If a navigator license has been terminated or revoked for more than 12 months, the navigator shall, in order to be relicensed, satisfy the examination and other licensing requirements established by subs. (2) to (4).

(7) Financial responsibility requirements. Each individual navigator not affiliated with a navigator entity shall comply with the requirements of s. 628.92 (5) (b), Stats., by submitting the original bond and form to the office in the form prescribed by the commissioner or by providing evidence of an equivalent coverage alternative subject to the commissioner’s prior approval.

Note: A copy of a sample navigator and navigator entity bond form OCI 11-093, required in sub. (7), may be obtained at no cost from the Office of the Commissioner of Insurance at 101 E. Wilson St., Madison WI 53703, or at the Office’s web address: oci.wi.gov.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14; corrections in (2) (d) 1. b., (e) made under s. 13.92 (4) (b) 7., Stats. Register August 2014 No. 704; CR 19-025: am. (2) (a), (4) (a), (6) (a), (c) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.93 Registration of navigator entities {#sec-ins-6.93 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.93}

(1) Initial application.

(a) Registration application for navigator entity. An entity registering as a navigator entity shall submit an application to the commissioner in the form prescribed by the commissioner. A completed application shall include: the navigator entity’s name; the names of the entity’s officers; the current mailing address; the name and contact email address of at least one licensed designated responsible navigator; names, license number, contact email addresses, and mailing addresses for the navigators it employs, supervises or is affiliated with; proof of financial responsibility under sub. (4) (b), and compliance with competence and trustworthiness criteria under s. Ins 6.92 (3), and any documentation required to questions on the application.

Note: A copy of the navigator entity registration application form OCI 11-091, required in par. (a), may be obtained at no cost from the Office of the Commissioner of Insurance at 101 E. Wilson St., Madison WI 53703, or at the Office’s web address: oci.wi.gov.

(b) Payment of fees. An applicant for an original registration shall pay an initial, non-refundable, registration fee of $100.00 is due with submission of the application.

(c) Acknowledgement of registration. Determination of the acceptance or rejection of a completed application shall be made within 90 days of receipt by the commissioner of the completed application, which is tolled until receipt of any additional required or requested documentation. The commissioner shall accept a registration if the applicant satisfies the requirements of pars. (a) and (b), and if the applicant is designated by the exchange as a navigator entity, receives funding through a federal grant, is in compliance with s. 628.92 (2), Stats., and is in compliance with applicable federal requirements including 45 CFR 155.215 (a) (1), as amended.

(2) Registration renewals. The renewal fee of $100.00 is due before October 1 of each year. The commissioner shall send notice of the registration renewal fee in a manner prescribed by the commissioner at least 60 days prior to the fee due date to each navigator entity. Applications for navigator entity renewal shall be submitted before the October 1 renewal deadline. The navigator entity shall comply with the requirements of s. 628.92 (5) (a), Stats., by submitting proof of a current bond or by providing evidence of an equivalent coverage alternative subject to the commissioner’s prior approval. Failure to comply with the requirements of this section may be cause for the commissioner to deny, revoke, or suspend the registration of a navigator entity.

(3) Entity reporting. The navigator entity shall report any updates to the list of navigators given in the application to register as a navigator entity, including additions, deletions, or modifications, within 30 days of the addition, deletion, or modification to the list of navigators.

(4) Entity liability.

(a) A navigator entity assumes full legal responsibility for the acts of the navigators whom the entity employs, supervises or is affiliated with for acts that are performed in this state and that are within the scope of the apparent authority to act as a navigator on behalf of the entity.

(b) The entity shall provide evidence of financial responsibility consistent with s. 628.92 (5) (a), Stats., by submitting the original bond and form to the office in the form prescribed by the commissioner. Alternatively the navigator entity, subject to the commissioner’s prior approval, may provide evidence of an equivalent coverage alternative.

Note: A copy of a sample navigator and navigator entity bond form OCI 11-093, required in sub. (4) (b), may be obtained at no cost from the Office of the Commissioner of Insurance at 101 E. Wilson Street, Madison WI 53703, or at the Office’s web address: oci.wi.gov.

(5) Investigation and review.

(a) The commissioner, or designated examiner, may investigate and review all navigator entities under ss. 601.43 and 601.44, Stats. The method and timing of the reviews shall be determined by the commissioner in each case and may consist of any of the following:

Consideration of information available from state, federal, or local agencies, private organizations or agencies, or interested persons.
Investigation upon receipt of a complaint from any person.
Any other information the commissioner deems relevant to the investigation.

(b) If, after the investigation the commissioner suspends, denies or revokes the registration, written notification shall be given with reasons for such action. The suspension, denial or revocation constitutes an order pursuant to s. 601.62 (3) (a), Stats., and the navigator entity may request a hearing before the commissioner under that section.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14; correction in (1) (title) made under s. 13.92 (4) (b) 2., Stats., and in (1) (c), (2) made under s. 35.17, Stats., Register August 2014 No. 704.; CR 19-025: am. (1) (a), (2) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 6.95 Registration of certified application counselors, nonnavigator assisters and nonnavigator assister entities {#sec-ins-6.95 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.95}

(1g) Registration requirement. Certified application counselors and other nonnavigator assisters shall be employed or supervised by a registered nonnavigator assister entity, or be affiliated with a registered nonnavigator assister entity.

(1r) Electronic registration for a nonnavigator assister entity. An entity registering as a nonnavigator assister entity shall provide all of the following information to the commissioner in the form prescribed by the commissioner:

(a) The nonnavigator assister entity’s name and current mailing address.

(b) The name and contact information for the nonnavigator assister entity.

(c) The name, business address, and type of nonnavigator assister for each nonnavigator assister it employs, supervises, or is affiliated with.

(d) An attestation that each nonnavigator assister is in compliance with applicable state law including any nonnavigator assister who is a certified application counselor and who has complied with s. 628.96 (2), Stats.

(e) The nonnavigator assister entity’s agreement to provide to the commissioner all supporting documents as requested by the commissioner.

(2) Certified application counselors and other nonnavigator assisters.

(a) Certified application counselors under 45 C.F.R. 155.225, and other nonnavigator assisters, are eligible to be registered by a nonnavigator assister entity if either of the following apply:

The application counselor or other nonnavigator assister is designated by the federal government to provide consumer assistance; that designation is not withdrawn; and the person has completed the training and examination requirement under ss. 628.92 (7) and 628.96 (2), Stats.
The application counselor or other nonnavigator assister is an insurance agent who hold an active resident license with the accident and health line of authority and is in compliance with continuing education requirements; complies with s. 628.96 (3), Stats., including competence and trustworthiness, and satisfactorily completes 4 hours of navigator training specific to public assistance programs, including Medicaid, in addition to the completion of any federally required nonnavigator assister training and compliance with federal restrictions and requirements. An insurance agent who meets the requirements of this subdivision is not required to complete prelicensing training or the navigator licensing examination under ss. 628.92 (7) and 628.96 (2), Stats.

(b) The nonnavigator assister entity shall maintain records that each certified application counselor and other nonnavigator assister registered under par. (a) has completed the annual continuing education training. The nonnavigator assister entity shall provide an attestation of compliance with such requirement to the commissioner in a form prescribed by the commissioner by October 1 of each year. The commissioner will provide guidance on the topics for the continuing education training required under this subsection.

(c) The commissioner may deny registration for a certified application counselor and other nonnavigator assisters, for any of the following:

Failure to possess requisite character, integrity, competency and trustworthiness. In addition to the requirements set forth in s. 628.04, Stats., and s. Ins 6.92 (3)
Commission of any act that would warrant the denial, suspension, or revocation of an insurance license or registration including any of the acts delineated in s. Ins 6.92 (3).
Failure to fully provide required or requested information, to complete requisite training including continuing education, to maintain certification from the federal government as a certified application counselor or nonnavigator assister entity.

(3) Entity reporting of updates. A nonnavigator assister entity shall comply with s. 628.96 (1), Stats., reporting in an electronic format as prescribed by the commissioner, any updates to the list of nonnavigator assisters that the nonnavigator assister entity provided when it first registered with the commissioner, including additions, deletions, or modifications. The information shall be provided within 30 days of the addition, deletion, or modification to the list of nonnavigator assisters.

(4) Entity liability. A nonnavigator assister entity assumes legal responsibility, in accordance with s. 628.96 (3), Stat., for the acts of the nonnavigator assisters, on behalf of the entity, that the entity employs, supervises or is formally affiliated with, that are performed in this state and that are within the scope of the apparent authority to act as a nonnavigator assister.

(5) Revocation of entity registration. The commissioner may deny, suspend or revoke a nonnavigator assister entity registration if the nonnavigator assisters it employs, supervises or is affiliated with, fail to comply with s. Ins 6.92 (3), or the nonnavigator assister entity fails to comply with any provision contained in this section or by failing to comply with requests of the commissioner.

(6) Investigation and review.

(a) The commissioner, or designated examiner, may investigate and review all nonnavigator entities under ss. 601.43 and 601.44, Stats. The method and timing of the reviews shall be determined by the commissioner in each case and may consist of any of the following:

Consideration of information available from state, federal, or local agencies, private organizations or agencies, or interested persons.
Investigation upon receipt of a complaint from any person.
Any other information the commissioner deems relevant to the investigation.

(b) If, after the investigation the commissioner suspends, denies, or revokes the registration, written notification shall be given with reasons for such action. The suspension, denial or revocation constitutes an order pursuant to s. 601.62 (3) (a), Stats., and the nonnavigator entity may request a hearing before the commissioner under that section.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14; (1g) and (1r) renumbered from (intro.) and (1) under s. 13.92 (4) (b) 1., Stats., (1g) (title) added under s. 13.92 (4) (b) 2., Stats., correction in (2) (intro.) made under s. 13.92 (4) (b) 7. Register August 2014 No. 704.

Wis. Admin. Code § Ins 6.96 Prohibited business practices {#sec-ins-6.96 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.96}

In addition to the prohibited acts contained in s. 628.95 (2), Stats., navigators, navigator entities, nonnavigator assisters and nonnavigator assister entities are prohibited from all of the following:

(1) Providing enrollment or other specific information regarding a health benefit plan that is not offered in the federal exchange.

(2) Providing a recommendation comparing health benefit plans that may be better or worse for the consumer or employer.

(3) Making misleading statements to a consumer or employer regarding or otherwise misrepresenting one’s qualifications or services.

(4) Offering a recommendation directly to a consumer or employer regarding a particular health benefit plan concerning deductible, coinsurance, or any substantive benefits, terms, or conditions of the contract.

(5) Asking or urging a consumer to apply for a particular health benefit plan from a particular insurance company.

(6) Distributing cards, documents or advertisements regarding a particular health insurer.

(7) Recommending a particular health benefit plan or insurer.

(8) Receiving consideration directly or indirectly from any health insurer in connection with the enrollment of individual or employees into a qualified health plan as defined 45 CFR 155.20, as amended.

(9) Using a single appointment for selling, soliciting or advising a consumer or employer about a product other than health benefit plans by a navigator or nonnavigator assister who is also a licensed insurance agent. Insurance agents shall make a separate appointment with the consumer or employer for selling, soliciting, or advising about a product other than a health benefit plan.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14; correction in (8) made under s. 13.92 (4) (b) 7. Register August 2014 No. 704.

Wis. Admin. Code § Ins 6.97 Navigator, nonnavigator assister, navigator entity, and nonnavigator assister entity records {#sec-ins-6.97 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.97}

(1) Purpose. This section protects consumers by prescribing minimum standards and techniques of accounting and data handling of navigators, nonnavigator assisters, navigator entities and nonnavigator assister entities to ensure that timely and reliable information will exist, if applicable, and be available to the commissioner. This section implements and interprets ss. 601.42 and 628.34, Stats., by establishing the minimum records that are to be maintained.

(2) Recordkeeping requirements.

(a) Records, generally. Beginning October 1, 2013, each navigator, nonnavigator assister, navigator entity or nonnavigator assister entity shall maintain, for at least a 3-year period, unless a specific period is provided elsewhere, all of the following financial, consumer, and employee records arising from or related to the activities of the navigator or nonnavigator assister, as applicable:

Business checking account.
Cash disbursed records.
Cash receipts records.
Personnel records.
Consumer or policyholder records.

(b) Cash disbursed record. The cash disbursed record shall show the name of the party to whom the payment was made, date of payment, and reason for payment.

(c) Cash receipts record. The cash receipts record shall show the name of the party who remitted the money, date of receipt, and reason for payment.

(d) Personnel records. Personnel records shall include dates of employment, supervision, or affiliation; position held; description of principal duties; name and last known address and telephone number of employee, supervisee or affiliated person.

(3) Place of maintaining records.

(a) The navigator or navigator entity shall maintain records, if any, required by sub. (2) at the business address of the navigator or the navigator entity, or at another location only if the navigator provides written notice of the other location to the commissioner.

(b) The nonnavigator assister or nonnavigator assister entity shall maintain records, if any, required by sub. (2), at the business address of the nonnavigator assister entity or at another location only if the nonnavigator assister entity provides written notice of the other location to the commissioner.

(4) Updating records. The navigator, navigator entity, and nonnavigator assister entity shall maintain financial records, if any, all records of compliance with prelicensing training completion, successful passage of the examination and continuing education completion, compliance with federal training and other federal requirements for the navigators and nonnavigator assisters it employs, supervises, or is affiliated with, as applicable for at least 3 years from the transaction of an insurance business.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14; (2) (a) (title) added under s. 13.92 (4) (b) 2., Stats., Register August 2014 No. 704.

Wis. Admin. Code § Ins 6.98 Prohibition of uses of designations {#sec-ins-6.98 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.98}

(1) Prohibited uses of designations. It is an unfair and deceptive trade practice under s. 628.34 (12), Stats., for a person to use terms including “navigator,” “navigator entity,” “nonnavigator assister,” “certified application counselor,” “certified,” and “nonnavigator assister entity,” in such a way as to mislead a purchaser or prospective purchaser that the person has special certification or training in advising or providing services to consumers in connection with the advertising, solicitation, sale, or purchase of a health benefit plan or in the provision of advice as to the advisability of purchasing a health benefit plan, either directly or indirectly, offered in the state either within or outside the exchange. The terms may not be used by a person who is not licensed as a navigator or registered as a nonnavigator assister. The terms may not be used alone or in combination with one or more terms such as “certified,” “licensed,” “registered,” or like words, in the name of a certification or professional designation unless such terms appear in a certification or professional designation and that person has attained the certification or professional designation.

(2) Penalties. A violation of this section is an unfair and deceptive trade practice under s. 628.34 (12), Stats., and shall subject the violator to ss. 601.41, 601.62, 601.64, 601.65 and 628.10, Stats.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14.

Wis. Admin. Code § Ins 6.99 Exemption {#sec-ins-6.99 omnilex-key=us-wi-regs-official--agency-ins--Ins 6.99}

(1)

(a) State and local governmental entities or any persons acting on behalf of a state or local governmental entity are exempt from ss. Ins 6.91 to 6.98 provided all of the following are met:

All communications, advertisements, notices, or other marketing materials including verbal communications must identify the entity as working on behalf of the state or local unit of government.
The state or local unit of government, upon request, confirms to the commissioner that the entity is responsible or has an agreement or contract that establishes financial responsibility for the acts of the entity and the individual navigators, and nonnavigator assisters employed, supervised, or affiliated with the entity.
The state or local governmental entity shall not use any term or designation denoting that it is certified as a navigator, nonnavigator assister or related entity unless the person, persons, or entity using the term or designation is in compliance with ss. Ins 6.92 or 6.95 and any other applicable sections.

(b) Federal governmental entities or any persons acting on behalf of a federal governmental entity through a federal contract are exempt from ss. Ins 6.91 to 6.98 provided all of the following are met:

All communications, advertisements, notices or other marketing materials including verbal communications must identify the entity as working on behalf of the federal government.
The federal government, upon request, confirms to the commissioner that the federal governmental is responsible or has an agreement or contract that establishes financial responsibility for the acts of the entity and the individual navigators, and nonnavigator assisters employed, supervised or affiliated with the entity.
The state or local unit of [federal] governmental entity shall not use any term or designation denoting that it is certified as a navigator, nonnavigator assister or related entity unless the person, persons, or entity using the term or designation is in compliance with ss. Ins 6.92 or 6.95 and any other applicable sections.

Note: “Federal” shown in brackets should have replaced “state or local unit of”. The office intends to correct this error in future rulemaking.

(c)

Employees of a health care facility, including hospitals, clinics and other health care facilities are exempt from ss. Ins 6.91 to 6.98 if as part of their employment they provide assistance to patients including assistance with enrollment in state or federal assistance programs.
The health care facility, including hospitals, clinics and other health care facilities shall not use any term or designation denoting that it is certified as a navigator, nonnavigator assister or related entity unless the person, persons or entity using the term or designation is in compliance with ss. Ins 6.92 or 6.95 and any other applicable sections.

History

EmR1314: emerg. cr. eff. 9-10-13; CR 13-113: cr. Register August 2014 No. 704, eff. 9-1-14.

Chapter Ins 7 FORMS

Wis. Admin. Code § Ins 7.01 Purpose {#sec-ins-7.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 7.01}

This chapter lists the title and form number of each form prescribed by the office of the commissioner of insurance which imposes requirements meeting the definition of a rule in s. 227.01 (13), Stats., and which is required to be published under s. 227.23 (3), Stats.

History

Cr. Register, January, 1992, No. 433, eff. 2-1-92.

Wis. Admin. Code § Ins 7.02 Bureau of financial analysis and examinations forms {#sec-ins-7.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 7.02}

History

Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 04-133: am. Register June 2005 No. 594, eff. 7-1-05; CR 10-151: cr. Form line 21-064, 22-051 Register August 2012 No. 680, eff. 9-1-12; CR 17-015: r. Form line 21-001, 21-003, 22-001, 22-006, 22-080 Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 7.04 Division of regulation and enforcement {#sec-ins-7.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 7.04}

(1) Complaints section.

(2) Bureau of market regulation.

(3) Office of research and public information.

History

Cr. Register, January, 1992, No. 433, eff. 2-1-92; CR 10-151: cr. (2) Form line 11-042, 11-049 Register August 2012 No. 680, eff. 9-1-12.

Wis. Admin. Code § Ins 7.06 Commissioner {#sec-ins-7.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 7.06}

Note: These forms and all other forms currently in use may be obtained from the Office of the Commissioner of Insurance at its website at http://oci.wi.gov/, or by writing to P.O. Box 7873, Madison, WI 53707-7878.

History

Cr. Register, January, 1992, No. 433, eff. 2-1-92.

Chapter Ins 8 EMPLOYEE WELFARE FUNDS; EMPLOYEE BENEFIT PLAN ADMINISTRATORS; SMALL EMPLOYER HEALTH INSURANCE

Subchapter I Employee Welfare Funds

Wis. Admin. Code § Ins 8.11 County and school district self-insured employee health care benefits: excess or stop-loss insurance requirements {#sec-ins-8.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.11}

(1) Purpose. This section interprets ss. 59.52 (11) (c) and 120.13 (2) (c), Stats., for the purpose of prescribing detailed requirements for excess or stop-loss insurance for self-insured employee health care benefit plans provided by counties or school districts.

(2) Scope. This section applies to any county or school district that alone or together with one or more counties or one or more school districts provides employee health care benefits on a self-insured basis to less than 1,000 covered employees.

(3) Definitions. In this section:

(a) “Aggregate claims” means total actual claim amounts incurred under the employee health care benefit plan during a benefit period.

(b) “Aggregate deductible” means the aggregate amount of liability specified in the excess or stop-loss insurance contract at or below which the county or school district remains liable for payments for eligible claims.

(d) “Coinsurance” means a fixed percentage of each claim established in the employee health care benefit plan which the county or school district is obligated to pay for each person covered in the plan.

(e) “Covered employees” means employees participating in an employee health care benefit plan.

(f) “Employees eligible to participate” means employees who are eligible to be covered employees under the terms of the employee health care benefit plan.

(g) “Employee health care benefit plan” means a self-insured plan established by one county or school district or jointly by 2 or more counties or 2 or more school districts to provide health care benefits to employees eligible to participate in the plan.

(h) “Expected claims” means the most accurate actuarial estimate of aggregate claims during a benefit period.

(i) “Incurred” means to have provided or furnished a service or item to an employee or dependent covered under an employee health care benefit plan for which a charge for a covered expense is made.

(j) “Maximums” means the largest total amount of claims per person established by the employee health care benefit plan which the county or school district is obligated to pay.

(k) “Paid basis” means the application of a claim payment to the aggregate deductible for the benefit period in which the payment is actually made, regardless of when the claim is incurred.

(L) “Quota share reinsurance” means insurance purchased for the employee health care benefit plan which pays the plan a predetermined fixed percentage of each claim.

(4) Excess or stop-loss insurance requirements.

(a) Excess or stop-loss insurance required by s. 120.13 (2) (c), Stats., shall provide coverage for all claims incurred during the term of the policy or contract at a level at which an actuary has certified that the probability that aggregate claims will exceed 125% of expected claims is less than 5%.

(b) Each employee health care benefit plan shall be covered by one excess or stop-loss insurance policy that satisfies par. (a), regardless of the number of counties or school districts participating in the plan.

(c) Notwithstanding par. (a), a county or school district that self-insures employee health benefits under a plan in which an actuary has certified that the probability that aggregate claims will exceed 125% of expected claims is less than one-half percent need not purchase excess or stop-loss insurance.

(5) Excess or stop-loss insurance provided on a paid basis.

(a) Excess or stop-loss insurance required by s. 120.13 (2) (c), Stats., may provide coverage on a paid basis.

(b) Upon termination for any reason of an excess or stop-loss insurance policy that provides coverage on a paid basis, the policy shall apply all claims incurred but not paid prior to the termination of the policy to the aggregate deductible of the benefit period in which the service or item was provided or furnished to an employee or dependent under the self-insured employee health care benefit plan.

(6) Actuarial certification.

(a) Every county or school district with a plan that is subject to s. 120.13 (2) (c), Stats., shall file with the commissioner of insurance within 30 days after the effective date of the self-insured employee health care benefit plan, every 3 years thereafter and whenever a material change occurs to the plan, an actuarial certification that includes information on:

The number of employees eligible to participate in the plan and the number of covered employees in the plan.
A description of the plan’s coverage including but not limited to an outline of benefits provided, deductibles, coinsurance, maximums and quota share reinsurance, if any.
A statement that the plan satisfies the excess or stop-loss insurance requirements specified in sub. (4).
Except for a county or school district with a plan subject to s. 641.08, Stats., a copy of the excess or stop-loss insurance contract and of the plan for self-insuring.

Note: A county or school district with a plan subject to ch. 641, Stats., must already file this information with the commissioner.

Note: Chapter 641, Stats., was repealed by 2003 Wis. Act 261.

(b) The actuarial certification required in par. (a) may be filed by an actuary employed by the excess or stop-loss insurer or by an actuary independent of the excess or stop-loss insurer.

(c) Two or more counties or 2 or more school districts that jointly establish an employee health care benefit plan shall designate the individual who will file the actuarial certification required in par. (a). Only one actuarial certification shall be filed for the plan.

Note: The commissioner of insurance will utilize the following tables to evaluate actuarial certifications for accuracy and compliance with this section. The following example illustrates the application of the tables. This example only gives a basic description of how to use the following tables. It may be necessary to extrapolate or interpolate from the information given in the tables in order to apply the tables to a particular plan. An actuary or other qualified person should be consulted to be certain that a plan meets the requirements of sub. (4). Also note that no table provides a description of dental or vision plan benefits. Under sub. (4) (c), many dental or vision plans may not need to purchase stop-loss insurance.

Example

Assume a school district has a self-insured employee health care benefit plan that covers 250 employees and family members. The plan offers individual specific stop-loss of $25,000 and provides benefits with a $500.00 deductible per person, 80% coinsurance and $1,000.00 out-of-pocket limit per person.

The plan’s stop-loss coverage and benefit package are the same as that used in Table 7. Therefore, use Table 7 for determining whether the plan meets the requirements in sub. (4).

In Table 7, use the 125 percent of mean line. Since sub. (4) (a) deals with “125% of expected claims,” refer to the 125% of mean line when using any of the tables.

To determine whether the probability that aggregate claims will exceed 125% of expected claims is less than 5%, subtract the decimal numbers shown in the tables from the number “1”. For example, for a plan offering the benefits described in Table 7 and having 25 employees, the probability that aggregate claims will exceed 125% of expected claims is 28% (1 minus .72= .28). It is 26% for 50 employees (1 minus .74), 23% for 100 employees (1 minus .77), etc.

In this example, the plan covers 250 employees. Table 7 shows that at 250 employees, the probability that aggregate claims will exceed 125% of expected claims is 18% (1 minus .82).

In order to comply with the rule, this probability must be less than 5%. In this example, the probability is 18%. Therefore, the school district or county must purchase aggregate stop-loss insurance at a level sufficient to bring this probability down to less than 5%. Stop-loss insurance is sold at various levels, including a level at which the probability that aggregate claims will exceed 125% of expected claims is less than 5%. At a minimum, the school district or county should purchase stop-loss insurance at this level.

(7) Actuary qualifications. The actuarial certification specified in sub. (6) shall be signed by an actuary who satisfies the requirements of s. Ins 6.12.

History

Cr. Register, April, 1988, No. 388, eff. 5-1-88; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562.

Subchapter II Employee Benefit Plan Administrators

Wis. Admin. Code § Ins 8.20 Purpose {#sec-ins-8.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.20}

This subchapter interprets and implements ch. 633, Stats.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Wis. Admin. Code § Ins 8.22 Definitions {#sec-ins-8.22 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.22}

In this subchapter:

(1) “Administrator” has the meaning given in s. 633.01 (1), Stats.

(2) “Commissioner” means the commissioner of insurance.

(3) “Employee” has the meaning given in s. 633.01 (2), Stats.

(4) “Office” means the office of the commissioner.

(5) “Plan” has the meaning given in s. 633.01 (4), Stats.

(6) “Principal” has the meaning given in s. 633.01 (5), Stats.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Wis. Admin. Code § Ins 8.24 Exemptions {#sec-ins-8.24 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.24}

(1) Each of the following is exempt from ch. 633, Stats., and this subchapter for the portion of its business subject to regulation under the specified sections:

(a) An administrator of one or more self-insured, partially insured or divided insurance worker’s compensation plans subject to s. DWD 80.60 or 80.61.

(b) A warrantor or warranty plan administrator, as defined in s. Ins 15.01 (4) (c) or (e), that holds a valid certificate of authority under ch. Ins 15.

(2) An administrator that is partially exempt under sub. (1) (a) or (b) is subject to ch. 633, Stats., and this subchapter for any portion of its business that is outside the scope of the exemption.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92; correction in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1997, No. 498.

Wis. Admin. Code § Ins 8.26 Licensing {#sec-ins-8.26 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.26}

(1) Application. A person applying for a new or renewal license as an administrator shall submit an application to the office in the form prescribed by the office. With the application, the person shall submit all of the following:

(a) With the initial application, a performance bond meeting the requirements of s. Ins 8.28.

(b) With a renewal application, proof that the bond continues to meet the requirements of s. Ins 8.28, if the amount required for the bond has changed.

(c) A financial statement for the administrator’s most recently completed fiscal year, prepared according to generally accepted accounting principles. The financial statement shall report the administrator’s assets, liabilities and net worth, the results of operations and the changes in net worth for the fiscal year on the accrual basis.

(d) A statement as to whether the administrator does any of the following:

Collects premiums or employee contributions on behalf of any principal.
Maintains separate fiduciary accounts for each principal.

(e) All of the following information about the administrator, if an individual, or about each officer, director, partner or other individual having comparable responsibilities in the organization, if a corporation or partnership:

Whether the individual has been fined or reprimanded or has been the subject of a consent decree in any state by any agency that regulates the business of administrators, insurance, real estate, securities or financial institutions.
Whether the individual has had a license to solicit insurance, real estate or securities or to act as an administrator refused, suspended, denied or revoked in any state.
Whether the individual has been convicted of a felony or misdemeanor, other than a misdemeanor related to the use of a motor vehicle or the violation of a fish and game regulation.
If the individual has ever been employed by an administrator or insurance company, or in the business of real estate, securities or financial institutions, whether his or her employment has been terminated or nonrenewed because of allegations of misconduct or wrongdoing.

(f) If the administrator is an individual, his or her insurance intermediary agent’s license number and social security number and a statement that he or she intends to act as an administrator in good faith and in compliance with all applicable laws of this state and rules and orders of the commissioner.

(g) If the administrator is a corporation or partnership, its federal identification number, the state and year of its incorporation or year of its formation and a statement that it intends to act as an administrator in good faith and in compliance with all applicable laws of this state and rules and orders of the commissioner and that it has designated or will designate an individual with direct responsibility for each plan it administers.

(h) If the administrator is an individual who is not a resident of this state or a corporation or partnership that is not organized under the laws of this state, a statement that the administrator agrees to be subject to the jurisdiction of the commissioner and the courts of this state with respect to all matters pertaining to activities as an administrator and to accept service of process as provided under ss. 601.72 and 601.73, Stats.

(i) Any other information requested by the office.

(j) The fee specified under s. 601.31 (1) (w), Stats., which shall be nonrefundable.

(2) Renewal application deadline. An administrator shall submit a renewal application on or before August 1 of each year.

(3) Application review. The office shall review and approve or disapprove each complete application within 60 days after its receipt.

Note: The application form, which includes a sample performance bond format, OCI 30-001, may be obtained from the Office of the Commissioner of Insurance, P.O. Box 7872, Madison, Wisconsin 53707-7872.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Wis. Admin. Code § Ins 8.28 Performance bond requirements {#sec-ins-8.28 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.28}

(1) A performance bond required under s. 633.14 (1) (b) or (2) (b), Stats., shall be continuous in form, shall be issued by an insurer authorized to do a surety business in this state and shall be in favor of the commissioner and payable to any resident of this state who is the beneficiary of an employee benefit plan administered by the administrator and to any such employee benefit plan on behalf of the residents of this state who are its beneficiaries in the event of injury caused by a failure of the administrator to fulfill its responsibilities as an administrator.

(2) If the administrator collects premiums or employee contributions on behalf of any principal, or commingles funds belonging to more than one principal, the performance bond shall be in the greater of the following amounts:

(a) $25,000.

(b) Ten percent of the total amount of projected premiums, charges and claim funds the administrator expects to handle on behalf of residents of this state during the fiscal year following the year for which a financial statement is submitted under s. Ins 8.26 (1) (c). A bond under this paragraph need not exceed $500,000.

(3) If the administrator does not collect premiums or employee contributions on behalf of any principal, and maintains a separate fiduciary account for each principal, the performance bond shall be in the greater of the following amounts:

(a) $15,000.

(b) Five percent of the total amount of projected claim funds the administrator expects to handle on behalf of residents of this state during the fiscal year following the year for which a financial statement is submitted under s. Ins 8.26 (1) (c). A bond under this paragraph need not exceed $250,000.

(4) An administrator may exclude from the calculations required under sub. (2) (b) or (3) (b) all amounts handled as administrator for any of the following:

(a) Self-insured, partially insured or divided insurance worker’s compensation plans subject to s. DWD 80.60 or 80.61.

(b) Warranty plans subject to ch. Ins 15.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92; correction in (4) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1997, No. 498.

Wis. Admin. Code § Ins 8.30 Notification to office {#sec-ins-8.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.30}

An administrator shall notify the office in writing of any of the following within 30 days after the date of the occurrence:

(1) The cessation of business activities as an administrator. A notification under this subsection shall include the name and address of the custodian of the administrator’s business records and the location of those records.

(2) Any change in the administrator’s business mailing address or the location of its business records.

(3) Formal administrative action in this state or another state by an agency that regulates the business of administrators, insurance, real estate, securities or financial institutions against the administrator or any officer, director, partner or other individual having comparable responsibilities in the corporation or partnership.

(4) The conviction in this state or another state of a felony or misdemeanor, other than a misdemeanor related to the use of a motor vehicle or the violation of a fish and game regulation, of the administrator or any of the officers, directors, partners or other persons having comparable responsibilities in the corporation or partnership.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Wis. Admin. Code § Ins 8.32 Audit {#sec-ins-8.32 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.32}

In order to determine whether the financial resources of an administrator are adequate to safeguard the interests of the public and persons covered by a plan, or to determine the appropriate bond amount under s. Ins 8.28, the office may order the administrator to submit financial statements that have been audited by a certified public accountant.

History

Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Subchapter III Small Employer Health Insurance

Wis. Admin. Code § Ins 8.40 Purpose {#sec-ins-8.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.40}

This subchapter interprets and implements ch. 635, Stats.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. Register, November, 1993, No. 455, eff. 2-1-94; correction made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: am. Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 8.42 Definitions {#sec-ins-8.42 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.42}

In addition to the definitions in s. 635.02, Stats., which apply to this subchapter, in this subchapter:

(1) “Basic market share ratio” means the ratio of the number of risk characteristic basic health benefit plans in force to the total number of basic health benefit plans in force.

(2) “Commissioner” means the commissioner of insurance.

(3) “Initial enrollment period” means a period prior to issuance of a policy during which eligible employees, and dependents of eligible employees, are entitled to enroll in coverage under the policy.

(4) “Late enrollee” means an eligible employee, or dependent of an eligible employee, who does not request coverage under a policy during an enrollment period in which the individual is entitled to enroll in the policy, and who subsequently requests coverage under the policy, regardless of whether the enrollment period was held prior to, on or after the law’s effective date. “Late enrollee” does not include an individual who is a new entrant under sub. (7) (b) or (c).

(5) “Law’s effective date” means May 12, 1992, or the first renewal date of a policy which occurs on or after May 12, 1992, whichever is later.

(6) “Market share ratio” means the ratio of the number of risk characteristic basic health benefit plans in force to the total number of policies in force.

(7) “New entrant” means an eligible employee, or the dependent of an eligible employee, who:

(a) Becomes part of an employer group on or after the law’s effective date and after commencement of an initial enrollment period;

(b) Is a spouse, minor or dependent under a covered employee’s policy who a court orders be covered under the policy and who requests enrollment within 30 days after issuance of the court order; or

(c) Failed to request enrollment in the policy during an enrollment period which commenced prior to, on or after the law’s effective date, during which the individual was entitled to enroll in the policy, if the individual:

Subsequently, and on or after February 1, 1994, loses coverage under the qualifying coverage; and
Requests enrollment within 30 days after termination of the qualifying coverage.

(8) “Office” means the office of the commissioner.

(9) “Policy” means any of the following:

(a) A group health benefit plan issued to a small employer.

(b) An individual health benefit plan, including, but not limited to, an individual health benefit plan which is intended or designed to supplement a basic health benefit plan, issued by an insurer to an eligible employee if 3 or more eligible employees of the same small employer apply for the coverage or were intentionally excluded from applying for reasons related to their health, and the individual health benefit plan is in fact, or in substance, sold to, or through active cooperation of, the small employer, including but not limited to circumstances where:

Premium is collected through a direct or indirect arrangement with the small employer;
The individual health benefit plan is in substance a replacement for group health benefit plan coverage provided through the small employer;
The small employer directly or indirectly contributes toward a portion of the premium for the individual health benefit plan; or
An eligible employee is solicited to purchase the individual health benefit plan on the premises of the small employer and with the consent and cooperation of the small employer or the small employer participates in the solicitation of the eligible employee.

(c) For a health benefit plan that provides coverage through a trust or association, a certificate or other evidence of coverage, including, but not limited to, coverage intended or designed to supplement a basic health benefit plan, issued to an individual small employer or in fact or substance, sold to, or through the active cooperation of, the small employer, including but not limited to circumstances where:

Premium is collected through a direct or indirect arrangement with the small employer;
The coverage is in substance a replacement for group health benefit plan coverage provided through the small employer;
The small employer directly or indirectly contributes toward a portion of the premium for the coverage; or
An eligible employee is solicited to purchase the coverage on the premises of the small employer and with the consent and cooperation of the small employer or the small employer participates in the solicitation of the eligible employee.

(d) A group health benefit plan which supplements or is designed to supplement the basic health benefit plan.

(10) “Risk characteristic” means the health status, claims experience, duration of coverage, or any similar characteristic related to the health status or experience of a small employer group or of any member of a small employer group.

(11) “Risk characteristic basic health benefit plan” means a basic health benefit plan which, when issued, is issued to a small employer group which:

(a) Is not eligible for any policy available from the small employer insurer, other than the basic health benefit plan or health benefit plans that do not provide benefits similar to or exceeding benefits provided under the basic health benefit plan as determined under s. Ins 8.66 (1), under the underwriting standards of the small employer insurer and based on the small employer group’s risk characteristics; or

(b) Is assigned a rate for the basic health benefit plan which exceeds the new business premium rate for the basic health benefit plan by 15% or more.

(12) “Risk load” means the percentage above the applicable base premium rate that is charged by a small employer insurer to a small employer to reflect the risk characteristics of the small employer group.

(13) “Underwritten individual” means an individual who, prior to the law’s effective date, requested but was excluded from coverage, or denied coverage, under a policy, whether issued by the current insurer or a preceding insurer, and continued to be and is an eligible employee, or dependent of an eligible employee, of the small employer.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; renum. (1) to (3) to be (2), (8) and (9) and am. (9) (b) and (c), cr. (1), (3) to (7), (9) (d), (10) to (13), Register, November, 1993, No. 455, eff. 2-1-94; corrections in (4) (a), (b), (7) (c) 1. and (13) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: consol. (4) (intro.) and (c) and renum. to (4) and am., r. (4) (a), (b), (7) (c) 1., am. (13) Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 8.44 Applicability; exclusion {#sec-ins-8.44 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.44}

(1) Chapter 635, Stats., and this subchapter apply to a policy issued to, or renewal for, an employer if the number of eligible employees in this state was not less than 2 nor more than 25 during at least 50% of the number of weeks the employer was actively engaged in the business enterprise during the 12 months preceding the date of application or the policy renewal date.

(2) A small employer insurer shall notify each employer in writing when a policy is issued that if the employer employs less than 2 or more than 25 eligible employees during at least 50% of the number of weeks in any 12-month period, or moves the business enterprise outside this state, the protections provided under ch. 635, Stats., and this subchapter will cease to apply to the employer on renewal of its health benefit plan.

(3) In addition to the types of policies excluded under s. 635.02 (3m), ch. 635, Stats., and this subchapter do not apply to policies providing only specified disease coverage or to hospital indemnity policies, as defined in s. 632.895 (1) (c), Stats.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (1), renum. (2) to be (3), cr. (2), Register, November, 1993, No. 455, eff. 2-1-94; corrections in (intro.), (2) and (3) made under 13.93 (2m) (b) 7., Register, March, 2000, No. 531; reprinted to correct error in sub. (3) Register February 2011 No. 662.

Wis. Admin. Code § Ins 8.46 Required policy provisions {#sec-ins-8.46 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.46}

Each policy shall include all of the following:

(1) On the face page or first page, a statement that the policy is guaranteed renewable except for the reasons stated in the policy, which shall be consistent with s. 635.07 (1) and (2), Stats.

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See ss. 632.749 (2) and 635.19 (3), Stats.

(2) A statement of the minimum number of eligible employees required in order to keep the policy in effect, expressed either as a schedule or as a percentage of eligible employees or both. The small employer insurer shall state the method for determining the minimum number required in the policy or employer agreement. For purposes of this subsection, “eligible employee” does not include any person who has continued coverage under s. 632.897 (2) (b) 2., Stats., under a small employer’s group policy and the number of individuals in a group shall not include individuals with other qualifying coverage except as permitted under s. 635.17 (2) (c) 2., Stats. A small employer insurer may not impose more stringent requirements than the following:

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.749 (2), Stats.

(a) For a small employer with more than 10 eligible employees, 70% of the group.

(b) For a small employer with 10 eligible employees, 6 eligible employees.

(d) For a small employer with 7 eligible employees, 4 eligible employees.

(e) For a small employer with 5 or 6 eligible employees, 3 eligible employees.

(f) For a small employer with 2 to 4 eligible employees, 2 eligible employees.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (2), Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.48 Solicitation; disclosure requirements {#sec-ins-8.48 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.48}

(1) Agents. Before completing an application for a policy, an agent shall provide the small employer or representative of the small employer or the individual applicant with a form stating the information required under s. 635.11 (1m), Stats. The agent shall sign and date the form certifying that he or she made the required disclosure and shall obtain the signature of the small employer or representative of the small employer or the individual applicant on the form. The agent shall give one copy of the completed form to the person who signed it. The agent or small employer insurer shall retain one copy of the completed form.

(2) Small employer insurers. A small employer insurer that does not use agents to solicit or sell policies shall, with any solicitation material, provide the small employer or individual applicant with a form stating the information required under s. 635.11 (1m), Stats. The small employer insurer shall secure with or as part of each application a form signed by the small employer, a representative of the small employer or individual applicant stating that he or she has received the information. The small employer insurer shall provide a copy to the person who signed the form no later than the date the policy is issued.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; corrections made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562.

Wis. Admin. Code § Ins 8.49 Uniform employee application form {#sec-ins-8.49 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.49}

(1)

(a) In accordance with s. 635.10, Stats., small employer insurers shall use the small employer uniform employee application form as the only acceptable form when small employers apply for coverage from small employer insurers. Small employer insurers shall implement procedures and policies necessary to use the small employer uniform employee application form.

(b) Small employer insurers shall treat and accept a copy of the uniform employee application as an original.

(c) The contents of the uniform small employer application shall not vary, except as permitted in par. (d), from the text or format including bold character, line spacing, the use of boxes around text and shall use a type size of at least 10 points as delineated in form OCI 26-501.

(d) Small employer insurers and licensed intermediaries may pre-print the name of the small employer insurer on the uniform employee application provided that the form contains at least 3 additional spaces to insert the names of insurers to whom the uniform applications may be sent and the form complies with par. (c).

Note: A copy of the uniform employee application form OCI 26-501 (c. 2/2004), required in par. (a), may be obtained at no cost from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison WI 53707-7873, or at the Office’s web address: oci.wi.gov.

(2)

(a) The information contained within each uniform employee application shall be considered current information by the small employer insurer if the information is received by the small employer insurer within 45 days of completion of the earliest signed and completed uniform employee application form. For the period of time that the information contained within the uniform employee application is considered current, small employer insurers may not require a small employer employee to complete a new application form or any document, addendum or certification representing that the information contained in the completed uniform employee applications is current.

(b) A small employer insurer may accept and utilize information provided by a small employer employee subsequent to the date the employee signed the completed application if the employee is providing the insurer with additional or modified information.

(c) A small employer insurer may require small employer employees to complete and submit new uniform employee applications if either of the following occurs:

The authorization signed by the employees does not include the name of the small employer insurer that the small employer is requesting provide it with an underwritten premium amount and coverage.
The completed uniform employee applications are received by the small employer insurer after 45 days of completion of the earliest signed and completed uniform employee application.

(3)

(a) Small employer insurers that receive a written request from a small employer to forward copies of the completed uniform employee applications to a different small employer insurer listed within the authorization section of the application shall forward copies of the uniform employee applications within 5 business days from receipt of the request without requiring a fee be paid for the photocopying or delivery of the copies of completed uniform employee applications. The small employer insurer shall notify the employer, as soon as practicable, if the small employer insurer is unable to comply with the request because the small employer has requested that information be sent to a small employer insurer not identified within the authorization.

(b) An intermediary shall forward, within 5 business days from receipt of the applications, copies of the uniform employee applications to all small employer insurers identified within the uniform employee application authorization to receive the applications, or to an authorized representative of each small employer insurer. The intermediary may withhold distribution to a small employer insurer, or the insurer’s authorized representative, at the request of the small employer.

(c) Completed uniform employee applications shall be maintained by small employer insurers and licensed intermediaries, as applicable, in accordance with subch. V of ch. Ins 25.

(4)

(a) Small employer insurers shall either state the premium to the small employer within 10 business days from receipt of all pertinent information required for its underwriting of the small employer’s application for group health insurance, including completed uniform employee applications, or deny the application in accordance with s. 635.18 (6), Stats.

(b) Small employer insurers shall make a reasonable effort to promptly obtain information it determines is necessary to make an underwriting decision including the information described in par. (a).

History

CR 03-055: cr. Register April 2004 No. 580, eff. 5-1-04.

Wis. Admin. Code § Ins 8.50 Underwriting restriction {#sec-ins-8.50 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.50}

In determining whether to issue or continue to provide coverage to a small employer, a small employer insurer may not consider the occupation of the employees of the small employer or the type of business in which the small employer is engaged.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92.

Wis. Admin. Code § Ins 8.52 Regulation of rates and rate changes {#sec-ins-8.52 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.52}

(1) Identification of the set of midpoint rates.

(a) Each small employer insurer shall identify a set of rates applicable to all combinations of case characteristics and benefit design characteristics that serves as the set of midpoint rates for policies issued to small employers. These rates shall be represented by any combination of rates and rating factors that satisfy the following:

All differences among rates in the set shall be in accordance with the insurer’s rate manual or rating procedures and shall be based on the actuarially determined values of the differences in case characteristics and benefit design characteristics.
The differences among the rates may not reflect any differences due to such factors as the claim experience, health status and duration of coverage of an individual policy or a collection of policies grouped according to anything other than case characteristics or benefit design.

(b) The set of midpoint rates identified in par. (a) shall apply during a specified period which shall not be less than one calendar month.

(2) Rate variance restriction.

(a) For a new policy issued on or after March 15, 1992, the following table lists the maximum percent a rate may vary from the midpoint rate applicable to policies with the same case characteristics and benefit design characteristics according to the effective date of any rate applied to that policy:

(b) For a policy issued before March 15, 1992, an insurer shall comply with the rate variance restriction specified in par. (a) 2 no later than August 15, 1994.

(3) Premium rate changes; documentation and restrictions.

(a) For the purpose of complying with s. 635.02 (2), Stats., and this subsection,“class of business” means a group of policies with the same or similar benefit design whose rates are based wholly or partly on their aggregate loss experience.

(b) For a policy renewed on or after March 15, 1993, an insurer shall maintain sufficient documentation so that each of the following distinct components can be identified:

The percentage change in the new business premium rate measured from the rating period in which the small employer was last rated to the current rating period or, in the case of a class of business for which the insurer is not issuing new policies, the corresponding change in the base premium rate.
The percentage change due to adjustments in case characteristics, determined in accordance with the insurer’s rate manual or rating procedures.
The percentage change due to adjustments in benefit design, determined in accordance with the insurer’s rate manual or rating procedures.
The percentage change due to such rating factors as claim experience, health status and duration of coverage, determined in accordance with the insurer’s rate manual or rating procedures.

(c) Each renewal rate, regardless of whether the rate represents an increase, shall be limited to the previous rate adjusted by the combination of the 4 components specified in par. (b) with the following restrictions on the experience component specified in par. (b) 4.:

For a policy issued on or after March 15, 1992, the experience component shall be limited to 15% per year, adjusted proportionately for rating periods of less than one year.
For a policy issued before March 15, 1992, subd. 1. applies, except if the premium rate exceeds the midpoint rate by more than the percentage specified in sub. (2) (a) for the applicable period for policies with the same case characteristics and benefit design characteristics, the experience component may not exceed 0%.

(d) For a rate change made before the end of the policy term due to the addition of a new entrant, late enrollee, underwritten individual or a new dependent of an insured employee, par. (c) applies, except that:

The new business rate change component specified in par. (b) 1. may not be applied at that time.
The experience component specified in par. (b) 4. may not exceed 15% per year, adjusted proportionately to the time remaining in the policy term.
The experience component specified in par. (b) 4., when combined with the experience component of the last scheduled rate renewal and any other subsequent rate changes during the current policy term, shall not exceed the limit specified in par. (c) 1. or 2., whichever applies.

(4) Annual publication of rates.

(a) On or before December 1, every small employer insurer shall annually file with the commissioner the small employer insurer’s lowest available monthly new business premium rates which will be in effect the following January 1. The filing shall be made on a form provided by the commissioner and shall require all of the following information as may apply to the type of plan offered:

For an indemnity plan, the rates shall be based on the insurer’s plan that is closest to a plan that features a $500.00 annual deductible and 80%/20% coinsurance.
For a defined network plan, the rates shall be based on a plan which is actuarially equivalent to the features described in subd. 1.
For all plans, the rates shall be specified for family and single plans, by group size and by the geographical criteria that are used by the insurer.
The commissioner may require additional information be provided in the form as appropriate to implement this subsection.

Note: OCI 26-500, the form described in this subsection may be obtained without charge by contacting the Office of the Commissioner of Insurance PO Box 7873, Madison WI. 53707-7873. The form is also available on the OCI website at oci.wi.gov

(b) Small employer insurers who file rates with the commissioner as described in this subsection will be in compliance with the requirements of s. 635.12, Stats.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (3) (d) (intro.), Register, November, 1993, No. 455, eff. 2-1-94; CR 02-043: cr. (4), Register October 2002 No. 562, eff. 11-1-02.

Wis. Admin. Code § Ins 8.54 Guaranteed renewability; cancellation and renewal restrictions {#sec-ins-8.54 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.54}

(1) Definition.

(a) In this section, “medically underwritten policy” means a policy that is issued after the small employer insurer has, for purposes of risk selection, used information about the group’s claim experience or the health history or medical records of one or more persons eligible for coverage.

(b) Notwithstanding par. (a), a small employer insurer may apply medical underwriting standards to an individual who originally declined and later applies for coverage under a nonmedically underwritten policy without converting that policy to a medically underwritten policy.

(2) Class of business.

(a) In this section, each of the following is a separate class of business, regardless of variations in policy forms, marketing methods or duration of coverage among small employers in the class of business:

All small employers with medically underwritten policies.
All small employers with policies that are not medically underwritten.
All small employers whose policies constitute a block of business assumed by the small employer insurer under a specific assumption treaty with an insurer that is not an affiliate.

(b) No small employer insurer may establish a class of business other than one specified in par. (a).

(3) Guaranteed renewability. Except as provided in s. 635.07, Stats., a policyholder has the right to renew a policy on the same terms subject to the premium rate restrictions specified in s. Ins 8.52 (3). The subsection does not prohibit a small employer insurer from offering a policyholder renewal with altered benefit design characteristics if the offer is available to all policyholders in the same class of business without regard to claim experience.

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749, Stats.

(4) Nonrenewal or termination based on participation requirements.

(a) A small employer insurer that intends to nonrenew a policy or terminate a policy under s. 635.07 (1) (d), Stats., because the number of eligible employees is less than the number required to keep the policy in force shall do all of the following:

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (2), Stats.

Notify the small employer of its intent to nonrenew or terminate and the reason for the nonrenewal or termination. The notice shall be given as required under s. 631.36, Stats., for a nonrenewal or at least 20 days before the termination date for a termination.
Offer to continue the small employer’s coverage for not less than 60 days after the nonrenewal or termination date in order to allow the small employer to increase the number of eligible employees to the required number.
Provide the additional coverage, if the small employer accepts the offer under subd. 2. before the nonrenewal or termination date and pays the premium for the additional coverage at the rate in effect at the time the additional coverage is provided.

(b) A small employer insurer may not nonrenew a policy or terminate a policy under s. 635.07 (1) (d), Stats., if the reason the number of eligible employees is less than the required number is due to an employee’s sickness or injury, approved leave of absence or temporary layoff. The small employer insurer may establish participation requirements and reasonable verification procedures as part of the policy or employer agreement.

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (2), Stats.

(c) A small employer insurer may not take into consideration factors related to an individual small employer’s claim experience in deciding whether to nonrenew a policy or terminate a policy under s. 635.07 (1) (d), Stats.

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

(d) A small employer insurer that intends to terminate a policy under s. 635.07 (1) (a) to (c) or (e), Stats., shall comply with the notice requirements under s. 631.36 (2) (b) and (c), (4), (6) and (7), Stats.

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (2), Stats.

(5) Nonrenewal of class of business.

(a) If a small employer insurer ceases to renew policies issued to all small employers in the same class of business under s. 635.07 (2), Stats., the small employer insurer may not establish any new class of business during the 5-year period beginning with the latest expiration date for policies in effect in the class of business that is not renewed.

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

(b) At least one year before a small employer insurer ceases to renew policies under s. 635.07 (2), Stats., the small employer insurer shall provide the office with all of the following information:

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

The reason for the decision not to renew.
The number of small employers and the total number of eligible employees affected by the decision not to renew.
The number of small employers in other classes of the small employer insurer’s business that are not affected by the decision not to renew.

(c) The commissioner may order an examination under s. 601.43, Stats., in order to determine the premium rate history and obtain information on the profitability of the nonrenewed class of business.

(d) At least one year before a small employer insurer ceases to renew policies under s. 635.07 (2), Stats., the small employer insurer shall provide written notice of that intent to all affected small employers and the insurance regulatory agency in each state in which an affected insured individual resides. The notice shall include all of the following:

Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

The reason for the decision to terminate coverage for the class of business.
The date on which coverage will terminate.

(e) In addition to the requirement under par. (d), the small employer insurer shall, at least 60 days but not more than 75 days before the date coverage will terminate, provide each affected small employer with written notice, complying with s. 631.36 (6) and (7), Stats., of the intent not to renew the policy. The notice shall also comply with the notice requirements of ss. 632.79 and 632.897, Stats.

(6) Conversion of assumed class of business. A small employer insurer that assumes a class of business from another small employer insurer shall, by the 2nd renewal date for each policy or one year from the date of assumption, whichever is later, convert each policy in the assumed class of business to a policy with the same or similar benefit design characteristics in another class of business specified under sub. (2) (a).

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (4) (a) to (c), Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.56 Certification of compliance; additional information required {#sec-ins-8.56 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.56}

(1) The annual certification of compliance required under s. 635.13, Stats., shall be submitted in the form prescribed by the office.

(2) In addition to the annual certification required under sub. (1), the commissioner may require a small employer insurer to furnish additional information including, but not limited to, the following, using the form and method of transmittal prescribed by the commissioner:

(a) Rate manuals or exhibits of all rating factors used for each class of business.

(b) Sample data of small employers including premiums charged and rating factors applied for case characteristics and benefit design characteristics.

(d) An exhibit showing the difference in new business premium rates between the current certification date and the last certification date.

(e) A description of how midpoint rates are determined.

Note: The form required under sub. (1), OCI 26-051, may be obtained from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison, WI 53707-7873.

History

Cr. Register, October, 1992, No. 442, eff. 11-1-92.

Wis. Admin. Code § Ins 8.59 Small employer insurers shall offer an initial enrollment period to all members of small employer groups; riders and discriminatory coverage are prohibited {#sec-ins-8.59 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.59}

(1) A small employer insurer that offers a policy shall provide an initial enrollment period during which each eligible employee and dependent of an eligible employee is entitled to enroll in coverage under the policy.

(2) Except as permitted under sub. (3), a small employer insurer shall provide the same policy coverage to each eligible employee, and dependent of an eligible employee of a small employer, who is covered under a policy.

(3) A small employer insurer may offer, or participate in an offer, to eligible employees of a choice by the eligible employee among 2 or more policies for coverage of the eligible employee and the eligible employee’s dependents, but only if:

(a) The enrollment period is simultaneous for all the policies;

(b) The eligible employee may choose any one of the offered policies; and

(c) All the policies offered provide benefits similar to or exceeding the benefits provided under the basic health benefit plan as determined under s. Ins 8.66 (1).

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94; correction in (4) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (4) Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 8.60 A small employer insurer may accept an employee’s or dependent’s waiver of coverage during an initial enrollment period only under limited conditions {#sec-ins-8.60 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.60}

(1) A small employer insurer may not issue a policy unless during the initial enrollment period all the eligible employees and dependents of eligible employees elect and are provided coverage under the policy, except a small employer insurer may permit an individual to decline coverage in the initial enrollment period if the small employer insurer determines:

(b) The individual elected coverage under another policy during an enrollment period permitted under s. Ins 8.59 (3);

(c) The individual does not have a risk characteristic or other attribute that would be the sole cause for the small employer insurer to make a decision with respect to premiums or eligibility for a policy that is adverse to the small employer;

(2) A small employer insurer may permit an individual to decline coverage under a policy under sub. (1) only if the insurer complies with ss. Ins 8.64 and 8.65.

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94; correction in (1) (a), (d) and (e) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (1) (a), (d), (e) Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 8.61 Small employer insurers shall offer coverage to new entrants {#sec-ins-8.61 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.61}

(1) A small employer insurer shall provide under a policy for an enrollment period during which a new entrant is entitled to enroll in coverage under the policy. The small employer insurer shall provide an enrollment period under a policy of at least 30 days after the date the new entrant is notified of the opportunity to enroll. A small employer insurer which offers more than one policy in the initial enrollment period under s. Ins 8.59 (3) shall offer the new entrant the same choice of policies during the new entrant’s enrollment period.

(3) A small employer insurer’s policy shall not apply, or permit an employer to apply, a probationary period which must be met before a new entrant is eligible for coverage under a small employer policy, or a similar limitation, that is longer than 6 months.

(4) A small employer insurer may not add coverage restrictions or limitations under a policy because of the risk characteristics of a new entrant.

(5) A small employer insurer may assess a risk load to the premium rate associated with a new entrant, consistent with the requirements of s. 635.05, Stats., and s. Ins 8.52 (3) (d).

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94; corrections in (2) and (6) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (2), (6) Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 8.62 Small employer insurers shall offer an open enrollment for individuals excluded prior to enactment or application of the small employer health insurance law {#sec-ins-8.62 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.62}

(1) A small employer insurer shall provide an enrollment period during which underwritten individuals who were excluded or denied coverage prior to the law’s effective date are entitled to enroll in coverage under the policy currently held by the small employer. Notice of the enrollment period shall [be] given as required under sub. (4).

(2) A small employer insurer may require an individual who requests enrollment under this section to sign a statement indicating that the individual sought coverage under a policy issued to the employer, other than as a late enrollee, and that the coverage was not offered to the individual. If the individual provides the statement it is presumed that the individual is an underwritten individual and entitled to enroll under this section.

(3) The enrollment period required under this section shall comply with all of the following:

(a) It shall commence no later than 45 days after December 1, 1993, and shall last for a period of at least 90 days.

(b) Underwritten individuals who are provided an opportunity to enroll under this section shall be treated as new entrants.

(c) The terms of coverage offered to an underwritten individual under sub. (1) may exclude coverage for preexisting medical conditions only if the policy currently held by the small employer contains such an exclusion, the exclusion complies with s. 635.17 (1), Stats., and the exclusion period is reduced by the number of days between the date the individual was excluded or denied coverage and the date coverage is provided to the individual under this section.

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746 (1), Stats.

(4) A small employer insurer shall provide written notice of the right to enroll under this section to each small employer insured under a policy offered by the insurer. The notice shall be mailed at least 30 days before commencement of the enrollment period and shall clearly describe the rights granted under this section and the process for enrollment of the underwritten individuals in the policy. The insurer shall provide the employer with sufficient copies of the notice to distribute to each eligible employee and shall ask the employer to promptly distribute a copy to each eligible employee. The small employer insurer shall make reasonable efforts to obtain from the small employer certification that the notice was promptly distributed to all eligible employees.

(5) A small employer insurer may assess a risk load to the premium rate associated with an underwritten individual, consistent with the requirements of s. 635.05, Stats., and s. Ins 8.52 (3) (d).

(6) The requirement under sub. (1) to offer an enrollment period applies regardless of whether the small employer insurer required to make the offer was the insurer of the employer when the individual was originally excluded or denied coverage.

History

Cr. Register, November, 1993, No. 455, eff. 12-1-93.

Wis. Admin. Code § Ins 8.63 Small employer insurers shall offer coverage to late enrollees {#sec-ins-8.63 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.63}

(1) A small employer insurer shall provide under a policy for an enrollment period during which a late enrollee is entitled to enroll in coverage under the policy. The small employer insurer shall provide an enrollment period of at least 30 days after the date the late enrollee requests coverage and is notified of the opportunity to enroll.

(2) A small employer insurer may exclude coverage of a late enrollee who elects coverage for no more than 18 months or provide for up to an 18-month preexisting condition exclusion, but if both a period of exclusion from coverage and a preexisting condition exclusion are applied by the small employer insurer under the policy the combined period may not exceed 18 months from the date the individual applies for coverage under the policy. A small employer insurer may require that the late enrollee remain continuously employed by, or remain a dependent of an eligible employee continuously employed by, the small employer for the entire period of exclusion permitted under this subsection. A small employer insurer may not impose a preexisting condition exclusion under s. 635.17 (1), Stats., in addition to an exclusion permitted under this subsection.

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746 (1), Stats.

(3) A small employer insurer may assess a risk load to the premium rate associated with a late entrant, consistent with the requirements of s. 635.05, Stats., and s. Ins 8.52 (3) (d).

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.64 Small employer insurers may not participate with a small employer to coerce, or discriminate among, eligible employees or dependents {#sec-ins-8.64 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.64}

(1) A small employer insurer may not accept a waiver of coverage, if the insurer, or an insurance intermediary for the insurer, reasonably should know that the small employer pressured or unfairly induced the eligible employee or dependent of an eligible employee to decline coverage due to the individual’s risk characteristics.

(2) An insurance intermediary shall notify a small employer insurer in writing, prior to submitting an application for coverage with the insurer on behalf of a small employer, or prior to transmittal of a waiver, of any circumstances that would indicate that the small employer pressured or unfairly induced an eligible employee or dependent of an eligible employee to decline coverage due to the individual’s risk characteristics.

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.65 A small employer insurer shall require small employers to provide documentation to establish that waivers of coverage are voluntary and permitted {#sec-ins-8.65 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.65}

(1) A small employer insurer shall require each small employer that applies for a policy, as part of the application process, to provide a complete list of eligible employees and dependents of eligible employees of the small employer. The small employer insurer shall require the small employer to provide appropriate supporting documentation, such as the state unemployment or worker’s compensation quarterly reporting forms, to verify the information required under this subsection.

(2) A small employer insurer shall secure a waiver signed by the eligible employee on behalf of the employee or the dependent of the employee with respect to each eligible employee, and each dependent of an eligible employee, who declines an offer of coverage under a policy, whether during an initial enrollment period, as a new entrant or as an underwritten individual. The small employer insurer shall include on the waiver and require:

(a) A certification that the individual who declined coverage was informed of the availability of coverage under the policy;

(b) That the reason for declining coverage be stated; and

(3) A small employer insurer shall obtain, with respect to each individual who submits a waiver under sub. (2) in connection with an initial enrollment period, information sufficient to establish that the waiver may be accepted under s. Ins 8.60 (1).

(4) A small employer insurer shall maintain waivers required under sub. (2), the information required to be obtained under sub. (3) and notifications under s. Ins 8.64 (2), for a period of 3 years or until the policy terminates, whichever is later.

(5) A small employer insurer may not issue coverage to a small employer that refuses to provide the list required under sub. (1), a waiver required under sub. (2) or information required under sub. (3).

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.66 Qualifying coverage for portability and late enrollees; transition {#sec-ins-8.66 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.66}

(1) For the purpose of determining whether a health benefit plan or other health benefit arrangement is qualifying coverage under s. 635.17, Stats., or under this subchapter:

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.745 (4), Stats.

(a) A health insurance policy, certificate or other health benefit arrangement is employer-based if an employer sponsors the plan or arrangement or makes a contribution to the plan or arrangement.

(b) A health insurance policy, certificate or other benefit arrangement provides benefits similar to or exceeding the benefits provided under the basic health benefit plan if the policy, certificate or other benefit arrangement provides benefits that:

Have an actuarial value as considered for a normal distribution of groups that is not substantially less than the actuarial value of the basic health benefit plan; or
Provides coverage for hospitalization and physician services that is substantially similar to or exceeds the coverage for those services in the basic health benefit plan.

(c) A small employer insurer shall evaluate a previous or existing policy, certificate or other benefit arrangement taken as a whole and shall not base its determination on the fact that one or more portions of the previous or existing policy, certificate or benefit arrangement provides less coverage than the comparable portion of the basic health benefit plan.

(2) For the purposes of s. 635.17 (1) (b), Stats., an individual has previous qualifying coverage with respect to a particular service if the previous policy, certificate or other benefit arrangement covering the individual was qualifying coverage and provided any benefit with respect to the service.

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746 (1) and (3), Stats.

(3) To the extent necessary to comply with this section and s. 635.17, Stats., a small employer insurer shall ascertain the source of previous or existing coverage of each eligible employee and each dependent of an eligible employee at the time the employee or dependent initially enrolls in the health benefit plan provided by the small employer insurer. The small employer insurer shall contact the source of previous or existing coverage to resolve any questions about the benefits or limitations related to the previous or existing coverage.

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746, Stats.

(4) No small employer insurer may renew or issue a policy after November 30, 1993, unless the policy includes a provision complying with s. 635.17 (1) (b), Stats., as to qualifying coverage defined in s. 635.02 (5m) (b) and (c), Stats., in addition to qualifying coverage defined in s. 635.02 (5m) (a), Stats. An insurer shall administratively comply with s. 635.17 (1) (b), Stats., for all policies in force on or after July 1, 1993, with respect to qualifying coverage defined under s. 635.02 (5m) (b) and (c), Stats., for all individuals who commence coverage under a policy after June 30, 1993. All small employer insurers shall establish and disseminate policies and procedures designed to ensure compliance with this subsection by not later than December 1, 1993.

Note: 1995 Wis. Act 289 repealed ss. 635.02 (5m) and 635.17, Stats. See ss. 632.745 (4) and 632.746 (1), Stats.

(5) An insurer, on request, shall provide to the current insurer of a small employer copies of pertinent health benefit plan provisions, a statement of coverage available and other information reasonably necessary to enable the current insurer to comply with subs. (1) to (3).

History

Cr. Register, November, 1993, No. 455, eff. 12-1-93.

Wis. Admin. Code § Ins 8.67 Restrictive riders prohibited {#sec-ins-8.67 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.67}

A restrictive rider, endorsement or other provision that would violate s. 635.17 (3) (b), Stats., and that was in force on May 12, 1992, may not remain in force beyond the first renewal date of the policy and a small employer insurer shall delete the rider, endorsement or other provision after the law’s effective date.

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.748 (1), Stats.

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.68 Fair marketing standards {#sec-ins-8.68 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.68}

(1)

(a) Unless otherwise permitted under par. (b), (c) or (d), a small employer insurer shall actively market its health benefit plans to all small employers and without regard to the size of the small employer group by:

Actively marketing in each segment of the small employer market the basic health benefit plan and at least one form of a policy which provides benefits which materially exceed benefits provided under the basic health benefit plan.
Actively marketing in each area of the state the basic health benefit plan and at least one form of a policy which provides benefits which materially exceed benefits provided under the basic health benefit plan, except a small employer insurer which is, and is likely to remain, in compliance with s. Ins 8.69 may:

a. Limit marketing to the provider service areas for the health maintenance organization or preferred provider plans if it limits the policies it offers to the basic health benefit plan and policies which are health maintenance organization plans or preferred provider plans; or

b. Limit its marketing of policies to selected areas which the small employer insurer can demonstrate by clear and convincing evidence are selected for justifiable business reasons other than desirable demographic characteristics related to risk selection.

(b) A small employer insurer may limit marketing and issuance of the basic health benefit plan under s. 635.26 (2m) or (4), Stats., or may limit marketing and issuance of other forms of policies, or both, to a particular segment of the market, only if the segment is not based on the size of the small employer group and the small employer insurer:

Note: 1997 Wis. Act 27 repealed s. 635.26, Stats. See s. 635.19 (2), Stats.

Files with the commissioner on or after February 1, 1994, in the form prescribed by the commissioner, a request for approval to limit its marketing of policies;
Obtains prior written approval from the commissioner, after the commissioner finds approval is consistent with the purpose of ch. 635, Stats., and the approval is not rescinded;
Complies with this chapter and ch. 635, Stats., with respect to the entire market segment;
Complies with s. Ins 8.69 computed based on the entire market, not only the market segment targeted by the small employer insurer; and
Does not use targeting of a particular market segment as a subterfuge for applying underwriting criteria, including, but not limited to, selling only through a trust or association which limits membership based on health or based on factors which are designed to limit the enrollment of individuals with health conditions.

(c) Until February 1, 1995, a small employer insurer may limit marketing of health benefit plans to small employers based on the size of the small employer group but:

Only according to the small employer insurer’s marketing practices in effect on July 1, 1993; and
Only if the small employer insurer issues the basic health benefit plan to small employer groups of any size and is in compliance with s. Ins 8.69.

(d) A small employer insurer may actively market only the basic health benefit plan but only if it does not sell or market any other form of a policy in this state.

(2) A small employer insurer shall market the basic health benefit plan using at least the same sources and methods of distribution that it uses to market policies other than the basic health benefit plan. A small employer insurer shall authorize all insurance intermediaries who are authorized to market its health benefit plans to also sell its basic health benefit plan.

(3) A small employer insurer shall offer the basic health benefit plan to a small employer that applies for health insurance coverage from the small employer insurer. The small employer insurer may provide the offer directly to the small employer or may deliver it through an insurance intermediary. The offer shall be in writing and shall include at least all the following information:

(a) A general description of the benefits contained in the basic health benefit plan.

Will not be eligible for continuation of coverage or a conversion policy;
Will be eligible only as a late enrollee under the health benefit plan then held by the small employer; and
May, as a late enrollee, be subject to the exclusion permitted under s. Ins 8.63 (2).

(d) Information describing how the small employer may enroll in the plan.

(4) A small employer insurer shall provide written notice of the information described under sub. (3) (a) to each small employer who applies for a basic health benefit plan within 10 working days of the date the small employer insurer receives the small employer’s application. The small employer insurer shall provide the notice directly or through an authorized insurance intermediary. The small employer insurer shall provide the employer with sufficient copies of the notice to distribute to each eligible employee and shall ask the employer to promptly distribute a copy to each eligible employee. The small employer insurer shall make reasonable efforts to obtain, within 20 business days after the small employer insurer issues a basic health benefit plan to a small employer, certification that the small employer promptly distributed the notice to all eligible employees.

(5)

(a) A small employer insurer shall provide a price quote for the basic health benefit plan to a small employer directly or through an authorized insurance intermediary within 15 working days of receiving a request for a quote and the information necessary to provide the quote. A small employer insurer shall notify a small employer directly or through an authorized insurance intermediary within 7 working days of receiving a request for a price quote of any additional information needed by the small employer insurer to provide the quote.

(b) A small employer insurer may not apply more stringent or detailed requirements related to the application process for the basic health benefit plan than are applied for other health benefit plans offered by the insurer to groups of equivalent size.

(6)

(a) If a small employer insurer denies coverage under a health benefit plan to a small employer on the basis of a risk characteristic, the denial shall be in writing and shall state with specificity the reasons for the denial, subject to any restrictions related to confidentiality of medical information. The written denial shall be accompanied by a written explanation of the availability of the basic health benefit plan from the small employer insurer. The explanation shall include at least the following:

A general description of the benefits contained in each plan;
A price quote for each plan; and
Information describing how the small employer may enroll in the plan.

(b) A small employer insurer shall provide the written information described in par. (a) within the time periods provided under sub. (5) (a) directly to the small employer or delivered through an authorized insurance intermediary.

(c) The price quote required under par. (a) 2. shall be for the managed care option which will result in the lowest-priced basic health benefit plan for which the small employer is eligible, if the small employer insurer has such an option available in the area where the small employer is located.

(7) A small employer insurer shall establish and maintain a toll-free telephone service to provide information to small employers regarding the availability of small employer health benefit plans in this state. The toll-free telephone service is not required to be dedicated to this purpose. The service shall provide information to callers on how to apply for coverage from the insurer. The information may include the names and phone numbers of insurance intermediaries actively marketing in the geographic area proximate to the caller or other information that is reasonably designed to assist the caller to locate an authorized insurance intermediary or to otherwise apply for coverage.

(8) A small employer insurer may not require a small employer to join or contribute to any association or group as a condition of being accepted for coverage by the small employer insurer, except that, if an association or group requires membership in the association or other group as a condition for accepting a small employer into a particular health benefit plan, the small employer insurer may apply the requirement if:

(a) The requirement is reasonable;

(b) The requirement is not intended to and does not discourage or prevent acceptance of small employers applying for the basic health benefit plan;

(c) The requirement is not related to the health status or claim experience of the small employer or employees or dependents of employees of small employers;

(d) The requirement is applied consistently to all small employers applying for coverage; and

(e) The small employer insurer permits all small employers who join the association or group to apply for a health benefit plan.

(9) A small employer insurer may not require, as a condition to the offer or sale of a health benefit plan to a small employer, that the small employer purchase or qualify for any other insurance product or service or purchase or qualify for a health benefit plan which includes coverage other than health coverage.

(10)

(a) An insurer offering individual or group health benefit plans or coverage under a trust or association health benefit plan in this state shall investigate and determine whether the plans are subject to this subchapter and ch. 635, Stats. An insurer shall obtain the following information from applicants for individual and group health benefit plans at the time of application:

Whether or not any portion of the premium will be paid by or on behalf of a small employer, either directly or through wage adjustments or other means of reimbursement;
Whether or not any portion of the premium will be collected by or with the cooperation of a small employer; and
Whether or not the prospective policyholder, certificate holder or any prospective insured individual intends to treat the health benefit plan as part of a plan or program under Section 162, Section 125 or Section 106 of the United States internal revenue code.

(b) If a small employer insurer fails to comply with par. (a), the small employer insurer is deemed to be on notice of any information that could reasonably have been obtained if the small employer insurer had complied with par. (a).

(c) An insurer is not relieved from complying with ch. 635, Stats., and there is no presumption that ch. 635, Stats., does not apply merely because the insurer has complied with the minimum obligation to investigate the status of applicants imposed under this subsection.

(11) No small employer insurer may permit an insurance intermediary to advise, and no insurance intermediary may advise, a small employer whether the insurer may accept the small employer’s application for coverage under a health benefit plan based on claims experience or health conditions of the group except after submittal of an application and review by the insurer.

(12) A small employer insurer shall annually file information with the commissioner related to health benefit plans issued by the small employer insurer to small employers in this state in the form prescribed by the commissioner.

Note: Copies of forms referred to in this section may be obtained without charge from the Office of the Commissioner of Insurance by sending a written request to P. O. Box 7873, Madison, Wisconsin 53707-7873.

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94; correction in (10) (a) made under 13.93 (2m) (b) 7., Register, March, 2000, No. 531; corrections in (3) (b) and (c) (intro.) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (3) (b), (c), am. (4) Register December 2017 No. 744, eff. 1-1-18.

(1) No small employer insurer may have a basic market share ratio which is significantly less than the basic market share ratio for all small employer insurers unless the insurer establishes by clear and convincing evidence that the reason the basic market share ratio is significantly less is because:

(a) Of a specific practice or condition that is beyond the control of the insurer; or

(b) The insurer uses risk characteristics to underwrite applications for policies to a substantially lesser extent than most other small employer insurers.

(2) No small employer insurer may have a market share ratio which is significantly less than the market share ratio for all small employer insurers unless the small employer insurer establishes by clear and convincing evidence that the reason the market share ratio is significantly less is because:

(a) Of a specific practice or condition that is beyond the control of the insurer; or

(b) The insurer uses risk characteristics to underwrite applications for policies to a substantially lesser extent than most other small employer insurers.

(3) For the purpose of this section:

(a) A small employer insurer’s basic market share ratio is presumed to be significantly less than the basic market share ratio for all small employer insurers if the small employer insurer’s basic market share ratio is less than a number equal to q-2. For the purpose of this paragraph:

‘m’ is the number of basic health benefit plans the small employer insurer has in force; and
‘q’ is the basic market share ratio for all small employer insurers.

(b) A small employer insurer’s market share ratio is presumed to be significantly less than the market share ratio for all small employer insurers if the small employer insurer’s market share ratio is less than a number equal to p-2. For the purpose of this paragraph:

‘n’ is the number of policies the small employer insurer has in force; and
‘p’ is the market share ratio for all small employer insurers.

(4) A small employer insurer shall submit an application for an exemption under s. 635.26 (3) (a), Stats., in the form prescribed by the commissioner. Any application for an exemption under s. 635.26 (3) (a), Stats., shall include the small employer insurer’s basic market share ratio and market share ratio and shall address whether the small employer insurer has ratios which are, or are likely to be, significantly higher than the ratios for all small employer insurers and the reasons why the small employer insurer ratios are, or are likely to be, significantly higher than the ratio for all small employer insurers.

Note: 1997 Wis. Act 27 repealed s. 635.26, Stats. See s. 635.19 (6), Stats.

(5) Each small employer insurer shall file, in the form prescribed by the commissioner:

(a) Within 45 days after the end of each quarter calendar year in calendar years 1993, 1994 and 1995:

The number of risk characteristic basic health benefit plans it has in force at the end of the previous quarter calendar year;
The number of risk characteristic basic health benefit plans it issued in the previous quarter calendar year;
The number of basic health benefit plans it has in force at the end of the previous quarter calendar year;
The number of basic health benefit plans it issued in the previous quarter calendar year;
The total number of policies it has in force at the end of the previous quarter calendar year;
The total number of policies it issued in the previous quarter calendar year;
Its basic market share ratio for the previous quarter calendar year;
Its market share ratio for the previous quarter calendar year;
The total number of applications for any policy which the small employer insurer received in the previous quarter calendar year, regardless of whether, or what type of, a policy was issued, and which the small employer insurer:

a. Rejected, or would have rejected, for each policy available from the small employer insurer, other than the basic health benefit plan or a policy that does not provide benefits similar to or exceeding benefits provided under the basic health benefit plan; or

b. Assigned, or would have assigned, a rate for each policy available from the small employer insurer, other than the basic health benefit plan or a policy that does not provide benefits similar to or exceeding benefits provided under the basic health benefit plan, which exceeds the new business premium rate for the policy by 15% or more; and

The total number of applications for any policy which the small employer insurer received in the previous quarter calendar year, regardless of whether, or what type of, a policy was issued.

(b) By March 1 of each year:

The number of risk characteristic basic health benefit plans it had in force at the end of the previous calendar year;
The number of risk characteristic basic health benefit plans it issued in the previous calendar year;
The number of basic health benefit plans it had in force at the end of the previous calendar year;
The number of basic health benefit plans it issued in the previous calendar year;
The total number of policies it had in force at the end of the previous calendar year;
The total number of policies it issued in the previous calendar year;
Its basic market share ratio for the previous calendar year;
Its market share ratio for the previous calendar year;
The total number of applications for any policy which the small employer insurer received in the previous calendar year, regardless of whether, or what type of, a policy was issued, and which the small employer insurer:

The total number of applications for any policy which the small employer insurer received in the previous calendar year, regardless of whether, or what type of, a policy was issued.

(6) A small employer insurer shall obtain sufficient information to comply with sub. (5) and shall maintain the information and the documentation required under sub. (5) for 3 years or until the issued policy, if any, terminates, whichever is later.

(7) A small employer insurer shall establish procedures for determining whether a basic health benefit plan is a risk characteristic basic health benefit plan and shall document the basis for each such determination.

History

Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Subchapter IV Basic Health Benefit Plan For Small Employers

Wis. Admin. Code § Ins 8.70 Purpose {#sec-ins-8.70 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.70}

This subchapter implements ch. 635, Stats., by establishing the basic health benefit plan that small employer insurers shall actively market and offer to small employers.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93; correction in (intro.) made under 13.93 (2m) (b) 7., Stats., Register, March, 2000, No. 531.

Wis. Admin. Code § Ins 8.71 Definitions {#sec-ins-8.71 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.71}

(1) The definitions in s. 635.02, Stats., apply to this subchapter.

(2) In this subchapter, “health care provider” means any of the following:

(a) A medical or osteopathic physician, podiatrist, physical therapist or physician’s assistant licensed or certified under ch. 448, Stats.

(b) A psychologist licensed under ch. 445, Stats.

(d) A nurse midwife certified under s. 441.15, Stats.

(e) A nurse practitioner licensed under ch. 441, Stats.

(f) A nurse licensed under ch. 441, Stats., who is certified as a nurse anesthetist by the American association of nurse anesthetists.

(g) A dentist licensed under ch. 447, Stats.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register April 2004 No. 580.

Wis. Admin. Code § Ins 8.72 Basic benefits {#sec-ins-8.72 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.72}

Subject to the limitations and restrictions under s. Ins 8.75 and copayments and coinsurance under s. Ins 8.77, each plan shall provide coverage for all of the following, if medically necessary:

(1) Professional services by a health care provider acting within the scope and limitations of his or her license or certificate or a person acting under the direction of a health care provider, including all of the following:

(a) Office, outpatient, inpatient and emergency room visits including treatment rendered during those visits.

(b) Surgical services including postoperative care following inpatient or outpatient surgery.

(d) Anesthesia services.

(2) Hospital care, including all of the following:

(a) Semi-private room, board and ancillary services and supplies that are generally provided to hospital inpatients.

(b) Confinement in an intensive care or coronary care unit of a hospital.

(d) Medical care and treatment provided in a hospital emergency room.

(3) Medical care and treatment provided in an ambulatory surgery center, as defined in 42 CFR 416.2.

(4) Outpatient x-ray, laboratory and other diagnostic tests.

(5) Confinement in a skilled nursing home licensed under subch. I of ch. 50, Stats.

(6) Services provided by a home health agency licensed under s. 50.49, Stats.

(7) Care provided by a hospice licensed under subch. VI of ch. 50, Stats.

(8) Local ground licensed ambulance services.

(9) Physical therapy.

(10) Rental and purchase of durable medical equipment and supplies.

(11) Prescription drugs.

(12) Reconstructive surgery which is either of the following:

(a) Incidental to or following surgery necessitated by illness or injury.

(b) Caused by a congenital disease or anomaly of a covered dependent child which results in a functional defect.

(13) Sterilization.

(14) Maternity services including all of the following:

(a) Prenatal services normally associated with pregnancy.

(b) Delivery services normally associated with a vaginal or caesarean section delivery.

(15) Complications of pregnancy.

(16) Inpatient, outpatient and transitional treatment for nervous and mental disorders and alcoholism and other drug abuse, subject to s. Ins 8.75 (3).

(17) Preventive services appropriate to the age and sex of the covered person including all of the following:

(a) Routine physical examinations and health screening tests.

(b) Immunizations for poliomyelitis, diphtheria, pertussis, typhoid, measles, mumps and rubella.

(d) Diphtheria and tetanus boosters.

(e) Influenza and pneumonia vaccinations.

(f) Tuberculosis skin tests.

(18) Organ transplants that are covered by medicare.

(19) Services provided by a dentist for the repair of accidental dental injuries.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93; corrections in (3) and (6) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; correction in (7) made under s. 13.92 (4) (b) 7., Stats., Register March 2017 No. 735.

Wis. Admin. Code § Ins 8.73 Health insurance mandates {#sec-ins-8.73 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.73}

A plan shall comply with the health insurance mandates, as defined in s. 601.423, Stats., and may not exclude or limit coverage for any mandate except as provided in s. Ins 8.75 (3).

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.74 Policy title; term {#sec-ins-8.74 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.74}

(1) The policy form for a plan submitted to the office of the commissioner of insurance for approval under s. 631.20, Stats., shall be entitled “basic health benefit plan.”

(2) The term period for plan coverage shall not be less than 12 months.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.75 Limitations and restrictions {#sec-ins-8.75 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.75}

(1) Preexisting conditions. Section 635.17 (1), Stats., applies to a plan subject to this subchapter.

Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746, Stats.

(2) Annual maximum. The annual calendar year maximum benefit for a plan is $30,000 per insured individual. Charges for a hospitalization which extends from one calendar year to another shall be subject to the calendar year maximum for the year in which each charge was incurred and only one $100 copayment shall apply to the confinement.

(3) Limitation on coverage for mental health and substance abuse treatment. The annual calendar year benefit payable for treatment of a covered person for nervous and mental disorders and alcoholism and other drug abuse is $1,400. A plan may not apply the cost of outpatient prescription drugs used in the treatment of nervous and mental disorders or alcoholism or other drug abuse toward the annual limit specified in this subsection.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.76 Policy terms; exclusions; limitations {#sec-ins-8.76 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.76}

(1) Except as otherwise provided in this subchapter, a plan’s policy terms shall be defined consistently with the definitions in the small employer insurer’s other small group health benefit plans.

(2) A plan may exclude from coverage or limit coverage for specified conditions and services other than those required under s. Ins 8.72 but may exclude or limit only those conditions and services which are generally excluded from coverage or limited under the small employer insurer’s other small group health benefit plans.

(3) A plan may apply the same limitations on provider choice, coverage and geographical service area that apply under the small employer insurer’s other small group health benefit plans.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.77 Copayments; coinsurance {#sec-ins-8.77 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.77}

(1) Definitions. In this section:

(a) “Primary care provider” means any of the following:

If the plan is an indemnity plan, a preferred provider organization or health maintenance organization that does not require the insured to designate a primary provider, the physician who normally provides care to the insured, if the physician is any of the following:

a. A physician who is not certified by any specialty board.

b. A physician certified by the American board of family practice.

c. A physician certified by the American board of internal medicine.

d. A physician certified by the American board of obstetrics and gynecology.

e. A physician certified by the American board of pediatrics.

If the plan is a health maintenance organization that requires an insured to designate a primary provider, the physician designated.

(b) “Specialist” means any physician other than a primary care provider.

(2) Copayments.

(a) Except as provided in par. (b), sub. (4) and s. Ins 8.79, a copayment in the specified amount applies each time an insured receives any of the following:

Professional services from a primary care provider or from a specialist who is consulted with a referral from a primary care provider when provided during an office visit or on an outpatient basis in a hospital, ambulatory surgery center or approved treatment facility, as defined in s. 51.01 (2), Stats.: $25.
Professional services from a specialist when provided during an office visit or on an outpatient basis in a hospital, ambulatory surgery center or approved treatment facility, as defined in s. 51.01 (2), Stats., when the specialist is consulted without a referral from a primary care provider: $35.
Professional services from a chiropractor: $11.
Ambulance service, unless immediately admitted to the hospital: $75.
Treatment in a hospital emergency room, unless immediately admitted to the hospital: $75.
Inpatient hospitalization: $100.
Prescription drugs, proprietary: $20 or the cost of the prescription, whichever is less.
Prescription drugs, generic: $10, or the cost of the prescription, whichever is less.

(b) The copayments specified in par. (a) 1. and 2. do not apply to professional services in connection with prenatal care or well baby care from birth to 24 months.

(3) Coinsurance. Except as provided in sub. (4) and s. Ins 8.79, for each insured individual, a plan shall pay the following portions of the amount by which covered charges in a calendar year exceed the copayments:

(a) For all charges other than for the treatment of nervous or mental disorders or alcoholism or other drug abuse problems:

80% of the first $5,000 of charges until the plan has paid $4,000.
95% of the remainder of charges until the plan limit under s. Ins 8.75 (2) has been met.

(b) For the treatment of nervous or mental disorders or alcoholism or other drug abuse problems, 80% of the charges until the plan has paid $1,400 or the plan limit under s. Ins 8.75 (2) has been met.

(4) Exception for health maintenance organizations. A plan offered by a health maintenance organization that requires participants to use only specified health care providers may elect to offer either copayments or coinsurance if the amount for which a participant is responsible is the actuarial equivalent of the copayments and coinsurance required under subs. (2) and (3). Upon request, a health maintenance organization shall provide the office of the commissioner of insurance with sufficient documentation to support its determination of actuarial equivalence.

(5) Deductibles and other cost-sharing prohibited. A plan shall not include an annual deductible or any copayment or coinsurance requirement other than those specified in this section, except as provided in s. Ins 8.79.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.78 Participation; enrollment {#sec-ins-8.78 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.78}

(1) Participation.

(a) A small employer insurer shall offer a plan to any small employer meeting the definition of eligible employer in s. 635.20 (2), Stats., regardless of the number required for participation in other small group health benefit plans offered by the small employer insurer.

Note: 1997 Wis. Act 27 repealed s. 635.20.

(b) In par. (c), the number of persons in a group means the number of eligible employees without other qualifying coverage, as defined in s. 635.02 (5m), Stats.

Note: 1995 Wis. Act 289 repealed s. 635.02 (5m).

(c) A small employer insurer may impose participation requirements on a plan offered to a small employer, not to exceed the following:

For a group of more than 10 persons: 70% of the group.
For a group of 10 persons: 6 participants.
For a group of 8 or 9 persons: 5 participants.
For a group of 7 persons: 4 participants.
For a group of 5 or 6 persons: 3 participants.
For a group of 2 to 4 persons: 2 participants.

(2) Probationary period. A small employer may impose a waiting period of not more than 90 days from the date of hire before a new employee is eligible to enroll in the small employer’s plan.

(3) Enrollment.

(a) A plan may require that new employees of a small employer and newly eligible dependents enroll in the plan within 30 days after becoming eligible to enroll.

(b) An eligible employee or dependent whose coverage under another health insurance plan terminates for any reason may enroll in a small employer’s plan without medical underwriting within 30 days after termination of the other coverage.

(c) Section Ins 8.63 (2) applies to an eligible employee or dependent who does not enroll in a small employer’s plan within the period specified in par. (a) or (b).

(4) Employer contribution exception.

(a) A plan may limit coverage to eligible employees, as defined in s. 635.20 (1m), Stats., and their dependents.

Note: 1997 Wis. Act 27 repealed s. 635.20.

(b) If a plan permits employees other than those defined as eligible employees in s. 635.20 (1m), Stats., to enroll, the small employer is not required to pay the employer contribution specified under s. 635.254 (1), Stats., for those employees. If the small employer elects not to contribute, the small employer shall withhold the entire amount of the premium from the earnings of each employee permitted to participate, as provided in s. 635.254 (2), Stats.

Note: 1997 Wis. Act 27 repealed ss. 635.20 and 635.254. See ss. 632.745 (5) and 635.19 (4), Stats.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93; cr. (3) (c), Register, November, 1993, No. 455, eff. 2-1-94.

Wis. Admin. Code § Ins 8.79 Managed care options {#sec-ins-8.79 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.79}

A small employer insurer that offers health benefit plans with one or more managed care options in the small employer market shall offer purchasers of a basic health benefit plan at least one managed care option. If the option offered is a preferred provider plan, as defined under s. 609.01 (4), Stats., the small employer insurer, in order to encourage the use of health care providers that participate in the plan, may increase any copayment specified in s. Ins 8.77 (2) or the percentage of an insured’s coinsurance under s. Ins 8.77 (3) if the insured uses a nonparticipating health care provider.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.80 Rating {#sec-ins-8.80 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.80}

(1) In establishing the new business premium rate for the plan, a small employer insurer shall take into account the experience of all of its small employer health benefit plans. The differences between the plan’s new business premium rate and the insurer’s new business premium rates for all other small employer health benefit plans shall be based solely on the differences in the plan designs and not on the actual or anticipated experience of those insured under the basic health benefit plan.

(2)

(a)

Except as provided in par. (b), the plan shall apply a higher rate to smokers than to nonsmokers. The rate applied to smokers shall be no higher than permitted under s. 111.35 (3), Stats. The small employer insurer shall provide the small employer with enough copies of the statements required under s. 111.35 (3) (a) 2. and (b) 2., Stats., for distribution to all plan participants.
For the purpose of complying with s. 635.05, Stats., and s. Ins 8.52, smoking status shall be treated as a case characteristic.

(b) Paragraph (a) does not apply to a health maintenance organization federally qualified under title 13 of the public health service act.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Wis. Admin. Code § Ins 8.81 Form approval and marketing {#sec-ins-8.81 omnilex-key=us-wi-regs-official--agency-ins--Ins 8.81}

(1) Except as provided in s. 635.26 (2m) to (4), Stats., each small employer insurer shall file its basic health benefit plan policy form with the commissioner of insurance under s. 631.20, Stats., before October 1, 1993.

Note: 1997 Wis. Act 27 repealed s. 635.26, Stats. See s. 635.19 (2), Stats.

(2) Except as provided in s. 635.26 (2m) to (4), Stats., no small employer insurer shall market any health benefit plan to small employers on and after December 1, 1993 unless its basic health benefit plan policy form has been filed with and approved by the commissioner of insurance under s. 631.20, Stats.

Note: 1997 Wis. Act 27 repealed s. 635.26, Stats. See 635.19 (2), Stats.

History

Cr. Register, June, 1993, No. 450, eff. 7-1-93.

Chapter Ins 9 DEFINED NETWORK PLANS

Subchapter I Definitions

Wis. Admin. Code § Ins 9.01 Definitions {#sec-ins-9.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.01}

In this chapter, and for the purposes of applying ch. 609, Stats.:

(1) “Acceptable letter of credit” means a clean, unconditional, irrevocable letter of credit issued by a Wisconsin bank or any other financial institution acceptable to the commissioner which renews on an annual basis for a 3–year term unless written notice of nonrenewal is given to the commissioner and the limited service health organization at least 60 days prior to the renewal date.

(2) “Commissioner” means the “commissioner of insurance” of this state or the commissioner’s designee.

(3) “Complaint” means any expression of dissatisfaction expressed to an insurer by an enrollee, or an enrollee’s authorized representative, about the insurer or its participating providers.

(3m) “Defined network plan” has the meaning provided under s. 609.01 (1b), Stats., and includes Medicare select policies and certificates, as defined in s. Ins 3.39 (3) (vm) and (ve), respectively, and health benefit plans that contract for use of participating providers.

(4) “Expedited grievance” means a grievance where the standard resolution process may include any of the following:

(a) Serious jeopardy to the life or health of the enrollee or the ability of the enrollee to regain maximum function.

(b) In the opinion of a physician with knowledge of the enrollee’s medical condition, would subject the enrollee to severe pain that cannot be adequately managed without the care or treatment that is the subject of the grievance.

(5) “Grievance” means any dissatisfaction with the provision of services or claims practices of an insurer offering a defined network plan, preferred provider plan or limited service health organization, or administration of a defined network, preferred provider plan or limited service health organization, that is expressed to the insurer by, or on behalf of, an enrollee.

(6) “Health benefit plan” has the meaning provided under s. 632.745 (11), Stats.

(7) “HMO” or “health maintenance organization” means a health care plan as defined in s. 609.01 (2), Stats.

(8) “Health maintenance organization insurer” has the meaning provided under s. 600.03 (23c), Stats.

(9) “Hospital emergency facility” means any hospital facility that offers services for emergency medical conditions as described in s. 632.85 (1) (a), Stats., within its capability to do so and in accordance with s. DHS 124.24, or the licensure requirements of the jurisdiction in which the hospital resides.

(9m) “Intermediate entity” means a provider network, a provider association, a provider leasing arrangement or other similar entity that contracts with providers for the rendering of health care services, items or supplies to enrollees of a defined network plan, preferred provider plan or limited service health organization and also contracts with the insurer offering a defined network plan, preferred provider plan or limited service health organization.

(10) “IPA” or “individual practice association” has the meaning provided under s. 600.03 (23g), Stats.

(11) “Limited service health organization” means a health care plan as defined in s. 609.01 (3), Stats.

(13) “OCI complaint” means any written complaint received by the office of the commissioner of insurance by, or on behalf of, an enrollee of an insurer offering a defined network plan, preferred provider plan or limited service health organization.

(14) “Office” means the “office of the commissioner of insurance.”

(14m) “Participating” has the meaning provided under s. 609.01 (3m), Stats., and includes a provider as being under contract with the insurer when the provider is under contract with an intermediate entity.

(15) “Preferred provider plan” has the meaning provided under s. 609.01 (4), Stats.

(16) “Primary provider” has the meaning provided under s. 609.01 (5), Stats.

(17) “Silent provider network” means one or more participating providers that provide services covered under a defined network plan where all of the following apply:

(a) The insurer does not include any incentives or penalties in the defined network plan related to utilization or failure to utilize the provider.

(b) The only direct or indirect compensation arrangement the insurer has with the provider provides for compensation that is:

On a fee for service basis and not on a risk sharing basis, including, but not limited to, capitation, withholds, global budgets, or target expected expenses or claims;
The compensation arrangement provides for compensation that is not less than 80% of the provider’s usual fee or charge.

(c) The insurer, in any arrangement described under par. (b), requires that the reduction in fees will be applied with respect to cost sharing portions of expenses incurred under the defined network plan to the extent the provider submits the claim directly to the insurer.

(d) The provider is not directly or indirectly managed, owned, or employed by the insurer.

(e) The insurer does not disclose, market, advertise, provide a telephone service or number relating to, or include in policyholder or enrollee material information relating to, the availability of the compensation arrangement described under par. (b), or the names or addresses of the provider or an entity that maintains a compensation arrangement described under par. (b), except to the extent required by law in processing of explanation of benefits. The insurer may not indirectly cause or permit a prohibited disclosure and may not make any such disclosure in the course of utilization review or pre-authorization functions.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; correction in (12) made under s. 13.93 (2m) (b) 7., Stats., Register February 2006 No. 602; CR 05-059: renum. (12) to be (3m), am. (3), (3m), (5), (13), (17) (a) and (c), cr. (9m), (10m) and (14m) Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. (5), (9m) and (13), r. (10m) Register December 2006 No. 612, eff. 1-1-07; correction in (9) made under s. 13.92 (4) (b) 7., Stats., Register February 2013 No. 686; CR 19-036: am. (3m) Register December 2019 No. 768, eff. 1-1-20; correction in (3m) made under s. 35.17, Stats., Register December 2019 No. 768.

Wis. Admin. Code § Ins 9.015 Scope {#sec-ins-9.015 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.015}

This chapter applies to all insurers offering a defined network plan, a preferred provider plan or a limited service health organization plan except to an insurer offering a preferred provider plan that also meets the subject matter of s. 632.745 (11) (b) 9., Stats.

History

CR 06-083: cr. Register December 2006 No. 612, eff. 1-1-07.

Subchapter II Financial Standards for Health Maintenance Organizations or Limited Service Health Organizations

Wis. Admin. Code § Ins 9.02 Purpose {#sec-ins-9.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.02}

This subchapter establishes financial standards for health maintenance organizations and limited service health organizations doing business in Wisconsin. These requirements are in addition to any other statutory or administrative rule requirements that apply to health maintenance organizations and limited service health organizations.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.03 Scope {#sec-ins-9.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.03}

This subchapter applies to all insurers writing health maintenance organization or limited service health organization business in this state.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.04 Financial requirements {#sec-ins-9.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.04}

The following are the minimum financial requirements for compliance with this section unless a different amount is ordered by the commissioner:

(1) Capital. Unless otherwise ordered by the commissioner the minimum capital or permanent surplus of:

(a) A health maintenance organization insurer first licensed or organized on or after July 1, 1989, is $750,000;

(b) A health maintenance organization insurer first licensed or organized prior to July 1, 1989, is $200,000;

(c) The minimum capital or permanent surplus requirement for an insurer licensed to write only limited service health organization business shall be not less than $75,000. The commissioner may accept the deposit or letter of credit under sub. (3) to satisfy the minimum capital or permanent surplus requirement under this par. (c), if the insurer licensed to write only limited service health organization business demonstrates to the satisfaction of the commissioner that it does not retain any risk of financial loss because all risk of loss has been transferred to providers through provider agreements.

(d) Any other insurer writing health maintenance organization or limited service health organization business, is the amount of capital or required surplus required under the statutes governing the organization of the insurer.

(2) Compulsory surplus.

(a) An insurer, including an insurer organized under ch. 613, Stats., writing health maintenance organization or limited service health organization business, except for a health maintenance organization insurer or an insurer licensed to write only limited service health organization business, is subject to s. Ins 51.80.

(b) A health maintenance organization insurer shall maintain a compulsory surplus as follows, or a greater amount required by order of the commissioner: the greater of $750,000 or an amount equal to the sum of:

10% of premiums earned in the previous 12 months for policies that include coverages that are considered other insurance business under s. 609.03 (3) (a) 3., Stats., plus;
3% of other premiums earned in the previous 12 months except that if the percentage of the liabilities of the health maintenance organization insurer that are covered liabilities is less than 90%, 6% of other premiums earned in the previous 12 months.

(c) Each insurer licensed to write only limited service health organization business shall maintain a compulsory surplus to provide security against contingencies that affect its financial position but which are not fully covered by provider contracts, insolvency insurance, reinsurance, or other forms of financial guarantees. The compulsory surplus shall be the greater of 3% of the premiums earned by the limited service health organization in the previous 12 months, or $75,000.

(d) The commissioner may accept a deposit of securities or letter of credit with the same terms and conditions as required under sub. (3) to satisfy the compulsory surplus requirement if the limited service health organization demonstrates to the satisfaction of the commissioner that it does not retain any risk of financial loss because all risk of loss has been transferred to providers through provider agreements. The commissioner may, by order, require a higher or lower compulsory surplus or may establish additional factors for determining the amount of compulsory surplus required for a particular limited service health organization.

(3) Deposit or letter of credit. Each limited service health organization shall maintain either a deposit of securities with the state treasurer or an acceptable letter of credit on file with the commissioner’s office. The amount of the deposit or letter of credit shall be not less than $75,000 for limited service health organizations. The letter of credit shall be payable to the commissioner whenever rehabilitation or liquidation proceedings are initiated against the limited service health organization.

(4) Risks. Risks and factors the commissioner may consider in determining whether to require greater compulsory surplus by order include, but are not limited to, those described under s. 623.11 (1) (a) and (b), Stats., and the extent to which the insurer effectively transfers risk to providers. A health maintenance organization insurer may transfer risk through any mechanism including, but not limited to, those provided under s. Ins 9.05 (4).

(5) Security surplus.

(a) An insurer, including an insurer organized under ch. 613, Stats., writing health maintenance organization insurance or limited service health organization business, except for a health maintenance organization insurer or an insurer licensed to write only limited service health organization business, is subject to s. Ins 51.80.

(b) Health maintenance organization insurers and insurers licensed to write only limited service health organization business should maintain a security surplus to provide an ample margin of safety and clearly assure a sound operation. The security surplus of a health maintenance organization insurer shall be the greater of:

Compulsory surplus plus 40% reduced by 1% for each $33 million of premium in excess of $10 million earned in the previous 12 months; or
110% of its compulsory surplus.

(c) The security surplus of an insurer licensed to write only limited service health organization business shall be not less than 110% of compulsory surplus.

(6) Insolvency protection for policyholders.

(a) Each health maintenance organization insurer is required to either maintain compulsory surplus as required for other insurers under s. Ins 51.80 or to demonstrate that in the event of insolvency all of the following shall be met:

Enrollees hospitalized on the date of insolvency will be covered until discharged.
Enrollees will be entitled to similar, alternate coverage that does not contain any medical underwriting or pre-existing limitation requirements.

(b) Each insurer licensed to write only limited service health organization business that provides hospital benefits shall demonstrate that, in the event of an insolvency, enrollees hospitalized at the time of an insolvency will be covered until discharged.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.05 Business plan {#sec-ins-9.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.05}

All applications for certificates of incorporation and certificates of authority of a health maintenance organization insurer or an insurer licensed to write only limited service health organization business shall include a proposed business plan. In addition to the items listed in ss. 611.13 (2) and 613.13 (1), Stats., the following information shall be contained in the business plan:

(1) Organization type.

(a) The type of health maintenance organization insurer, including whether the providers affiliated with the organization will be salaried employees, group contractors, or individual contractors.

(b) The type of limited service health organization insurer including:

The name and address of the insurer licensed to write only limited service health organization business and the names and addresses of individual providers, if any, who control the insurer licensed to write only limited service health organization business, and;
The type of organization, including information on whether providers will be salaried employees of the organization or individual or group contractors.

(2) Feasibility studies and marketing surveys. A summary of feasibility studies or marketing surveys that support the financial and enrollment projections for the health maintenance organization insurer or the insurer licensed to write only limited service health organization business. The summary shall include the potential number of enrollees in the operating territory, the projected number of enrollees for the first 5 years, the underwriting standards to be applied, and the method of marketing the organization.

(3) Geographical service area. The geographical service area by county including a chart showing the number of primary and specialty care providers with locations and service areas by county; the method of handling emergency care, with locations of emergency care facilities; and the method of handling out–of–area services.

(4) Provider agreements. The extent to which any of the following will be included in provider agreements and the form of any provisions that do any of the following:

(a) Limit the providers’ ability to seek reimbursement for covered services from policyholders or enrollees.

(b) Permit or require the provider to assume a financial risk in the health maintenance organization insurer, including any provisions for assessing the provider, adjusting capitation or fee–for–service rates, or sharing in the earnings or losses.

(5) Provider availability. A description of how services will be provided to policyholders in each service area, including the extent to which primary care will be given by providers under contract with the health maintenance organization insurer.

(6) Quality assurance. A summary of comprehensive quality assurance standards that identify, evaluate and remedy problems related to access to care and continuity and quality of care. The summary shall address all of the following:

(a) A written internal quality assurance program.

(b) Written guidelines for quality of care studies and monitoring.

(d) Procedures for remedial action to address quality problems, including written procedures for taking appropriate corrective action.

(e) Plans for gathering and assessing data.

(f) A peer review process.

(g) A process to inform enrollees on the results of the insurer’s quality assurance program.

(h) Any additional information requested by the commissioner.

(7) Plan administration. A summary of how administrative services will be provided, including the size and qualifications of the administrative staff and the projected cost of administration in relation to premium income. If management authority for a major corporate function is delegated to a person outside the organization, the business plan shall include a copy of the contract. Contracts for delegated management authority shall be filed for approval with the commissioner under ss. 611.67 and 618.22, Stats. The contract shall include all of the following:

(a) The services to be provided.

(b) The standards of performance for the manager.

(c) The method of payment including, any provisions for the administrator to participate in the profit or losses of the plan.

(d) The duration of the contract.

(e) Any provisions for modifying, terminating or renewing the contract.

(8) Financial projections. A summary of: current and projected enrollment; income from premiums by type of payor; other income; administrative and other costs; the projected break even point, including the method of funding the accumulated losses until the break even point is reached; and a summary of the assumptions made in developing projected operating results.

(9) Financial guarantees. A summary of all financial guarantees by providers, sponsors, affiliates or parents within a holding company system, or any other guarantees which are intended to ensure the financial success of the health maintenance organization insurer. These include hold harmless agreements by providers, insolvency insurance, reinsurance or other guarantees.

(10) Contracts with enrollees. A summary of benefits to be offered enrollees including any limitations and exclusions and the renewability of all contracts to be written.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.06 Changes in the business plan {#sec-ins-9.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.06}

(1) A health maintenance organization insurer or an insurer licensed to write only limited service health organization business shall file a written report of any proposed substantial change in its business plan. The insurer shall file the report at least 30 days prior to the effective date of the change. The office may disapprove the change. The insurer may not enter into any transaction, contract, amendment to a transaction or contract or take action or make any omission that is a substantial change in the insurer’s business plan prior to the effective date of the change or if the change is disapproved. Substantial changes include changes in articles and bylaws, organization type, geographical service areas, provider agreements, provider availability, plan administration, financial projections and guarantees and any other change that might affect the financial solvency of the plan. Any changes in the items listed in s. Ins 9.05 (4) shall be filed under this section.

(2) A change in the quality assurance plan conducted in accordance with s. Ins 9.40 and s. 609.32, Stats., is not a reportable change in a business plan.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.07 Copies of provider agreements {#sec-ins-9.07 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.07}

(1) Notwithstanding any claim of trade secret or proprietary information, all insurers offering a defined network plan, preferred provider plan or limited service health organization shall, upon request, from the commissioner, make available to the commissioner all executed copies of any provider agreements between the insurer and intermediate entities or individual providers. Any party to a provider agreement may assert that a portion of the contracts contain trade secrets, and the commissioner may withhold that portion to the extent it may be withheld under s. Ins 6.13.

(2) All health maintenance organization insurers or insurers licensed to write only limited service health organization business shall file with the commissioner, prior to doing business, copies of all executed provider agreements and other contracts covering liabilities of the health maintenance organization. For contracts with providers, a list of providers executing a standard contract and a copy of the form of the contract may be filed instead of copies of the executed contracts.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. (1) Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. (1) Register December 2006 No. 612, eff. 1-1-07.

Wis. Admin. Code § Ins 9.08 Other reporting requirements {#sec-ins-9.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.08}

(1) Annual statement. All insurers authorized to write health maintenance organization business and insurers licensed to write only limited service health organization business shall file with the commissioner by March 1 of each year an annual statement for the preceding year. A health maintenance organization insurer and limited service health organization insurer shall use the current health annual statement blank prepared by the national association of insurance commissioners.

(a) A health maintenance organization insurer shall include with its annual statement a statement of covered expenses, and a special procedures opinion from a certified public accountant, in the form prescribed by the commissioner as appendix A.

(b) A health maintenance organization insurer shall file a quarterly report, including a report concerning covered expenses, in a form prescribed by the commissioner within 45 days after the close of each of the first 3 calendar quarters of the year unless the commissioner has notified the insurer that another reporting schedule is appropriate.

(c) A health maintenance organization insurer shall include with its annual audit financial reports filed under s. Ins 50.05 a statement of covered expenses and an audit opinion concerning the statement. Both the statement and opinion shall be in the form prescribed by the commissioner as appendix B and are due no later than May 1 of each year.

(1m) Medicare and Medicaid Health Maintenance Organizations. A health maintenance organization insurer that writes 100 % of its business to Medicare or Medicaid recipients, or a combination of the 2, is not required to include a special procedures opinion from a certified public accountant as required by sub. (1) (a) or an audit opinion concerning the statement of covered expenses as required by sub. (1) (c).

(2) Quarterly report. An insurer writing health maintenance organization business, other than a health maintenance organization insurer, shall file a quarterly report in a form prescribed by the commissioner within 45 days after the close of each of the first 3 calendar quarters of the year unless the commissioner notifies the insurer that another reporting schedule is appropriate.

(3) Presumptions.

(a) If a health maintenance organization insurer fails to file a statement or opinion required under subs. (1) to (3) by the time required, it is presumed, in any action brought by the office within one year of the due date, that the health maintenance organization insurer is in financially hazardous condition and that the percentage of its liabilities for health care costs which are covered liabilities is and continues to be less than 65% for the purpose of s. 609.95, Stats.

(b) It is presumed that the percentage of liabilities that are covered liabilities of a health maintenance organization insurer is and continues to be not greater than the percentage of covered expenses stated in the report or statement filed under subs. (1) to (3) for the most recent period.

Note: The form described in sub. (1) may be obtained from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison, WI 53707-7873.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 22-070: am. (1) (intro.), cr. (1m), r. (4) Register June 2023 No. 810, eff. 7-1-23; correction in (1m) made under s. 35.17, Stats., Register June 2023 No. 810.

Wis. Admin. Code § Ins 9.09 Notice of election and termination of hold harmless {#sec-ins-9.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.09}

(1) A notice of election to be exempt from s. 609.91 (1) (b), Stats., or a notice of termination of election to be subject to s. 609.91 (1) (c), Stats., in accord with s. 609.925 (1), Stats., is effective only if filed on the form prescribed by the commissioner and if the form is properly completed.

(2) A notice of termination of election to be exempt from s. 609.91 (1) (b), Stats., in accord with s. 609.92 (4), Stats., or a notice of termination of election to be subject to s. 609.91 (1) (c), Stats., in accord with s. 609.925 (2), Stats., shall be filed on the form prescribed by the commissioner. Notices described in this subsection that are filed with the commissioner but are not on the prescribed form or are not properly completed are nevertheless effective.

(3) In accordance with s. 609.93, Stats., a provider may not exercise an election under s. 609.92 or 609.925, Stats., separately from a clinic or an individual practice association with respect to health care costs arising from health care provided under a contract with, or through membership in, the individual practice association or provided through the clinic.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.10 Receivables from affiliates {#sec-ins-9.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.10}

A receivable, note or other obligation of an affiliate to a health maintenance organization insurer and limited service health organization insurer shall be valued at zero by the insurer for all purposes including, but not limited to, the purpose of reports or statements filed with the office, unless the commissioner specifically approves a different value. The different value shall be not more than the amount of the receivable, note or other obligation which is fully secured by a security interest in cash or cash equivalents held in a segregated account or trust.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.11 Receivables from Individual Practice Association (“IPA”) {#sec-ins-9.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.11}

After December 31, 1990, a health maintenance organization insurer shall value receivables, notes or obligations of individual practice associations as defined under s. 600.03 (23g), Stats., at zero for all purposes including, but not limited to, the purpose of reports or statements filed with the office, unless the receivable, note or obligation is fully secured by a security interest in cash or cash equivalents held in a segregated account or trust.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.12 Incidental or immaterial indemnity business in health maintenance organizations {#sec-ins-9.12 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.12}

(1) Except as provided by sub. (2), insurance business is not incidental or immaterial under s. 609.03 (3) (a) 3., Stats., if a health maintenance organization insurer issues coverage which is not typically included in a health maintenance organization or limited service health organization policy and the insurer does any of the following:

(a) Markets the policy containing the coverage.

(b) The total premium for policies containing the coverage exceeds or is projected to exceed 5% of total premium earned in any 12–month period.

(2) Insurance business is incidental or immaterial under s. 609.03 (3) (a) 3., Stats., if the business is written according to the terms of a specific business plan for issuance of coverage under s. 609.03 (3) (a) 3., Stats., and the business plan is approved in writing by the office. A request for approval to do business under this paragraph including, but not limited to, issuance of policies with point of service coverage, shall include a detailed business plan, a copy of the policy form, a detailed description of how the business will be marketed and premium volume controlled, and other information prescribed by the office. The total premium for policies containing coverages subject to this paragraph and policies issued under sub. (1) may not exceed 10% of premium earned or projected to be earned in any 12–month period.

(3) If the commissioner approves insurance business as incidental or immaterial the commissioner may also, by order under s. Ins 9.04 (2), require the insurer to maintain more than the minimum compulsory surplus.

(4) For the purpose of this section, any coverage that covers services by a provider other than a participating provider is not typically included in a health maintenance organization or limited service health organization policy, except coverage of emergency out–of–area services.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.13 Summary {#sec-ins-9.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.13}

A health maintenance organization insurer shall use the form prescribed in appendix C to comply with s. 609.94, Stats.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.14 Nondomestic HMO {#sec-ins-9.14 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.14}

No certificate of authority may be issued under ch. 618, Stats., to a person to do health maintenance organization or limited service health organization business in this state unless the person is organized and regulated as an insurer and domiciled in the United States.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Wis. Admin. Code § Ins 9.15 Time period {#sec-ins-9.15 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.15}

In accordance with s. 227.116, Stats., the commissioner shall review and make a determination on an application for a certificate of authority within 60 business days after it has been received.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00.

Subchapter III Market Conduct Standards for Defined Network Plans, Preferred Provider Plans and Limited Service Health Organizations

Wis. Admin. Code § Ins 9.20 Scope {#sec-ins-9.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.20}

This subchapter applies to all insurers offering a defined network plan, preferred provider plan or limited service health organization in this state. The insurer shall ensure that the requirements of this subchapter are met by all defined network plans, preferred provider plans or limited service health organizations issued by the insurer. The commissioner may approve an exemption to this subchapter for an insurer to market a defined network plan, preferred provider plan or limited service health organization if the insurer files the plan with the commissioner and the commissioner determines that all of the following conditions are met:

(1) The coverage involves ancillary coverage with minimal cost controls, such as minimal cost controls involving vision, prescription cards or transplant centers.

(2) The cost controls are unlikely to significantly affect the pattern of practice.

(3) The exemption is consistent with the purpose of this subchapter.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: renum. from Ins 9.31 and am. (intro.) Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. (intro.) Register December 2006 No. 612, eff. 1-1-07.

Wis. Admin. Code § Ins 9.21 Limited exemptions {#sec-ins-9.21 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.21}

(1) Silent discount. An insurer, with respect to a defined network plan:

(a) Is exempt from meeting the requirements under ss. 609.22, 609.24, 609.32, 609.34, 609.36 and 632.83, Stats., and ss. Ins 9.31, 9.32 (1), 9.35, 9.37, 9.38, 9.39, 9.40 (1) to (7), 9.42 (1) to (7), if the only owned, employed, or participating provider providing services covered under the plan is a silent provider network.

(b) Is exempt from meeting the requirements under ss. 609.22, 609.24, 609.32, 609.34, and 609.36, Stats., and ss. Ins 9.32 (1), 9.35, 9.37, 9.38, 9.39, 9.40 (1) to (7), and 9.42 (1) to (7), solely with respect to services provided by the silent provider network, if the plan also covers services by providers that the insurer owns or employs, or another participating provider. An insurer is not exempt from those provisions with respect to a provider that is not a silent provider network.

(2) De minimus limited exception. Insurers offering a defined network plan are exempt from meeting the requirements under ss. 609.22 (1) to (4) and (8), 609.32 and 609.34, Stats., ss. Ins 9.32 (1), 9.40 (1) to (7), and 9.42 (6) and (7), with respect to a defined network plan, if the insurer meets all of the following requirements.

(a) The insurer offering a defined network plan provides comprehensive benefits to insureds of at least 80% coverage for in-plan providers.

(b) The insurer’s only financial incentive to the insureds to utilize participating providers is a co-insurance differential of not more than 10% between in-plan versus off-plan providers. Except for the co-insurance differential of no greater than 10%, all benefits, deductibles and co-payments must be the same regardless of whether the insured obtains benefits, services or supplies from in-plan or off-plan providers.

(d) The insurer makes no representation that the defined network plan is a preferred provider plan or that the defined network plan directs or is responsible for the quality of health care services. Nothing in this paragraph prevents an insurer from describing the availability or limits on availability of participating providers or the extent or limits of coverage under the defined network plan if participating or non-participating providers are utilized by an insured.

(e) The insurer, at the time an application is solicited, does all of the following.

Discloses to a potential applicant, and allows the applicant a reasonable opportunity to review, a directory which reasonably and clearly discloses the availability and location of providers:

a. Within reasonable travel distance from the principle location of the place of employment of employees likely to enroll under the plan, if the applicant is an employer; or

b. Within reasonable travel distance from the residence of the proposed insured, for any other application.

Obtains on the application, or on an addendum to the application, the applicant’s signed acknowledgement that the applicant:

a. Has reviewed the disclosure under subd. 1.;

b. Understands that participating providers may or may not be available to provide services and that the insurer is not required to make participating providers available; and

c. Understands that the plan will provide reduced benefits if the insured uses a non-participating provider.

Provides to each applicant a copy of the provider directory at the time the policy is issued.
The insurer provides access to translation services for the purpose of providing information concerning benefits, to the greatest extent possible, if a significant number of enrollees of the plan customarily use languages other than English.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; correction in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register November 2001 No. 551; CR 05-059: renum. from Ins 9.32 and am. (1) (a) and (b), (2) (a) and (d) Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.25 Preferred provider plan same service provisions {#sec-ins-9.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.25}

For purposes of s. 609.35, Stats., an insurer offering a preferred provider plan covers the same services when performed by a nonparticipating provider that it covers when those services are performed by a participating provider only if the insurer complies with all of the following:

(1) The insurer offering a preferred provider plan provides coverage that complies with either of the following:

(a) Provides coverage for services performed by nonparticipating providers with the insurer paying at a coinsurance rate of not less than 60% and the enrollee paying at a coinsurance rate of not more than 40%.

(b) Provides coverage for services performed by nonparticipating providers with the insurer paying at a coinsurance rate not less than 50% and the enrollee paying at a coinsurance rate of not more than 50% and the insurer provides the enrollee with the disclosure notice that is compliant with sub. (5).

(2) The insurer offering a preferred provider plan equally applies material exclusions regardless if the services are performed by either participating or nonparticipating providers. The insurer may exceed the coinsurance differential in s. Ins 9.27 (1), or the deductible differential in s. Ins 9.27 (2), or the co-payment differential in s. Ins 9.27 (3) to the extent the insurer reasonably determines the cost sharing is necessary to encourage enrollees to use participating providers or centers of excellence for transplant or other unique disease treatment services or preventive health care services limited to immunizations pursuant to s. 632.895 (14), Stats., and the services as covered benefits greater than the minimum required for specific mandated benefits under ss. 632.895 and 632.89, Stats., when the insurer at the time of solicitation and within the policy, does either or both, as applicable, of the following:

(a) Provides a disclosure to enrollees that identify the centers of excellence and the specific covered benefits that are covered at a different rate if provided by a health care provider that is recognized and identified as a center of excellence.

(b) Clearly and prominently discloses that either immunizations or expanded benefits above mandated minimum coverage, or both, are covered when performed by participating providers or with greater disparity than permitted in s. Ins 9.27 (1) through (3).

(3) The insurer offering a preferred provider plan provides coverage of services without use of any financial incentives other than maximum limits, out-of-pocket limits and those incentives described in this section and s. Ins 9.27 to encourage the use of participating providers.

(4) The insurer offering a preferred provider plan may use utilization management, including preauthorization or similar methods, for denying access to or coverage of services of nonparticipating providers with just cause and without such frequency as to indicate a general business practice.

(5) An insurer required to provide a disclosure notice under sub. (1) shall provide the disclosure notice to the applicant at the time of solicitation, and shall include in a prominent location within the certificate of coverage issued under a group policy and in a prominent location in an individual policy, the following form and in not less than 11-point bold font:

(6) The insurer files a report with the commissioner certifying compliance with this section on a form prescribed by the commissioner and signed by an officer of the company.

(7) The insurer does not require a referral to obtain coverage for care from either a participating or nonparticipating provider and complies with ss. Ins 9.27 and 9.32 (2).

(8) This section first applies to an insurer offering a preferred provider plan beginning on January 1, 2007. This section does not apply to an insurer with respect to a preferred provider plan issued prior to January 1, 2007 and periodically renewed after December 31, 2006.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06; emerg. cr. (8), eff. 9-1-06; CR 06-083: am. (4) Register December 2006 No. 612, eff. 1-1-07; CR 06-118: cr. (8) Register April 2007 No. 616, eff. 5-1-07.

Wis. Admin. Code § Ins 9.26 Preferred provider plan subject to defined network plan regulations {#sec-ins-9.26 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.26}

An insurer offering a preferred provider plan that does not cover the same services when performed by a nonparticipating provider that it covers when those services are performed by a participating provider is subject to the requirements of a defined network plan that is not a preferred provider plan including ss. Ins 9.31, 9.32 (1), 9.35 (1), 9.37 (4), 9.40 (2) and (4), and 18.03 (2) (c) 1., and ss. 609.22 (2), (3), (4) and (7), 609.32 (1) and 609.34 (1), Stats.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06; correction under s. 13.92 (4) (b) 7. Register December 2017 No. 745.

Wis. Admin. Code § Ins 9.27 Preferred provider plan requirements {#sec-ins-9.27 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.27}

Insurers offering a preferred provider plan shall comply with all the following:

(1) Except as provided in s. Ins 9.25 (2), insurers offering a preferred provider plan that apply a coinsurance percentage when the services are performed by nonparticipating providers at a different percentage than the coinsurance percentage that is applied when the services are performed by participating providers shall offer plans that have either of the following:

(a) The coinsurance differential between participating and nonparticipating providers performing the same services is 30% or less.

(b) The coinsurance differential between participating and nonparticipating provider performing the same services is greater than 30% and the insurer provides the enrollee with a disclosure notice that is compliant with s. Ins 9.25 (5).

(2) Except as provided in s. Ins 9.25 (2), insurers offering a preferred provider plan that apply a deductible when the services are performed by nonparticipating providers in a different amount than the deductible that is applied when the services are performed by participating providers shall offer plans that have either of the following:

(a) The deductible applied to nonparticipating providers is no more than 2 times greater than the deductible applied to participating providers or no more than $2000 higher than the participating provider deductible.

(b) The deductible applied to nonparticipating providers is more than 2 times greater than the deductible applied to participating providers or is more than $2000 higher than the participating provider deductible and the insurer provides the enrollee with a disclosure notice that is compliant with s. Ins 9.25 (5).

(3) Except as provided in s. Ins 9.25 (2), insurers offering a preferred provider plan that apply a co-payment when the services are performed by nonparticipating providers in a different amount than the co-payment that is applied when the services are performed by participating providers shall offer plans that have either of the following:

(a) The co-payment applied to nonparticipating providers is no more than 3 times greater than the co-payment applied to participating providers or no more than $100 for services of a health care provider or no more than $300 for services of a health care facility.

(b) The co-payment applied to nonparticipating providers is more than 3 times greater than the co-payment applied to participating providers or is more than $100 for services of a health care provider or is more than $300 for services of a health care facility and the insurer provides the enrollee with a disclosure notice that is compliant with s. Ins 9.25 (5).

(4) This section first applies to an insurer offering a preferred provider plan beginning on January 1, 2007. This section does not apply to an insurer with respect to a preferred provider plan issued prior to January 1, 2007 and periodically renewed after December 31, 2006.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06; emerg. cr. (4), eff. 9-1-06; CR 06-118: cr. (4) Register April 2007 No. 616, eff. 5-1-07.

Wis. Admin. Code § Ins 9.30 Group and blanket health insurers compliance {#sec-ins-9.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.30}

The commissioner finds that the circumstances of offering a group or blanket health insurance policy require that the insurer offering the policy otherwise exempt from chs. 600 to 646, Stats., under s. 600.01 (1) (b) 3., Stats., comply with s. Ins 9.32 (2) and s. 609.22 (2), Stats., in order to provide adequate protection to Wisconsin enrollees and the public. An insurer that covers 100 or more residents of this state under a policy otherwise exempt under s. 600.01 (1) (b) 3., Stats., shall comply with s. Ins 9.32 (2) and s. 609.22 (2), Stats.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.31 Annual certification of access standards {#sec-ins-9.31 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.31}

(1) An insurer offering a defined network plan that is not a preferred provider plan shall file an annual certification with the commissioner no later than August 1 of each year certifying compliance with the access standards of s. 609.22, Stats., and s. Ins 9.32 (1) for the preceding year. The certification shall be submitted on a form prescribed by the commissioner and signed by an officer of the company.

(2) An insurer offering a preferred provider plan shall file an annual certification with the commissioner no later than August 1 of each year certifying compliance with the access standards contained in ss. 609.22 (1), (4m), (5), (6) and (8), Stats., and s. Ins 9.32 (2) for the preceding year, on a form prescribed by the commissioner and signed by an officer of the company. The certification is to be filed within 3 months after March 1, 2006, and thereafter, no later than August 1 of each year.

Note: A copy of the certification of access standards form required under sub. (1), OCI26-110, and sub. (2), OCI26-111, may be obtained at no cost from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison, WI, 53707-7873 or from the OCI website address: http://oci.wi.gov.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.32 Defined network plan requirements {#sec-ins-9.32 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.32}

(1) An insurer offering a defined network plan that is not a preferred provider plan shall do all of the following:

(a) Provide covered benefits by plan providers with reasonable promptness with respect to geographic location, hours of operation, waiting times for appointments in provider offices and after hours care. The hours of operation, waiting times, and availability of after hours care shall reflect the usual practice in the local area. Geographic availability shall reflect the usual medical travel times within the community.

(b) Have sufficient number and type of plan providers to adequately deliver all covered services based on the demographics and health status of current and expected enrollees served by the plan.

(c) Provide 24-hour nationwide toll-free telephone access for its enrollees to the plan or to a Wisconsin participating provider for authorization for care which is covered by the plan.

(d) Provide as a covered benefit the emergency services rendered during the treatment of an emergency medical condition, as defined by s. 632.85, Stats., by a nonparticipating provider as though the services was provided by a participating provider, if the insurer provides coverage for emergency medical services and the enrollee cannot reasonably reach a participating provider or, as a result of the emergency, is admitted for inpatient care subject to any restriction which may govern payment to a participating provider for emergency services. The insurer shall pay the nonparticipating provider at the rate the insurer pays a nonparticipating provider after applying any co-payments, coinsurance, deductibles or other cost-sharing provisions that apply to participating providers.

(2) An insurer offering a preferred provider plan shall do all of the following:

(a) Provide covered benefits by participating providers with reasonable promptness consistent with normal practices and standards in the geographic area. Geographic availability shall reflect the usual medical travel times within the community. This does not require an insurer offering a preferred provider plan to offer geographic availability of a choice of participating providers.

(b) Provide sufficient number and type of participating providers to adequately deliver all covered services based on the demographics and to meet the anticipated needs of its enrollees served by the plan including at least one primary care provider and a participating provider with expertise in obstetrics and gynecology accepting new enrollees.

(d) Include in its provider directory a prominent notice that complies with Appendix D and is printed in 11-point bold font.

(fm) Provide emergency medical services as a covered benefit when the enrollee receives treatment for an emergency medical condition, as defined by s. 632.85, Stats., from a nonparticipating provider. The insurer shall cover the treatment of the emergency medical condition rendered by a nonparticipating provider as though the services were rendered by a participating provider if the insurer provides coverage for emergency medical services and the enrollee cannot reasonably reach a participating provider or, as a result of the emergency, is admitted for inpatient care. The insurer shall compensate the nonparticipating providers at the rate the insurer pays nonparticipating providers and after applying any co-payments, coinsurance, deductibles or other cost-sharing provisions that apply to participating providers until the nonparticipating provider has met its obligations under 42 U.S.C. §1395dd.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. (2) (a), r. (2) (c), (e) and (f), cr. (fm), Register December 2006 No. 612. eff. 1-1-07.

Wis. Admin. Code § Ins 9.33 Enrollee election of nonparticipating provider reimbursement {#sec-ins-9.33 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.33}

Nothing in s. Ins 9.32 changes the reimbursement payable or the amounts due, including co-payments, coinsurance, deductibles and other cost-sharing provisions from an enrollee when the enrollee of a preferred provider plan that is not a defined network plan elects to utilize the services of a nonparticipating provider when a participating provider is available in accordance with s. Ins 9.32 (2) (a) and (b) and the requirements of s. Ins 9.32 (2) (d), are provided to the enrollee.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. Register December 2006 No. 612, eff. 1-1-07.

Wis. Admin. Code § Ins 9.35 Continuity of care {#sec-ins-9.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.35}

(1) In addition to the requirements of s. 609.24, Stats., an insurer offering a defined network plan shall do one of the following:

(a) Upon termination of a provider from a defined network plan, the insurer offering a defined network plan shall appropriately notify all enrollees of the termination, provide information on substitute providers, and at least identify the terminated providers within a separate section of the annual provider directory. In addition, the insurer shall comply with all of the following as appropriate:

If the terminating provider is a primary care provider and the insurer offering a defined network plan requires enrollees to designate a primary care provider, the insurer shall notify each enrollee who designated the terminating provider of the termination no later than 30 days prior to the termination or 15 days following the date the insurer received the provider’s termination notice, whichever is later, and shall describe each enrollee’s options for receiving continued care from the terminated provider.
If the terminating provider is a specialist and the insurer offering a defined network plan requires a referral, the insurer shall notify each enrollee authorized by referral to receive care from the specialist of the termination no later than 30 days prior to the termination or 15 days following the date the insurer received the provider’s termination notice, whichever is later, and describe each enrollee’s options for receiving continued care from the terminated provider.
If the terminating provider is a specialist and the insurer offering a defined network plan does not require a referral, the provider’s contract with the insurer shall comply with the requirements of s. 609.24, Stats., and require the provider to post a notification of termination with the plan in the provider’s office no later than 30 days prior to the termination or 15 days following the date the insurer received the provider’s termination notice, whichever is later.

(b)

Upon termination of a provider from a defined network plan, the insurer offering a defined network plan shall notify all affected enrollees of the termination and each enrollee’s options for receiving continued care from the terminated provider not later than 30 days prior to the termination, or upon notice by the provider if the insurer receives less than 30 days notice. The insurer offering a defined network plan shall provide information on substitute providers to all affected enrollees.
If the provider is a primary care provider and the insurer offering a defined network plan requires enrollees to designate a primary care provider, the insurer shall notify all enrollees who designated the terminating provider.

(1m) An insurer offering a preferred provider plan shall either comply with sub. (1) (a) or (b) or have a contract with participating providers requiring the provider to notify all plan enrollees of the enrollees’ rights under s. 609.24, Stats., if the provider’s participation terminates for reasons other than provided in sub. (2) (a) or (b). The participating provider contracted with the insurer shall post a notification of termination with the plan no later than 30 days prior to the termination or 15 days following the date the insurer received the provider’s termination notice, whichever is later, and describe each enrollee’s options for receiving continued care from the terminated provider. The insurer offering a preferred provider plan shall enforce the contract and ensure that enrollees are informed of a participating provider’s termination.

(2) An insurer offering a defined network plan is not required to provide continued coverage for the services of a provider if either of the following is met:

(a) The provider no longer practices in the defined network plan’s geographic service area.

(b) The insurer offering a defined network plan terminates the provider’s contract due to misconduct on the part of the provider.

(3) The insurer offering a defined network plan shall make available to the commissioner upon request all information needed to establish cause for termination of providers.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.36 Gag clauses {#sec-ins-9.36 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.36}

(1) No contract between an insurer offering a defined network plan and a participating provider may limit the provider’s ability to disclose information, to or on behalf of an enrollee, about the enrollee’s medical condition.

(2) A participating provider may discuss, with or on behalf of an enrollee, all treatment options and any other information that the provider determines to be in the best interest of the enrollee and within the scope of the provider’s professional license. An insurer offering a defined network plan may not penalize the participating provider nor terminate the contract of a participating provider because the provider makes referrals to other participating providers or discusses medically necessary or appropriate care with or on behalf of an enrollee. An insurer offering a defined network plan may not retaliate against a provider for advising an enrollee of treatment options that are not covered benefits under the plan.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.37 Notice requirements {#sec-ins-9.37 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.37}

(1) Provided information. Prior to enrolling members, insurers offering a defined network plan shall provide to prospective group or individual policyholders information on the plan including all of the following:

(a) Covered services.

(b) A definition of emergency and out-of-area coverage.

(d) Enrollment procedures.

(e) Limitations on benefits including limitations on choice of providers and the geographical area serviced by the plan.

(2) Provider directories. Insurers offering a defined network plan shall make current provider directories available to enrollees upon enrollment, and no less than annually, following the first year of enrollment. Preferred provider plans shall also include the language of Appendix D.

(3) Obstetricians and gynecologists. Insurers offering a defined network plan that permits obstetricians or gynecologists to serve as primary care providers shall clearly so state in enrollment materials. Insurers offering a defined network plan that limits access to obstetricians and gynecologists shall clearly so state in enrollment materials the process for obtaining referrals.

(4) Standing referral criteria. Insurers offering a defined network plan other than a preferred provider plan shall make information available to their enrollees describing the criteria for obtaining a standing referral to a specialist, including under what circumstances and for what services a standing referral is available, how to request a standing referral, and how to appeal a standing referral determination. For purposes of s. 609.22 (4), Stats., and this subsection, referral includes prior authorization for services if the insurer uses this or similar methods for denying standing referrals to specialists without just cause and with such frequency to indicate a general business practice, as determined by the commissioner.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. (1) to (4) Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.38 Policy and certificate language requirements {#sec-ins-9.38 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.38}

Each policy form marketed or each certificate issued to an enrollee by an insurer offering a defined network plan or limited service health organization plan shall contain all of the following:

(1) Definitions. A definition of geographical service area, emergency care, urgent care, out–of–area service, dependent and primary provider, if these terms or terms of similar meaning are used in the policy or certificate and have an effect on the benefits covered by the plan. The definition of geographical service area need not be stated in the text of the policy or certificate if such definition is adequately described in an attachment that is given to all enrollees along with the policy or certificate.

(2) Disclosure of exclusions, limitations and exceptions. Clear disclosure of any provision that limits benefits or access to services in the exclusions, limitations, and exceptions sections of the policy or certificate. Among the exclusions, limitations and exceptions that shall be disclosed are those relating to:

(a) Emergency and urgent care.

(b) Restrictions on the selection of primary or referral providers.

(d) Out–of–pocket costs including copayments and deductibles.

(e) Any restrictions on coverage for dependents who do not reside in the service area.

(3) Disclosure of mandated benefits. Clear disclosure of all benefit mandates outlined in Wisconsin statutes.

(4) Disclosure of procedures and emergency care notification. Insurers offering a defined network plan shall do all of the following in a manner consistent with s. 609.22, Stats.:

(a) Provide a description of the procedure for an enrollee to obtain any required referral, including the right to a standing referral, and notice that any enrollee may request the criteria for the standing referral.

(b) Provide a description of the procedure for any enrollee to obtain a second opinion from a participating plan provider consistent with s. 609.22 (5), Stats.

(c) Consistent with s. 609.22 (6), Stats., and s. Ins 9.32 (1) (d), an insurer offering a defined network plan may require enrollees to notify the insurer of emergency room usage, but in no case may the insurer offering a defined network plan require notification less than 48 hours after receiving services or before it is medically feasible for the enrollee to provide the notice, whichever is later. An insurer offering a defined network plan may impose no greater penalty than assessing a deductible that may not exceed the lesser of 50% of covered expenses for emergency treatment or $250.00 for failing to comply with emergency treatment notification requirements.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. (intro.), (4) (intro.) and (c) Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.39 Disenrollment {#sec-ins-9.39 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.39}

(1) Disclosure. The health maintenance organization or limited service health organization shall clearly disclose in the policy and certificate any circumstances under which the health maintenance organization or limited service health organization may disenroll an enrollee.

(2) Enrollee disenrollment criteria. Except as provided in s. 632.897, Stats., the health maintenance organization or limited service health organization may only disenroll an enrollee if one of the following occurs:

(a) The enrollee has failed to pay required premiums by the end of the grace period.

(b) The enrollee has committed acts of physical or verbal abuse that pose a threat to providers or other members of the organization.

(c) The enrollee has allowed a nonmember to use the health maintenance or limited service health organization’s certification card to obtain services or has knowingly provided fraudulent information in applying for coverage.

(d) The enrollee has moved outside of the geographical service area of the organization.

(e) The enrollee is unable to establish or maintain a satisfactory physician–patient relationship with the physician responsible for the enrollee’s care. Disenrollment of an enrollee under this paragraph shall be permitted only if the health maintenance organization or limited service health organization can demonstrate that it did all of the following:

Provided the enrollee with the opportunity to select an alternate primary care physician.
Made a reasonable effort to assist the enrollee in establishing a satisfactory patient–physician relationship.
Informed the enrollee that he or she may file a grievance on this matter.

(3) Prohibited disenrollment criteria. Notwithstanding sub. (2), the health maintenance organization or limited service health organization plan may not disenroll an enrollee for reasons related to any of the following:

(a) The physical or mental condition of the enrollee.

(b) The failure of the enrollee to follow a prescribed course of treatment.

(4) Alternative coverage for disenrolled enrollees. An insurer offering a health maintenance organization plan or limited service health organization plan that has disenrolled an enrollee for any reason except failure to pay required premiums shall make arrangements to provide similar alternate insurance coverage to the enrollee. In the case of group certificate holders, the insurance coverage shall be continued until the affected enrollee finds his or her own coverage or until the next opportunity to change insurers, whichever comes first. In the case of an enrollee covered on an individual basis, coverage shall be continued until the anniversary date of the policy or for one year, whichever is earlier.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. (4) Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 9.40 Required quality assurance and remedial action plans {#sec-ins-9.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.40}

(1) In this section “quality assurance” means the measurement and evaluation of the quality and outcomes of medical care provided.

(2)

(a) By April 1, 2000, an insurer, with respect to a defined network plan that is not a preferred provider plan shall submit a quality assurance plan consistent with the requirements of s. 609.32, Stats., to the commissioner, except as provided in par. (b). The insurers shall submit a quality assurance plan that is consistent with the requirements of s. 609.32, Stats., by April 1 of each subsequent year. The quality assurance plan shall be designed to reasonably assure that health care services provided to enrollees of the defined network plan meet the quality of care standards consistent with prevailing standards of medical practice in the community. The quality assurance plan shall document the procedures used to train employees of the defined network plan in the content of the quality assurance plan.

(b) Insurers offering a defined network plan that is not also a preferred provider plan or health maintenance organization plan shall submit a quality assurance plan consistent with the requirements of par. (a) and s. 609.32, Stats., to the commissioner by April 1, 2007, and April 1 of each subsequent year.

(3) Insurers offering a preferred provider plan shall develop procedures for taking effective and timely remedial action to address issues arising from quality problems including access to, and continuity of care from, participating primary care providers. The remedial action plan shall at least contain all of the following:

(a) Designation of a senior-level staff person responsible for the oversight of the insurer’s remedial action plan.

(b) A written plan for the oversight of any functions delegated to other contracted entities.

(c) A procedure for the periodic review of services related to clinical protocols and utilization management performed by the insurer offering a preferred provider plan or by another contracted entity.

(d) Periodic and regular review of grievances, complaints and OCI complaints.

(e) A written plan for maintaining the confidentiality of protected information.

(f) Documentation of timely correction of access to and continuity of care issues identified in the plan. Documentation shall include all of the following:

The date of awareness that an issue exists for which a remedial action plan shall be initiated.
The type of issue that is the focus of the remedial action plan.
The person or persons responsible for developing and managing the remedial action plan.
The remedial action plan utilized in each situation.
The outcome of the remedial action plan.
The established time frame for re-evaluation of the issue to ensure resolution and compliance with the remedial action plan.

(4) All insurers offering a defined network plan, other than a preferred provider plan, shall establish and maintain a quality assurance committee and a written policy governing the activities of the quality assurance committee that assigns to the committee responsibility and authority for the quality assurance program. All complaints, OCI complaints, appeals and grievances relating to quality of care shall be reviewed by the quality assurance committee.

(7) No later than April 1, 2001, with respect to an insurer offering a defined network plan that is a health maintenance organization plan, and by April 1, 2008, for insurers offering a defined network plan that is not also a preferred provider plan or health maintenance organization plan, shall do all of the following:

(a) Include a summary of its quality assurance plan in its marketing materials.

(b) Include a brief summary of its quality assurance plan and a statement of patient rights and responsibilities with respect to the plan in its certificate of coverage or enrollment materials.

(8) Beginning April 1, 2000, an insurer offering any defined network plan shall submit an annual certification for each plan with the commissioner no later than April 1 of each year. The certification shall assert the type of plan and be signed by an officer of the company. OCI shall maintain for public review a current list of health benefit plans, categorized by type.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; CR 05-059: am. (2), (3), (4), (6), (7) and (8), r. (1) (c) Register February 2006 No. 602, eff. 3-1-06; reprinted to restore dropped copy in (3), Register September 2006 No. 609; CR 17-015: consol. (1) (intro.), (b) and renum. and am., r. (1) (a), (5), (6) Register December 2017 No. 744, eff. 1-1-18.

Wis. Admin. Code § Ins 9.41 Right of the commissioner to request OCI complaints be handled as grievances {#sec-ins-9.41 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.41}

An insurer offering a defined network plan, preferred provider plan or limited service health organization shall treat and process an OCI complaint as a grievance at the request of the commissioner. The commissioner will provide a written description of the OCI complaint to the insurer.

History

CR 05-059: cr. Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. Register December 2006 No. 612, eff. 1-1-07.

Wis. Admin. Code § Ins 9.42 Compliance program requirements {#sec-ins-9.42 omnilex-key=us-wi-regs-official--agency-ins--Ins 9.42}

(1) All insurers offering a defined network plan, preferred provider plan or limited service health organization except to the extent otherwise exempted under this chapter or by statute, are responsible for compliance with ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, and 632.83, Stats., applicable sections of this subchapter and other applicable sections including but not limited to s. Ins 9.07. Insurers offering a defined network plan, preferred provider plan or limited service health organization, to the extent they are required to comply with those provisions, shall establish a compliance program and procedures to verify compliance. Nothing in this section shall affect the availability of the privilege established under s. 146.38, Stats.

(2) The insurers shall establish and operate a compliance program that provides reasonable assurance that:

(a) The insurer is in compliance with ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, 632.83, and 632.83, Stats., this subchapter and other applicable sections including but not limited to s. Ins 9.07.

(b) Any violations of ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, and 632.83, Stats., this subchapter or any applicable sections including but not limited to s. Ins 9.07 are detected and timely corrections are taken by the insurer.

(3) The insurer’s compliance program shall include regular internal audits, including regular audits of any contractors or subcontractors who perform functions relating to compliance with ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, and 632.83, Stats., this subchapter or any applicable sections including but not limited to s. Ins 9.07.

(4) An insurer that materially relies upon another party to carry out functions under ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, and 632.83, Stats., this subchapter or any applicable sections including but not limited to s. Ins 9.07, shall do all of the following:

(a) Contractually require the other party to carry out those functions in compliance with ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, and 632.83, Stats., this subchapter and other applicable sections including but not limited to s. Ins 9.07.

(b) Enforce the contractual provisions required under par. (a).

(c) Include in the insurer’s compliance program provisions to monitor, supervise and audit the performance of the other party in carrying out the functions.

(d) Maintain management reports and records reasonably necessary to monitor, supervise and audit the other party’s performance.

(e) Include and enforce contractual provisions requiring the other party to give the office access to documentation demonstrating compliance with ss. 609.22, 609.24, 609.30, 609.32, 609.34, 609.36, and 632.83, Stats., this subchapter and other applicable sections including but not limited to s. Ins 9.07 within 15 days of receipt of notice.

(f) Regularly audit compliance with contract provisions including audits of internal working papers and reports.

(5) The insurer shall maintain all of the following items in its records:

(a) Any audits, and associated work papers of audits, conducted during the period of review relating to the business and service operation of the insurer offering a defined network plan, preferred provider plan or limited service health organization.

(b) All provider directories and provider manuals for the period of review. The directory shall include, as an addendum, a list of all providers that disassociated with the insurer or provider network in the review period.

(c) A sample copy of the provider agreement, including those with a provider network, for each provider category including hospital, physician, medical clinic, pharmacy, mental health services and chiropractor.

(d) Copies of contracts for management services, data management and processing, marketing, administrative services and case management.

(e) A sample copy of each certificate form for the period of review including a copy of sample enrollment forms.

(6) Except as permitted under sub. (7), an insurer shall maintain a complete record of the following:

(a) An access plan developed in accordance with s. Ins 9.32 (1) and s. 609.22, Stats., requirements.

(b) A quality assurance plan developed in accordance with s. Ins 9.40 and s. 609.32, Stats., requirements including means of identification, evaluation and correction of quality assurance problems.

(d) Utilization management procedures and policies.

(e) Minutes from any committee, physician association, or board of directors meeting pertaining to quality assurance, utilization management, and credentialing.

(7) An insurer that complies with subs. (1) to (5), may permit another party to maintain any record required under sub. (6), but only if both of the following requirements are met:

(a) The insurer includes and enforces the contractual provision described in sub. (4) (e).

(b) The insurer produces any required record within 15 days after the office requests the record.

(8) An insurer shall maintain all of the following documents that relate to a silent provider network and shall make them available at the request of the commissioner:

(a) Provider and provider network agreements, including addenda addressing reimbursement and discounts.

(b) A listing of providers participating in additional group or individual discount contracts with the insurer.

(d) Claims administration guidelines for processing discounts including silent discounts.

(e) Detailed documentation and explanation of claim system data fields and codes that identify silent discounts, other discount calculations, usual and customary calculations, and billed and paid amounts.

(9) An insurer offering a preferred provider plan that is not also a defined network plan shall comply with this section to the extent applicable.

History

Cr. Register, February, 2000, No. 530, eff. 3-1-00; corrections in (1) to (4) made under s. 13.93 (2m) (b) 7., Stats., Register November 2001 No. 551; CR 05-059: am. (1) to (3), (4) (a) and (e), (5) (a), and (6) (a), cr. (9) Register February 2006 No. 602, eff. 3-1-06; CR 06-083: am. (1) and (5) (a) Register December 2006 No. 612, eff. 1-1-07.

Chapter Ins 9 Appendix A AUDITOR’S SPECIAL PROCEDURES REPORT ON THE SCHEDULE OF COVERED EXPENSES

Wis. Admin. Code § Chapter Ins 9 AUDITOR’S SPECIAL PROCEDURES REPORT ON THE SCHEDULE OF COVERED EXPENSES {#sec-chapter-ins-9 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 9}

Board of Directors

XYZ Health Maintenance Organization Insurer

We have performed the following special procedures with respect to the Schedule of Covered Expenses for XYZ health maintenance organization insurer (“HMO insurer”), for the year ended December 31, XXXX. It is understood that this report is solely to assist you in complying with ch. Ins 9, Wis. Adm. Code, and ch. 609, Wis. Stats., and our report is not to be used for any other purpose. Our procedures and findings are as follows:

a. A randomly selected sample was taken from all medical and hospital expenses paid during the calendar year to test the attribute that the expenses reported on the provider’s IRS 1099-MISC forms (or other supporting documentation for providers not issued an IRS-1099-MISC form) trace to the Schedule of Covered Expenses for those providers included on the Schedule of Covered Expenses.

b. A comparison was made between the Schedule of Covered Expenses and the Election of Exemption notices by providers to verify that providers which had given notice of their Election of Exemption prior to December 31, XXXX, and which had not also given notice of their Termination of Election prior to December 31, XXXX, are excluded from the Schedule of Covered Expenses.

A review of the assumptions and methods of the HMO insurer in establishing the amount of covered expenses included in the Incurred But Not Reported line of the Schedule of Covered Expenses was undertaken to determine if the company’s estimate is reasonably estimated based on the HMO insurer’s historical data and best information available to the HMO insurer.

Because the procedures do not constitute an examination made in accordance with generally accepted auditing standards, we do not express an opinion on any of the accounts or items referred to above. The following summarizes our findings as a result of the procedures referred to above.

FINDINGS REPORTED HERE

Had we performed any additional procedures, other matters might have come to our attention that would have been reported to you. This report relates only to the items specified above and does not extend to any financial statements of the HMO insurer taken as a whole.

Date CPA Signature

Chapter Ins 9 Appendix B AUDITOR’S REPORT ON THE SCHEDULE OF COVERED EXPENSES

Wis. Admin. Code § Chapter Ins 9 AUDITOR’S REPORT ON THE SCHEDULE OF COVERED EXPENSES {#sec-chapter-ins-9 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 9}

Date

BOARD OF DIRECTORS

XYZ Health Maintenance Organization Insurer

We have audited, in accordance with generally accepted auditing standards, Financial Statements of XYZ health maintenance organization insurer (“HMO insurer”), for the year ended December 31, XXXX, and have issued our report thereon dated XXXXXXXXXX XX, XXXX. We have also audited the accompanying Schedule of Covered Expenses for XYZ HMO insurer as of December 31, XXXX. This schedule is the responsibility of management of XYZ HMO insurer. Our responsibility is to express an opinion on this schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the aforementioned schedule is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the aforementioned schedule. An audit also includes assessing the accounting principles used and any significant estimates made by management, as well as evaluating the overall schedule presentations. We believe that our audit provides reasonable basis for our opinion.

In our opinion, the schedule referred to above presents fairly, in all material respects, covered expenses for the year ended December 31, XXXX.

Date CPA Signature

Chapter Ins 9 Appendix C NOTICE THIS NOTICE DESCRIBES HOLD-HARMLESS PROVISIONS WHICH AFFECT YOUR ABILITY TO SEEK RECOURSE AGAINST HEALTH MAINTENANCE ORGANIZATION INSURER ENROLLEES FOR PAYMENT FOR SERVICES

Wis. Admin. Code § Chapter Ins 9 NOTICE THIS NOTICE DESCRIBES HOLD-HARMLESS PROVISIONS WHICH AFFECT YOUR ABILITY TO SEEK RECOURSE AGAINST HEALTH MAINTENANCE ORGANIZATION INSURER ENROLLEES FOR PAYMENT FOR SERVICES {#sec-chapter-ins-9 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 9}

Section 609.94, Wis. Stats., requires each health maintenance organization insurer (“HMO insurer”), to provide a summary notice to all of its participating providers of the statutory limitations and requirements in §§ 609.91 to 609.935, and § 609.97 (1), Wis. Stats.

SUMMARY

Under Wisconsin law a health care provider may not hold HMO insurer enrollees or policyholders (“enrollees”) liable for costs covered under an HMO insurer policy if the provider is subject to statutory provisions which “hold harmless” the enrollees. For most health care providers application of the statutory hold-harmless is “mandatory” or it applies unless the provider elects to “opt-out.” A provider permitted to “opt-out” must file timely notice with the Wisconsin Office of the Commissioner of Insurance (“OCI”).

Some types of provider care are subject to the hold-harmless statutes only if the provider voluntarily “opts-in.” An HMO insurer may partially satisfy its regulatory capital and surplus requirements if health care providers elect to remain subject to the statutory hold-harmless provisions.

This notice is only a summary of the law. Every effort has been made to accurately describe the law. However, if this summary is inconsistent with a provision of the law or incomplete, the law will control.

Filings for exemption with OCI must be on the prescribed form in order to be effective.

HOLD HARMLESS

A health care provider who is subject to the statutory hold-harmless provisions is prohibited from seeking to recover health care costs from an enrollee. The provider may not bill, charge, collect a deposit from, seek remuneration or compensation from, file or threaten to file with a credit reporting agency or have any recourse against an enrollee or any person acting on the enrollee’s behalf, for health care costs for which the enrollee is not liable. The prohibition on recovery does not effect the liability of an enrollee for any deductibles or copayments, or for premiums owed under the policy or certificate issued by the HMO insurer.

A. MANDATORY FOR HOLD HARMLESS.

An enrollee of an HMO insurer is not liable to a health care provider for health care costs that are covered under a policy issued by that HMO insurer if any of the following are met:

Care is provided by a provider who is an affiliate of the HMO insurer, owns at least 5% of the voting securities of the HMO insurer, is directly or indirectly involved with the HMO insurer through direct or indirect selection of or representation by one or more board members, or is an Individual Practice Association (“IPA”) and is represented, or an affiliate is represented, by one of at least three HMO insurer board members who directly or indirectly represent one or more IPAs or affiliates of IPAs.
Care is provided by a provider under a contract with or through membership in an organization identified in 1.
To the extent the charge exceeds the amount the HMO insurer has contractually agreed to pay the provider for that health care service.
The care is provided to an enrolled medical assistance recipient under a Department of Health Services prepaid health care policy.
The care is required to be provided under the requirements of s. Ins 9.35, Wis. Adm. Code.

B. “OPT-OUT” HOLD HARMLESS.

If the conditions described in A do not apply, the provider will be subject to the statutory hold harmless unless the provider files timely election with OCI to be exempt if the health care meets any of the following:

Provided by a hospital or an IPA.
A physician service, or other provider services, equipment, supplies or drugs that are ancillary or incidental to such services and are provided under a contract with the HMO insurer or are provided by a provider selected by the HMO insurer.
Provided by a provider, other than a hospital, under a contract with or through membership in an IPA that has not elected to be exempt. Note that only the IPA may file election to exempt care provided by its member providers from the statutory hold harmless. (See Exemptions and Elections, No. 4.)

C. “OPT-IN” HOLD HARMLESS.

If a provider of health care is not subject to the conditions described in A or B, the provider may elect to be subject to the statutory hold-harmless provisions by filing a notification with OCI stating that the provider elects to be subject with respect to any specific HMO insurer. A provider may terminate such a notice of election by stating the termination date in that notice or in a separate notification.

CONDITIONS NOT AFFECTING IMMUNITY

An enrollee’s immunity under the statutory hold harmless is not affected by any of the following:

Any agreement entered into by a provider, an HMO insurer, or any other person, whether oral or written, purporting to hold the enrollee liable for costs (except a notice of election or termination permitted under the statute).
A breach of or default on any agreement by the HMO insurer, an IPA, or any other person to compensate the provider for health care costs for which the enrollee is not liable.
The insolvency of the HMO insurer or any person contracting with the HMO insurer, or the commencement of insolvency, delinquency or bankruptcy proceedings involving the HMO insurer or other persons which would affect compensation for health care costs for which an enrollee is not liable under the statutory hold harmless.
The inability of the provider or other person who is owed compensation to obtain compensation for health care costs for which the enrollee is not liable.
Failure by the HMO insurer to provide notice to providers of the statutory hold-harmless provisions.
Any other conditions or agreement existing at any time.

EXEMPTIONS AND ELECTIONS

Hospitals, IPAs, and providers of physician services who may “opt-out” may elect to be exempt from the statutory hold harmless and prohibition on recovery of health care costs under the following conditions and with the following notifications:

If the hospital, IPA, or other provider has a written contract with the HMO insurer, the provider must within thirty (30) days after entering into that contract provide a notice to OCI of the provider’s election to be exempt from the statutory hold-harmless and recovery limitations for care under the contract.
If the hospital, IPA, or other provider does not have a contract with an HMO insurer, the provider must notify OCI that it intends to be exempt with respect to a specific HMO insurer and must provide that notice for the period January 1, 1990, to December 21, 1990, at least sixty (60) day before the health care costs are incurred; and must provide that notice for health care costs incurred on and after January 1, 1991, at least 90 days in advance.
A provider who submits a notice of election to be exempt may terminate that election by stating a termination date in the notice or by submitting a separate termination notice to OCI.
The election by an IPA to be exempt from the statutory provisions, or the failure of an IPA to so elect, applies to costs of health care provided by any provider, other than a hospital, under contract with or through membership in the IPA. Such a provider, other than a hospital, may not exercise an election separately from the IPA. Similarly, an election by a clinic to be exempt from the statutory limitations and restrictions or the failure of the clinic to elect to be exempt applies to costs of health care provided by any provider through the clinic. An individual provider may not exercise an election to be exempt separate from the clinic.
The statutory hold-harmless “opt-out” provision applies to physician services only if the services are provided under a contract with the HMO insurer or if the physician is a selected provider for the HMO insurer, unless the services are provided by a physician for a hospital, IPA or clinic which is subject to the statutory hold-harmless “opt-out” provision.

NOTICES

All notices of election and termination must be in writing and in accordance with rules promulgated by the Commissioner of Insurance. All notices of election or termination filed with OCI are not affected by the renaming, reorganization, merger, consolidation or change in control of the provider, HMO insurer, or other person. However, OCI may promulgate rules requiring an informational filing if any of these events occur.

Notices to the Office of the Commissioner of Insurance must be written, on the prescribed form, and received at the Office’s current address:

P. O. Box 7873, Madison, WI 53707-7873

HMO INSURER CAPITAL AND SECURITY SURPLUS

Each HMO insurer is required to meet minimum capital and surplus standard (“compulsory surplus requirements”). These standards are higher if the HMO insurer has fewer than 90% of its liabilities covered by the statutory hold-harmless. Specifically, beginning January 1, 1992, the compulsory surplus requirement shall be at least the greater of $750,000 or 6% of the premiums earned by the HMO insurer in the last 12 months if its covered liabilities are less than 90%, or 3% of the premiums earned by the HMO insurer in the last 12 months if its covered liabilities are 90% or more. In addition to capital and surplus, an HMO insurer must also maintain a security surplus in the amount set by the Commissioner of Insurance.

FINANCIAL INFORMATION

An HMO insurer is required to file financial statements with OCI. You may request financial statements from the HMO insurer. OCI also maintains files of HMO insurer financial statements that can be inspected by the public.

Chapter Ins 9 Appendix D PREFERRED PROVIDER PLAN NOTICE TO ENROLLEES

Wis. Admin. Code § Chapter Ins 9 PREFERRED PROVIDER PLAN NOTICE TO ENROLLEES {#sec-chapter-ins-9 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 9}

IMPORTANT NOTICE

You are strongly encouraged to contact us to verify the status of the providers involved in your care including, for example, the anesthesiologist, radiologist, pathologist, facility, clinic or laboratory, when scheduling appointments or elective procedures to determine whether each provider is a participating or nonparticipating provider. Such information may assist in your selection of provider(s) and will likely affect the level of co-payment, deductible and amount of co-insurance applicable to the care you receive. The information contained in this directory may change during your plan year. Please contact [insert 800 and direct dial phone number of insurer] to learn more about the participating providers in your network and the implications, including financial, if you decide to receive your care from nonparticipating providers.

Chapter Ins 10 CONTINUING CARE FACILITIES

Wis. Admin. Code § Ins 10.10 Continuing care contracts {#sec-ins-10.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 10.10}

(1) Purpose. The purpose of this section is to interpret s. 100.18 and ch. 647, Stats., by establishing guidelines and standards for the filing and review of continuing care contracts.

(2) Scope. This section applies to all contracts entered into by providers subject to ch. 647, Stats.

(3) Definitions. The definitions in s. 647.01, Stats., apply to this section.

(4) Filing and approval of continuing care contract forms.

(a) No provider may enter into a continuing care contract with any resident or prospective resident unless the contract form prepared for general use has been filed with and approved by the commissioner. A contract form filed with the commissioner need not include the rules, regulations and procedures the provider uses for the day-to-day operation of the facility. The filing shall be deemed approved if it is not disapproved within 30 days after filing. The commissioner may disapprove a contract form upon a finding that it violates a statute or a rule promulgated by the commissioner.

(b) A provider shall file each amended contract form with the commissioner within 30 days after any change is made in that contract.

(5) Contract format and style; prohibitions.

(a) No continuing care contract may contain any agreement or incorporate any provision not fully set forth in the contract or in an application or other document attached to and made part of the contract at the time of its delivery.

(b) The text of a continuing care contract shall be printed in not less than 10 point type of a style in general use. Captions and summary paragraphs shall be printed in not less than 12 point type of a style in general use.

(c) A continuing care contract may not be deceptive or obscure, encourage misrepresentation or in any other way be contrary to ss. 100.18 and 647.05, Stats.

(6) Contract provisions. Each contract and any amendment of the contract, in addition to compliance with s. 647.05, Stats., shall do all of the following:

(a) Clearly identify the entities who are party to the contract and the entities who may be providing the services under the contract.

(b) Contain a schedule clearly setting forth all fees including, without limitation by reason of enumeration, advance fees, entrance fees, periodic service fees and any other charges or costs to be assumed by the resident under the contract. The contract shall also contain an explanation of the manner in which the amount of any refundable portion of the entrance or advance fee will be determined and an explanation of those fees and charges which are nonrefundable.

(c) Contain a summary description in a format substantially the same as that shown in Appendix A, of the maintenance, medical, nursing and personal care services that are provided to the resident under the contract at no additional cost and also a description of any other such services that are to be available to the resident at an additional cost. The summary description may also contain a listing of other significant services.

(d) Under a separate and appropriate heading, contain a description of the resident’s right, if any, to nursing home care or access to a nursing home and, if known, the name of the nursing home, the conditions under which the care or access will be available, a description of the care and benefits to be provided and the manner in which the charge for the service is to be determined.

(e) Contain a notice on the first page of the contract in not less than 12 point bold face type that the contract does not include any purchase of insurance or real estate.

(f) Be complete and contain a clear statement of the obligations and responsibilities of each of the parties to the contract including, if any, the obligations and responsibilities for future services and future payments. The effective dates and termination dates of the contract shall be clearly described.

(7) Grievance procedures. If not contained in the continuing care contract, the provider shall file with the commissioner for approval the internal grievance procedure established pursuant to s. 647.04 (7), Stats. The filing shall be deemed approved if not disapproved within 30 days after filing. The commissioner may disapprove the filing upon a finding that it violates a statute or a rule promulgated by the commissioner.

(8) Advertising, brochures and promotional material.

(a) No continuing care contract advertisement, brochure or promotional material may be delivered or issued for delivery in this state unless it is not misleading, deceptive or obscure, does not encourage misrepresentation or is not in any other way contrary to this section or s. 100.18 or ch. 647, Stats.

(b) Each provider shall maintain at its principal office a complete file containing every printed, published or prepared advertisement of its contracts, including the script of any advertisement used in broadcast media, disseminated in this or any other state, whether or not licensed in the other state. A notation shall be attached to each advertisement in the file indicating the manner and extent of distribution and the form number of any contract form advertised. A copy of the contract advertised shall be included in the file with each advertisement. The file shall be subject to regular and periodic inspection by the office of the commissioner. All advertisements subject to this paragraph shall be maintained in the file for 3 years.

(9) Applicability. This section applies to all contracts and amendments of contracts, and to advertisements, brochures and promotional material issued or used on and after July 1, 1991.

History

Cr. Register, April, 1991, No. 424, eff. 5-1-91.

Chapter Ins 11 INSURANCE SECURITY FUND BOARD

Wis. Admin. Code § Ins 11.02 Reports {#sec-ins-11.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 11.02}

(1) Purpose. The purpose of this section is to establish reporting for administration of the insurance security fund.

(2) Reports to insurers subject to assessment. The board from time to time at the direction of the chairperson shall make a report of its activities and of the income and disbursements of each account of the fund to all authorized insurers subject to assessment.

(3) Annual audited financial reports. The board shall submit an audited financial report to the commissioner each year not later than 120 days after the insurance security fund’s fiscal year.

History

Cr. Register, July, 1973, No. 211, eff. 8-1-73; r. and recr. (1), r. (2), (3), (4) (a) and (b), renum. (4) (c) to be (2) and am. September. 1988, No. 393. eff. 10-1-88; correction in (1) made under s. 13.93 (2m) (b) 3., Stats., Register, September, 1988, No. 393; cr. (3), Register, July, 1993, No. 451, eff. 8-1-93.

Chapter Ins 13 TOWN MUTUAL INSURANCE

Wis. Admin. Code § Ins 13.01 Other rules applicable to town mutual insurers {#sec-ins-13.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.01}

The following chapter and sections of the Wisconsin Administrative Code are applicable to town mutual insurers:

(1) Chapter Ins 5 RULES OF PROCEDURE FOR HEARINGS.

(2) Section Ins 6.07 INSURANCE POLICY LANGUAGE SIMPLIFICATION.

(3) Section Ins 6.11 INSURANCE CLAIMS SETTLEMENT PRACTICES.

(4) Section Ins 6.20 INVESTMENTS OF INSURANCE COMPANIES.

(5) Section Ins 6.52 BIOGRAPHICAL DATA RELATING TO COMPANY OFFICERS AND DIRECTORS.

(6) Section Ins 6.72 RISK LIMITATIONS.

(7) Section Ins 6.76 GROUNDS FOR DISAPPROVAL OF AND AUTHORIZED CLAUSES FOR FIRE, INLAND MARINE AND OTHER PROPERTY INSURANCE FORMS.

(8) Chapter Ins 7 FORMS.

History

Cr. Register, August, 1974, No. 224, eff. 9-1-74, emerg. r. (1) (b) eff. 6-22-76; r. (1) (b), Register, September, 1976, No. 249, eff. 12-1-76; r. and recr., Register, April, 1982, No. 316, eff. 5-1-82.

Wis. Admin. Code § Ins 13.02 Definitions, usages, synonyms and abbreviations {#sec-ins-13.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.02}

(1) “Admitted assets” as used in this chapter includes the total of ledger assets, plus the total of nonledger assets, less the total assets not admitted as determined in the annual report filed with the office of the commissioner of insurance.

(2) “Gross income” as used in this chapter includes premiums written and assessments collected on direct business and from reinsurance assumed, policy and membership fees, interest and dividend income from investments, gains on investments, rental income from real estate investments and miscellaneous income.

History

Cr. Register, August, 1974, No. 224, eff. 9-1-74.

Wis. Admin. Code § Ins 13.03 Organization of town mutuals {#sec-ins-13.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.03}

(1) Purpose. This rule is promulgated to implement, interpret and set forth procedural requirements necessary to carry out the purpose and provisions of s. 612.02, Stats.

(2) Scope. This rule shall apply to all town mutual insurers organized or operating under ch. 612, Stats.

(3) Model articles. Town mutual insurers may adopt articles of incorporation with provisions as follows:

History

Cr. Register, August, 1974, No. 224, eff. 9-1-74; am. (3), Register, June, 2001, No. 546, eff. 1-1-02.

Wis. Admin. Code § Ins 13.04 Undertaking to pay premiums and assessments and contract forms {#sec-ins-13.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.04}

(1) Purposes. This rule is promulgated to implement, and set forth procedural requirements necessary to carry out the purpose and provisions of ss. 612.51, 612.52 and 612.54, Stats.

(2) Scope. This rule shall apply to all corporations organized or operating under ch. 612, Stats.

(3) Undertaking to pay premiums and assessments. The undertaking to pay premiums and assessments to be signed by all prospective members shall be in form and substance substantially as follows, and may be a part of the application:

(4) Town mutual policy forms. Town mutual policy forms shall conform to ss. Ins 6.07 and 6.76, and shall include provisions substantially as follows relating to articles of incorporation and bylaws and notice of annual meeting:

(a)

(b)

(5) Permissible variations. Provisions of a town mutual policy may be so arranged in the policy as to provide for convenience in its preparation and issuance. Blank spaces may be changed or altered, spaces may be provided for the listing of rates and premiums for coverages insured under the policy or by riders or by endorsements attached to or printed thereon, and spaces may be utilized for reference to forms and for listing the amount of insurance, provisions as to coinsurance, provisions as to mortgage clause, descriptions and locations of the insured property and other matters advisable and necessary to indicate a delineation of the insurance effective under the contract, and other data as may be included for duplication of daily reports for office records.

(6) Forms and endorsements. Riders, forms and endorsements may be attached to the town mutual policy to include perils in addition to fire and lightning and for other necessary purposes. Except when in contradiction with ch. 612, Stats., the contracts, endorsements, and other forms of town mutuals should be similar to like forms of insurers subject to chs. 631 and 632, Stats.

(7) Mortgagee clause. If a loss under a policy issued by a town mutual insurer is payable to a mortgagee who is not an insured, the mortgagee clause may provide:

(a) For payment by the insurer despite policy defense; or

(b) That the mortgagee is not liable for any premium or assessment, regardless of whether coverage has been extended after payment of a premium or assessment by the mortgagee.

History

Cr. Register, August, 1974, No. 224, eff. 9-1-74; emerg. am. (4) (a) and (c), eff. 6-22-76; am. (4) (a) and (c), Register, September, 1976, No. 249, eff. 10-1-76; am. (3), r. and recr. (4) and (5), cr. (6), Register, April, 1982, No. 316, eff. 5-1-82; cr. (7), Register, May, 1986, No. 365, eff. 6-1-86.

Wis. Admin. Code § Ins 13.05 Accounting records, accounting controls and reports {#sec-ins-13.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.05}

(1) Purpose. This rule is intended to implement and interpret s. 601.41, Stats., for the purpose of setting minimum standards and techniques for accounting and reporting of data relating to company financial transactions and other operations.

(2) Scope. This rule shall apply to all town mutual insurers organized or operating under ch. 612, Stats.

(3) Accounting records. The following journals, ledgers and subsidiary records or similar records from which the data indicated may be obtained shall be maintained:

(a) Policy Register: A register or other records which shall contain the policy number, policyholder’s name, effective date of policy, term of policy, risk in force, amount of risk in force reinsured, premium amount, policy fee, reinsurance premium, and provision for miscellaneous data.

(b) Cash Receipts Journal: A journal which shall contain the date, payor, amount received, identification, and reference to the general ledger account and amount affected. All cash received by the company shall be recorded in the journal.

(c) Cash Disbursements Journal: A journal which shall contain the date, payee, check number, amount of check, and a reference to the general ledger account and amount affected. All cash disbursed by the company shall be recorded in the journal.

(d) General Journal: A journal for recording entries for all transactions affecting ledger items, which are not recorded in the cash receipts journal or cash disbursements journal. The general journal shall contain the date of the transaction, an explanation, the ledger account affected, and the amount of the transaction.

(e) General Ledger: A ledger which shall have an account for each asset and liability, surplus, income and expense items of the company. Each account shall contain an account title and/or number, a date for each transaction, a description, debit amounts, credit amounts and an account balance.

(f) Loss Claim Register: A register for recording all claims filed with the company. It shall list all claims in claim number order and contain the claimant’s and policyholder’s name, policy number, date of loss, date that loss was reported to the company, cause of the loss, estimated amount of the loss, and the date the claim was settled and the amount of loss payments, if any. Claims closed without payment should be so noted.

(4) Accounting controls. The following minimum controls of records and data handling should be maintained:

(a) Cash Receipts: All cash receipts shall be recorded on a cash receipts journal. The cash receipts and cash funds of the company shall at all times be kept separate and distinct from any personal, agency or other funds. All cash received shall be deposited in the bank intact, in the company’s name. A duplicate deposit ticket shall be retained in the company’s office for each deposit. All checks in payment of premiums or received by the company for other purposes shall be endorsed for deposit immediately upon receipt. All cash receipts shall be deposited at least weekly. All cash deposits shall be prepared and made, whenever possible, by some individual other than the one who records the receipts or reconciles the bank accounts.

(b) Cash Disbursements: All disbursements except those made from the petty cash fund shall be made by check. All checks issued by the company shall be recorded in chronological and numerical order in a cash disbursements journal. Each disbursement shall be supported and explained in the records of the company. All checks used for disbursements shall be pre-numbered and properly accounted for. All checks shall be mailed or delivered immediately after being signed. All disbursements over a specified amount shall be approved by more than one officer, director or employee of the company. Whenever possible, a person other than the person maintaining the company’s cash disbursement journal or reconciling the bank accounts shall sign the checks.

(c) Petty Cash Fund: A petty cash fund may be maintained for the payment of small bills or for making change. Each disbursement shall be supported by a signed voucher or receipted invoice. At any time the total of the cash, checks and paid vouchers in the fund shall exactly equal the total of the fund as originally set up. The petty cash fund shall be reimbursed at regular intervals and always on the last business day of each year.

(d) Reconciliation of Bank Accounts: Bank statements shall be obtained from each of the banks in which the company maintains checking accounts at the end of each calendar month. The balance appearing on the bank statement shall be reconciled with the cash balance appearing on the company’s records at the end of each month. Whenever possible, bank reconciliations should be made or reviewed by an individual other than the individuals preparing and making bank deposits, recording income and disbursements, and individuals signing company checks.

(e) Loss Claims: All claims reported to the company shall be assigned a claim number when reported. Claims in excess of a specified amount shall be approved by more than one officer, director or employee of the company. All claims shall be adequately documented so that amounts for settlement and coverage can be verified. The claim file shall contain the reason for denial if the claim is denied.

(f) General Internal Controls: Non-negotiable evidences of company investments such as registered bonds, certificates of deposits, notes, etc., shall be maintained to ensure their safekeeping with adequate safety controls. Negotiable evidences of company investments shall be maintained in a safety deposit box in a bank, or under a safekeeping agreement with a bank or banking and trust company pursuant to s. 610.23, Stats. Access to a company safety deposit box containing negotiable securities shall require the presence and signature of at least 2 officers, directors or employees of the company. Company accounting records shall be maintained in such detail that verification can be made to source documents supporting each transaction.

(5) Financial statements. Financial statements shall be prepared by the secretary and treasurer of the company showing the financial condition of the company as of December 31, of each year or whenever requested by the commissioner. The report shall be prepared as prescribed by the commissioner.

(6) Fidelity bond requirements. All insurers subject to this rule shall procure and maintain in force a fidelity bond or honesty insurance as a guaranty against financial loss caused by employee dishonesty. The bond shall cover all fraudulent or dishonest acts, including larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction or willful application, committed by employees acting alone or in collusion. The bond shall cover all officers, directors and employees having direct access to the company’s assets and with responsibility for the handling and processing of income of the company and disbursements of the company. A blanket bond covering all officers, directors and employees satisfies this requirement. The minimum amount of the bond shall be determined on the basis of total admitted assets, plus gross income of the company as set forth in the following schedule:

History

Cr. Register, August, 1974, No. 224, eff. 9-1-74; reprinted to correct error, Register, March, 1980, No. 291; am. (3)(e), Register, April, 1982, No. 316, eff. 5-1-82; am. (3) (a) to (f), (4) and (6), Register, July, 1991, No. 427, eff. 8-1-91; am. (6), Register, June, 2001, No. 546, eff. 1-1-02.

Wis. Admin. Code § Ins 13.06 Surplus requirements {#sec-ins-13.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.06}

(1) Purpose. This rule implements and interprets ss. 612.31 and 612.33, Stats., for the purpose of setting minimum surplus requirements as a condition for the transaction of specified types of business.

(2) Scope. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.

(3) Nonproperty insurance.

(a) If a town mutual insurer retains any portion of a risk covered by nonproperty insurance, the town mutual shall obtain reinsurance on that nonproperty business with an insurer authorized to do business in this state. The maximum aggregate liability for incurred losses on nonproperty coverage retained by a town mutual insurer for any calendar year or contract year may not exceed the lesser of $200,000 or 20% of its surplus as of the preceding December 31.

(b) A town mutual may retain nonproperty insurance coverage not to exceed a proportional share of each limit of liability as shown in the following schedule:

(4) Surplus requirements. A town mutual insurer shall maintain a surplus of the greater of $200,000 or 20% of the net written premiums and assessments in the 12-month period ending on or not more than 60 days before the date as of which the calculation is made. Every town mutual shall achieve and maintain this minimum surplus by December 31, 2001.

(5) Individual circumstances. The commissioner may take into consideration the experience, management and any other significant information about an individual town mutual insurer in determining whether to approve or disapprove town mutual property and nonproperty reinsurance and in setting of minimum surplus requirements.

History

Cr. Register, December, 1974, No. 228, eff. 1-1-75; cr. (4) to (6), Register, July, 1984, No. 343, eff. 8-1-84; am. (3) and (5), r. and recr. (6), cr. (3) (b) and (c), Register, December, 1984, No. 348, eff. 1-1-85; r. (3) (a) and (5), renum. (3) (b) and (c) to be (3) (a) and (b), and (6) to be (5), and am. (4), Register, June, 2001, No. 546, eff. 1-1-02; except (4), eff. 7-1-01.

Wis. Admin. Code § Ins 13.08 Valuation of liabilities {#sec-ins-13.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.08}

(1) Purpose. This rule implements and interprets s. 623.04, Stats., for the purpose of determining liabilities for financial statements filed with the commissioner.

(2) Scope. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.

(3) Unearned premium reserve. The financial statements of town mutuals which charge advance premiums shall show as a liability an unearned premium reserve. The unearned premium reserve must be calculated on all advance premiums, on the original or full-term premium basis, less advance premiums on risks assumed by other insurers under reinsurance contract. The minimum unearned premium reserves shall be calculated on the premiums in force as follows:

(a) One year policies or policies on which premiums are paid annually.

50% of the net advanced premium.

(b) Two year policies on which the entire premium is paid in advance.

75% on policies in first year of term.
25% on policies in second year of term.

83% on policies in first year of term.
50% on policies in second year of term.
17% on policies in third year of term.

(4) The unearned premium reserve shall be the sum of the amounts as calculated above. Any other method of calculating the unearned premium reserve must be approved by the commissioner.

History

Cr. Register, December, 1974, No. 228, eff. 1-1-75; am. (3) (intro.), Register, April, 1982, No. 316, eff. 5-1-82; r. (3) (d) and (e), Register, June, 2001, No. 546, eff. 1-1-02; CR 22-076: am. (3) (intro.) Register July 2023 No. 811, eff. 8-1-23.

Wis. Admin. Code § Ins 13.09 Reinsurance {#sec-ins-13.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 13.09}

(1) Purpose. This rule implements and interprets s. 612.33, Stats., for the purpose of setting rules or guidelines for permitted and prohibited reinsurance and required reinsurance.

(2) Scope. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.

(3) Definitions. For the purpose of this section only:

(a) ‘‘Maximum attachment point” means the amount of losses, expressed as a percentage of net premiums written, which constitutes the limit of the town mutual’s retention under the aggregate excess of loss reinsurance required by sub. (4).

(b) ‘‘Net premiums written” means gross premiums written less premiums ceded for reinsurance inuring to the benefit of an aggregate excess of loss reinsurance contract. Reinsurance premiums ceded for aggregate excess of loss reinsurance, reinsurance premiums paid or recovered related to coverage for other years, and dividends paid to policyholders shall not be considered in determining net premiums written.

(4) Required reinsurance.

(a) Aggregate excess of loss reinsurance. Every town mutual shall obtain and continuously maintain unlimited aggregate excess of loss reinsurance for all risks covered by property and nonproperty insurance that is not otherwise ceded under another reinsurance contract. The aggregate excess of loss reinsurance shall provide a maximum attachment point expressed as a percentage of net premiums written, which is based on the relationship of the town mutual’s prior year-end surplus to prior year-end gross premiums written, as set forth in the following schedule:

For purposes of this section 13.09, all calculations shall be based on the final annual statement filed with the commissioner.
The aggregate excess of loss reinsurance contract shall warrant by specific reference that it complies with this section.
Any town mutual that fails to comply, or has reason to believe that it is in imminent risk of failure to comply, with this section after its effective date shall notify the commissioner within 5 days of such failure or awareness.

(b) Reinsurance of nonproperty insurance. Any town mutual which provides nonproperty insurance coverage shall obtain reinsurance as required by s. 612.33 (2) (b), Stats.

History

Cr. Register, December, 1974, No. 228, eff. 1-1-75; r. and recr., Register, June, 2001, No. 546, eff. 1-1-02.

Chapter Ins 14 VEHICLE PROTECTION PRODUCT WARRANTIES

Wis. Admin. Code § Ins 14.01 Purpose and scope {#sec-ins-14.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 14.01}

(1) Purpose. This section interprets ss. 100.203, 600.01 (1) (b) 11., 601.31 (1) (km) and 632.185, Stats. The commissioner finds that a warrantor issuing a vehicle protection product warranty is doing the business of insurance, subject to full application of chs. 600 to 646, Stats. If the warrantor issuing a vehicle protection product warranty registers and complies with this rule and the applicable statutes, only those sections of chs. 600 to 646, Stats., as expressly provided in the enabling statutes will apply.

(2) Scope.

(a) This chapter applies to all vehicle protection product warranties operating or offering a vehicle protection plan in this state.

(b) This chapter does not apply to licensed insurers who operate or offer to operate a vehicle protection plan pursuant to an authorization to transact insurance in this state.

History

CR 04-133: cr. Register June 2005 No. 594, eff. 7-1-05.

Wis. Admin. Code § Ins 14.10 Initial registration {#sec-ins-14.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 14.10}

A fee of $250 shall be paid to the Office of the Commissioner of Insurance at the time the initial warrantor registration form (OCI 21-050) is filed with the Office of the Commissioner of Insurance.

Note: This form may be obtained at no charge from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison WI 53707–7873 or on the web at http://oci.wi.gov/ociforms/21-050.pdf.

History

CR 04-133: cr. Register June 2005 No. 594, eff. 7-1-05.

Wis. Admin. Code § Ins 14.20 Annual renewal registration {#sec-ins-14.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 14.20}

(1) The annual warrantor renewal registration form (OCI 21-051) and an annual fee of $250 shall be filed and paid at the Office of the Commissioner of Insurance on or before April 30 of each year.

(2) If the renewal form and fee are not filed and paid on or before April 30, a late filing fee of an $100 is due. For each consecutive 7 day period after April 30 that the form and fee are not filed or paid, an additional $100 is due.

Note: This form may be obtained at no charge from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison WI 53707–7873 or on the web at http://oci.wi.gov .

History

CR 04-133: cr. Register June 2005 No. 594, eff. 7-1-05.

Wis. Admin. Code § Ins 14.80 Enforcement {#sec-ins-14.80 omnilex-key=us-wi-regs-official--agency-ins--Ins 14.80}

This chapter may be enforced under ss. 100.203, 601.41, 601.64, 601.65 or 632.185, Stats.

History

CR 04-133: cr. Register June 2005 No. 594, eff. 7-1-05.

Chapter Ins 15 EXEMPTIONS FROM APPLICATION OF INSURANCE CODE

Wis. Admin. Code § Ins 15.01 Warranty plans {#sec-ins-15.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 15.01}

(1) Purpose. This section interprets ss. 600.01 (1) (b) 5., 601.04 (2), (3) and (4) and 600.03 (25) (a), Stats., by substituting requirements more specifically appropriate to the characteristics of the business of the issuance of warranties in lieu of the full application of chs. 600 to 646, Stats. The commissioner finds that the making of a contract relating to repair, replacement or restoration to a prescribed condition of any good, product or object is the transaction of insurance, subject to full application of chs. 600 to 646, Stats., unless the person making the contract submits to the jurisdiction of the commissioner and to the provisions of this section.

(2) Scope.

(a) Subject to sub. (3), this section applies to all warrantors operating or offering to operate a warranty plan in this state.

(b) This section does not apply to licensed insurers who operate or offer to operate a warranty plan pursuant to an authorization to transact insurance in this state or who issue mechanical breakdown coverage insurance policies in this state.

(3) Exemption. This section and chs. 600 to 646, Stats., do not apply to:

(a) The provision of services under a maintenance services contract which may include some repairs and replacements as a part of the maintenance program if the services are provided by the entity issuing the contract and claiming the exemption and are not, except on limited occasions, performed by outside organizations and do not involve the creation of obligations including acting as a warranty plan administrator by a third party; or

(b) Warranties by manufacturers of products which relate to the quality, merchantability or characteristics of the products manufactured by the entity claiming exemption; or

(c) Warranties by a seller of services which relate to the quality or characteristics of such services performed by the entity claiming exemption.

(d) Any vehicle protection product warranty properly registered under Chapter Ins 14.

(4) Definitions. In this section:

(a) “Certificate of authority” means a limited certificate of insurance authority issued by the commissioner to operate a warranty business in this state.

(b) “Consumer” means any person who has purchased a warranty contract to whom or for whose benefit the warranty is given.

(c) “Warrantor” means a person, other than an insurer authorized to do business in this state under chs. 611 and 618, Stats., who operates a warranty business as principal. “Warrantor” includes a warranty plan administrator who operates a warranty business as a principal.

(d) “Warranty contract” means the written agreement setting forth the obligations of the warranty plan.

(e) “Warranty plan” means a program or business, however denominated, involving the sale and issuance of a warranty contract wherein a warrantor assumes responsibility to repair, replace or restore to a prescribed condition a good, product or object purchased or owned by a consumer.

(f) “Warranty plan administrator” means a person, other than an insurer authorized to do business in this state under chs. 611 and 618, Stats., who operates a warranty business as a principal or who functions in a fiduciary capacity by:

Receiving, holding, channelling or otherwise controlling monies connected with the warranty plan, including premium dollars collected from providers of services or sellers of products; or
Approving or disapproving claims, paying claims or controlling the claim adjustment process; or
Arranging for or the controlling of the purchase of insurance associated with warranty plan coverages.

(5) Authorization for transaction of warranty business.

(a) No warrantor or warranty plan administrator may transact a warranty business or function in a fiduciary capacity as defined in sub. (4) (f) without having been issued a valid limited certificate of insurance authority from the commissioner pursuant to sub. (10).

(b) In the event that identical warranty plans are offered or sold by warrantors, which plans are prepared and administered by a common warranty plan administrator, the commissioner may authorize the warranty plan administrator to apply for and may issue a group limited certificate of insurance authority covering the warranty plan administrator and each warrantor named as offering or selling such warranty plan. The application for such authorization and the acceptance of the authorization by the warranty plan administrator constitutes an agreement by the administrator to assume the obligations of the warrantor under subs. (6), (7), (8), (9), and (11).

(6) Application.

(a) An applicant for a limited certificate of insurance authority shall submit a warranty plan or warranty plan administrator application form prescribed by the commissioner. The warrantor, another person on the warrantor’s behalf, or warranty plan administrator shall sign and acknowledge the application. The commissioner may request any additional relevant information in order to make a determination of the applicant’s eligibility for a certificate of authority. An applicant shall pay the fee required by s. 601.31 (1) (a) 1., Stats.

(b) The application shall include a statement that the warrantor or warranty plan administrator is subject to the terms and conditions of this section and a statement naming the commissioner as agent for service of process on the warrantor or warranty plan administrator in actions related to the warrantor’s or warranty plan administrator’s transaction of a warranty business in this state.

(7) Financial security requirements.

(a) The commissioner shall condition the issuance of a limited certificate of insurance authority and its continuation upon the warrantor or warranty plan administrator providing security to compensate any consumer in this state who sustains loss due to the failure of such warrantor or warranty plan administrator to perform its obligations under a warranty contract as a result of insolvency or other financial impairment. The commissioner shall approve the amount and form of the security. The security shall be in one or a combination of the following:

Deposit of securities under s. 601.13, Stats. The deposit of securities shall be for the benefit of Wisconsin consumers.
An irrevocable letter of credit from a bank properly chartered by the federal government or any state and that is acceptable to the commissioner and issued for a term of at least 5 years with provision for renewal 2 years before termination. The letter of credit shall be payable to the commissioner or the commissioner’s designee for the benefit of Wisconsin consumers upon a finding by the commissioner that a warrantor or warranty plan administrator is insolvent or financially impaired and unable to meet its obligations under warranty contracts issued in Wisconsin. The warrantor or warranty plan administrator shall notify the commissioner in writing of the nonrenewal of a letter of credit within 30 days after receiving a notice of nonrenewal. No warrantor or warranty plan administrator whose letter of credit has been nonrenewed may offer or sell or renew any warranty contract under the warranty plan on or after the date of nonrenewal until the warrantor obtains security satisfying the requirements of this subsection or alternative security satisfying the requirements of sub. (8) and the warrantor or warranty plan administrator receives written approval from the commissioner that the security or alternative security satisfies the requirements of this section.

(b) The security prescribed in par. (a) shall be not less than $50,000 plus 15% of the warranty fees and charges collected from consumers for all unexpired warranty contracts in force in Wisconsin on January 1 of the current year.

(c) The security shall continue until released by the commissioner pursuant to a finding that it is not necessary for the reasonable protection of Wisconsin consumers.

(8) Alternate security requirements.

(a) In lieu of the financial security requirements in sub. (7), the warrantor may file an insurance contract procured from an insurer authorized to transact business in Wisconsin under which the insurer assumes the obligations of the warrantor arising out of warranty contracts issued in Wisconsin to the extent that the obligations are not fulfilled by the warrantor due to insolvency or other financial impairment of the warrantor.

(b) In lieu of the financial security requirements in sub. (7), the warranty plan administrator may file an insurance contract procured from an insurer authorized to transact business in Wisconsin under which the insurer assumes the obligations of the warranty plan administrator arising out of warranty contracts issued in Wisconsin to the extent that the obligations are not fulfilled by the warranty plan administrator due to insolvency or other financial impairment of the warranty plan administrator.

(c) The warranty contract shall contain a statement providing the name and address of the insurer assuming the obligation of the warrantor in the event of insolvency or other financial impairment, and instructions on how the consumer may file a claim with such insurer.

(d) The insurance contract furnished under this section shall contain a provision under which the insurer shall notify the commissioner in writing of the termination or nonrenewal of the insurance contract at least 60 days prior to the termination or nonrenewal.

(e) The insurance contract shall cover the obligations under the warranty contracts issued during the period of time that the insurance contract is in force.

(9) Contracts: filing, review and required language.

(a)

As a condition for obtaining a limited certificate of insurance authority to transact a warranty business in Wisconsin, an applicant shall file a copy of all contracts which are an essential or integral part of the conduct of the applicant’s business. Contracts which an applicant shall file with the commissioner include, but are not limited to:

a. Warranty contracts.

b. Insurance contracts procured and furnished pursuant to sub. (8).

c. Contracts with any administrator, marketing agent or other entity.

d. Contracts with providers of any service to be performed pursuant to the obligations assumed under the warranty contract.

e. Any other contract as may be requested by the commissioner.

As a condition of maintaining a limited certificate of insurance authority to transact a warranty business in this state, the warrantor or warranty plan administrator shall file a copy of any modification to a contract filed under subd. 1. prior to using the contract as modified.

(b) The contract shall satisfy the conditions set forth in s. 631.20, Stats., and shall clearly present the obligations being assumed by the warrantor and the obligations being transferred by the warrantor to other parties.

(c)

All warranty contracts issued under a warranty plan subject to this section shall contain the following statement, printed in bold type:“THIS WARRANTY IS SUBJECT TO LIMITED REGULATION BY THE OFFICE OF THE COMMISSIONER OF INSURANCE.”
All warranty contracts issued under a warranty plan subject to this section shall contain a provision under which the purchaser may, within 15 calendar days of the delivery of the warranty contract, reject and return the warranty contract for a full refund less actual costs or charges needed to issue and service the warranty contract.

(10) Certificate of authority; issuance and suspension or revocation.

(a) Within 90 days of receipt of the completed application, the commissioner shall issue a certificate of authority to transact a warranty business in this state upon finding that all of the requirements of this section have been met and that the applicant is sound, reliable and entitled to public confidence and that the commissioner may reasonably expect the applicant to perform its obligations continuously in the future. Upon issuance of the certificate of authority, the warrantor or warranty plan administrator shall pay the fee required by s. 601.31 (1) (b) 1., Stats.

(b) The commissioner may revoke or suspend a certificate of authority previously granted under this section if:

There is any violation of any applicable statute, rule or order.
The commissioner finds that the warrantor or warranty plan administrator is unable to conduct a warranty plan in a manner consistent with the protection of Wisconsin citizens and consumers.
The financial condition of the warranty plan is such that the interests of Wisconsin citizens and consumers are threatened with imminent and substantial injury.
The warrantor or warranty plan administrator makes a material misstatement of fact in the application, annual reports or in connection with any examination conducted by the commissioner.

(11) Reports and examination.

(a) As a condition prerequisite to the continuation of a limited certificate of insurance authority to transact a warranty business in Wisconsin, every warrantor and warranty plan administrator shall, by March 31 of each year, submit financial statements prepared on an accrual basis in accordance with generally accepted accounting principles and audited by an independent certified public accountant on the financial condition of such warrantor or warranty plan administrator for the preceding calendar year ending December 31 and which shall also include such additional information as the commissioner may require. An annual continuation fee required under s. 601.31 (1) (c) 1., Stats., shall accompany the annual report.

(b) The commissioner may examine the applicant for a certificate of authority and may examine any warrantor or warranty plan administrator who holds a certificate of authority under this section under the procedures of ss. 601.43 to 601.45, Stats.

(12) Applicable statutes. In addition to statutes previously set forth in this section, ss. 601.41 to 601.45, 601.61 to 601.73, 628.34, 628.46 and ch. 645, Stats., apply to a warrantor, a warranty plan administrator and the transaction of a warranty business in this state.

(13) Transition requirements. Plans which hold a limited certificate of insurance authority under the current rule on June 1, 1991 need not reapply for a license but shall comply with subs. (7) and (8) effective June 1, 1991, and shall file all contracts under sub. (9) within 60 days of June 1, 1991.

Note: This rule requires use of an application form for warranty plans which may be obtained from the Office of the Commissioner of Insurance, Financial Examinations Bureau, P.O. Box 7873, Madison, Wisconsin 53707-7873.

This rule was first promulgated in 1978 and it was revised in December 1984. This revision is an attempt to update the rule such as to provide more effective regulation and also to more effectively recognize the complexities that currently exist in the warranty plan marketplace. In general, the sale of warranty contracts is clearly the transaction of an insurance business under the provisions of Wisconsin Statutes. The rule as adopted in 1978 exempts warranty plans and contracts from a major portion of the Wisconsin insurance regulatory statutes and administrative rules. Warranty plan corporations have been established in Wisconsin and foreign corporations have been authorized to do business in this state under the limited regulation provided by the administrative rule in existence up until this current revision. It would be unrealistic to significantly change the 1978 plan of exemption from the insurance statutes.

The rule now being promulgated regulates the content of Wisconsin contracts and the rule imposes basic requirements for solvency protection of Wisconsin consumers. The rule makes no attempt to regulate the countrywide operations of entities issuing warranty contracts but it does require periodic financial reports from any such entity and the commissioner has the authority and the responsibility to remove from the marketplace those companies that are unable to demonstrate reasonable financial and operational solidity.

The regulation of warranty plans and warranty contracts even to the limited extent provided in the revised administrative rule, is complex and difficult because of a number of factors which are unique to warranty contracts and which present the insurance commissioner with a kind of business that has little or no similarity to the traditional insurance mechanism. For example, there is no countrywide system of regulation of warranty plans and warranty contracts. In many states there is no regulation whatsoever and in other states there is partial regulation somewhat comparable to that imposed by the Wisconsin administrative rule. In addition, there is no uniform accounting standard or system applicable to the financial reports submitted to the regulatory authorities. The financial reports that OCI receives are of limited value because of the difficulty in determining or measuring the liabilities assumed under contracts issued in Wisconsin and in the other states in which the company does business. Similarly, the value of the assets held by the warranty company in various locations throughout the country is often difficult to determine. Warranty plan companies are quite often an integral part of a holding company system with intricate contractual relationships between various corporate entities involved with the marketing, the sale of the product that is the subject of the warranty, claims adjustment, and the processing of warranty payments. This revised administrative rule attempts to accomplish reasonable regulatory objectives while at the same time recognizing the difficulties of asserting the entire scheme of insurance regulation.

History

Cr. Register, January, 1978, No. 265, eff. 2-1-78; cr. (6) (c), Register, December, 1984, No. 348, eff. 1-1-85; r. and recr. Register, May, 1991, No. 425, eff. 6-1-91; CR 04-131: cr. (3) (d) Register June 2005 No. 594, eff. 7-1-05.

Chapter Ins 16 REGULATORY STRUCTURES

Wis. Admin. Code § Ins 16.01 Annual billings for the examination of domestic insurers {#sec-ins-16.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 16.01}

(1) Purpose. The purpose of this section is to develop a framework for the regular annual billing of domestic insurers, except for town mutuals and cooperative associations organized under s. 185.981, Stats., to fund the costs of administering examinations as prescribed by s. 601.44, Stats., and to interpret and implement s. 601.45, Stats.

(2) Scope. The billing structure established by sub. (4) shall apply to all domestic insurers as defined by s. 600.03 (17), Stats., with the exception of town mutuals and cooperative associations organized under s. 185.981, Stats.

(3) Billing for examination charges.

(a) On February 1, 1981, and annually thereafter, each domestic insurer subject to the provisions of this rule shall be billed an amount equivalent to such insurer’s share of the estimated cost of conducting the insurer examinations program during that year.

(b) All other insurers and licensees, including town mutual insurers and cooperative associations organized under s. 185.981, Stats., shall be billed on a charge-back basis for the full cost of their examinations, including actual salaries and expenses of examinations and other apportionable expenses.

(c) Domestic insurers which request an examination, the end of the period of which is to be within 3 years of the end of the period of the insurer’s last examination, shall be billed on a charge-back basis for the full cost of the conduct of such an examination. This cost shall be in addition to the annual billing of the insurer as determined by sub. (6) and is excluded from the limitations established under sub. (7).

(4) Billing structure.

(a) The commissioner shall annually, prior to the annual hearing held under sub. (8), estimate the cost of administering the insurer examinations program for the next fiscal year. This amount shall be based on the biennial budget as approved by the legislature. Included in the estimated cost of administering the insurer examinations program shall be:

Salaries, fringe benefits and expenses of insurer examinations staff, including office overhead;
Supplies, office space, training costs, related data processing charges; and,
A contingency fund for hiring outside consulting or technical services.

(b) Excluded from this amount shall be the estimated share of the costs of the examination function which shall be provided through funding by insurers and licensees who will be charged for their examinations on a charge-back basis.

(c) In the event that the sum of a year’s billings under this rule differs from the actual cost of administering the insurer examinations program, the amount of the difference shall be applied as an adjustment to the estimated cost for the next year’s examinations program.

(5) Accounting summary. On or before November 1 of each year, an accounting summary of the previous fiscal year’s examination costs shall be prepared by the commissioner. This summary will be furnished upon request to those insurers subject to this rule.

(6) Determination of individual billings.

(a) The amount to be billed each domestic insurer subject to this rule shall be determined so that the billing is equal to a constant of proportionality times the square root of the insurer’s premiums, where the constant of proportionality is determined each year so that the total of all billings equals the estimated cost of administering the insurer examinations program described in sub. (4). The formula is stated algebraically as follows:

(b) Domestic insurers located primarily out of state for examination purposes shall be billed according to the formula in par. (a) adjusted for the additional expense associated with the out of state examinations. However, the total billings to all domestic insurers shall not exceed the estimated cost of administering the insurer examinations program, as determined according to sub. (4), in any one year.

(c) The following shall be considered when determining whether a domestic insurer is located primarily out of state for examination purposes:

The insurer’s mailing address.
The location of the insurer’s administrative offices.
The primary location of the insurers books and records.
The location where the insurer and its service providers perform accounting, administration, investment, underwriting, claims, data processing and other key business functions.
The location of the offices of the insurer’s officers and the location of its board of director, policyholder or shareholder meetings.

(d) Domestic insurers that are members of a holding company system that may be the subject of a supervisory college shall be billed according to the formula in par. (a) adjusted for the additional expense associated with the reasonable expense of the commissioner’s participation in supervisory colleges. This adjustment may be in addition to any adjustment under par. (b). However, total billing to all domestic insurers shall not exceed the estimated cost of administering the insurer examinations program, as determined according to sub. (4) in any one year.

Whether the commissioner must visit out of state locations in order to efficiently and thoroughly conduct the examination.

(7) Limitations on amount of billings. The annual bill for each insurer subject to this rule shall be determined utilizing the formula developed for its proportionate share of cost of the examination function, except that:

(a) The maximum annual billing for any insurer shall be 1% of net premiums earned or premiums and annuity considerations reported in the applicable annual statement listed in s. Ins 7.02 for business of the second calendar year preceding the year of billing.

(b) The annual bill for any insurer billed the previous year shall not exceed 1.2 times the immediately preceding year’s bill adjusted for premium growth by multiplying by a factor equal to the second prior year’s premium divided by the third prior year’s premium. In calculating this adjustment, the year a billing is due shall be considered the current year. This paragraph does not apply if the second prior year’s premium is less than the third prior year’s premium.

(c) Notwithstanding the limitations in pars. (a) and (b), the minimum annual bill shall be $10,000 for domestic insurers located primarily out of state for examination purposes and $3,000 for all other domestic insurers. This paragraph first applies to annual billings beginning February 1, 2018.

(8) Annual hearing. The commissioner shall annually schedule a hearing in November under s. 601.41 (5), Stats., to review problems in the area of examinations, the estimated budget established under sub. (4) (a), the accounting summary required under sub. (5) and the formulas established under sub. (6).

(9) Due date. Amounts billed to domestic insurers under sub. (3) shall be due and payable to the commissioner no later than March 1 of each year.

Note: Any method for yearly billing of all domestic insurers for examination costs will be somewhat imprecise and arbitrary. This rule attempts to spread those costs in an equitable manner by adjusting billings according to insurers’ premiums and the additional costs associated with performing examinations of domestic insurers located primarily out of state.

Note: The revision to subs. (6) and (7) that were published on August 1, 1999, first apply to annual billings beginning February, 2000.

History

Cr. Register, December, 1977, No. 264, eff. 1-1-78; r. and recr., Register, December, 1980, No. 300, eff. 1-1-81; am. (1), (2), (3) (b), (4) (a) and (b), (5) and cr. (3) (c), Register, December, 1981, No. 312, eff. 1-1-82; corrections in (2), (6) and (7) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; renum. (6) to be (6) (a), cr. (6) (b) and (c), am. (7) (a), Register, July, 1999, No. 523, eff. 8-1-99; CR 14-071: cr. (6) (d) Register August 2015 No. 716, eff. 9-1-15; CR 17-015: am. (4) (c), (6) (a), (7) (a), (b), cr. (7) (c) Register December 2017 No. 744, eff. 1-1-18.

Chapter Ins 17 HEALTH CARE LIABILITY INSURANCE PATIENTS COMPENSATION FUND

Wis. Admin. Code § Ins 17.001 Definitions {#sec-ins-17.001 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.001}

In this chapter:

(1) “Board” means the board of governors established under s. 619.04 (3), Stats.

(1m) “Commissioner” means the commissioner of insurance or deputy commissioner acting under s. 601.11 (1) (b), Stats.

(2) “Fund” means the patients compensation fund established under s. 655.27 (1), Stats.

(3) “Hearing” means a contested case, as defined in s. 227.01 (3), Stats.

(4) “Plan” means the Wisconsin health care liability insurance plan, a nonprofit, unincorporated association established under s. 619.01 (1) (a), Stats.

History

Cr. Register, July, 1979, No. 283, eff. 8-1-79; am. (intro.) to (4), cr. (1m), Register, June, 1990, No. 414, eff. 7-1-90; r. and recr. (3), Register, March, 1996, No. 483, eff. 4-1-96.

Wis. Admin. Code § Ins 17.005 Purpose {#sec-ins-17.005 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.005}

This chapter implements ss. 619.01 and 619.04, Stats., and ch. 655, Stats.

History

Cr. Register, June, 1990, No. 414, eff. 7-1-90.

Wis. Admin. Code § Ins 17.01 Payment of mediation fund fees {#sec-ins-17.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.01}

(1) Purpose. This section implements s. 655.61, Stats., relating to the payment of mediation fund fees.

(2) Fee.

(a) Each physician subject to ch. 655, Stats., except a resident, and each hospital subject to ch. 655, Stats., shall pay to the commissioner an annual fee to finance the mediation system created by s. 655.42, Stats.

(b) The fund shall bill a physician or hospital subject to this section under s. Ins 17.28 (4). The entire annual fee under this section is due and payable 30 days after the fund mails the bill.

(d) The fund shall notify the medical examining board of each physician who has not paid the fee as required under par. (b).

(e) The fund shall notify the department of health services of each hospital which has not paid the fee as required under par. (b).

(f) Fees collected under this section are not refundable except to correct an administrative billing error.

(3) Fee schedule. The following fee schedule shall be effective July 1, 2013:

(a) For physicians — $0.

(b) For hospitals, per occupied bed — $0.

History

Cr. Register, August, 1978, No. 272, eff. 9-1-78; emerg. r. and recr. eff. 7-2-86; r. and recr., Register, September, 1986, No. 369, eff. 10-1-86; cr. (2) (f), am. (3), Register, June, 1987, No. 378, eff. 7-1-87; am. (1), (2) (a), (d) and (e), (3), r. and recr. (2) (b), r. (2) (c), Register, June, 1990, No. 414, eff. 7-1-90; emerg. am. (3), eff. 7-1-91; am. (3) (intro.), Register, July, 1991, No. 427, eff. 8-1-91; am. (3) (a) and (b), Register, October, 1991, No. 430, eff. 11-1-91; emerg. am. (3), eff. 4-28-92; am. (3), Register, July, 1992, No. 439, eff. 8-1-92; emerg. am. (1), (3) (intro.), (a), eff. 7-22-93; am. (1) (3) (intro.), (a), Register, September, 1993, No. 453, eff. 10-1-93; am. (3) (intro.), Register, June, 1994, No. 462, eff. 7-1-94; emerg. am. (3) (intro.) and (a), eff. 6-14-95; am. (3) (intro.) and (a), Register, December, 1995, No. 480, eff. 1-1-96; emerg. am. (3) (intro.), eff. 5-28-96; am. (3) (intro.), Register, September, 1996, No. 489, eff. 10-1-96; emerg. am. (3) (intro.), eff. 8-12-97; am. (3) (intro.), Register, November, 1997, No. 503, eff. 12-1-97; emerg. am. (intro.), (a) and (b), eff. 6-1-98; emerg. am. (3), eff. 6-1-98; emerg. am. (3), eff. 6-19-98; am. (3), Register, August, 1998, No. 512, eff. 9-1-98; emerg. am. (3) (intro.), eff. 7-1-99; am. (3) (intro.), Register, September, 1999, No. 535, eff. 10-1-99; emerg. am. (3), eff. 7-1-00; am. (3), Register, August, 2000, No. 536, eff. 9-1-00; emerg. am. (3), eff. 7-1-01; CR 01-035: am. (3) (intro.), Register September 2001 No. 549, eff. 10-1-01; emerg. am. (3), eff. 7-1-02; CR 02-035: am. (3), Register September 2002 No. 561, eff. 10-1-02; CR 03-039: am. (3) Register October 2003 No. 574, eff. 11-1-03; CR 04-032: am. (3) Register January 2005 No. 589, eff. 2-1-05; emerg. am. (3), eff. 7-1-05; CR 05-028: am. (3) Register October 2005 No. 598, eff. 11-1-05; CR 06-002: am. (3) Register June 2006 No. 606, eff. 7-1-06; CR 07-002: am. (3), Register June 2007 No. 618, eff. 7-1-07; CR 08-006: am. (3) Register June 2008 No. 630, eff. 7-1-08; CR 09-004: am. (3) Register June 2009 No. 642, eff. 7-1-09; correction in (2) (e) made under s. 13.92 (4) (b) 6., Stats., Register June 2009 No. 642; EmR1020: emerg. am. (3), eff. 6-15-10; CR 10-065: am. (3) Register November 2010 No. 659, eff. 12-1-10; EmR1108: emerg. am. (3), eff. 6-10-11; CR 11-015: am. (3) Register August 2011 No. 668, eff. 9-1-11; EmR1306: emerg. am. (3), eff. 6-3-13; CR 13-044: am. (3) Register June 2014 No. 702, eff. 7-1-14.

Wis. Admin. Code § Ins 17.24 Review of classification {#sec-ins-17.24 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.24}

(1) Any person insured by the plan or covered by the fund may petition the board for a review of its classification by the plan or fund. The petition shall state the basis for the petitioner’s belief that its classification is incorrect. The board shall refer a petition for review to either of the following:

(a) If the petitioner is a hospital or a nursing home or other entity affiliated with a hospital, to a committee appointed by the commissioner consisting of 2 representatives of hospitals, other than the petitioner’s hospital, and one other person who is knowledgeable about insurance classification.

(b) If the petitioner is any person other than a person specified in par. (a), to a committee appointed by the commissioner consisting of 2 physicians who are not directly or indirectly affiliated or associated with the petitioner and one other person who is knowledgeable about insurance classification.

(2) The plan, the fund or both shall provide the committee with any information needed to review the classification.

(2m) The committee shall review the classification and report its recommendation to the petitioner and the board within 5 days after completing the review.

(3) Any person that is not satisfied with the recommendation of the committee may petition for a hearing under ch. 227, Stats., and ch. Ins 5 within 30 days after the date of receipt of written notice of the committee’s recommendation.

(4) At the hearing held pursuant to a petition under sub. (3), the committee report shall be considered and the members of the committee may appear and be heard.

History

Cr. Register, July, 1979, No. 283, eff. 8-1-79; r. and recr. (1) and (2), cr. (2m), am. (3) and (4), Register, June, 1990, No. 414, eff. 7-1-90.

Wis. Admin. Code § Ins 17.25 Wisconsin health care liability insurance plan {#sec-ins-17.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.25}

(1) Findings.

(a) Legislation has been enacted authorizing the commissioner to promulgate a plan to provide health care liability insurance and liability coverage normally incidental to health care liability insurance for risks in this state which are equitably entitled to but otherwise unable to obtain such coverage, or to call upon the insurance industry to prepare plans for the commissioner’s approval.

(b) Health care liability insurance, liability coverage normally incidental to health care liability insurance or both are not readily available in the voluntary market for the persons specified in sub. (5) (a).

(c) A plan for providing health care liability insurance and liability coverage normally incidental to health care liability insurance should be enacted pursuant to ch. 619, Stats.

(2) Purpose. This section implements ss. 619.01 and 619.04, Stats., by establishing procedures and requirements for a mandatory risk sharing plan to provide health care liability insurance coverage and liability coverage normally incidental to health care liability insurance on a self-supporting basis for the persons specified in sub. (5) (a) and for their employees acting within the scope of their employment and providing health care services. This section is also intended to encourage improvement in reasonable loss prevention measures and to encourage the maximum use of the voluntary market.

(3) Coverage; exclusions.

(a) Each policy of health care liability insurance coverage issued by the plan shall provide occurrence coverage for all of the following:

Providing or failing to provide health care services to a patient.
Peer review, accreditation and similar professional activities in conjunction with and incidental to the provision of health care services, when conducted in good faith by the insured or an employee of the insured.
Utilization review, quality assurance and similar professional activities in conjunction with and incidental to the provision of health care services, when conducted in good faith by the insured or an employee of the insured.

(b) Each policy issued by the plan shall also provide for supplemental payments in addition to the limits of liability under par. (d), including attorney fees, litigation expenses, costs and interest.

Criminal acts.
Intentional sexual acts and other intentional torts.
Restraint of trade, anti-trust violations and racketeering.
Defamation.
Employment, religious, racial, sexual, age and other unlawful discrimination.
Pollution resulting in injury to a 3rd party.
Acts that occurred before the effective date of the policy of which the insured was aware or should have been aware.
Incidents occurring while and insured’s license to practice is suspended, revoked, surrendered or otherwise terminated.
Criminal and civil fines, forfeitures and other penalties.
Punitive and exemplary damages.
Liability of the insured covered by other insurance, such as worker’s compensation, automobile, fire or general liability.
Liability arising out of the ownership, operation or supervision by the insured of a hospital, nursing home or other health care facility or business enterprise.
Liability of others assumed by the insured under a contract or agreement.

(d) The maximum limits of liability for coverage under par. (a) are the following:

For all occurrences before July 1, 1987, $200,000 for each occurrence and $600,000 per year for all occurrences in any one policy year.
For occurrences on or after July 1, 1987, and before July 1, 1988, $300,000 for each occurrence and $900,000 for all occurrences in any one policy year.
Except as provided in subds. 4. and 5., for occurrences on or after July 1, 1988, and before July 1, 1997, $400,000 for each occurrence and $1,000,000 for all occurrences in any one policy year.
Except as provided in subd. 5., for occurrences on or after July 1, 1997, $1,000,000 for each occurrence and $3,000,000 for all occurrences in any one policy year.
For podiatrists licensed under ch. 448, Stats., for occurrences on and after November 1, 1989, $1,000,000 for each occurrence and $1,000,000 for all occurrences in any one policy year.

(e) The plan may also issue liability coverage normally incidental to health care liability insurance including all of the following:

Owners, landlords and tenants liability insurance.
Owners and contractors protective liability insurance.
Completed operations and products liability insurance.
Contractual liability insurance.
Personal injury liability insurance.

(f) The maximum limits of liability for coverage under par. (e) are $1,000,000 per claim and $3,000,000 aggregate for all claims in any one policy year.

(5) Eligibility for plan coverage. All of the following are eligible for insurance under the plan:

(a) A medical or osteopathic physician or podiatrist licensed under ch. 448, Stats.

(b) A nurse anesthetist or nurse midwife licensed under ch. 441, Stats.

(c) A nurse practitioner licensed under ch. 441, Stats., who meets at least one of the requirements specified under s. DHS 105.20 (1).

(d) A partnership comprised of, and organized and operated in this state for the primary purpose of providing the medical services of, physicians, podiatrists, nurse anesthetists, nurse midwives, nurse practitioners or cardiovascular perfusionists.

(e) A corporation or general partnership organized and operated in this state for the primary purpose of providing the medical services of physicians, podiatrists, nurse anesthetists, nurse midwives, nurse practitioners or cardiovascular perfusionists.

(f) An operational cooperative sickness care plan organized under ss. 185.981 to 185.985, Stats., which directly provides services through salaried employees in its own facility.

(g) An accredited teaching facility conducting approved training programs for medical or osteopathic physicians licensed or to be licensed under ch. 448, Stats., or for nurses licensed or to be licensed under ch. 441, Stats.

(h) A hospital, as defined in s. 50.33 (2) (a) and (c), Stats., but excluding facilities exempted by s. 50.39 (3), Stats., except as provided in par. (k).

(i) An entity operated in this state that is an affiliate of a hospital and that provides diagnosis or treatment of, or care for, patients of the hospital.

(j) A nursing home, as defined in s. 50.01 (3), Stats., whose operations are combined as a single entity with a hospital, whether or not the nursing home operations are physically separate from the hospital operations.

(k) A health care facility owned or operated by a county, city, village or town in this state, or by a county department established under s. 51.42 or 51.437, Stats., if the facility would otherwise be eligible for coverage under this subsection.

(L) A corporation organized to manage approved training programs for medical or osteopathic physicians licensed under ch. 448, Stats.

(m) A cardiovascular perfusionist.

(n) An ambulatory surgery center, as defined in s. DHS 101.03 (10).

(6) Definitions.

(a) In this subsection:

“Personal injury liability insurance” means any insurance coverage against loss by the personal injury or death of any person for which loss the insured is liable. “Personal injury liability insurance” includes the personal injury liability component of multi-peril policies, but does not include steam boiler insurance authorized under s. Ins 6.75 (2) (a), worker’s compensation insurance authorized under s. Ins 6.75 (2) (k) or medical expense coverage authorized under s. Ins 6.75 (2) (d) or (e).
“Premiums written” means gross direct premiums less return premiums, dividends paid or credited to policyholders and the unused or unabsorbed portions of premium deposits, with respect to personal injury liability insurance covering insureds or risks residing or located in this state.

(b)

Each insurer authorized in this state to write personal injury liability insurance, except a town mutual organized under ch. 612, Stats., is a member of the plan.
An insurer’s membership in the plan terminates if the insurer is no longer authorized to write personal injury liability insurance in this state. The effective date of termination shall be the last day of the plan’s current fiscal year. A terminated insurer shall continue to be governed by this subsection until it completes all of its obligations under the plan.
Subject to the approval of the commissioner, the board may charge a reasonable annual membership fee, not to exceed $50.00.

(c) If the funds available to the plan at any time are not sufficient for the sound financial operation of the plan, the board shall assess the members an amount sufficient to remedy the insufficiency. Each member shall contribute according to the proportion that that member’s premiums written during the preceding calendar year bears to the aggregate premiums written by all members during the preceding calendar year. The amounts of premiums written shall be determined on the basis of the annual statements and other reports filed by the members with the commissioner. Assessments are subject to any credit plan developed under sub. (8) (a) 4. When the amount of the assessment is recouped under s. 619.01 (1) (c) 2., Stats., each member shall be reimbursed the amount of that member’s assessment.

(d) The board shall report to the commissioner the name of any member that fails to pay within 30 days any assessment levied under par. (c).

(7) Board meetings; quorum. The board shall meet as often as required to perform the general duties of supervising the administration of the plan, or at the call of the commissioner. Seven members of the board shall constitute a quorum.

(8) Powers and duties of the board. The board may do any of the following:

(a)

Invest, borrow and disburse funds, budget expenses, levy assessments and cede and assume reinsurance.
Appoint a manager or one or more agents to perform the duties designated by the board.
Appoint advisory committees of interested persons, not limited to members of the plan, to advise the board in the fulfillment of its duties and functions.
Develop an assessment credit plan subject to the approval of the commissioner, by which a member of the plan receives a credit against an assessment levied under sub. (6) (c), based on voluntarily written health care liability insurance premiums in this state.
Take any action consistent with law to provide the appropriate examining boards or the department of health services with appropriate claims information.
Perform any other act necessary or incidental to the proper administration of the plan.

(b) The board shall do all of the following:

Develop rates, rating plans, rating and underwriting rules, rate classifications, rate territories and policy forms for the plan.
Ensure that all policies written by the plan are separately coded so that appropriate records may be compiled for purposes of calculating the adequate premium level for each classification of risk, and performing loss prevention and other studies of the operation of the plan.
Subject to the approval of the commissioner, determine the eligibility of an insurer to act as a servicing company to issue and service the plan’s policies. If no qualified insurer elects to be a servicing company, the board shall assume these duties on behalf of member companies.
Enter into agreements and contracts as necessary for the execution of this section.
By May 1 of each year, report to the members of the plan and to the standing committees on insurance in each house of the legislature summarizing the activities of the plan in the preceding calendar year.

(10) Application for insurance.

(a) Any person specified in sub. (5) may submit an application for insurance by the plan directly or through any licensed agent. Each application shall request coverage for the applicant’s partnership or corporation, if any, and for the applicant’s employees acting within the scope of their employment and providing health care services, unless the partnership, corporation or employees are covered by other professional liability insurance.

(b) The plan may bind coverage.

(c) Within 8 business days after receiving an application, the plan shall notify the applicant whether the application is accepted, rejected or held pending further investigation. Any applicant rejected by the plan may appeal the decision to the board as provided in sub. (16).

(cm) The board may authorize retroactive coverage by the plan for a health care provider, as defined in s. 655.001 (8), Stats., if the provider submits a timely request for retroactive coverage showing that the failure to procure coverage occurred through no fault of the provider and despite the fact that the provider acted reasonably and in good faith. The provider shall furnish the board with an affidavit describing the necessity for the retroactive coverage and stating that the provider has no notice of any pending claim alleging malpractice or knowledge of a threatened claim or of any occurrence that might give rise to such a claim.

(d) If the application is accepted, the plan shall deliver a policy to the applicant upon payment of the premium.

(12) Rates, rate classifications and filings.

(a)

In developing rates and rate classifications, as provided under sub. (8) (b) 1., the board shall ensure that the plan complies with ss. 619.01 (1) (c) 2. and 619.04 (5) and ch. 625, Stats.
Rates shall be calculated in accordance with generally accepted actuarial principles, using the best available data.
Rates shall be calculated on a basis which will make the plan self-supporting but may not be excessive. Rates shall be presumed excessive if they produce long-term excess funds over the total of the plan’s unpaid losses, including reserves for losses incurred but not yet reported, unpaid loss adjustment expenses, additions to the surplus established under s. 619.01 (1) (c) 2., Stats., and s. Ins 51.80 (3) and (4), the premium assessment under s. 619.01 (8m), Stats., and other expenses.
The board shall annually determine if the plan has accumulated excess funds as described under subd. 3. and, if so, the board shall return the excess funds to the insureds by means of refunds or prospective rate decreases according to a distribution method and formula established by the board.

a. In establishing the plan’s rates, the board shall use loss and expense experience in this state to the extent it is statistically credible supplemented by relevant data from outside this state including, but not limited to, data provided by other insurance companies, rate service organizations or governmental agencies.

b. The board shall annually review the plan’s rates using the experience of the plan, supplemented first by the experience of coverage provided in this state by other insurers and, to the extent necessary for statistical credibility, by relevant data from outside this state.

The loss and expense experience used in establishing and revising rates shall be adjusted to indicate as nearly as possible the loss and expense experience which will emerge on policies issued by the plan during the period for which the rates were being established. For this purpose loss experience shall include paid and unpaid losses, a provision for incurred but not reported losses and both allocated and unallocated loss adjustment expenses, giving consideration to changes in estimated costs of unpaid claims and to indications of trends in claim frequency, claim severity and level of loss expense.
Expense provisions included in the plan’s rates shall reflect reasonable prospective operating costs of the plan.

(b) The board shall establish and annually review plan classifications which, in addition to the requirements under s. 619.04 (5), Stats., do all of the following to the extent possible:

Measure variations in exposure to loss and in expenses based upon the best data available.
Reflect the past and prospective loss and expense experience of risks insured in the plan and other relevant experience from this and other states.

(c) With each rate and classification filing, the board shall submit supporting information including, in the case of rate filings, the existence, extent and nature of any subjective factors in the rates based on the judgment of technical personnel, such as consideration of the reasonableness of the rates compared with the cost of comparable available coverage.

(12m) Premium surcharge tables.

(a) This subsection implements s. 619.04 (5m) (a), Stats., requiring the establishment of an automatic increase in a provider’s plan premium based on loss and expense experience.

(b) In this subsection:

“Aggregate indemnity” has the meaning given under s. Ins 17.285 (2) (a).
“Closed claim” has the meaning given under s. Ins 17.285 (2) (b).
“Provider” has the meaning given under s. Ins 17.285 (2) (d).
“Review period” has the meaning given under s. Ins 17.285 (2) (e).

(c) The following tables shall be used in making the determinations required under s. Ins 17.285 as to the percentage increase in a provider’s plan premium:

For a class 1 and class 8 physician, podiatrist, nurse anesthetist, nurse midwife, nurse practitioner or cardiovascular perfusionist:
For a class 2 physician:
For a class 3 physician:
For a class 4 physician:
For a class 5A physician:
For a class 5 physician:
For a class 6 physician:
For a class 7 physician:
For a class 9 physician:

(14) Plan business; cancellation and nonrenewal.

(a) The plan may not cancel or refuse to renew a policy except for one or more of the following reasons:

Nonpayment of premium.
Revocation of the license of the insured by the appropriate licensing board.
Revocation of accreditation, registration, certification or other approval issued to the insured by a state or federal agency or national board, association or organization.
If the insured is not licensed, accredited, registered, certified or otherwise approved, failure to provide evidence that the insured continues to provide health care services in accordance with the code of ethics applicable to the insured’s profession, if the board requests such evidence.

(b) Each notice of cancellation or nonrenewal under par. (a) shall include a statement of the reason for the cancellation or nonrenewal and a conspicuous statement that the insured has the right to a hearing as provided in sub. (16).

(15) Commission.

(a) If the application designates a licensed agent, the plan shall pay the agent a commission for each new or renewal policy issued, as follows:

To a health care provider specified in sub. (5) (a) to (e) or (m), 15% of the premium or $150, whichever is less.
To a health care provider specified in sub. (5) (f) to (L) or (n), 5% of the annual premium or $2,500 per policy period, whichever is less.

(b) An agent need not be listed by the insurer that acts as the plan’s servicing company to receive a commission under par. (a).

(16) Right to hearing. Any person satisfying the conditions specified in s. 227.42 (1), Stats., may request a hearing under ch. Ins 5 within 30 days after receiving notice of the plan’s action or failure to act with respect to a matter affecting the person.

(18) Indemnification.

(a) The plan shall indemnify against any cost, settlement, judgment and expense actually and necessarily incurred in connection with the defense of any action, suit or proceeding in which a person is made a party because of the person’s position as any of the following:

A member of the board or any of its committees or subcommittees.
A member of or a consultant to the peer review council under s. 655.275, Stats.
A member of the plan.
The manager or an officer or employee of the plan.

(b) Paragraph (a) does not apply if the person is judged, in the action, suit or proceeding, to be liable because of willful or criminal misconduct in the performance of the person’s duties under par. (a) 1. to 4.

(d) Indemnification under par. (a) does not exclude any other legal right of the person indemnified.

(19) Applicability. Each person insured by the plan is subject to this section as it existed on the effective date of the person’s policy. Any change in this section during the policy term applies to the insured as of the renewal date.

Note: See the table of Appellate Court Citations for Wisconsin appellate cases citing s. Ins 17.25.

History

Emerg. cr. eff. 3-20-75; cr. Register, June, 1975, No. 234, eff. 7-1-75; emerg. am. eff. 7-28-75; emerg. r. and recr. eff. 11-1-75; r. and recr. Register, January, 1976, No. 241, eff. 2-1-76; am. (1) (b), (2), (4) (c), and (5) (a), Register, May, 1976, No. 245, eff. 6-1-76; emerg. am. (4) (b), eff. 6-22-76; am. (1) (b), (2), (4) (b) and (c) and (5) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) (b), (2), (4) (c), (5) (a), (5) (f), (10) (a) and (15), cr. (4) (h), Register, May, 1977, No. 257, eff. 6-1-77; am. (1) (b), (2), (4) (c), (5) (a), (10) (a) and (15), Register, September, 1977, No. 261, eff. 10-1-77; am. (1) (b), (2), (4) (b) and (c), (5) (a) and (f), and (15), Register, May, 1978, No. 269, eff. 6-1-78; am. (7) (b) 1.a., Register, March, 1979, No. 279, eff. 4-1-79; renum. from. Ins 3.35, am. (1) (b), (2), (5) (a) and (10) (a), Register, July, 1979, No. 283, eff. 8-1-79; r. and recr. (5) (a), Register, April, 1980, No. 292, eff. 5-1-80; am. (1) (b), (2), (4) (c), (5) (a), (10) (a), (12) (a) 3. and 4. and (15), r. (12) (a) 11. renum. (12) (a) 5. through 10. and 12. to be 7. through 12. and 13., cr. (12) (a) 5. and 6., Register, May, 1985, No. 353, eff. 6-1-85; emerg. am. (1) (b), (2), (4) (c) and (5) (a) 2., eff. 7-29-86; am. (1) (b), (2), (4) (c) and (5) (a) 2., Register, January, 1987, No. 373, eff. 2-1-87; emerg. am. (1) (b), (2), (4) (c), (5) (a) 3., 4. and 7., (7) (b) 2., 3. and 5., (10) (a), (12) (intro.), (14) (a) (intro.) and 1. and (15), cr. (5) (a) 11., (7m) and (14) (a) 3. and 4., renum. (5) (a) 11., (b) and (7) (b) 1. intro. to be (5) (am), (b) (intro.) and (7) (b) and am., r. (7) (b) 1. a. and b. eff. 2-16-87; am. (1) (b), (2), (4) (c), (5) (a) 3., 4. and 7., (7) (b) 2., 3. and 5., (10) (a), (12) (intro.), (14) (a) (intro.) and 1. and (15), renum. (5) (a) 11., (b) and (7) (b) 1. to be (5) (am), (b) (intro.) and (7) (b) 1. and am., cr. (5) (a) 7m and 11., (b) 1. to 3., (7) (b) 2m. and (14) (a) 3. and 4., r. (7) (b) 1. a. and b., Register, July, 1987, No. 379, eff. 8-1-87; r. (12) (a) 13. and (b) 5., cr. (5) (a) 2m. and (12m), am. (16), Register, February, 1988, No. 386, eff. 3-1-88; r. (4) (g) and (9) (b), renum. (9) (a) to be (9), Register, March, 1988, No. 387, eff. 4-1-88; cr. (10) (cm), Register, April, 1989, No. 400, eff. 5-1-89; emerg. am. (5) (b) 3., cr. (5) (b) 4., eff. 10-16-89; am. (5) (b) 3., cr. (5) (b) 4., Register, March, 1990, No. 411, eff. 4-1-90; am. (1) (a) and (c), (2), (10) (a), (b), (c) and (d), (12) (a) 2. and 3., (14) (a) (intro.) and 4., (b), r. (3), (4) (a), (c), (d), (f) and (h), (5) (am), (d), (e) and (f), (6) (a), (7), (8) (j), (11) (a), (12) (intro.), (a) 4. to 6. intro., b. and c. and 7., (b), (c) 1., 3. and 6., (12m) (c) and (13), r. and recr. (12) (a) 1., (15), (16) and (18), renum. (4) (b) and (e), (5) (a) (intro.) to 11., (5) (b) and (c), (6) (b) and (c), (8) (a) to (i), (9), (11) (b), (12) (a) 6., 8., to 12., (12) (b) 2. and 4. and (17) to be (6) (a) 1. and 2., (5) (intro.) to (m), (3) (d) and (f), (6) (b) 2. and 3., (7), (8) (a), (b) 1. to 4., (8) (a) 3. to 5., (8) (b) 5., (6) (c), (12) (a) 4. to 6., (12) (a) 5. b., (12) (c), (12) (a) 7., (12) (b) 1. and 2., and (6) (d) and am. except (3) (d) 1. to 4., cr. (3) (a) to (c) and (e), (5) (n), (6) (a) (intro.) and (b) 1., (8) (a) (intro.) and 6., (b) (intro.), (12) (b) (intro.) and (19), Register, June, 1990, No. 414, eff. 7-1-90; am. (10) (cm), Register, April, 1991, No. 424, eff. 5-1-91; am. (12m) (c) (intro.), Register, January, 1992, No. 433, eff. 2-1-92; correction in (5) (c) and (n) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1997, No. 498; correction in (12) (a) 3. made under s. 13.93 (2m) (b) 7., Stats., Register, September, 1999, No. 525; emerg. am. (3) (d) 3., renum. (3) (d) 4. to be 5. and cr. (3) (d) 4., eff. 7-1-02; CR 02-035: am. (3) (d) 3., renum. (3) (d) 4. to be (3) (d) 5., cr. (3) (d) 4., Register September 2002 No. 561, eff. 10-1-02; corrections in (5) (c) and (n) made under s. 13.93 (2m) (b) 7., Stats., Register October 2003 No. 574; CR 07-001: am. (12m), Register June 2007 No. 618, eff. 7-1-07; corrections in (5) (c), (n), and (8) (a) 5. made under s. 13.92 (4) (b) 6. and 7., Stats., Register June 2009 No. 642.

Wis. Admin. Code § Ins 17.26 Payments for future medical expenses {#sec-ins-17.26 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.26}

(1) Purpose. This section implements s. 655.015, Stats.

(3) Definitions. In this section:

(a) “Account” means a portion of the fund allocated specifically for the medical expenses of an injured person.

(b) “Claimant” means the injured person, the individual legally responsible for the injured person’s medical expenses or the injured person’s legal representative.

(c) “Medical expenses” means charges for medical services, nursing services, medical supplies, drugs and rehabilitation services that are incurred after the date of a settlement, panel award or judgment.

(4) Administration.

(a) If a settlement or judgment is subject to s. 655.015, Stats., the insurer or other person responsible for payment shall, within 30 days after the date of the settlement or judgment, pay the fund the amount in excess of $100,000 and shall provide the fund with an executed copy of the document setting forth the terms under which payments for medical expenses are to be made.

(b) The fund shall credit each account with a proportional share of any interest earned by the fund, based on the remaining value of the account at the time the investment board declares the interest earnings. The fund shall maintain an individual record of each account as provided in s. 16.41, Stats.

(c) Upon receipt of a claimant’s request for reimbursement of medical expenses, the fund, after determining that the supplies or services provided were necessary and incidental to the injury sustained by the injured person and that the provider of the supplies or services has actually been paid, shall pay the claim from the appropriate account.

(d)

If the fund is not satisfied that a provider has actually been paid for services or supplies provided to an injured person, the fund may make payments jointly to the claimant and the provider.
A claimant may, in writing, authorize direct payment to a provider.

(e) The fund shall at least annually report to each claimant the status of the injured person’s account, including the original amount, payments made since the last report and the balance remaining.

(f) If an injured person dies and there is a balance in his or her account, the balance shall revert to the insurer or other person responsible for establishing the account.

Note: See the table of Appellate Court Citations for Wisconsin appellate cases citing s. Ins 17.26.

History

Cr. Register, November, 1976, No. 251, eff. 12-1-76; renum. from Ins 3.37, Register, July, 1979, No. 283, eff. 8-1-79; am. (3), r. (4) (b) and (f), renum. (4) (d), (e), (g) and (h) to be (4) (e) (b), (d) and (f) and am., Register, April, 1984, No. 340, eff. 5-1-84; am. (1), (3) (a) to (c) and (4), r. (2), Register, June, 1990, No. 414, eff. 7-1-90; emerg. am. (4) (a), eff. 5-28-96; am. (4) (a), Register, September, 1996, No. 489, eff. 10-1-96.

Wis. Admin. Code § Ins 17.27 Filing of financial report {#sec-ins-17.27 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.27}

(1) Purpose. This section implements s. 655.27 (3) (b), (4) (d) and (5) (e), Stats., for the purpose of setting standards and techniques for accounting, valuing, reserving and reporting of data relating to the financial transactions of the fund.

(2) Definitions. In this section:

(a) “Amounts in the fund,” as used in s. 655.27 (5) (e), Stats., means the sum of cash and invested assets as reported in a financial report under sub. (3).

(b) “Fiscal year,” as used in s. 655.27 (4) (d), Stats., means a year commencing July 1 and ending June 30.

(3) Financial reports. The board shall furnish the commissioner with the financial report required by s. 655.27 (4) (d), Stats., within 60 days after the close of each fiscal year. In addition, the board shall furnish the commissioner with quarterly financial reports prepared as of September 30, December 31 and March 31 of each year within 60 days after the close of each reporting period. The board shall prescribe the format for preparing financial reports in accordance with statutory accounting principles for fire and casualty companies. Reserves for reported claims and reserves for incurred but not reported claims shall be maintained on a present value basis with the difference from full value being reported as a contra account to the loss reserve liability. Mediation fund fees collected under s. Ins 17.01 shall be indicated in the financial reports but shall not be regarded as assets or liabilities or otherwise taken into consideration in determining assessment levels to pay claims.

(4) Selection of actuaries. The board shall select one or more actuaries to assist in determining reserves and setting fees under s. 655.27 (3) (b), Stats. If more than one actuary is selected, the board members named by the Wisconsin medical society and the Wisconsin hospital association shall jointly select the 2nd actuary.

History

Cr. Register, June, 1980, No. 294, eff. 7-1-80; am. (1), (2) (a) and (b) to (4), cr. (2) (intro.), Register, June, 1990, No. 414, eff. 7-1-90.

Wis. Admin. Code § Ins 17.275 Claims information; confidentiality {#sec-ins-17.275 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.275}

(1) Purpose. This section interprets ss. 19.35 (1) (a), 19.85 (1) (f), 146.82, 655.26 and 655.27 (4) (b), Stats.

(2) Open records; privileged or confidential fund records. Except as provided in s. 601.427 (7), Stats., records of the fund are subject to subch. II of ch. 19, Stats., and are open to inspection as required under subch. II of ch. 19, Stats. The fund may withhold and retain as confidential any record which may be withheld and retained as confidential under subch. II of ch. 19, Stats., including, but not limited to, a record which may be withheld or which is privileged under any law or the rules of evidence, as attorney work product under the rules of civil procedure, as attorney-client privileged material under s. 905.03, Stats., as a medical record under ss. 146.81 to 146.84, Stats., or as privileged under s. 601.465, Stats.

(3) Definition. In this section, “confidential claims information” means any document or information relating to a claim against a plan-insured health care provider in the possession of the commissioner, the board or an agent thereof, including claims records of the plan.

(4) Disclosure. Confidential claims information may be disclosed only as follows:

(a) To the medical examining board as provided under s. 655.26, Stats.

(b) As needed by the peer review council, consultants and the board under s. 655.275, Stats., and rules promulgated under that section.

(d) To an individual, organization or agency required by law or designated by the commissioner or board to conduct a management or financial audit.

(e) With a written authorization from the plan-insured health care provider on whose behalf the claim was defended or paid.

(f) To the risk manager for the fund, as needed to perform the duties specified in its contract. The risk manager may not disclose confidential claims information to any 3rd party, unless the board expressly authorizes the disclosure. The board may authorize disclosure of patient health care records subject to ss. 146.81 to 146.84, Stats., only as provided in those sections.

Note: See the table of Appellate Court Citations for Wisconsin appellate cases citing s. Ins 17.275.

History

Cr. Register, March, 1988, No. 387, eff. 4-1-88; cr. (3) (e), Register, June, 1990, No. 414, eff. 7-1-90; cr. (3) (f), Register, May, 1995, No. 473, eff. 6-1-95; am., Register, September, 1999, No. 525, eff. 10-1-99.

Wis. Admin. Code § Ins 17.28 Health care provider fees {#sec-ins-17.28 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.28}

(1) Purpose. This section implements s. 655.27 (3), Stats.

(2) Scope. This section applies to fees charged to providers for participation in the fund, but does not apply to fees charged for operation of the mediation system under s. 655.61, Stats.

(3) Definitions. In this section:

(a) “Annual fee” means the amount established under sub. (6) for each class or type of provider.

(b) “Begin operation” means for a provider other than a natural person to start providing health care services in this state.

(bm) “Begin practice” means to start practicing in this state as a medical or osteopathic physician or nurse anesthetist or to become ineligible for an exemption from ch. 655, Stats.

(c) “Class” means a group of physicians whose specialties or types of practice are similar in their degree of exposure to loss. The specialties and types of practice and the applicable Insurance Services Office, Inc., codes included in each fund class are the following:

Class 1:
Class 2:
Class 3:
Class 4:

(d) “Fiscal year” means each period beginning each July 1 and ending each June 30.

(e) “Permanently cease operation” means for a provider other than a natural person to stop providing health care services with the intent not to resume providing such services in this state.

(f) “Permanently cease practice” means to stop practicing as a medical or osteopathic physician or nurse anesthetist with the intent not to resume that type of practice in this state.

(g) “Primary coverage” means health care liability insurance meeting the requirements of subch. III of ch. 655, Stats.

(h) “Provider” means a health care provider, as defined in s. 655.001 (8), Stats.

(hm) “Resident” means a licensed physician engaged in an approved postgraduate medical education or fellowship program in any specialty specified in par. (c) 1. to 4.

(i) “Temporarily cease practice” means to stop practicing in this state for any period of time because of the suspension or revocation of a provider’s license, or to stop practicing for at least 90 consecutive days for any other reason.

(3e) Primary coverage required. Each provider shall ensure that primary coverage for the provider and the provider’s employees other than employees excluded from fund coverage under par. (b), is in effect on the date the provider begins practice or operation and for all periods during which the provider practices or operates in this state. A provider does not have fund coverage for any of the following:

(a) Any period during which primary coverage is not in effect.

(b) Any employee who is a health care practitioner under the circumstances described in s. 655.005 (2), Stats.

(3h) Supervision and direction. For the purposes of clarifying s. 655.005 (2) (a), Stats., health care services that are “under the direction and supervision of a physician or nurse anesthetist” include, but are not limited to the health care services being provided pursuant to and within the scope of the health care practitioner’s professional license and:

(a) The health care practitioner is subject to a quality assurance program, peer review process, or other similar program or process that is implemented for and designed to ensure the provision of competent and quality patient care and that program or process also includes participation by a physician or a nurse anesthetist; or

(b) The health care services are provided by the health care practitioner within the scope of standing orders, protocols, procedures or clinical practice guidelines established or approved by a physician or nurse anesthetist.

(3m) Exemptions; eligibility. A medical or osteopathic physician licensed under ch. 448, Stats., or a nurse anesthetist licensed under ch. 441, Stats., may claim an exemption from ch. 655, Stats., if at least one of the following conditions applies:

(a) The provider will not practice more than 240 hours in the fiscal year.

(c) During the fiscal year, the provider will derive more than 50% of the income from his or her practice from outside this state or will attend to more than 50% of his or her patients outside this state.

(3s) Late entry to fund.

(a) A provider that begins or resumes practice or operation during a fiscal year, has claimed an exemption or has failed to comply with sub. (3e) may obtain fund coverage during a fiscal year by giving the fund advance written notice of the date on which fund coverage should begin.

(b) The board may authorize retroactive fund coverage for a provider who submits a timely request for retroactive coverage showing that the failure to procure coverage occurred through no fault of the provider and despite the fact that the provider acted reasonably and in good faith. The provider shall furnish the board with an affidavit describing the necessity for the retroactive coverage and stating that the provider has no notice of any pending claim alleging malpractice or knowledge of a threatened claim or of any occurrence that might give rise to such a claim. The authorization shall be in writing, specifying the effective date of fund coverage.

(4) Annual fees; billing procedures.

(a) Definition. In this subsection, “semimonthly period” means the 1st through the 14th day of a month or the 15th day through the end of a month.

(b) Entry during fiscal year; prorated annual fee. If a provider begins practice or operation or enters the fund under sub. (3s) (b) after the beginning of a fiscal year, the fund shall charge the provider one twenty-fourth of the annual fee for each semimonthly period or part of a semimonthly period from the date fund coverage begins to the next June 30.

(c) Ceasing practice or operation; refunds. A provider or person acting on the provider’s behalf shall notify the fund in the form specified by the fund if any of the following occurs:

The provider is exempt under sub. (3m) (a) or (c).
The provider is no longer eligible to participate in the fund under s. 655.003 (1) or (3), Stats.
This state is no longer a principal place of practice for the provider.
The provider has temporarily or permanently ceased practice or has ceased operation.
The provider’s classification under sub. (6) has changed.

(cm) Eligibility for exemption; refund. If a provider claims an exemption after paying all or part of the annual fee, the fund shall issue a refund equal to one twenty-fourth of the provider’s annual fee for each full semi-monthly period from the date the provider becomes eligible for the exemption to the due date of the next payment. The refund for any past exemption period will be limited to the current fiscal year and the immediate prior fiscal year.

(cs) Ineligibility for fund coverage; refund.

If a provider who has paid all or part of the annual fee is or becomes ineligible to participate in the fund under s. 655.003 (1) or (3), Stats., or because he or she does not practice in this state, the fund shall issue a full refund of any amount the provider paid for fund coverage for which he or she was not eligible.
If a provider that has paid all or part of the annual fee is ineligible for fund coverage because the provider is not in compliance with sub. (3e), the fund shall issue a full refund of the amount paid for the period of noncompliance, beginning with the date the noncompliance began.

(d) Change of classification; increased annual fee.

If a provider’s change of classification under sub. (6) during a fiscal year results in an increased annual fee, the fund shall adjust the provider’s annual fee to equal the sum of the following:

a. One twenty-fourth of the annual fee for the provider’s former classification for each full semimonthly period from the due date of the provider’s first payment during the current fiscal year to the date of the change.

b. One twenty-fourth of the annual fee for the provider’s new classification for each full or partial semimonthly period from the date of the change to the next June 30.

The fund shall bill the provider for the total amount of the increase under subd. 1. if the provider has already paid the total annual fee, or shall prorate the increase over the remaining installment payments.

(e) Change of classification; decreased annual fee.

If a provider’s change of classification under sub. (6) during a fiscal year results in a decreased annual fee, the fund shall adjust the provider’s annual fee to equal the sum of the following:

a. One twenty-fourth of the annual fee for the provider’s former classification for each full or partial semimonthly period from the due date of the provider’s first payment during the current fiscal year to the date of the change.

b. One twenty-fourth of the annual fee for the provider’s new classification for each full semimonthly period from the date of the change to the next June 30.

The fund shall credit the amount of the decrease under subd. 1. over any remaining installment payments. If the provider has already paid the total annual fee, the fund shall issue a refund if the amount of the refund is more than $10. The fund shall credit any amount of $10 or less to the provider’s account. If the provider no longer participates in the fund, a credit of $10 or less shall lapse to the fund.

(f) Refund of other charges. If a provider is entitled to a refund or credit under this subsection, the fund shall also issue a refund or credit of the unearned portion of any amounts paid as surcharges using the same method used to calculate a refund or credit of an annual fee. A mediation fund fee is refundable only if the provider did not participate in the injured patients and families compensation fund for any part of the fiscal year.

(g) Refund for administrative error. In addition to any refund authorized under par. (c), (cm), (cs), (e) or (f), the fund may issue a refund to correct an administrative error in the current or any previous fiscal year.

(h) Billing; entire fiscal year. Except as provided in sub. (6e) (b), for each fiscal year, the fund shall issue to each provider participating in the fund an initial bill which shall include all of the following:

The total annual fee due for the fiscal year.
Any applicable surcharge imposed under s. Ins 17.285.
The balance and accrued interest, if any, due from a prior fiscal year.
Notice of the provider’s right to pay the amount due in full or in instalments.
The minimum amount due if the provider elects installment payments.
The payment due date.

(i) Billing; partial fiscal year. The fund shall issue each provider entering the fund after the beginning of a fiscal year an initial bill which shall include all of the following;

The total amount due calculated under par. (b).
Notice of the provider’s right to pay the amount due in full or in instalments.
The minimum amount due if the provider elects installment payments.
The payment due date.

(j) Balance billing. If a provider pays at least the minimum amount due but less than the total amount due by the due date, the fund shall calculate the remainder due by subtracting the amount paid from the amount due and shall bill the provider for the remainder on a quarterly installment basis. Each subsequent bill shall include all of the following:

The total of the remainder due.
Interest on the remainder due. The daily rate of interest shall be the average annualized rate earned by the fund on its short-term funds for the first 3 quarters of the preceding fiscal year, as determined by the state investment board, divided by 360.
A $3 administrative service charge.
The minimum amount due.
The payment due date.

(k) Prompt payment required. A provider shall pay at least the minimum amount due on or before each due date. If the fund receives payment later than the due date specified in the late payment notice sent to the provider by certified mail, the fund, notwithstanding par. (n) 5., may not apply the payment retroactively to the annual fee unless the board has authorized retroactive coverage under sub. (3s) (b).

(n) Application of payments. Except as provided in par. (k), all payments to the fund shall be applied in chronological order first to previous fiscal years for which a balance is due and then to the current fiscal year. The amounts for each fiscal year shall be credited in the following order:

Mediation fund fee imposed under s. Ins 17.01.
Administrative service charge under par. (j) 3.
Interest under par. (j) 2.
Surcharge imposed under s. Ins 17.285.
Annual fee under sub. (6).

(o) Waiver of balance. The fund may waive any balance of $50 or less, if it is in the economic interest of the fund to do so.

(5) Filing of certificates of insurance.

(a) Electronic filing. Except as provided in par. (b), each insurer and self-insured provider required under s. 655.23 (3) (b) or (c), Stats., to file a certificate of insurance shall file the certificate electronically in the format specified by the commissioner by the 15th day of the month following the month of original issuance or renewal or a change of class under sub. (6).

(b) Exemption. An insurer or self-insured provider may file a written request for an exemption from the requirement of par. (a). The commissioner may grant the exemption if he or she finds that compliance would constitute a financial or administrative hardship. An insurer or self-insured provider granted an exemption under this paragraph shall file a paper certificate in the format specified by the commissioner within 45 days after original issuance or renewal or a change of class under sub. (6).

(c) Late filing fee. A late fee in the amount of $100.00 per certificate shall be paid to the fund by each insurer and self-insured provider who fails to file a certificate of insurance in accordance with the requirements of this subsection. An additional $100.00 late fee shall be paid per certificate for each additional week, or portion thereof, the certificate is not in compliance with this subsection.

(6) Fee schedule. The following fee schedule is in effect from July 1, 2013 to June 30, 2014:

(a) Except as provided in pars. (b) to (f) and sub. (6e), for a physician for whom this state is a principal place of practice:

(b) For a resident acting within the scope of a residency or fellowship program:

(d) For a Medical College of Wisconsin, Inc., full-time faculty member:

(e) For physicians who practice part-time:

For a physician who practices fewer than 500 hours during the fiscal year, limited to office practice and nursing home and house calls, and who does not practice obstetrics or surgery or assist in surgical procedures: $ 364
For a physician who practices 1,040 hours or less during the fiscal year, including those who practice fewer than 500 hours during the fiscal year whose practice is not limited to office practice, nursing homes or house calls or who do practice obstetrics, surgery or assist in surgical procedures:

(f) For a physician for whom this state is not a principal place of practice:

(g) For a nurse anesthetist for whom this state is a principal place of practice: $ 358

(h) For a nurse anesthetist for whom this state is not a principal place of practice: $ 179

(i) For a hospital, all of the following fees:

Per occupied bed $ 87
Per 100 outpatient visits during the last calendar year for which totals are available: $ 4.35

(j) For a nursing home, as described under s. 655.002 (1) (j), Stats., that is wholly owned and operated by a hospital and that has health care liability insurance separate from that of the hospital by which it is owned and operated:

(k) For a partnership comprised of physicians or nurse anesthetists, organized for the primary purpose of providing the medical services of physicians or nurse anesthetists, all of the following fees:

a. If the total number of partners and employed physicians and nurse anesthetists is from 2 to 10 $ 51

b. If the total number of partners and employed physicians and nurse anesthetists is from 11 to 100 $ 503

c. If the total number of partners and employed physicians and nurse anesthetists exceeds 100 $1,252

The following fee for each full-time equivalent allied health care professional employed by the partnership as of the most recent completed survey submitted:

(L) For a corporation, including a service corporation, with more than one shareholder organized under ch. 180, Stats., for the primary purpose of providing the medical services of physicians or nurse anesthetists, all of the following fees:

a. If the total number of shareholders and employed physicians and nurse anesthetists is from 2 to 10 $ 51

b. If the total number of shareholders and employed physicians and nurse anesthetists is from 11 to 100 $ 503

c. If the total number of shareholders and employed physicians or nurse anesthetists exceeds 100 $1,252

The following fee for each full-time equivalent allied health care professional employed by the corporation as of the most recent completed survey submitted:

(m) For a corporation organized under ch. 181, Stats., for the primary purpose of providing the medical services of physicians or nurse anesthetists, all of the following fees:

a. If the total number of employed physicians and nurse anesthetists is from 1 to 10 $ 51

b. If the total number of employed physicians and nurse anesthetists is from 11 to 100 $ 503

c. If the total number of employed physicians or nurse anesthetists exceeds 100 $1,252

The following fee for each full-time equivalent allied health care professional employed by the corporation as of the most recent completed survey submitted:

(n) For an operational cooperative sickness care plan as described under s. 655.002 (1) (f), Stats., all of the following fees:

Per 100 outpatient visits during the last calendar year for which totals are available $0.11
2.5% of the total annual fees assessed against all of the employed physicians.
The following fee for each full-time equivalent allied health care professional employed by the operational cooperative sickness plan as of the most recent completed survey submitted:

(o) For a freestanding ambulatory surgery center, as defined in s. DHS 120.03 (13), per 100 outpatient visits during the last calendar year for which totals are available: $ 22.73

(p) For an entity affiliated with a hospital, the greater of $100 or whichever of the following applies:

7.0% of the amount the entity pays as premium for its primary health care liability insurance, if it has occurrence coverage.
10.0% of the amount the entity pays as premium for its primary health care liability insurance, if it has claims-made coverage.

(q) For an organization or enterprise not specified as a partnership or corporation that is organized and operated in this state for the primary purpose of providing the medical services of physicians or nurse anesthetists, all of the following fees:

a. If the total number of employed physicians and nurse anesthetists is from 1 to 10 $ 51

b. If the total number of employed physicians and nurse anesthetists is from 11 to 100 $ 503

c. If the total number of employed physicians or nurse anesthetists exceeds 100 $ 1,252

The following for each full-time equivalent allied health care professional employed by the organization or enterprise not specified as a partnership, corporation, or an operational cooperative health care plan as of the most recent completed survey submitted:

(6d) Primary purpose presumption. For purposes of s. 655.002 (1) (e), Stats., and this section, it is presumed:

(a) A corporation organized and operated in this state of which 50% or more of its shareholders are physicians or nurse anesthetists is organized and operated in this state for the primary purpose of providing the medical services of physicians or nurse anesthetists.

(b) Conclusively that a corporation organized and operated in this state of which less than 50% of its shareholders are physicians or nurse anesthetists is not organized and operated in this state for the primary purpose of providing the medical services of physicians or nurse anesthetists.

Note: A person who disputes the application of this presumption to the person may be entitled to a hearing on the issue in accordance with s. 227.42, Stats.

(6e) Medical college residents’ fees.

(a) The fund shall calculate the total amount of fees for all medical college of Wisconsin affiliated hospitals, inc., and UW hospital and clinics, residents on a full-time-equivalent basis, taking into consideration the proportion of time spent by the residents in practice which is not covered by the fund, including practice in federal, state, county and municipal facilities, as determined and documented by the medical college of Wisconsin affiliated hospitals, inc., and UW hospital and clinics, respectively.

(b) Notwithstanding sub. (4) (h), the fund’s initial bill for each fiscal year shall be the amount the medical college of Wisconsin affiliated hospitals, inc., estimates will be due for the next fiscal year for all its residents. At the end of the fiscal year, the fund shall adjust the fee to reflect the residents’ actual exposure during the fiscal year, as determined by the medical college of Wisconsin affiliated hospitals, inc., and shall bill the medical college of Wisconsin affiliated hospitals, inc., for the balance due, if any, plus accrued interest, as calculated under sub. (4) (j) 2., from the beginning of the fiscal year. The fund shall refund the amount of an overpayment, if any.

(6m) Reporting.

(a) The fund may require any provider to report, at the times and in the manner prescribed by the fund, any information necessary for the determination of a fee specified under sub. (6).

(b) For purposes of sub. (6) (k) to (m), a partnership or corporation shall report the number of partners, shareholders and employed physicians and nurse anesthetists on July 1 of the previous fiscal year.

(6s) Surcharge.

(a) This subsection implements s. 655.27 (3) (bg) 1., Stats., requiring the establishment of an automatic increase in a provider’s fund fee based on loss and expense experience.

(b) In this subsection:

“Aggregate indemnity” has the meaning given under s. Ins 17.285 (2) (a).
“Closed claim” has the meaning given under s. Ins 17.285 (2) (b).
“Provider” has the meaning given under s. Ins 17.285 (2) (d).
“Review period” has the meaning given under s. Ins 17.285 (2) (e).

(c) The following tables shall be used in making the determinations required under s. Ins 17.285 as to the percentage increase in a provider’s fund fee:

For a class 1 physician or a nurse anesthetist:
For a class 2 physician:
For a class 3 physician:
For a class 4 physician:

Note: For a complete history of s. Ins 17.28 from June 1980 through August 31, 2000, see the History note following s. Ins 17.28 published in Register August 2000 No. 536.

History

Cr. Register, June, 1980, No. 294, emerg. r. and recr. (6) and am. (6a), eff. 7-1-00; r. and recr. (6) and am. (6a), Register, August, 2000, No. 536, eff. 9-1-00; emerg. r. and recr. (6) and am. (6a), eff. 7-1-01; CR 01-035: r. and recr. (6) and am. (6a), Register September 2001 No. 549, eff. 10-1-01; emerg. r. and recr. (6), r. (6a), eff. 7-1-02; CR 02-035: r. and recr. (6), r. (6a), Register September 2002 No. 561, eff. 10-1-02; CR 03-039: r. and recr. (6) Register October 2003 No. 574, eff. 11-1-03; CR 04-032: r. and recr. (6) Register January 2005 No. 589, eff. 2-1-05; emerg. r. and recr. (6), eff. 7-1-05; CR 05-028: r. and recr. (6) Register October 2005 No. 598, eff. 11-1-05; CR 06-002: am. (3) (c) 1. and 2. and r. and recr. (6) Register June 2006 No. 606, eff. 7-1-06; CR 07-002: am. (6), Register June 2007 No. 618, eff. 7-1-07; CR 07-002: am. (6e), Register June 2007 No. 618, eff. 7-1-07; CR 08-006: am. (6) (intro.), (k) 2., (L) 2., (m) 2., (n) 3. and (q) 2. Register June 2008 No. 630, eff. 7-1-08; CR 09-004: am. (3) (c), r. and recr. (6) Register June 2009 No. 642, eff. 7-1-09; correction in (6) (o) made under s. 13.92 (4) (b) 7., Stats., Register June 2009 No. 642; CR 09-055: cr. (3h) Register March 2010 No. 651, eff. 4-1-10; EmR1020: emerg. r. and recr. eff. 6-15-10; CR 10-065: r. and recr. Register November 2010 No. 659, eff. 12-1-10; correction in (6) (o) made under s. 13.92 (4) (b) 7., Stats., Register November 2010 No. 659; EmR1108: emerg. am. (3) (c), r. and recr. (6) eff. 6-10-11; CR 11-015: am. (3) (c), r. and recr. (6) and Register August 2011 No. 668, eff. 9-1-11; EmR1306: emerg. am. (3) (c) 1. to 3., r. and recr. (6), eff. 6-3-13; CR 13-044: am. (3) (c) 1. to 3., r. and recr. (6) Register June 2014 No. 702, eff. 7-1-14; CR 19-119 am. (3) (c) 1. to 3., (4) (f) Register July 2020 No. 775, eff. 8-1-20.

Wis. Admin. Code § Ins 17.285 Peer review council {#sec-ins-17.285 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.285}

(1) Purpose. This section implements ss. 619.04 (5) (b) and (5m) (b), 655.27 (3) (a) 2m. and (bg) 2. and 655.275, Stats.

(2) Definitions. In this section:

(a) “Aggregate indemnity” means the total amount attributable to an individual provider that is paid or owing to or on behalf of claimants for all closed claims arising out of one incident or course of conduct, including amounts held by the fund under s. 655.015, Stats. “Aggregate indemnity” does not include any expenses paid in the defense of the claim.

(b) “Closed claim” means a medical malpractice claim against a provider, or a claim against an employee of a health care provider for which the provider is vicariously liable, for which there has been either of the following:

A final determination based on a settlement, award or judgment that indemnity will be paid to or on behalf of a claimant.
A payment to a claimant by the provider or another person on the provider’s behalf.

(cg) “Health care provider” has the meaning given in s. 146.81 (1), Stats.

(cr) “Patient health care records” has the meaning given in s. 146.81 (4), Stats.

(d) “Provider,” when used without further qualification, means a health care provider subject to ch. 655, Stats., who is a natural person. “Provider” does not include a hospital or other facility or entity that provides health care services.

(e) “Review period” means the 5-year period ending with the date of the first payment on the most recent closed claim reported under s. 655.26, Stats., for a specific provider.

(f) “Surcharge” means the automatic increase in a provider’s plan premium or fund fee established under s. Ins 17.25 (12m) or 17.28 (6s) or both.

(2m) Time for reporting. In reporting claims paid under s. 655.26, Stats., each insurer or self-insurer shall report the required information by the 15th day of the month following the date on which there has been a final determination of the aggregate indemnity to be paid to or on behalf of any claimant.

(2s) Information for provider. Upon receipt of a report under sub. (2m), the council shall mail to the provider who is the subject of the report all of the following:

(a) A copy of the report, with a statement that the provider may contact the insurer that filed the report if the provider believes it contains inaccurate information.

(b) A statement that the council may use its authority under s. 146.82 (2) (a) 5., Stats., to obtain any patient health care records necessary for use in making determinations under this section.

(c) A request that the provider sign and return to the council an authorization for release of information form, authorizing the provider’s insurer to provide the council with relevant factual information about the closed claim for use in making determinations under this section. A copy of the form shall be enclosed with the mailing.

(d) If necessary, a request that the provider verify the council’s closed claim record and furnish the council with information on any additional closed claims not known to the council that have been paid by or on behalf of the provider during the review period.

(e) Notice that if the provider does not comply with a request under par. (c) or (d) within 40 days after the date of the request, the provider is in violation of s. 601.42 (4), Stats., and may be subject to a forfeiture of up to $1,000 for each week of continued violation, as provided in s. 601.64 (3), Stats.

(3) Determination of need for review. Based on reports received under sub. (2m) and any additional closed claims reported in response to a request under sub. (2s) (d), the council, using the tables under ss. Ins 17.25 (12m) (c) and 17.28 (6s) (c), shall determine when a provider has, during a review period, accumulated enough closed claims and aggregate indemnity to consider the imposition of a surcharge.

(4) Records requests; notice to provider.

(a) When the council makes a determination under sub. (3), it may request any of the following:

From any health care provider, patient health care records related to each closed claim subject to review as provided in s. 146.82 (2) (a) 5., Stats.
From the provider’s insurer, relevant factual information about each closed claim subject to review. This subdivision applies only if the provider has complied with the request under sub. (2s) (c).

(b) A request under par. (a) shall be in writing and shall specify a reasonable time for response. Each person receiving a request shall provide the council with the records and information requested, unless the person no longer maintains or has access to them. If a person is unable to comply with a request, the person shall notify the council in writing of the reason for the inability to comply.

(c) The council shall notify a provider for whom a determination is made under sub. (3) that, after reviewing the patient health care records, consultants’ opinions and other relevant information submitted by the provider and the provider’s insurer, the council may recommend that a surcharge be imposed on the provider’s plan premium, fund fee or both, and that the surcharge may be reduced or eliminated following a review as provided in this section. The notice shall include a description of the procedures specified in this section and a statement that the provider may submit in writing relevant information about any closed claim involved in the review and a description of mitigating circumstances that may reduce the future risk to the plan, the fund or both.

(5) Procedure for review.

(a) The council or a single council member may conduct a preliminary review of the records and information relating to each of a provider’s closed claims. If the council or council member is able to determine, without a consultant, that the provider met the appropriate standard of care with respect to any closed claim, the council shall not refer that closed claim to a consultant and shall not use that closed claim in determining whether to impose a surcharge on that provider.

(b) Unless a determination under par. (a) reduces the number of closed claims and aggregate indemnity so that the provider is no longer subject to the imposition of a surcharge, the council shall refer all records and information relating to closed claims subject to review, including records and information in the custody of the plan and the fund, to one or more specialists as provided in s. 655.275 (5) (b), Stats.

(c) Each specialist consulted under par. (b) shall provide the council with a written opinion as to whether the provider met the appropriate standard of care with respect to each closed claim reviewed.

(d) At least 30 days before the meeting at which the council will decide whether or not to recommend that a surcharge should be imposed on a provider, the council shall notify the provider of the date of the meeting and furnish the provider with a copy of the consultant’s opinions and a list of any other documents on which the recommendation will be based. The council shall make all documents available to the provider upon request for inspection and copying, as provided under s. 19.35, Stats.

(e) In reviewing a closed claim, the council or a consultant may consider any relevant information except information from a juror who participated in a civil action for damages arising out of an incident under review. The council or a consultant may consult with any person except a juror, interview the provider, employees of the provider or other persons involved in an incident or request the provider to furnish additional information or records.

(f) The council, after taking into consideration all available information, shall decide whether each closed claim reviewed should be counted in recommending whether to impose a surcharge on the provider.

(7) Report to board.

(a) If the total number of closed claims which the council determines should be included and the aggregate indemnity attributable to those claims would be sufficient to require the imposition of a surcharge under s. Ins 17.25 (12m) (c), 17.28 (6s) (c) or both, the council shall prepare a written report for the board recommending the surcharge that should be imposed. The report shall include the factual basis for the determination on each incident involved in the review and a description of any mitigating circumstances.

(b) If the council determines that one or more closed claims should not be counted and, as a result, the total number of closed claims remaining and the aggregate indemnity attributable to those claims is not sufficient to require the imposition of a surcharge, the council shall prepare a written report for the board recommending that no surcharge should be imposed. The report shall include a brief summary of the basis for the recommendation.

(c) The council shall furnish the provider with a copy of its report and recommendation to the board and with notice of the right to a hearing as provided in sub. (9).

(9) Hearing.

(a) A provider has the right to a hearing under ch. 227, Stats., and ch. Ins 5 on the council’s recommendation, if the provider requests a hearing within 30 days after receiving the notice under sub. (7) (c).

(am) The reports of the consultant and any other documents relied on by the council in making its recommendation to the board are admissible in evidence at a hearing under this section.

(b) Notice of the hearing examiner’s proposed decision shall inform the provider that he or she may submit to the board written objections and arguments regarding the proposed findings of fact, conclusions of law and decision within 20 days after the date of the notice.

(10) Final decision; judicial review. The board shall make the final decision on the imposition of a surcharge. The final decision is reviewable by the circuit court as provided under ch. 227, Stats.

(11) Surcharge; imposition; refund; duration.

(a) A surcharge imposed on a provider’s plan premium, fund fee or both after a final decision by the board takes effect on the next billing date and remains in effect during any period of judicial review.

(c) If judicial review results in the imposition of no surcharge or a reduced surcharge, the plan, the fund or both shall refund the excess amount collected from the provider or apply a credit to the provider’s next plan premium or fund fee bill or both.

(d) A surcharge remains in effect for 36 months. The percentage imposed shall be reduced by 50% for the 2nd 12 months and by 75% for the 3rd 12 months, if the provider does not accumulate any additional closed claims before the expiration of the surcharge. The time periods specified in this paragraph are tolled on the date a provider stops practicing in this state and remain tolled until the provider resumes practice in this state.

(e) If the provider accumulates additional closed claims while a surcharge is in effect, the provider is subject to the higher of the following:

The surcharge imposed under sub. (10) and par. (d).
The surcharge determined by the board following a new review of the provider’s claims record under sub. (5).

(f) If the provider is a physician who changes from one class to another class specified in s. Ins 17.25 (12m) (c) or 17.28 (6s) (c) while a surcharge is in effect, the percentage imposed by the final decision of the board shall be applied to the plan premium, fund fee or both for the physician’s new class effective on the date the class change occurs.

(12) Request from private insurer. If the council receives a request for a recommendation under s. 655.275 (5) (a) 3., Stats., from a private insurer, the council shall follow the procedures specified in subs. (3) to (5) and notify the private insurer and the provider of the determination it would make under sub. (5) (f) if the provider’s primary insurer were the plan. A provider is not entitled to a hearing on any determination reported under this subsection.

(13) Confidentiality. The final decision of the board and all information and records relating to the review procedure are the work product of the board and are confidential.

(14) Member and consultant compensation. Council members and consultants shall be paid $250 per meeting attended or $250 per report filed by a consultant based on the consultant’s review of a file under s. 655.275 (5) (b), Stats.

History

Cr. Register, February, 1988, No. 386, eff. 3-1-88; am. (2) (a) and (b), (3) (a) and (c) 2., (5) (b) (intro.), (7) (a), (8), (9) (a), (11) (f) and (14), cr. (2m) and (4) (c) 2., renum. (4) (c) to be (4) (c) 1., Register, June, 1990, No. 414, eff. 7-1-90; am. (2) (a), (b), (d) and (e), (7) (b), (11) (a), (c) to (e) (intro.) and 1., (f) and (12), renum. (3) (a), (4) (b) (intro.) and 1., (5) (d), (8) to be (3), (4) (c), (5) (e) and (7) (c) and am. (3), (4) (c) and (7) (c), r. (3) (b) and (d), (4) (b) 2., (c) (d), (6) and (11) (b), cr. (2) (cg) and (cr), (2s), (4) (b), (5) (d) and (f), (9) (am), r. and recr. (4) (a), (5) (a) to (c) and (9) (a), Register, January, 1992, No. 433, eff. 2-1-92; CR 03-039: cr. (14) Register October 2003 No. 574, eff. 11-1-03.

Wis. Admin. Code § Ins 17.29 Servicing agent {#sec-ins-17.29 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.29}

(1) Purpose. This section implements s. 655.27 (2), Stats., relating to contracting for claim services for the fund.

(2) Criteria. The board shall establish the criteria for the selection of the servicing agent prior to the expiration of each contract term.

(3) Selection. The commissioner, with the approval of the board, shall select a servicing agent through the competitive negotiation process.

(4) Contract term. The commissioner, with the approval of the board, shall establish the term of the contract with the servicing agent. The contract shall include a provision for its cancellation if performance or delivery is not made in accordance with its terms and conditions.

(5) The servicing agent shall perform all of the following functions:

(am) Reporting to the claims committee of the board on claim files identified by that committee, at the times and in the manner specified by that committee.

(b) Establishing and revising case reserves.

(d) Investigating and evaluating claims.

(e) Negotiating to settlement all claims made against the fund except in cases where this responsibility is retained by the claims committee of the board.

(f) Filing with the commissioner and the board the annual report required under s. 655.27 (2), Stats., and any other report requested by the commissioner or the board.

(g) Reviewing court orders, verdicts and judgments and making recommendations on appeals.

(h) All other functions specified in the contract.

History

Cr. Register, February, 1984, No. 338, eff. 3-1-84; am. (1), (3) and (4), r. and recr. (2), r. (5) (a), renum. (5) (b) to be (5) and am. (5) (intro.), (b) to (g), cr. (5) (am) and (h), Register, June, 1990, No. 414, eff. 7-1-90.

Wis. Admin. Code § Ins 17.30 Peer review council assessments {#sec-ins-17.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.30}

(1) Purpose. This section implements ss. 655.27 (3) (am) and 655.275 (6), Stats., relating to the assessment of fees sufficient to cover the costs, including the costs of administration, of the patients compensation fund peer review council appointed under s. 655.275 (2), Stats.

(2) Assessments.

(a) The following fees shall be assessed annually beginning with fiscal year 1986-87:

Against the fund, one-half of the actual cost of operating the council for each fiscal year, less one-half of the amounts, if any, collected under subd. 3.
Against the plan, one-half of the actual cost of operating the council for each fiscal year, less one-half of the amounts, if any, collected under subd. 3.
Against a private medical malpractice insurer, the actual cost incurred by the council for its review of any claim paid by the private insurer, if the private insurer requests a recommendation on premium adjustments with respect to that claim under s. 655.275 (5) (a) 3., Stats.

(b) Amounts collected under par. (a) 3. shall be applied to reduce, in equal amounts, the assessments under par. (a) 1. and 2. for the same fiscal year.

(3) Payment. Each assessment under sub. (2) shall be paid within 30 days after the billing date.

History

Cr. Register, June, 1987, No. 378, eff. 7-1-87; am. (2) (a) 1. and 2., Register, June, 1990, No. 414, eff. 7-1-90.

Wis. Admin. Code § Ins 17.35 Primary coverage; requirements; permissible exclusions; deductibles {#sec-ins-17.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.35}

(1) Purpose. This section implements ss. 631.20 and 655.24, Stats., relating to the approval of policy forms for health care liability insurance subject to s. 655.23, Stats.

(2) Required coverage. To qualify for approval under s. 631.20, Stats., a policy shall at a minimum provide all of the following:

(a) Coverage for providing or failing to provide health care services to a patient.

(b) Coverage for peer review, accreditation and similar professional activities in conjunction with and incidental to the provision of health care services, when conducted in good faith by an insured.

(c) Coverage for utilization review, quality assurance and similar professional activities in conjunction with and incidental to the provision of health care services, when conducted in good faith by an insured.

(d) Indemnity limits of not less than the amounts specified in s. 655.23 (4), Stats.

(e) Coverage for supplemental payments in addition to the indemnity limits, including attorney fees, litigation expenses, costs and interest.

(f) That the insurer will provide a defense of the insured and the fund until there has been a determination that coverage does not exist under the policy or unless otherwise agreed to by the insurer and the fund.

(g) If the policy is a claims-made policy:

A guarantee that the insured can purchase an unlimited extended reporting endorsement upon cancellation or nonrenewal of the policy.
If the policy is a group policy, a provision that any health care provider, as defined under s. 655.001 (8), Stats., whose participation in the group terminates has the right to purchase an individual unlimited extended reporting endorsement.
A prominent notice that the insured has the obligation under s. 655.23 (3) (a), Stats., to purchase the extended reporting endorsement unless other insurance is available to ensure continuing coverage for the liability of all insureds under the policy for the term the claims-made policy was in effect.
A prominent notice that the insurer will notify the commissioner if the insured does not purchase the extended reporting endorsement and that the insured, if a natural person, may be subject to administrative action by his or her licensing board.

(2b) Aggregate limits; unlimited extended reporting endorsements.

(a) This subsection interprets and implements s. 655.23 (4), Stats.

(b) Highest aggregate limit applies.

‘Claims-made coverage.’ The aggregate limit applicable to all claims reported during a reporting year of a claims-made policy shall be the highest limit specified in s. 655.23 (4) (b), Stats., that applies during the reporting year.
‘Occurrence coverage.’ The limit applicable to all occurrences during an occurrence year of an occurrence policy shall be the highest limit specified in s. 655.23 (4), Stats., that applies during the occurrence year.

(c) Unlimited extended reporting endorsements issued before January 1, 1999. Before January 1, 1999, the aggregate limit applicable to an unlimited extended reporting endorsement shall be one of the following:

The total amount of the annual aggregate limit specified in s. 655.23 (4), Stats., as it applied on the date of the occurrence, shall be available for each occurrence year, less amounts previously paid under any policy for that occurrence year.
The following minimum percentage of the annual aggregate limit specified in s. 655.23 (4), Stats., as it applied to the last reporting year of the canceled or nonrenewed claims-made policy shall be available for all claims reported under the extended reporting endorsement: 100% when the policy was in effect for 1 year or less, including any retroactive coverage period; 130% when the policy was in effect for more than 1 year, but less than or equal to 2 years, including any retroactive coverage period; 150% when the policy was in effect for more than 2 years, but less than or equal to 3 years, including any retroactive coverage period; 160% when the policy was in effect for more than 3 years, including any retroactive coverage period.

(d) Unlimited extended reporting endorsements issued on and after January 1, 1999. On and after January 1, 1999 the minimum aggregate limit applicable to an unlimited extended reporting endorsement shall be that specified in par. (c) 2.

(2e) Requirements for group coverage.

(a) In this section, “provider” means a health care provider, as defined in s. 655.001 (8), Stats.

(b) An insurer or self-insured provider that provides primary coverage under a group policy or self-insured plan shall do all of the following:

At the time of original issuance of the policy or when the self-insured plan takes effect, and each time coverage for an individual provider is added:

a. Furnish each covered provider with a copy of the policy or a certificate of coverage specifying the coverage provided and whether the coverage is limited to a specific practice location, to services performed for a specific employer or in any other way.

b. Include on the first page of the policy or the certificate of coverage, or in the form of a sticker, letter or other form included with the policy or certificate of coverage, that it is the responsibility of the individual provider to ensure that he or she has health care liability insurance coverage meeting the requirements of ch. 655, Stats., in effect for all of his or her practice in this state, unless the provider is exempt from the requirements of that chapter.

For a policy or self-insured plan in effect on October 1, 1993, furnish the documents specified in subd. 1. a. and b. to each individual covered provider before the next renewal date or anniversary date of the policy or self-insured plan.
Notify each covered provider individually when the policy or self-insured plan is cancelled, nonrenewed or otherwise terminated, or amended to affect the coverage provisions.
On the certificate of insurance filed with the fund under s. 655.23 (3) (b) or (c), Stats., and s. Ins 17.28 (5), specify whether the coverage is limited to a specific practice location, to services performed for a specific employer or in any other way.

(2m) Risk retention groups. If the policy is issued by a risk retention group, as defined under s. 600.03 (41e), Stats., each new and renewal application form shall include the following notice in 10-point type:

Note: Subsection (2m) first applies to applications taken on October 1, 1991.

(3) Permissible exclusions. A policy may exclude coverage, or permit subrogation against or recovery from the insured, for any of the following:

(a) Criminal acts.

(b) Intentional sexual acts and other intentional torts.

(d) Defamation.

(e) Employment, religious, racial, sexual, age and other unlawful discrimination.

(f) Pollution resulting in injury to a 3rd party.

(g) Acts that occurred before the effective date of the policy of which the insured was aware or should have been aware.

(h) Incidents occurring while a provider’s license to practice is suspended, revoked, surrendered or otherwise terminated.

(i) Criminal and civil fines, forfeitures and other penalties.

(j) Punitive and exemplary damages.

(k) Liability of the insured covered by other insurance, such as worker’s compensation, automobile, fire or general liability.

(L) Liability arising out of the ownership, operation or supervision by the insured of a hospital, nursing home or other health care facility or business enterprise.

(m) Liability of others assumed by the insured under a contract or agreement.

(n) Any other exclusion which the commissioner determines is not inconsistent with the coverage required under sub. (2).

(4) Deductibles. If a policy includes a deductible or coinsurance clause, the insurer is responsible for payment of the total amount of indemnity up to the limits under s. 655.23 (4), Stats., but may recoup the amount of the deductible or coinsurance from the insured after the insurer’s payment obligation is satisfied.

Note: Subsection (2b) applies to all claims made health care liability insurance policies for which certificates have been filed with the patients compensation fund, whether issued before, on or after July 1, 1994.

Note: See the table of Appellate Court Citations for Wisconsin appellate cases citing s. Ins 17.35.

History

Cr. Register, June, 1990, No. 414, eff. 7-1-90; emerg. cr. (2m), eff. 7-1-91; cr. (2m), Register, July, 1991, No. 427, eff. 8-1-91; cr. (2e), Register, September, 1993, No. 453, eff. 10-1-93; cr. (2b), Register, June, 1994, No. 462, eff. 7-1-94; emerg. r. and recr. (2b) (b) and cr. (2b) (c) and (d), eff. 6-1-98; r. and recr. (2b) (b) and cr. (2b) (c) and (d), Register, August, 1998, No. 512, eff. 9-1-98.

Wis. Admin. Code § Ins 17.40 Notice to fund of filing of action outside this state {#sec-ins-17.40 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.40}

(1) Purpose. This section implements s. 655.27 (5) (a) and (b), Stats., relating to the requirement that the fund be notified of an action filed outside this state within 60 days of service of process on the health care provider or the employee of the health care provider and relating to the duty of the insurer or self-insurer of the provider to provide an adequate defense of the fund and act in good faith and in a fiduciary relationship with respect to any claim affecting the fund.

(2) Primary insurer or self-insurer to give notice to fund. A primary insurer or self-insurer for a health care provider or employee of a health care provider shall notify the fund in writing within 60 days of the insurer or self-insurer’s first notice of the filing of an action outside this state alleging medical malpractice against its insured health care provider or the employee of its insured health care provider or within 60 days of service of process on the insured health care provider or employee thereof, whichever is later. The notice shall provide at a minimum the names and addresses of the parties plaintiff and defendant, the court in which the action is filed, the case number, and copies, if available, of the complaint in the action and answer filed on behalf of the defendant provider.

(3) Failure to give notice. If the primary insurer or self-insurer fails to give notice to the fund as required in sub. (2), the board shall deny fund coverage for the action filed outside this state unless the primary insurer demonstrates, and the board finds, all of the following:

(a) The fund was not prejudiced by the failure to give notice as required, and

(b) It was not reasonably possible to give notice within the time limit.

(4) Failure to act in good faith. If the board denies coverage pursuant to sub. (3), then failure to give notice to the fund of the filing of an action outside this state as required in sub. (2) constitutes a failure to act in good faith on the part of the insurer or self-insurer in violation of s. 655.27 (5) (b), Stats.

History

CR 03-038: cr. Register October 2003 No. 574, eff. 11-1-03.

Wis. Admin. Code § Ins 17.50 Self-insured plans for health care providers {#sec-ins-17.50 omnilex-key=us-wi-regs-official--agency-ins--Ins 17.50}

(1) Purpose. This section implements s. 655.23 (3) (a), Stats.

(2) Definitions. In this section:

(a) “Actuarial” means prepared by an actuary meeting the requirements of s. Ins 6.12 who has experience in the field of medical malpractice liability insurance.

(am) “Affiliated health care providers” means two or more health care providers delivering services as described in s. 655.002 (1), Stats., and who satisfy all of the following:

The health care providers are either legal entities or are employed by one or more separate legal entities over which operating control is exercised by a common controlling legal entity. The controlling legal entity need not be a health care provider.
The incomes of the health care providers are consolidated with the controlling legal entity in audited financial statements prepared under generally accepted accounting principles.

(b) “Level of confidence” means a percentage describing the probability that a certain funding level will be adequate to cover actual losses.

(c) “Occurrence coverage” means coverage for acts or omissions occurring during the period in which a self-insured plan is in effect.

(d) “Office” means the office of the commissioner of insurance.

(e) “Provider,” when used without modification, means a health care provider as defined in s. 655.001 (8), Stats., or affiliated health care providers as defined in par. (am), responsible for the establishment and operation of a self-insured plan.

(f) “Risk margin” means the amount that must be added to estimated liabilities to achieve a specified confidence level.

(g) “Self-insured plan” means a method, other than through the purchase of insurance, by which a provider may furnish professional liability coverage which meets the requirements of ch. 655, Stats.

(h) “Year” means the self-insured plan’s fiscal year.

(3) Coverage.

(a) A self-insured plan shall provide professional liability occurrence coverage with limits of liability in the amounts specified in s. 655.23 (4), Stats., for the provider, the provider’s employees, other than employees who are natural persons defined as health care providers under s. 655.001 (8), Stats., and any other person for whom the provider is legally responsible while the employee or other person is acting within the scope of his or her duties for the provider.

(b) A self-insured plan may also provide occurrence coverage for any natural person who is a health care provider, as defined in s. 655.001 (8), Stats., and who is an employee, partner or shareholder of the provider. The self-insured plan shall provide separate limits of liability in the amounts specified in s. 655.23 (4), Stats., for each such natural person covered.

(c) A self-insured plan shall also provide for supplemental expenses in addition to the limits of liability in s. 655.23 (4), Stats., including attorney fees, litigation expenses, costs and interest incurred in connection with the settlement or defense of claims.

(d) A self-insured plan may not provide coverage for anything other than the professional liability coverage required under ch. 655, Stats., or for any other person than those specified in pars. (a) and (b).

(4) Initial filing. A provider that intends to establish a self-insured plan shall file with the office a proposal which shall include all of the following:

(a) If the provider is not a natural person, the history and organization of the provider.

(b) If the provider is not a natural person, a resolution adopted by the provider’s governing body approving the establishment and operation of a self-insured plan.

(d) An actuarial estimate of the liabilities that will be incurred by the self-insured plan in the first year of operation, an actuarial review of the cost of the first year’s funding and a description of how the self-insured plan will be funded.

(e) If prior acts coverage is required under sub. (6) (f) 1., an actuarial estimate of the liabilities of the provider and any natural person covered under sub. (3) (b) for prior acts, an actuarial review of the cost of funding the coverage and a description of how the coverage will be funded.

(f) An actuarial feasibility study which includes a 5-year projection of expected results.

(g) The identity of the bank that will act as trustee for the self-insured plan and a proposed trust agreement between the provider and the bank.

(h) Any proposed investment policy that will be applicable to the investment of the trust’s assets.

(i) A description of the provider’s existing or proposed risk management program.

(j) The estimated number and the professions of natural persons that the self-insured plan will cover under sub. (3) (b).

(k) A description of the proposed contractual arrangements with administrators, claims adjusters and other persons that will be involved in the operation of the self-insured plan.

(L) The provider’s most recent audited annual financial statement prepared under generally accepted accounting principles that includes, if applicable, all affiliated health care providers covered under the self-insured plan on a consolidated basis.

(m) A proposed draft of a letter of credit, if the provider intends to use one as part of the initial funding, except for affiliated health care providers who are prohibited from using a letter of credit for initial funding.

(n) Any additional information requested by the office.

(5) Review of proposal; approval.

(a) After reviewing a proposal submitted under sub. (4), the office may approve the proposal if all of the following conditions are met:

The initial filing is complete.
The proposal is actuarially sound.
The proposal complies with ch. 655, Stats.
The proposal ensures the provider’s continuing ability to meet the financial responsibility requirements of s. 655.23, Stats.
The provider is sound, reliable and entitled to public confidence and may reasonably be expected to perform its obligations continuously in the future.

(b) If any of the conditions specified under par. (a) is not met, the office may request the provider to submit additional information in writing or may assist the provider in revising the proposal.

(c) A self-insured plan may not begin operation without the written approval of the office which specifies the earliest date operation may begin.

(6) Funding requirements for providers: prohibitions.

(a) The minimum initial funding required for a self-insured plan is $2,000,000.

(b) Before a self-insured plan begins operation, the provider shall establish a trust with a Wisconsin-chartered or federally-chartered bank with trust powers which is located in this state.

(c) For self-insured plans except a self-insured plan for affiliated health care providers, the provider shall provide all of the following:

If the actuarial estimate under sub. (4) (d) is less than $2,000,000, the provider shall, before the self-insured plan begins operation, deposit in the trust cash equal to the first year’s estimated liabilities plus a letter of credit equal to the difference between the cash funding and $2,000,000 except as provided under sub. (4) (m).
In each of the next 3 years, the provider shall make quarterly cash payments to the trust in amounts sufficient to keep the estimated liabilities fully funded and shall keep in effect a letter of credit equal to the difference between the total estimated liabilities and $2,000,000.
If the total estimated liabilities for the 5th year of operation are less than $2,000,000, the provider shall, during that year, make quarterly cash payments to the trust in amounts sufficient to ensure that, by the end of that year, the trust’s cash assets equal $2,000,000, except that if the provider files a written request with the commissioner before the beginning of that year, the commissioner may permit the provider to continue using a letter of credit equal to the difference between the total estimated liabilities and $2,000,000. This permission may be renewed annually if the provider files a written request with the commissioner before the beginning of each subsequent fiscal year.
A letter of credit under this subsection shall meet all of the following conditions:

a. It shall be irrevocable.

b. It shall be issued by a Wisconsin-chartered or federally-chartered bank located in this state.

c. It shall be issued solely for the purpose of satisfying the funding requirements of the trust.

d. It shall describe the procedure by which the trustee may draw upon it.

(d) If the actuarial estimate under sub. (4) (d) is greater than $2,000,000, the provider shall, before the self-insured plan begins operation, deposit $2,000,000 cash in the trust. The provider shall make quarterly cash payments to the trust so that at the end of the first year of operation, the trust’s cash assets equal the first year’s estimated liabilities.

(e) In each subsequent year of the self-insured plan’s operation, the provider shall make quarterly cash payments to the trust in amounts sufficient to ensure that the total cash assets of the trust at the end of each year are not less than the estimated liabilities reported under sub. (8) (a) 1.

(f)

If the provider or any natural person covered under sub. (3) (b) had claims-made coverage before the self-insured plan was established and did not purchase an extended reporting endorsement from the previous carrier, the self-insured plan shall provide coverage for prior acts by means of cash payments to the trust in addition to the funding required for the occurrence coverage.
If the actuarial estimate under sub. (4) (e) is less than $500,000, the provider shall, before the self-insured plan begins operation, deposit in the trust the entire amount of the estimate in cash.
If the actuarial estimate under sub. (4) (e) is greater than $500,000, the provider shall, before the self-insured plan begins operation, deposit in the trust $500,000 or the first year’s estimated payments, whichever is greater. The provider shall make quarterly cash payments to the trust so that at the end of the first year, the trust’s assets include the total estimated liabilities for prior acts.

(g) Quarterly cash payments under this subsection shall be in equal amounts except that the amount of the last quarter’s payment shall be adjusted by the amounts of the trust’s investment income and actual expenses incurred, and except that the first quarter’s payment shall not be less than the amount of a quarterly payment for the previous year before adjustment for income and expenses.

(h)

A provider may not deposit in the trust, and the trustee may not pay from the trust, any funds other than those intended to meet the financial responsibility requirements of ch. 655, Stats., and to pay the administrative expenses of operating the self-insured plan and the trust.
The trustee may not invest any of the trust’s assets in securities or real property of the provider or any of its affiliates.

(i) If the assets of the trust at any time are insufficient to pay all claims against the self-insured plan, the liabilities are those of the provider without recourse against any employee, partner or shareholder covered by the self-insured plan.

(6m) Funding requirements for affiliated health care providers. The minimum initial funding required for a self-insured plan is the greater of $2,000,000 or the actuarial estimate under sub. (4) (d).

(7) Filing prior to operation of self-insured plan. Before an approved self-insured plan begins operation, the provider shall file with the office all of the following:

(a) Certified copies of the executed self-insured plan document and trust agreement.

(b) If the provider is not a natural person, a certified copy of an executed resolution adopted by the provider’s governing body approving the self-insured plan and trust agreement.

(d) The trustee’s certification that the initial amount of cash required under sub. (6) has been deposited in the trust.

(e) A certified copy of any letter of credit held by the trustee.

(f) If any part of the operation of the self-insured plan is conducted by a person other than the provider or an employee, partner or shareholder of the provider, a certified copy of an executed contract with each such person.

(8) Financial reporting.

(a) Within 120 days after the end of a year, the self-insured plan shall submit to the office all of the following:

Actuarial estimates of the projected liabilities for the current year and of the total liabilities for all prior years covered by the self-insured plan and the risk margin for all projected and incurred claims, and an actuarial opinion of the reasonableness of the estimates.
A description of the proposed method of funding for the current year.
The provider’s audited annual financial statement.
The self-insured plan’s audited annual financial statement.

(b) Within 60 days after the end of each quarter, the self-insured plan shall submit to the office the most recent quarterly financial statement of the trust.

(9) Other reporting requirements.

(a) After a self-insured plan begins operation, the provider shall report to the office any proposed change in the self-insured plan document, trust agreement, trust investment policy, letter of credit or any other document on file with the office if the change would materially affect the operation of the self-insured plan or its funding. No proposed change may take effect without the written approval of the office.

(b) The provider shall annually file with the patients compensation fund proof of financial responsibility under s. 655.23, Stats., in the form specified by the office. The provider shall also file proof of financial responsibility on behalf of each natural person covered under sub. (3) (b).

A claim filed with the self-insured plan has a reserve of 50% or more of the limit specified in s. 655.23 (4), Stats., for one occurrence.
The self-insured plan’s total aggregate reserves for the provider or for any natural person covered under sub. (3) (b) for a single year exceed 66% of the limit specified in s. 655.23 (4), Stats., for all occurrences in one year.
A claim filed with the self-insured plan creates potential exposure for the patients compensation fund, regardless of the amount reserved.

(d) The provider shall ensure that all claims paid by the self-insured plan are reported to the medical examining board and the board of governors of the patients compensation fund as required under s. 655.26, Stats.

(10) Discounting prohibited. All actuarial estimates required under this section shall be reported on a nondiscounted basis.

(11) Levels of confidence.

(a) The risk margin used in determining the initial funding under sub. (6) shall be at not less than a 90% level of confidence and, except as provided in pars. (b) and (c), shall remain at that level.

(b) After a self-insured plan has operated for at least 5 years and experience can be reasonably predicted, the office may permit the use of a risk margin of less than a 90%, but not less than a 75%, level of confidence in determining annual funding of the trust. For at least 5 years after such permission is granted, the provider shall fund the difference between the cash required at the lower level of confidence and the 90% level of confidence with funds restricted by the provider or the provider’s governing body for the purpose of paying obligations of the self-insured plan. The restricted funds may be part of the provider’s operating budget rather than assets of the trust.

(c) After a self-insured plan has operated for at least 5 years under par. (b), the office may permit the use of a risk margin of not less than a 75% level of confidence without additional restricted funds if the self-insured plan’s actuary states that the self-insured plan’s exposure base is stable enough to estimate the required liabilities.

(12) Monitoring; orders.

(a) If the office determines that a self-insured plan’s operation does not ensure that the provider can continue to satisfy the conditions specified in sub. (5) (a), the commissioner may order the provider to take any action necessary to ensure compliance with those conditions.

(b) If the provider does not comply with the commissioner’s order within the time specified in the order, the commissioner may order the provider to terminate the self-insured plan and the office may take whatever action is necessary to ensure the continued existence of the trust for a sufficient length of time to meet all of the obligations of the self-insured plan.

(13) Existing self-insured plans; compliance. After this section takes effect, the office may review any approved self-insured plan to determine if it complies with this section. If the office determines that any self-insured plan is not in compliance, the commissioner may order the provider to take any action necessary to achieve compliance.

History

Cr. Register, December, 1989, No. 408, eff. 1-1-90; CR 16-024: cr. (2) (am), am. (2) (e), (4) (L), (m), (6) (title), cr. (6) (c) (intro.), am. (6) (c) 1., cr. (6m) Register September 2016 No. 729, eff. 10-1-16.

Chapter Ins 18 HEALTH BENEFIT PLAN GRIEVANCES AND INDEPENDENT REVIEW ORGANIZATIONS CERTIFICATION AND REVIEW PROCEDURES

Subchapter I Definitions

Wis. Admin. Code § Ins 18.01 Definitions {#sec-ins-18.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.01}

In this chapter:

(1) “Commissioner” means the “commissioner of insurance” of this state or the commissioner’s designee.

(2) “Complaint” means any expression of dissatisfaction expressed to the insurer by the insured, or an insured’s authorized representative, about an insurer or its providers with whom the insurer has a direct or indirect contract.

(2m) “Coverage denial determination” has the meaning as defined in s. 632.835 (1) (ag), Stats., and includes, for individual insurance products, a policy reformation or change in premium charged based upon underwriting or claims information greater than 25% from the premium in effect during the period of contestability except to the extent the modification is due to the applicant’s age or a rate increase applied by the insurer to all similar individual policy forms applied uniformly.

(3) “Expedited grievance” means a grievance where any of the following applies:

(a) The duration of the standard resolution process will result in serious jeopardy to the life or health of the insured or the ability of the insured to regain maximum function.

(b) In the opinion of a physician with knowledge of the insured’s medical condition, the insured is subject to severe pain that cannot be adequately managed without the care or treatment that is the subject of the grievance.

(c) A physician with knowledge of the insured’s medical condition determines that the grievance shall be treated as an expedited grievance.

(4) “Grievance” means any dissatisfaction with an insurer offering a health benefit plan or administration of a health benefit plan by the insurer that is expressed in writing to the insurer by, or on behalf of, an insured including any of the following:

(a) Provision of services.

(b) Determination to reform or rescind a policy.

(d) Claims practices.

(5) “Independent review organizations” means an organization certified under s. 632.835 (4), Stats.

(6) “Independent review” means a review conducted by a certified independent review organization.

(7) “Insured” has the meaning provided in s. 600.03 (23), Stats.

(8) “OCI complaint” means any complaint received by the office of the commissioner of insurance by, or on behalf of, an insured of an insurer offering coverage under a health benefit plan.

(9) “Office” means the “office of the commissioner of insurance.”

(10) “Rescission” or “reformation” of a policy means a determination by an insurer offering health benefit plan, subject to s. 628.34 (3), Stats., to withdraw the coverage back to the initial date of coverage, modify the terms of the policy or adjust the premium rate by more than 25% from the premium in effect during the period of contestability. A modification in premium based upon the applicant’s or insured’s age or a rate increase uniformly applied by the insurer to all similar individual policy forms is not a rescission or reformation of a policy.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 10-023: cr. (2m), (10), am. (4) Register September 2010 No. 657, eff. 10-1-10.

Subchapter II Grievance Procedures

Wis. Admin. Code § Ins 18.02 Definitions {#sec-ins-18.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.02}

In addition to the definitions in s. 632.83, Stats., in this subchapter:

(1) “Health benefit plan” has the meaning provided in s. 632.83, Stats., and includes Medicare supplement and Medicare replacement plans as defined in s. 600.03 (28p) and (28r), Stats., and s. Ins 3.39 (3) (v) and (w). Health benefit plan includes Medicare cost and select plans but does not include Medicare Advantage plans.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 04-121: am. (1) Register June 2005 No. 594, eff. 7-1-05.

Wis. Admin. Code § Ins 18.03 Grievances {#sec-ins-18.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.03}

(1) Definition and explanation of the grievance procedure.

(a) Each insurer offering a health benefit plan shall incorporate within its policies, certificates and outlines of coverage the definition of a grievance as stated in s. Ins 18.01 (4).

(b) An insurer offering a health benefit plan shall develop an internal grievance and expedited grievance procedure that shall be described in each policy and certificate issued to insureds at the time of enrollment or issuance.

(c) In accordance with s. 632.83 (2) (a), Stats., an insurer that offers a health benefit plan shall investigate each grievance.

(2) Notification of right to appeal determinations.

(a) In addition to the requirements under sub. (1), each time an insurer offering a health benefit plan denies a claim or benefit or initiates disenrollment proceedings, the health benefit plan shall notify the affected insured of the right to file a grievance. For purposes of this subchapter, denial or refusal of an insured’s request of the insurer for a referral shall be considered a denial of a claim or benefit.

(b) When notifying the insured of their right to grieve the denial, determination, or initiation of disenrollment, an insurer offering a health benefit plan shall either direct the insured to the policy or certificate section that delineates the procedure for filing a grievance or shall describe, in detail, the grievance procedure to the insured. The notification shall also state the specific reason for the denial, determination or initiation of disenrollment.

(c)

An insurer offering a health benefit plan that is a defined network plan as defined in s. 609.01 (1b), Stats., other than a preferred provider plan as defined in s. 609.01 (4), Stats., shall do all of the following:

a. Include in each contract between it and its providers, provider networks, and within each agreement governing the administration of provider services, a provision that requires the contracting entity to promptly respond to complaints and grievances filed with the insurer to facilitate resolution.

b. Require contracted entities that subcontract for the provision of services, including subcontracts with health care providers, to incorporate within their contracts a requirement that the providers promptly respond to complaints and grievances filed with the insurer to facilitate resolution.

c. Maintain records and reports reasonably necessary to monitor compliance with the contractual provisions required under this paragraph.

d. Take prompt action to compel correction of non-compliance with contractual provisions required under this paragraph.

An insurer offering a health benefit plan that is a preferred provider plan as defined in s. 609.01 (4), Stats., shall do all of the following:

a. Include in each contract between it and its providers, provider networks and within each agreement governing the administration of provider services, a provision that requires the contracting entity to promptly provide the insurer the information necessary to permit the insurer to respond to complaints or grievances described under subd. 2. c.

b. Require contracted entities that subcontract for the provision of services, to incorporate within their contracts, including subcontracts with health care providers, a requirement that the subcontractor promptly provide the insurer with the information necessary to respond to complaints or grievances described under subd. 2. c.

c. Include in its description of the grievance process required under sub. (1), a clear statement that an insured may submit to the insurer offering a health benefit plan a complaint or grievance relating to covered services provided by a participating health care provider.

d. Process and respond to a complaint or grievance described under subd. 2. c.

e. Maintain records and reports reasonably necessary to monitor compliance with the contractual provisions required under this paragraph.

f. Take prompt action to compel correction of non-compliance with contractual provisions required under this paragraph.

(d) If the insurer offering a health benefit plan is either a health maintenance organization as defined in s. 609.01 (2), Stats., or a limited service health organization as defined by s. 609.01 (3), Stats., and the insurer initiates disenrollment proceedings, the insurer shall additionally comply with s. Ins 9.39.

(3) Grievance procedure. The grievance procedure utilized by an insurer offering a health benefit plan shall include all of the following:

(a) A method whereby the insured who filed the grievance, or the insured’s authorized representative, has the right to appear in person before the grievance panel to present written or oral information. The insurer shall permit the grievant to submit written questions to the person or persons responsible for making the determination that resulted in the denial, determination, or initiation of disenrollment unless the insurer permits the insured or insured’s authorized representative to meet with and question the decision maker or makers.

(b) A written notification to the insured of the time and place of the grievance meeting at least 7 calendar days before the meeting.

(c) Reasonable accommodations to allow the insured, or the insured’s authorized representative, to participate in the meeting.

(d) The grievance panel shall comply with the requirements of s. 632.83 (3) (b), Stats., and shall not include the person who ultimately made the initial determination. If the panel consists of at least three persons, the panel may then include no more than one subordinate of the person who ultimately made the initial determination. The panel may, however, consult with the ultimate initial decision-maker.

(e) The insured member of the panel shall not be an employee of the plan, to the extent possible.

(f) Consultation with a licensed health care provider with expertise in the field relating to the grievance, if appropriate.

(g) The panel’s written decision to the insured as described in s. 632.83 (3) (d), Stats., shall be signed by one voting member of the panel and include a written description of position titles of panel members involved in making the decision.

(4) Receipt of grievance acknowledgment. An insurer offering a health benefit plan shall, within 5 business days of receipt of a grievance, deliver or deposit in the mail a written acknowledgment to the insured or the insured’s authorized representative confirming receipt of the grievance.

(5) Authorization for release of information.

(a) An insurer offering a health benefit plan may require a written expression of authorization for representation from a person acting as the insured’s authorized representative unless any of the following applies:

The person is authorized by law to act on behalf of the insured.
The insured is unable to give consent and the person is a spouse, family member or the treating provider.
The grievance is an expedited grievance and the person represents that the insured has verbally given authorization to represent the insured.

(b) An insurer offering a health benefit plan shall process a grievance without requiring written authorization unless the insurer, in its acknowledgement to the person under sub. (4), clearly and prominently does all of the following:

Notifies the person that, unless an exception under par. (a) applies, the grievance will not be processed until the insurer receives a written authorization.
Requests written authorization from the person.
Provides the person with a form the insured may use to give written authorization. An insured may, but is not required to, use the insurer’s form to give written authorization.

(c) An insurer offering a health benefit plan shall accept under par. (a) any written expression of authorization without requiring specific form, language or format.

(d) An insurer offering a health benefit plan shall include in its acknowledgement of receipt of a grievance filed by an authorized representative a clear and prominent notice that health care information or medical records may be disclosed only if permitted by law. The acknowledgement shall state that unless otherwise permitted under applicable law, including the Health Insurance Portability and Accountability Act of 1996, U.S. PL 104-191, ss. 51.30, 146.82 to 146.84, and 610.70, Stats., and ch. Ins 25, informed consent is required and the acknowledgement shall include an informed consent form for that purpose. An insurer offering a health benefit plan may withhold health care information or medical records from an authorized representative, including information contained in its resolution of the grievance, but only if disclosure is prohibited by law. An insurer offering a health benefit plan shall process a grievance submitted by an authorized representative regardless of whether health care information or medical records may be disclosed to the authorized representative under applicable law.

(6) Resolution of a grievance. An insurer offering a health benefit plan shall resolve a grievance:

(a) For a grievance that is a review of a benefit determination that is subject to 29 CFR 2560.503-1, within the time provided under 29 CFR 2560-503-1 (i).

(b) For any grievance not subject to par. (a), within 30 calendar days of receiving the grievance. If the insurer offering a health benefit plan is unable to resolve the grievance within 30 calendar days, the time period may be extended an additional 30 calendar days, if the insurer provides a written notification to the insured and the insured’s authorized representative, if applicable, of all of the following:

That the insurer has not resolved the grievance.
When resolution of the grievance may be expected.
The reason additional time is needed.

(7) Commissioner annual report. The commissioner shall by June 1 of each year prepare a report that summarizes grievance experience reports received by the commissioner from insurers offering health benefit plans. The report shall also summarize OCI complaints involving the insurer offering health benefit plans that were received by the office during the previous calendar year.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; corrections in (2) (c) 1. and (5) (d) made under s. 13.93 (2m) (b) 7., Stats., Register December 2004 No. 588; CR 05-059: am. (2) (c) 1. Register February 2006 No. 602, eff. 3-1-06.

Wis. Admin. Code § Ins 18.04 Right of the commissioner to request OCI complaints be handled as grievances {#sec-ins-18.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.04}

The commissioner may require an insurer offering a health benefit plan to treat and process an OCI complaint as a grievance as appropriate, if the commissioner provides a written description of the complaint to the insurer. The insurer shall process the OCI complaint as a grievance in compliance with s. Ins 18.03.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01.

Wis. Admin. Code § Ins 18.05 Expedited grievance procedure {#sec-ins-18.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.05}

Section Ins 18.03 (2) to (4) and (6) does not apply to expedited grievances. For these situations, an insurer offering a health benefit plan shall develop a separate expedited grievance procedure. An expedited grievance shall be resolved as expeditiously as the insured’s health condition requires but not more than 72 hours after receipt of the grievance. An insurer offering a health benefit plan, upon written request, shall mail or electronically mail a copy of the insured’s complete policy to the insured or the insured’s authorized representative as expeditiously as the grievance is handled.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-011; CR 10-023: am. Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 18.06 Reporting requirements {#sec-ins-18.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.06}

An insurer offering a health benefit plan shall comply with all of the following requirements:

(1) Each record of each complaint and grievance submitted to the insurer shall be kept and retained for a period of at least 3 years. These records shall be maintained at the insurer’s home or principal office and shall be available for review during examinations by or on request of the commissioner or office.

(2) Submit a grievance experience report required by s. 632.83 (2) (c), Stats., to the commissioner by March 1 of each year. The report shall provide information on all grievances received during the previous calendar year. The report shall be in a form prescribed by the commissioner and, at a minimum, shall classify grievances into the following categories:

(a) Plan administration including plan marketing, policyholder service, billing, underwriting and similar administrative functions.

(b) Benefit services including denial of a benefit, denial of experimental treatment, quality of care, refusal to refer insureds or to provide requested services.

Note: A copy of the grievance experience report form OCI26-007, required under par. (2), may be obtained from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison WI 53707-7873.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01.

Subchapter III Independent Review Procedures

Wis. Admin. Code § Ins 18.10 Definitions {#sec-ins-18.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.10}

In addition to the definitions in s. 632.835 (1), Stats., in this subchapter:

(1) “Adverse determination” has the meaning as defined in s. 632.835 (1) (a), Stats. This includes the denial of a request for a referral for out-of-network services when the insured requests health care services from a provider that does not participate in the insurer’s provider network because the clinical expertise of the provider may be medically necessary for treatment of the insured’s medical condition and that expertise is not available in the insurer’s provider network.

(2) “Experimental treatment determination” means a determination by or on behalf of an insurer that issues a health benefit plan to which all of the following apply:

(a) A proposed treatment has been reviewed.

(b) Based on the information provided, the treatment under par. (a) is determined to be experimental under the terms of the health benefit plan.

(c) Based on the information provided, the insurer that issued the health benefit plan denied the treatment under par. (a) or payment for the treatment under par. (a).

(d) Pursuant to s. 632.835 (5) (c), Stats., the cost or expected cost of the denied treatment or payment exceeds, or will exceed during the course of the treatment, the amount published in accordance with s. Ins 18.105.

(3) “Health benefit plan” has the meaning provided in s. 632.835 (1) (c), Stats., and includes Medicare supplement and replacement plans as defined in s. 600.03 (28p) and (28r), Stats., and s. Ins 3.39 (3) (v) and (w). Health benefit plan includes Medicare cost and select plans but does not include Medicare Advantage plans.

(4) “Medical or scientific evidence” means information from any of the following sources:

(a) Peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff.

(b) Peer-reviewed medical literature, including literature relating to therapies reviewed and approved by a qualified institutional review board, biomedical compendia and other medical literature that meet the criteria of the National Institutes of Health’s Library of Medicine for indexing in Index Medicus, Excerpta Medicus (EMBASE), Medline and MEDLARS database Health Services Technology Assessment Research (HSTAR).

(c) Medical journals recognized by the Secretary of Health and Human Services under 42 USC1320c et. seq. of the federal Social Security Act.

(d) Any of the following standard reference compendia most current edition in publication at the time of the dispute:

The American Hospital Formulary Service — Drug Information.
The Center for Drug Evaluation and Research History.
The ADA/PDR Guide to Dental Therapeutics, current edition.
The United States Pharmacopeia — National Formulary.

(e) Findings, studies or research conducted by, or under the auspices of, federal governmental agencies and nationally recognized federal research institutes, including:

The federal Agency for Healthcare Research and Quality.
The National Institutes of Health.
The National Cancer Institute.
The National Academy of Sciences.
The Health Care Financing Administration.
Any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health care services.
Any other medical or scientific evidence that is comparable to the sources listed in this paragraph.

(4e) “Preexisting condition exclusion denial determination” has the meaning as defined in s. 632.835 (1) (cm), Stats.

(4m) “Legal basis” means information from any of the following sources:

(a) The most current version of The American Journal of Jurisprudence.

(b) United States 7th Judicial Circuit Court decisions.

(d) The terms of the insurance contract applicable for the period of coverage in dispute.

(5) “Unbiased” means an independent review organization that complies with all of the following:

(a) Section 632.835 (6), Stats.

(b) The independent review organization does not provide incentives of any kind, including financial incentives, to providers or consumers as inducements for selection as the independent review organization.

(c) The independent review organization does not directly or indirectly receive any compensation, in any form, related to a review, other than the compensation permitted under this subchapter and s. 632.835, Stats.

(d) The independent review organization does not promote, to providers, consumers or insurers any of the following:

A pattern of favorable results or a pattern of favorable results on a particular treatment or subject.
An association with a class of providers, consumers or insurers.
A bias favorable to a class of providers, consumers or insurers.

(e) The independent review organization does not have a pattern of decisions that are unsupported by substantial evidence.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 04-079: am. (2) (d) Register December 2004 No. 588, eff. 1-1-05; CR 04-121: am. (3) Register June 2005 No. 594, eff. 7-1-05; CR 10-023: am. (4) (d), cr. (4e) and (4m) Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 18.105 Annual CPI adjustment for independent review eligibility {#sec-ins-18.105 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.105}

(1) Publication and effective date. The commissioner shall publish to the office of the commissioner of insurance website on or before December 1 of each year the consumer price index for urban consumers as determined by the U.S. Department of Labor and publish the adjusted dollar amount in accordance with s. 632.835 (5) (c), Stats. The adjusted dollar amount published each December shall be used by insurers offering health benefit plans when complying with s. Ins 18.10 (2) (d) and s. 632.835 (1) (a) 4., Stats., effective the following January 1.

(2) Determination of adjusted rates. Insurers offering health benefit plans shall apply the adjusted dollar amount published annually by the commissioner that is required to be met in accordance with s. 632.835 (1) (a) 4. and (b) 4., Stats., as follows:

(a) For adverse determinations when treatment was received by the insured, the insurer shall use the date treatment was received to determine the proper adjusted dollar amount that is required to be met in accordance with s. 632.835 (1) (a) 4., Stats.

(b) For adverse determinations when a course of treatment was received by the insured or terminated by the insurer, the insurer shall use later of the following dates to determine the proper adjusted dollar amount that is required to be met in accordance with s. 632.835 (1) (a) 4., Stats.:

The last date treatment was received by the insured; or,
The date the insurer mailed written notification to the insured, or the insured’s authorized representative, that the course of treatment was terminated or denied.

(c) For experimental treatment determinations the insurer shall use the date the insurer mailed written notification to the insured, or the insured’s authorized representative, that for the proposed treatment the insurer has either denied the treatment or denied payment for the treatment, to determine the proper adjusted dollar amount that is required to be met in accordance with s. 632.835 (1) (b) 4., Stats., and s. Ins 18.10 (2) (d).

Note: Office website address: http://oci.wi.gov.

History

CR 04-079: cr. Register December 2004 No. 588, eff. 1-1-05.

Wis. Admin. Code § Ins 18.11 Independent review {#sec-ins-18.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.11}

(1) Independent review procedures. Each insurer offering a health benefit plan shall establish procedures to ensure compliance with this section and s. 632.835, Stats.

(2) Notification of right to independent review. In addition to the requirements of s. 632.835 (2) (b) or (2) (bg), Stats., and s. Ins 18.03, each time an insurer offering a health benefit plan makes a coverage denial determination the insurer shall provide all of the following in the notice to the insureds:

(a) A notice to an insured of the right to request an independent review. The notice shall comply with s. 632.835 (2) (b) or (2) (bg), Stats., and when required, to be accompanied by the informational brochure developed by the office or in a form substantially similar, describe the independent review process. The notice shall be sent when the insurer offering a health benefit plan makes a coverage denial determination. In addition, the notice shall contain all of the following information:

For coverage denial determinations occurring after June 15, 2002, the notice to an insured shall, in accordance with s. 632.835 (2) (c), Stats., state that the insured, or the insured’s authorized representative, must request independent review within 4 months from the date of the coverage denial determination by the insurer or from the date of receipt of notice of the grievance panel decision, whichever is later.
The notice shall state that the insured, or the insured’s authorized representative, shall select the independent review organization from the list of certified independent review organizations, accompanying the notice, as compiled by the commissioner and available from the insurer.

Note: The commissioner maintains a current listing, revised at least quarterly, of certified independent review organizations and posts the current list on the office website: http://oci.wi.gov.

The notice shall state that the insured’s, or the insured’s authorized representative’s, request for an independent review must be made in writing and contain the name of the selected independent review organization. The notice shall also state that the insured’s, or the insured’s authorized representative, written request be submitted to the insurer and must contain the address and name of the person or position to whom the request is to be sent.
The notice shall include a statement that references s. 632.835 (3) (f), Stats., informing the insured that once the independent review organization makes a determination, the determination may be binding upon the insurer and insured. For preexisting condition exclusion and rescission denial determinations, the notice shall indicate that the independent review organization determination is not binding on the insured.
The notice shall include a statement that references s. 632.835 (2) (d), Stats., informing the insured, or the insured’s authorized representative, that they need not exhaust the internal grievance procedure if either of the following conditions are met:

a. Both the insurer offering a health benefit plan and the insured, or the insured’s authorized representative, agree that the appeal should proceed directly to independent review.

b. The independent review organization determines that an expedited review is appropriate upon receiving a request from an insured or the insured’s authorized representative that is simultaneously sent to the insurer offering a health benefit plan.

The notice shall include a brief summary statement regarding Health Insurance Risk Sharing Plan eligibility as required in s. 632.785, Stats., when the coverage denial determination involved a policy rescission.

(b)

For preexisting condition exclusion denial and rescission determinations that occur on or after January 1, 2010, but prior to the date stated in the notice published by the commissioner in the Wisconsin Administrative Register under s. 632.835 (8) (b), Stats., the notice to an insured shall state that the insured, or the insured’s authorized representative, must request the independent review within 4 months from the date stated in the notice published by the commissioner in the Wisconsin Administrative Register under s. 632.835 (8) (b), Stats.
For preexisting condition exclusion denial and rescission determinations occurring subsequent to the date stated in the notice published by the commissioner in the Wisconsin Administrative Register under s. 632.835 (8) (b), Stats., the notice to an insured shall comply with sub. (2) (a), state that the insured, or the insured’s authorized representative, must request the independent review within 4 months from the date of the preexisting condition exclusion denial or rescission determination by the insurer or from the date of receipt of notice of the grievance panel decision, whichever is later.

(3) Independent review timeframes. In addition to the requirements set forth in s. 632.835 (3), Stats., the following procedures shall be followed:

(a) The insurer offering a health benefit plan, upon receipt of a request for independent review, shall provide written notice of the request to the commissioner and to the independent review organization selected by the insured or the insured’s authorized representative within 2 business days of receipt.

(b) The insurer offering a health benefit plan shall provide the information required in s. 632.835 (3) (b), Stats., to the independent review organization without requiring a written release from the insured in accordance with s. 610.70 (5) (f), Stats.

(bm) The insurer offering a health benefit plan shall provide, upon written request from the insurer or the insured’s authorized representative, a complete copy of the insured’s policy. The insurer offering a health benefit plan shall respond to the written request within 3 business days of the request by mailing or electronically mailing the copy to the insured or the insured’s authorized representative in the format requested.

(c) Information submitted to the independent review organization at the request of the independent review organization by either the insurer or the insured, or the insured’s authorized representative, shall also be promptly provided to the other party to the review.

(d) Paragraphs (a) to (c) do not apply to situations where the independent review organization determines that the normal duration of the independent review process would jeopardize the life or health of the insured or the insured’s ability to regain maximum function. For these situations, the independent review organization shall develop a separate expedited review procedure for expedited situations which complies with s. 632.835 (3) (g), Stats. An expedited review shall be conducted in accordance with s. 632.835 (3) (g) 1. to 4., Stats., and shall be resolved as expeditiously as the insured’s health condition requires.

(4) Disputes.

(a) A dispute between an insured and an insurer regarding eligibility for independent review shall be considered a coverage denial determination and the insured may seek independent review of the determination in accordance with this section.

(b) Disputes that are related to administrative matters, including enrollment eligibility, not related to treatment or services are not eligible for independent review determinations.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 04-079: am. (2) (a) 3. Register December 2004 No. 588, eff. 1-1-05; CR 10-023: am. (2) (intro.), (a) (intro.), 2., 4., 5., r. (2) (a) 1., cr. (2) (a) 7., (b), (3) (bm), (4) Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 18.12 Independent review organization procedures {#sec-ins-18.12 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.12}

(1) Independent review organizations shall have, and demonstrate compliance with, written policies and procedures governing all aspects of both the standard review and expedited review processes as described in s. 632.835, Stats., including all of the following:

(a) A regulatory compliance program that does all of the following:

Tracks applicable independent review laws and regulations.
Ensures the organization’s compliance with applicable laws.
Maintains a current list of potential conflicts of interest updated on no less than a quarterly basis in addition to conducting a conflict review at the time of each case referral to the organization.

(b) A procedure to determine, upon receipt of the referral for review, all of the following:

Whether a conflict of interest exists. If a conflict exists, the independent review organization shall provide a written notification to the insurer, the commissioner and the insured, or the insured’s authorized representative, within 3 business days stating that a conflict exists and declining to take the review, indicating that a different independent review organization will need to be selected by the insured, or the insured’s authorized representative.
The type of case for which review is sought. The independent review organization shall determine if the case relates to a coverage denial determination or an administrative issue. If the independent review organization determines that the review is not related to a coverage denial determination, the independent review organization shall provide written notification to the commissioner, the insured, or the insured’s authorized representative, and the insurer of its determination within 2 business days.
The specific question or issue that is to be resolved by the independent review process.
Whether the amount published in accordance with s. Ins 18.105, has been met based upon the type of determination the insurer made. The independent review organization shall calculate the amount that is required to be met, in accordance with s. 632.835 (1) (a) 4. and (b) 4., Stats., and s. Ins 18.10 (2) (d), as adjusted in accordance with s. 632.835 (5) (c), Stats., and s. Ins 18.105, using the actual cost charged the insured without deduction for cost sharing or contractual agreements with providers.
Whether the case merits standard review or expedited review.

(d) Procedures to ensure that, upon selection of the reviewer, a file which includes all information necessary to consider the case is provided to the reviewer. In cases where more than one reviewer is assigned to the case by the independent review organization, the independent review organization shall provide an opportunity for the reviewers to discuss the case with one another and shall accept the majority decision of the reviewers.

(e) Procedures for consideration of pertinent information for cases referred to independent review organizations regarding an adverse determination, including all of the following:

The insured’s medical records.
The attending provider’s recommendation.
The terms of coverage under the insured’s health benefit plan.
Information accumulated regarding the case prior to its referral to independent review, including the rationale for prior review determinations.
Information submitted to the independent review organization by the referring entity, insured or attending provider.
Clinical review criteria developed and used by the insurer.
Medical or scientific evidence including evidence that is determined to be an efficacious treatment or strategy as defined at s. Ins 3.36 (3) (c), as appropriate.
Legal basis, as appropriate.

(f) Procedures for consideration of pertinent information for cases referred to the independent review organization regarding experimental treatment determinations including all information required in par. (e) and existing medical or scientific evidence regarding the proposed treatment with respect to effectiveness and efficacy.

(g) Policies and procedures to request and accept any additional information that may assist in rendering a determination. Information received by the independent review organization from the insured or attending provider shall be provided to the insurer offering a health benefit plan in order to provide the insurer with the opportunity to reverse its decision.

(h) Procedures to ensure that within 2 business days of rendering a determination, the independent review organization shall, in addition to the requirements of s. 632.835 (3) (f), Stats., send to the insurer offering a health benefit plan, the insured, or the insured’s authorized representative a written notice of the determination that includes all of the following:

The question or issue that was referred for review.
A description of the qualifications of the reviewer or reviewers.
A clinical rationale or explanation for the independent review organization’s determination, including supporting evidence and a clear statement of the decision.
The decision shall be signed by the case reviewer or, in cases where more than one reviewer is assigned to review the case, the signature of at least one of the reviewers.

(i) Procedures to ensure expedited reviews are completed in accordance with s. 632.835 (3) (g), Stats., and take into account the insured’s health condition. Upon completion of the review, the independent review organization shall provide its decision within one hour, or as expeditiously as practicable, to the insured, or the insured’s authorized representative, and the insurer.

(j) Procedures to ensure that the decision of the independent review organization is consistent with s. 632.835 (3m), Stats.

(k) Procedures for determining when the inclusion of an attorney or actuary as a member of a review panel or the advice of an attorney and actuary would provide appropriate and necessary assistance in the review.

(2) Quality assurance procedures. Independent review organizations shall establish, maintain and demonstrate compliance with written quality assurance procedures that promote objective and systematic monitoring and evaluation of the independent review process and that includes, at a minimum, all procedures to ensure the following:

(a) That the independent reviews are conducted within the specified time frames and that required notices are provided in a timely manner.

(b) That the selection of qualified and impartial clinical peer reviewers to conduct independent reviews on behalf of the independent review organization is achieved, including that the matching of reviewers to specific cases is suitable.

(c) The independent review organization shall conduct appropriate training, monitor performance on an ongoing basis and evaluate, no less than annually, each of the reviewers and non-clinical staff.

(d) That the confidentiality of personal medical information is maintained in accordance with state and federal law. Access to personal medical information shall be limited to only the information necessary for review of the services under independent review, used solely for the purpose of independent review and shared only with the selected reviewers, the insurer and the insured or the insured’s authorized representative.

(e) That any person employed by, or under contract with, the independent review organization adheres to the requirements of this section.

(f) That management reports are adequate to track and monitor matters described in pars. (a) to (e).

(3) Accessibility.

(a) The independent review organization shall establish a toll-free telephone service to receive information on a 24-hour, 7-days per week, basis. The telephone service selected shall be capable of accepting, recording or providing appropriate instruction to incoming telephone callers during other than normal business hours.

(b) The independent review organization shall establish policies and procedures to ensure that services are provided during times other than normal business hours to ensure that the independent review organization meets its obligation under sub. (1) (i).

(4) Reviewer qualifications.

(a) In addition to the requirements of s. 632.835 (6m), Stats., the independent review organization shall require all clinical peer reviewers assigned to conduct independent reviews to be physicians or other appropriate health care providers whose qualifications are verified at least every 2 years.

(b) For coverage denial determinations that include a legal review, the independent review organization shall require legal reviewers assigned to conduct independent reviews be attorneys licensed and in good standing in this state and whose qualifications are verified at least every 2 years.

(c) For coverage denial determinations that include review of an underwriting determination, the independent review organization shall require actuaries be assigned to assist in the review and be a member in good standing of the American academy of actuaries and whose qualifications are verified at least every 2 years.

(5) Conflict of interest. In addition to the requirements in s. 632.835 (6), Stats., all clinical peer, legal and actuary reviewers shall, at least quarterly, provide to the independent review organization a list of potential conflicts of interest.

(6) Director.

(a) Except as provided in par. (b), an independent review organization shall employ or contract with a medical director with professional post-residency experience in direct patient care who holds a current license to practice medicine and who has a clinical specialty appropriate to the type of reviews conducted by the independent review organization.

(b) An independent review organization that limits its reviews to matters related to a particular type of health care may employ or contract with a clinical director. The clinical director shall be trained and hold a current license in a medical or health care specialty appropriate to the full scope of the organization’s review.

(c) The independent review organization shall require the medical director or clinical director to oversee the medical or health care aspects of quality assurance and credentialing programs.

(6m) An independent review organization may employ or contract with a law firm, experienced attorney, actuarial entity or experienced actuary to assist in the review of matters related to reformations, rescissions and preexisting condition denial determinations. The independent review organization shall oversee aspects of quality assurance, licensing and expertise of the legal or actuarial reviewer.

(7) Delegated functions. The independent review organization may delegate or subcontract review functions. Nevertheless, the independent review organization is responsible for the delegated or subcontracted functions, including any violation of law, policy or procedure. In addition, an independent review organization that delegates or subcontracts independent review functions shall provide documentation and verification of all of the following:

(a) Written contracts with the subcontractor that delineates with specificity all duties and responsibilities.

(b) A review by the independent review organization, on at least an annual basis, of the subcontractor’s policies, procedures, and quality assurance program, if relevant to the subcontracted functions.

(c) A review by the independent review organization, on at least an annual basis, of the subcontractor’s performance and compliance, monitored by the independent review organization, with stated policies, procedures, quality assurance programs and applicable laws.

(d) A review by the independent review organization, on at least an annual basis, of the effectiveness of communication and coordination of processes between the independent review organization and the subcontractor.

(8) Unbiased. An independent review organization shall be unbiased. An independent review organization shall establish and maintain procedures to ensure that it is unbiased.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 04-079: am. (1) (b) Register December 2004 No. 588, eff. 1-1-05; CR 10-023: am. (1) (b) 1., 2., (e) 7., (4), (5), cr. (1) (e) 8., (k), (6m) Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 18.13 Standards of independent review {#sec-ins-18.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.13}

(1) For coverage denial determinations other than experimental treatment determinations, independent review organizations shall consider any of the following:

(a) Medical or scientific evidence including evidence that is determined to be an efficacious treatment or strategy as defined at s. Ins 3.36 (3) (c).

(b) Legal basis.

(2) Independent review organizations shall include as members or advisors an attorney or actuary when the dispute involves a rescission, reformation or the dispute includes a legal dispute. The addition of an attorney or actuary to a review panel is at the discretion of the independent review organization or reviewers and need only be considered when the independent review organization or reviewers determine additional expertise would provide appropriate and necessary assistance in the review.

History

CR 10-023: cr. Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 18.14 Approval of independent review organizations {#sec-ins-18.14 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.14}

(1) In addition to meeting the requirements established s. 632.835 (4) (a), Stats., any independent review organization seeking approval to conduct independent reviews shall submit an application for approval on a form prescribed by the commissioner and include with the form all documentation and information necessary for the commissioner to determine if the independent review organization is unbiased and satisfies s. Ins 18.12.

(2) The independent review organization shall submit informational materials to the commissioner as part of the application. Materials will be maintained in the office for public review.

(3) The independent review organization shall submit the application fee in accordance with s. 601.31 (1) (Lp), Stats., at the time of the application to an identified lock box address.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01.

Wis. Admin. Code § Ins 18.16 Independent review organization reporting requirements {#sec-ins-18.16 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.16}

(1) An independent review organization shall maintain records on all independent review activity during each calendar year and submit a report to the commissioner, on a form prescribed by the commissioner, by March 1 of each year for the prior calendar year’s experience. Records shall be maintained so that, at a minimum, they satisfy the reporting requirements to the commissioner and shall be retained for at least 3 years.

(2) The annual report shall include all of the following information on an aggregate basis, by insurer and by insurer and insurance product name:

(a) The total number of requests for independent review received.

(b) The total number of requests for independent review declined and the reason for the declination, including whether the request was a qualified request or within the scope of the health benefit plan policy.

(c) The total number of requests for expedited independent review that the independent review organization declined to handle in an expedited timeframe, including whether the request was a qualified request or within the scope of the health benefit plan policy.

(d) The number of independent reviews that were done in an expedited manner and the results of those reviews.

(e) The number of requests for independent review resolved and, of those resolved, the number resolved upholding the coverage denial determination by the insurer and the number resolved reversing the coverage denial determination by the insurer.

(em) The names and specialty of the reviewers participating in reviews conducted during the year. The listing shall include the name of any attorney or actuary or the respective firm, who participated in the reviews.

(f) The average length of time for resolution.

(g) A detailed summary of cases including a synopsis of facts, rationale for decision and key evidence relied upon to reach the reviewer’s decision. The summary shall also include the types of cases or coverage for which an independent review was sought.

(h) The cost of reviews both in the aggregate and on a case by case basis.

(i) The number of independent reviews that were terminated as the result of reconsideration by the insurer offering a health benefit plan of its coverage denial determination after the receipt of additional information from the insured, the insured’s authorized representative, or other appropriate sources.

(j) Any other information the commissioner requests.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 10-023: am. (2) (e), (i), cr. (2) (em) Register September 2010 No. 657, eff. 10-1-10.

Wis. Admin. Code § Ins 18.18 Independent review organization fees {#sec-ins-18.18 omnilex-key=us-wi-regs-official--agency-ins--Ins 18.18}

(1) A certified independent review organization shall submit its fee schedule in accordance with s. 632.835 (4) (ap), Stats., to the commissioner for review and approval.

(2) Fee schedules shall be based on prevailing rates in the industry demonstrated by supporting credible documentation including actual costs for conducting the reviews. Fee schedules shall be on a per case basis according to categories established by the commissioner. The fee schedule shall include a category for the fee payable for a review that is terminated because the insurer voluntarily reverses its decision because of information first received by the insurer after the review is requested.

(3) An insurer offering a health benefit plan shall pay the fee submitted by the independent review organization within 30 days of receipt of a written invoice or billing record from the independent review organization.

(4) The independent review organization may only charge the fees in accordance with the fee schedule that is approved by the commissioner.

(6) If an independent review organization determines the matter is not within its authority to review, it may not charge for that determination.

History

CR 00-169: cr. Register November 2001 No. 551, eff. 12-1-01; CR 10-023: r. (5), am. (6) Register September 2010 No. 657, eff. 10-1-10.

Chapter Ins 19 WISCONSIN HEALTHCARE STABILITY PLAN

Wis. Admin. Code § Ins 19.01 Purpose {#sec-ins-19.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.01}

The commissioner implements 2017 Wis. Act 138 for the purposes of establishing the Wisconsin Healthcare Stability Plan. The commissioner will seek to maximize federal funding for the Wisconsin Healthcare Stability Plan. The commissioner shall design and adjust the payment parameters with the goal to stabilize or reduce premium rates, increase participation by health insurers, improve access to health care providers and services, and mitigate the impact of high-risk individuals participating in the individual health insurance market.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21.

Wis. Admin. Code § Ins 19.02 Definitions {#sec-ins-19.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.02}

In addition to definitions contained in s. 601.80, Stats., the following definitions shall apply in this chapter:

(1) “Audit” has the meaning provided under s. 601.83 (5) (f), Stats., and includes a verification and compliance audit conducted by OCI.

(2) “CMS” means the Centers for Medicare & Medicaid Services within the U.S. department of health and human services.

(3) “Commissioner” has the meaning provided under s. 600.03 (11), Stats.

(4) “Compliant plan” means an individual health benefit plan offered by an eligible health carrier that conforms with regulations set forth in the Affordable Care Act, as applicable, or an individual health benefit plan that provides substantially similar benefits as required by the Affordable Care Act effective July 1, 2018, as defined by the office.

(5) “Eligible health carrier” means an insurer offering a compliant plan either on or off the federally facilitated marketplace that was issued after January 1, 2014, and is not a grandfathered plan or transitional plan. A transitional plan is a health plan in effect on October 1, 2013, and is in compliance with CMS and guidance issued by the office. A grandfathered plan is a health plan that has been continuously offered since March 23, 2010, and in compliance with CMS.

(6) “Enrolled individual” means an insured member of an eligible health carrier during the applicable benefit year for at least one day and who has paid all premium owed for the period in which claims eligible for reinsurance payment were incurred or the eligible health carrier is obligated to pay under law.

(7) “External Data Gathering Environment” or “EDGE server” means the server developed by the CMS in conjunction with the federally facilitated marketplace for health care insurers to submit claims information on enrolled individuals for claims paid for covered services or treatments.

(7m) “Office” or “OCI” has the meaning provided under s. 600.03 (34), Stats.

(8) “Secure file transfer portal” or “FTP” means a manner of securely transferring requested information from the eligible health carrier to the commissioner in a manner specified by the commissioner.

(10) “Wisconsin Healthcare Stability Plan” or “WIHSP” means the Wisconsin healthcare stability plan created under s. 601.83, Stats.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21; correction in (5) made under s. 35.17, Stats., and correction in numbering of (7m) made under s. 13.92 (4) (b) 1., Stats., Register November 2021 No. 791.

Wis. Admin. Code § Ins 19.03 Payment parameters {#sec-ins-19.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.03}

The commissioner shall annually establish the payment parameters for future benefit years through an established procedure that includes all of the following components:

(1) The commissioner shall request, under s. 601.42, Stats., all eligible health carriers to submit data and information from prior and current benefit years including: compliant plan membership, premium experience at a metal and federally facilitated marketplace status level, advanced premium tax credit enrollee information, and other information as requested by the commissioner.

(2) The commissioner shall publish the preliminary payment parameters and a public hearing notice in the Wisconsin Administrative Register and to the OCI website. The commissioner shall hold a public hearing seeking public comment regarding the preliminary payment parameters for the subsequent benefit year.

(3) The commissioner shall set the final payment parameters after consultation with an actuarial firm, consideration of comments received from the public hearing, the goals established in s. 601.83 (2), Stats., and any additional information as appropriate.

(4) The commissioner shall publish the final payment parameters in the Wisconsin Administrative Register and to the OCI website by May 15 of the calendar year prior to the applicable benefit year.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21; correction in (4) made under s. 35.17, Stats., Register November 2021 No. 791.

Wis. Admin. Code § Ins 19.07 Eligible claims {#sec-ins-19.07 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.07}

For claims to be eligible for reinsurance payment, the eligible health carrier shall comply with s. 601.83, Stats., and submit claims that comply with the following criteria:

(1) The claims that were paid for as covered benefits by the eligible health carrier under the terms and conditions of the carrier’s compliant plan for the applicable benefit year including but not limited to medical, surgical, and prescription drug services and treatments.

(2) The claims that were paid by the eligible health carrier after January 1, of the applicable benefit year and before April 30, of the following calendar year, or a date established by the commissioner.

(3) The cumulative amount of the claims paid that exceeds the applicable attachment point. Claims reported shall not include any amount of cost sharing required to be paid by the enrolled individual or the person responsible for the payment of the enrolled individual’s cost sharing. Cost sharing may include any of the following; deductibles, co-insurance, co-payment, visit fees, or similar costs.

(4) The cumulative amount of paid claims shall be reduced by any reimbursement received by the eligible health carrier for the enrolled individual through subrogation, recoupment of overpayments from providers, application of negotiated rates reductions with providers, or recoupment of third-party payment including workers compensation or civil litigation.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21.

Wis. Admin. Code § Ins 19.10 Reporting requirements {#sec-ins-19.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.10}

All eligible health carriers shall provide all requested information as ordered by the commissioner pursuant to s. 601.42, Stats. Information collected under ss. Ins 19.07 and 19.11 may be used on an aggregate basis by the commissioner to satisfy federal and state reporting requirements. Additional data may be requested to inform federal and state reports including: second lowest cost silver rates by rating area demonstrating rates with and without reinsurance payments, actual average premium rates for compliant plans, and actual enrollment for compliant plans.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21; correction made under s. 35.17, Stats., Register November 2021 No. 791.

Wis. Admin. Code § Ins 19.11 Quarterly reporting requirements {#sec-ins-19.11 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.11}

(1) Eligible health carriers shall provide the information required by this section to the commissioner within 45-days from the end of each financial quarter. The data shall be extracted from the health carrier’s claims systems or similar database that tracks enrolled individual’s claims.

(2) Each quarterly report shall be transmitted to the commissioner, pursuant to s. 601.42, Stats., through a secure file transfer portal in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carriers by the commissioner. Information in the report shall include all of the following:

(a) The total number of enrolled individuals as of the last day of the applicable quarter.

(b) The total amount of claims paid by the eligible health carrier in the applicable quarter.

(d) For each identified enrolled individual, the total amount of eligible claims paid, consistent with s. Ins 19.07.

(e) The dollar amount of paid claims eligible for reinsurance payment for each identified enrolled individual.

(f) Any additional information requested by the commissioner.

(3) The eligible health carrier shall use the same enrolled individual’s unique identifier in each quarterly and annual report to the commissioner. For enrolled individuals with claims in more than one quarter, the amounts submitted shall reflect the cumulative dollar amount of eligible claims for that enrolled individual.

(4) The eligible carrier shall report the information required by sub. (2) (a) and (b), and all applicable information for that reporting quarter even if an eligible health carrier does not have updated or eligible claims to identify.

(5) All eligible health carriers who submit quarterly reports in accordance with this section shall retain a copy of the data and all supporting claims and enrollment data in an auditable format for 6 years from the last day of the applicable benefit year.

(6) An authorized representative of the eligible health carrier shall complete an affirmation that the data submitted is accurate, complete, and in compliance with s. Ins 19.07. The affirmation shall be transmitted to the commissioner on the same date as the data file transfer in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carriers by the commissioner.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21.

Wis. Admin. Code § Ins 19.12 Final annual report and affirmations {#sec-ins-19.12 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.12}

(1) Eligible health carriers shall provide a final annual report to the commissioner by or before May 15 of each calendar year after the applicable benefit year, or a date established by the commissioner. The final annual report shall be completed using data as submitted to CMS through the health carrier’s EDGE server that is compliant with all applicable EDGE server requirements. In the event the EDGE server data is no longer available, the eligible health carrier shall use data extracted from the health carrier’s claims systems or similar database that tracks enrolled insured’s validated claims.

(2) The final annual report shall be transmitted to the commissioner through a secure FTP in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carriers by the commissioner. The information shall include all of the following:

(a) The final total number of enrolled individuals for the applicable benefit year utilizing the same unique identifiers as contained in quarterly reports.

(b) The final total dollar amount of claims incurred in the applicable benefit year that were paid by the eligible health carrier no later than April 30 of the next calendar year, or a date established by the commissioner.

(d) Any additional information requested by the commissioner.

(3) An authorized representative of the eligible health carrier shall complete a report affirming the data was derived from the EDGE server and is accurate, in compliance with the EDGE server business rules and s. 601.83, Stats. The affirmation shall be transmitted to the commissioner by or before May 15, or a date established by the commissioner, of each calendar year after the applicable benefit year in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carriers by the commissioner.

(4)

(a) An authorized officer of the eligible health carrier shall attest to the carrier’s compliance with s. 601.83, Stats., in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carrier by the commissioner. The information shall include all of the following:

An attestation that the information provided to the commissioner is accurate, included only eligible claims and was derived from EDGE server data.
An attestation that the information contained the same unique identifiers for enrolled individuals as reported in quarterly or annual reports.
A copy of the Attestation and Discrepancy Reporting Summary confirmation page as reported to CMS. If the Attestation and Discrepancy Reporting Summary contained a dispute, the eligible health carrier shall provide documentation of the disputed data and identify the claims in dispute with the enrolled individual’s unique identifier.
An acknowledgment that the eligible health carrier will not receive a reinsurance payment in the event that WIHSP authorizing statute is amended in a manner that no reinsurance payment is due to any carriers.
An acknowledgment, in accordance with s. 601.83 (5) (h), Stats., that the eligible health carrier shall not bring a lawsuit over any delay in reinsurance payments or reduction in expected reinsurance payments.
Any additional information required by the commissioner.

(b) The eligible health carrier shall transmit the information to the commissioner by or before May 15, of each calendar year after the applicable benefit year, or by a date established by the commissioner.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21; correction in (1) made under s. 35.17, Stats., Register November 2021 No. 791.

Wis. Admin. Code § Ins 19.20 Verification audit {#sec-ins-19.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.20}

(1) The commissioner shall conduct a verification audit of the data submitted for reinsurance payment. The commissioner shall request eligible health carriers to provide information, pursuant to s. 601.42, Stats., including all of the following:

(a) Supporting claims information that includes the following information:

A sample number of claims and specific claims documentation supporting the claim for reinsurance payment. The sample of underlying claims data shall demonstrate that the claims were eligible for reinsurance payment.
Additional documentation for a select number of claims, including proof of payment and payment invoices for certain identified claims as specified by the commissioner.

(b) The requested data shall use the same enrolled individual unique identifier for eligible claims as contained in quarterly or annual reports provided to the commissioner.

(2) If, as a result of the commissioner’s verification audit, a discrepancy is identified the eligible health carriers shall be notified by the commissioner. The health carrier shall respond within 10 days either affirming the commissioner’s finding or providing documents to substantiate the filed data.

(3) Prior to release of the reinsurance payment, the commissioner shall review the claims information provided by the health carrier in the quarterly and annual reports and with the required affirmations or attestations confirming the accuracy of the information.

(4) Eligible health carriers shall retain all supporting information and data in an auditable format for 6 years from the last day of the applicable benefit year.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21.

Wis. Admin. Code § Ins 19.21 Reinsurance payment calculation {#sec-ins-19.21 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.21}

The commissioner shall calculate the dollar amounts eligible for reinsurance payment under s. 601.83 (4) (a), Stats., utilizing the information provided by the eligible health carriers. The commissioner shall consider all of the following information:

(1) The commissioner shall calculate the reinsurance payment by applying the payment parameters as contained in s. 601.83 (4) (a), Stats., to each eligible claim. The commissioner shall provide a preliminary estimate of the reinsurance payments by or before June 30, in the calendar year following the applicable benefit year.

(2) In accordance with s. 601.83 (3) (c), Stats., the aggregate reinsurance payments shall not exceed $200,000,000, or the amount available for the applicable benefit year. If the cumulative total amount of claims across all participating eligible health carriers exceeds $200,000,000, or the amount available for the given benefit year under s. 601.83 (1) (h), Stats., the commissioner shall make reinsurance payments in accordance with s. 601.83 (3) (c), Stats., to each eligible health carrier as follows:

(a) The commissioner shall calculate each carrier’s eligible claims after application of the applicable payment parameters and s. 601.83 (4), Stats.

(b) The commissioner shall distribute reinsurance payments in an amount that is directly proportional to the total available amount then apply the proportion to every participating carrier’s eligible paid claims amounts.

Example: If the Office receives eligible paid claims that aggregate $400,000,000.00 after application of the payment parameters, the Office shall pay 50% of each participating eligible health carrier’s submitted paid claims.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21.

Wis. Admin. Code § Ins 19.22 WIHSP payment reconciliation {#sec-ins-19.22 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.22}

The reconciliation period in this section means the time between June 30, or the date the commissioner notifies eligible health carriers of reinsurance payments, through December 31, of the calendar year following the applicable benefit year. For example, the reconciliation period for benefit year 2019 starts June 30, 2020, and continues through December 31, 2020. The following provisions apply during the reconciliation period:

(1) Eligible health carriers that receive additional adjustments in claim payments or identify additional data corrections during the reconciliation period shall notify the commissioner within 30 days of identifying the overpayment or no later than December 31. If the adjustment or data correction resulted in a WIHSP overpayment, the eligible health carrier shall fully identify the claim, the amount of overpayment, and either of the following as applicable:

(a) For eligible health carriers submitting claims for reinsurance payment during the benefit year in which the reconciliation occurs, the commissioner may reduce that benefit year’s reinsurance payment by the amount of overpayment.

(b) If a health carrier does not submit claims for reinsurance payment during the benefit year in which the reconciliation occurs, the amount of overpayment shall be remitted to the commissioner at the commissioner’s request.

(2) If, after June 30 of the reconciliation period, the eligible health carrier determines it underreported eligible claims as a result of claim adjustments or data corrections, the eligible health carrier shall notify the commissioner of the claim adjustments and data correction with supporting documentation as soon as possible. The commissioner may, at the commissioner’s sole discretion, provide additional reinsurance payments to the eligible health carrier for the applicable benefit year based on such factors as the reason for the underreporting, the timing of the underreporting and the availability of funds for distribution.

(3) If the commissioner identifies an overpayment has occurred to any eligible health carrier the commissioner may order, at the commissioner’s sole discretion, either repayment of the amount of the overpayment or may reduce future reinsurance payments to applicable eligible carriers in the amount of the overpayment.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21; correction in (2) made under s. 35.17, Stats., Register November 2021 No. 791.

Wis. Admin. Code § Ins 19.24 Compliance audit {#sec-ins-19.24 omnilex-key=us-wi-regs-official--agency-ins--Ins 19.24}

(1) The commissioner may, at the commissioner’s sole discretion, conduct an audit in accordance with s. 601.83 (5) (f), Stats., with the reasonable audit costs paid by the audited carrier pursuant to s. 601.45 (1), Stats. The commissioner shall give the carrier reasonable notice and identify the scope of the audit to be conducted.

(2) Upon findings by the commissioner that an eligible health carrier provided falsified data or intentionally provided incomplete data, the commissioner may determine, at the commissioner’s sole discretion, that health carrier is ineligible for reinsurance payments for subsequent benefit years. The health carrier shall be issued an order of the commissioner with administrative hearing rights as contained in s. 227.44, Stats.

History

CR 19-088: cr. Register November 2021 No. 791, eff. 12-1-21.

Chapter Ins 20 INSURANCE MARKETING

Wis. Admin. Code § Ins 20.01 Home solicitation selling {#sec-ins-20.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 20.01}

(1) Purpose.

(a) The purpose of this section is to require certain disclosures by an insurance agent making home solicitation of insurance.

(b) The office of the commissioner of insurance has received numerous complaints indicating that certain presentations may be misleading to consumers unless disclosures are required. The public interest requires that these disclosures be made. The commissioner finds that without these disclosures, such presentations are misleading and deceptive.

(2) Scope. This section applies to all insurance intermediaries or their representatives making home solicitation selling of insurance in the state of Wisconsin.

(3) Definition. For purpose of this section:

(a) “Buyer” means both an actual or prospective purchaser of insurance offered through home solicitation selling.

(b) “Home solicitation sale” or “sale” means a sale resulting from home solicitation selling as defined in par. (c).

(c) “Home solicitation selling” means the solicitation or the offering for sale of insurance where the solicitation or sale is either personally solicited or consummated by the agent at the residence or place of business or employment of the buyer or away from the agent’s regular place of business. Personal solicitation includes solicitations made directly or indirectly by telephone, person to person contact, or by written or printed communication, other than general advertising indicating a clear intent to sell insurance or services at a regular place of business.

(d) “Seller” means a person, insurance agent, representative, insurance intermediary or organization engaged in any of the following:

Home solicitation selling;
Advertising or offering services in home solicitation selling; or
Providing or exercising supervision, direction, or control over sales practices used in home solicitation sales.

(4) Disclosure obligation.

(a) In home solicitation selling every seller shall, at the time of initial contact or communication with the buyer, clearly and expressly disclose:

The seller’s individual name;
The name of the business firm or organization represented;
A statement of the fact that insurance is being sold;
The identity of the insurer, if the solicitation is primarily for a single insurer.
The type of insurance being solicited.

(b) When the initial contact is made in person or by telephone, the disclosures shall be made before asking any questions or making any statements other than an initial greeting.

(c) If the seller receives cash or a check, the seller shall furnish to the buyer, at or prior to the time payment is made, a receipt or other document evidencing the transaction showing:

The date of the sale;
A description of the type of policy applied for;
The total price paid;
The individual name of the person making the sale; and
The name and mailing address of the insurer issuing the policy.

(5) Prohibited practices.

(a) No seller engaged in a home solicitation sale shall represent directly or by implication that the seller is making an offer to specially selected persons or that the buyer or prospective buyer has been specially selected, unless such representations are true and the specific basis for such representations is stated at the same time the representation is made.

(b) No seller engaged in a home solicitation sale shall represent that the seller is conducting a survey, test or research project, or engaged in a contest or other venture to win a cash award, scholarship, vacation or similar prize, when in fact the principal objective is to make an insurance sale or obtain information to help identify sales prospects.

(c) No seller engaged in a home solicitation sale shall represent that the seller is conducting a special sales promotion campaign or making a special limited offer to a few persons only or for a limited period of time, or is authorized to sell the insurance in a few homes, unless the representations are true and the specific basis upon which representations are made is disclosed at the same time as the representations are made to the prospective buyer.

(d) No seller engaged in making a home solicitation sale shall use any false, deceptive or misleading representations to induce a sale, or use any plan, scheme or ruse which misrepresents that the person making the call is selling insurance, or fail to leave the premises at which a sales presentation is made promptly when requested to do so.

(6) Penalty. Violations of this rule shall subject violators and marketing firms to the penalties specified in ss. 601.64 and 601.65, Stats.

History

Cr. Register, April, 1986, No. 364, eff. 5-1-86.

Chapter Ins 21 WORKER’S COMPENSATION INSURANCE

Wis. Admin. Code § Ins 21.01 Termination of worker’s compensation insurance policies {#sec-ins-21.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 21.01}

(1) Purpose. In accordance with s. 631.36 (1) (c), Stats., this rule exempts worker’s compensation insurance, as defined in s. Ins 6.75 (2) (k), from the requirements of s. 631.36, Stats., and establishes specific requirements concerning termination of worker’s compensation insurance contracts.

(2) Scope. This section applies to all worker’s compensation insurance policies issued in Wisconsin. Worker’s compensation insurance policies may provide terms more favorable to policyholders than are required by this rule.

(3) Exemption. Worker’s compensation insurance policies are exempt from the requirements of s. 631.36, Stats.

(4) Midterm cancellations.

(a) Permissible grounds. Except as provided by par. (c), no worker’s compensation insurance policy may be cancelled by the insurer prior to the expiration of the agreed term except for failure to pay a premium due or on grounds stated in the policy, which must be comprehended within one of the following classes:

Material misrepresentation;
Substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract; or
Substantial breaches of contractual duties, conditions or warranties.

(b) Notice. No cancellation under par. (a) is effective until at least 30 days after the 1st class mailing or delivery of a written notice to the policyholder. The cancellation is effective whether or not the notice has been given to the policyholder upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer from carrying insurance under s. 102.28 (2), Stats.

(c) New policies. Paragraphs (a) and (b) do not apply to any worker’s compensation insurance policy that has not been previously renewed if the policy has been in effect less than 60 days at the time the notice of cancellation is mailed or delivered. No cancellation under this paragraph is effective until at least 30 days after the 1st class mailing or delivery of a written notice to the policyholder. The cancellation is effective whether or not the notice has been given to the policyholder upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer from carrying insurance under s. 102.28 (2), Stats.

(5) Anniversary cancellation. A worker’s compensation policy may be issued for a term longer than one year or for an indefinite term with a clause providing for cancellation by the insurer in the manner provided in sub. (6) (a) for nonrenewals, except the notice must be given at least 60 days prior to any anniversary date and an insurer may not cancel a policy solely because of the termination of an insurance marketing intermediary’s contract with the insurer unless the insurer complies with sub. (7).

(6) Nonrenewal.

(a) Notice required. Subject to subs. (4) and (5), a policyholder has a right to have the worker’s compensation policy renewed, on the terms then being applied by the insurer to similar risks, for an additional period of time equivalent to the expiring term if the agreed term is one year or less, or for one year if the term is longer than one year, unless at least 60 days prior to the date of expiration provided in the policy a notice of intention not to renew the policy beyond the agreed expiration date is mailed or delivered to the policyholder, or with respect to failure timely to pay a renewal premium a notice is given, not more than 75 days nor less than 30 days prior to the due date of the premium, which states clearly the effect of nonpayment of premium by the due date.

(b) Prohibited nonrenewal. Notwithstanding par. (a), an insurer may not refuse to renew a worker’s compensation policy solely because of the termination of an insurance marketing intermediary’s contract with the insurer unless the insurer complies with sub. (7).

(c) Exceptions. A nonrenewal of a worker’s compensation policy is effective whether or not the notice has been given to the policyholder upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer from carrying insurance under s. 102.28 (2), Stats.

(7) Policy cancellation. An insurer may refuse to renew or may cancel a worker’s compensation policy under sub. (5) or (6) solely because of the termination of an insurance marketing intermediary’s contract with the insurer only if the notice of nonrenewal or cancellation contains an offer to continue or renew the policy with the insurer if the insurer receives a written request from the policyholder prior to the cancellation or renewal date. The insurer shall continue or renew the policy if a timely request is received unless the policyholder does not meet normal underwriting criteria. However, the cancellation or nonrenewal is effective whether or not the notice contains an offer to continue or renew the policy upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer from carrying insurance under s. 102.28 (2), Stats.

(8) Information about grounds. A notice of cancellation or nonrenewal under sub. (4), (5) or (6) shall state with reasonable precision the facts on which the insurer’s decision is based. No such notice is effective unless it so states the facts. However, the cancellation or nonrenewal is effective whether or not the notice states with reasonable precision the facts [on] which the insurer’s decision is based, upon the effective date of replacement insurance coverage obtained by the employer or of an order exempting the employer from carrying insurance under s. 102.28 (2), Stats.

(9) Cancellation or nonrenewal notice. Notice of cancellation or nonrenewal under sub. (4) (b) or (6) is not effective unless the notice contains adequate instructions to the policyholder for obtaining insurance through the Wisconsin worker’s compensation insurance pool. This paragraph does not apply to worker’s compensation policies cancelled or nonrenewed on behalf of the Wisconsin worker’s compensation insurance pool or if the ground for cancellation or nonrenewal is nonpayment of premium and the notice of cancellation or nonrenewal so states.

(10) Cancellation for nonpayment of premium. Subsections (8) and (9) do not apply if the ground for cancellation or nonrenewal is nonpayment of the premium and if the notice so states. No termination of worker’s compensation insurance is effective unless such termination complies with s. 102.31 (2), Stats., including the entity designated by the department of industry, labor and human relations receiving proper notice at least 60 days prior to any nonrenewal under sub. (5) or (6) and at least 30 days prior to any cancellation under sub. (4).

(11) Insurer’s liability. There is no liability on the part of and no cause of action of any nature arises against any insurer, its authorized representatives, its agents, its employes, or any firm, person or corporation furnishing to the insurer information relating to the reasons for cancellation or nonrenewal, for any statement made by them in complying or enabling the insurer to comply with this section, or for the provision of information pertaining thereto.

(12) Return premiums. If an insurer cancels a worker’s compensation policy, the insurer shall return to the insured the pro rata unearned premium less any audit premiums which are due.

History

Cr. Register, January, 1987, No. 373, eff. 2-1-87; cr. (4) (i), Register, April, 1992, No. 436, eff. 5-1-92; am. (4) (a) (intro.), renum. (4) (b), (c), (d), (f) to (i) to be (4) (c), (5), (6) (c), (9) to (12) and am., cr. (4) (b), (6) (a) and (b), (7) and (8), r. (4) (e), Register, August, 1995, No. 476, eff. 9-1-95.

Chapter Ins 22 LEGAL EXPENSE INSURANCE

Wis. Admin. Code § Ins 22.01 Purpose {#sec-ins-22.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 22.01}

(1) Findings. The commissioner of insurance finds that certain plans of legal expense coverage, although they may constitute insurance plans, do not require regulation by the commissioner of insurance. The conduct of the lawyers is regulated by the state supreme court and, given the minimal coverage aspects of these plans, they do not require regulation by the commissioner. All other forms of legal expense insurance are subject to full insurance regulation.

(2) Purpose. This section exempts certain legal expense insurance from regulation and limits the regulation of other legal expense insurance plans.

(3) Scope. This chapter applies to all legal expense insurance written in the state of Wisconsin.

(4) Statutes interpreted. Wisconsin Statutes interpreted and implemented by this rule are: ss. 600.01 (1) (b) 5., 600.13, 601.41, 618.21, 623.11, 623.12 and 628.34 (12), Stats.

(5) Definitions.

(a) “Commissioner” means the commissioner of insurance.

(b) “Insurer” means any person doing an insurance business in the state as defined in s. 618.02, Stats.

(c) “Legal expense insurance” means the contractual obligation to provide specific legal services or to reimburse for specific legal expenses in consideration of specified payment for an interval of time, regardless of whether the payment is made by the beneficiary individually or by a third person for the beneficiary but does not include the provision of, or reimbursement for, legal services incidental to other insurance coverages.

History

Cr. Register, January, 1989, No. 397, eff. 2-1-89; correction in (4) made under s. 13.93 (2m) (b) 7., Stats., Register, September, 1999, No. 525.

Wis. Admin. Code § Ins 22.02 Exemptions {#sec-ins-22.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 22.02}

The provisions of chs. 600 to 655, Stats., do not apply to:

(1) Any lawyer referral service operated by the Wisconsin state bar or a local bar association.

(2) The furnishing of legal assistance by labor unions or other employe organizations to their members for matters relating to employment or occupation.

(3) The furnishing of legal assistance to members or their dependents by a church, cooperative, educational institution, credit union, or organization of employes if:

(a) The organization is established primarily for purposes other than to obtain insurance or to provide legal assistance or both;

(b) The organization contracts directly with a lawyer or law firm for the provision of legal services; and

(c) The administration and marketing of the legal services are conducted wholly by the organization and solely to individuals who are members of the organization.

(4) Employe welfare benefit plans to the extent that state laws are superseded by the Employee Retirement Income Security Act of 1974, 29 USC 1144, if evidence of exemption from state laws is shown to the commissioner.

History

Cr. Register, January, 1989, No. 397, eff. 2-1-89.

Wis. Admin. Code § Ins 22.03 Limited regulation {#sec-ins-22.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 22.03}

(1) Legal expense insurance plans which market plans which comply with all the following provisions are subject only to the requirements listed in subs. (2) and (3):

(a) Except as provided by par. (c), the plan’s legal services are limited to advice, consultation, preparation of a simple will or power of attorney or other simple, routine legal documents, and do not include representation in litigation except as provided in par. (c);

(b) The total annual cost including all fees, charges, or other consideration for one year of coverage under the plan does not exceed $200 per contract holder;

(c) Legal services other than those described under par. (a) provided under the plan are charged at predetermined or reduced rates which are not substantially below the usual charge by the same attorney for those services, but not less than 70% of the rate usually charged nonparticipants for the same service;

(d) A participant in the plan is not obligated to continue participation in the plan or to make further payments or to pay any fee or penalty to the plan if the participant wishes to withdraw from the plan at any time;

(e) A copy of the legal expense insurance contract and the form of agreement utilized under par. (f) is filed with the commissioner; and

(f) All legal services are to be provided either by partners, members, or employes of the plan or by individuals who have a written agreement to provide legal services to plan participants, which agreement includes provisions which:

Waive any liability of plan participants for compensation for services provided by the contractor if the services are covered by the plan; and
Require legal services must be rendered to the participants regardless of any breach of the contract by the plan including, but not limited to, the plan’s failure to make payments or the plan’s insolvency.

(2) Any plan described in sub. (1) is subject to only the following statutes and any related administrative rule:

(a) Sections 601.41 to 601.45, Stats.;

(b) Sections 601.61 to 601.73, Stats.;

(d) Chapter 630, Stats.; and

(e) Section 631.36, Stats.

(3) Any plan described in sub. (1) shall reply promptly in writing or other designated form supplying information requested by the commissioner in writing.

History

Cr. Register, January, 1989, No. 397, eff. 2-1-89.

Wis. Admin. Code § Ins 22.04 Plans included {#sec-ins-22.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 22.04}

Any legal expense insurance contract made by attorneys-at-law or law firms which are both promoted by mass-marketing techniques and charge a fee for the plan which is not based on an individual estimate of the nature, quantity, complexity, and amount of services to be provided each client are subject to this chapter unless otherwise exempted by s. Ins 22.02.

History

Cr. Register, January, 1989, No. 397, eff. 2-1-89.

Wis. Admin. Code § Ins 22.05 Other legal expense insurance not authorized {#sec-ins-22.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 22.05}

This chapter does not authorize an insurer to transact any insurance business, other than that of legal expense insurance exempted under this chapter, unless it is authorized under a certificate of authority issued by the commissioner under the provisions of chs. 600 to 655, Stats.

Note: This rule does not preempt any plan from compliance with supreme court rules including 11.06.

History

Cr. Register, January, 1989, No. 397, eff. 2-1-89.

Chapter Ins 23 STANDARDS FOR INSURANCE MARKETED TO FUND PREARRANGED FUNERAL PLANS

Wis. Admin. Code § Ins 23.01 Purpose {#sec-ins-23.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.01}

The rule establishes minimum standards for benefits, claims payments, marketing practices, compensation arrangements and reporting practices for funeral policies.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.10 Definitions {#sec-ins-23.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.10}

In this chapter:

(1) “Advertisement” has the meaning given in s. Ins 2.16 (3) (a) 1.

(2) “Consideration” means remuneration of any kind including, but not limited to, commission payments, cash, services, benefits, bonuses, goods or the benefit of marketing efforts.

(3) “Cumulative premiums” means all sums paid as consideration, net of dividends paid in cash in an orderly progression, for the coverage during the first 10 years of the policy, excluding amounts which are designated in the policy or certificate as providing for annuity benefits.

(4) “Funeral director” has the meaning given in s. 445.01(5), Stats.

(5) “Funeral establishment” has the meaning given in s. 445.01(6), Stats.

(6) “Funeral policy” means a life insurance or annuity policy sold for the purpose of funding a prearranged funeral plan which is sold by an insurance intermediary who is the authorized and appointed agent of the funeral director or funeral establishment providing the prearranged funeral plan.

(7) “Prearranged funeral plan” has the meaning given in s. 445.125 (3m) (a) 2., Stats.

(8) “Solicitation” means offering a policy for sale by telephone or personal contact or by written or printed communication at any location including the insurance intermediary’s regular place of business.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.20 General {#sec-ins-23.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.20}

(1) An insurance intermediary may sell a life insurance or annuity policy for the purpose of funding a prearranged funeral plan only if:

(a) The insurance intermediary is an authorized and appointed agent under s. 445.125 (3m), Stats. of the funeral director or funeral establishment which provides the prearranged funeral plan; or

(b) The insurance intermediary does not, directly or indirectly, receive referrals or other marketing information from a funeral director or operator of a funeral establishment or an agent of the funeral director or funeral establishment, sell the prearranged funeral plan, or participate in the sale of the prearranged funeral plan.

(2) No insurer may accept an application which an insurance intermediary solicited in violation of sub. (1) or another provision of this chapter.

(3) An insurer shall establish reasonable procedures to prevent violations of subs. (1) and (2).

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.25 Agent representation of affiliation {#sec-ins-23.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.25}

(1) No insurance intermediary may represent that he or she is affiliated with or representing a funeral operator or funeral establishment unless he or she is an authorized agent of the funeral operator or funeral establishment under s. 445.125 (3m), Stats.

(2) An insurer shall establish reasonable procedures to prevent violations of sub. (1).

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.30 Requirements for funeral policies {#sec-ins-23.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.30}

(1) No insurer may sell or issue a policy as a funeral policy unless all of the following occur:

(a) The policy is an individual whole life or group whole life or an annuity policy.

(b) The funeral policy if issued on a multi-premium basis provides an unintentional lapse provision which requires written notification to the insured and to one person designated by the insured to receive notification if no premium is received by the insurer during a grace period of no less than 30 days.

(c) The funeral policy provides that death benefits which exceed the actual final costs of the burial expenses shall be paid to the insured’s beneficiary or if no beneficiary is named, the insured’s estate.

(d) The funeral policy provides the unrestricted right to return the policy or certificate within 30 days of the date it is received by the policyholder. If the policyholder returns the policy or certificate, the insurance contract is void and all payments made under it shall be refunded directly to the policyholder by the insurer.

(e) Notification of the right to return is conspicuously printed on the front page of the funeral policy or conspicuously attached to the funeral policy.

(f) The insurance intermediary obtains a delivery receipt from the insured when the policy is given to the insured.

(g) The funeral policy provides that cancellation of the prearranged funeral plan does not automatically cancel the policy.

(2) No insurer may submit policy forms for funeral policies pursuant to s. 631.20, Stats. unless the forms comply with ch. Ins 2 and all of the following are included in the filing:

(a) An application form with provisions for signature by the applicant and insurance intermediary.

(b) A consideration plan and, within 30 days of any revisions to the consideration plan, the revised consideration plan including all of the following:

A description of consideration which may be paid to any person relating to the sale or renewal of a funeral policy.
A listing describing all consideration the insurer provides to the funeral director or operator of the funeral establishment for endorsing the insurer’s product or direct or indirect assistance in marketing of the product.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97; r. (1) (b) and (2) (d), renum. (1) (c) to (h) to be (1) (b) to (g), am. (2) (b), Register, January, 2001, No. 541, eff. 2-1-01.

Wis. Admin. Code § Ins 23.50 Minimum standards for claims payments under a funeral policy {#sec-ins-23.50 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.50}

(1) The insurer shall not pay policy death benefits to a funeral director or funeral establishment unless the prearranged funeral plan is in effect at the time of the insured’s death.

(2) In the event of the insured’s death, the insurer shall not pay to the funeral director or establishment more than the actual final costs billed by the funeral director or funeral establishment. The remainder or excess due under the policy is to be paid to the beneficiary designated by the insured to receive any policy benefits which exceed the actual final costs or, if no beneficiary has been designated by the insured, the insured’s estate.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.60 Requirements for advertisements of funeral policies {#sec-ins-23.60 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.60}

(1) Advertisements for funeral policies shall comply with all relevant statutes and rules, including but not limited to ch. Ins 2.

(2) An insurer or insurance intermediary placing or using or publishing an advertisement which may be utilized directly or indirectly in the solicitation or sale of a funeral policy shall disclose the following in a clear and conspicuous manner:

(a) That a purpose of the advertisement is the solicitation of insurance.

(b) That an insurance intermediary may contact any person who responds to the advertisement.

(3) No insurer or insurance intermediary may use a response from an advertisement of a prearranged funeral plan regardless of who placed or published the advertisement unless the advertisement includes the disclosures required under sub. (2).

(4) The insurer whose policy is advertised has the responsibility for the content, form and method of dissemination of all advertisements, regardless of who designed, created, wrote, printed or utilized them.

(5) An insurer shall require its insurance intermediaries, and all other persons or agencies acting on its behalf in preparing advertisements, to submit advertisements to it for approval prior to use of the advertisement.

(6) An insurer shall maintain a copy of every advertisement and all correspondence for each advertisement submitted for approval or used in Wisconsin for 3 years after the advertisement was last used.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.70 Marketing procedures {#sec-ins-23.70 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.70}

(1) The insurer shall establish and implement written marketing procedures for funeral policies to ensure compliance with solicitation, disclosure, and suitability requirements.

(2) The insurer shall train and monitor its agent force to ensure compliance with the written marketing procedures and provide each a copy of the written procedures.

(3) The insurer shall maintain a copy of the marketing procedures.

(4) The insurer shall maintain a copy of the list of funeral goods and services contracted for in the prearranged funeral plan at the time of the application.

(5) No insurer may accept an application unless the application is complete and on a form approved under s. 631.20, Stats., and in compliance with this section.

(6) The insurer shall provide the following disclosures and statements and ask the following questions on the application form in print no less than 12 point type:

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Wis. Admin. Code § Ins 23.80 Suitability {#sec-ins-23.80 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.80}

(1) An insurer shall establish written suitability standards to assure that inappropriate, unsuitable or excessive insurance is not sold or issued to fund prearranged funeral plans.

(2) An insurer shall require that the suitability standards include, but not limited to the following:

(a) The appropriateness of using a funeral policy to fund a prearranged funeral plan.

(b) The appropriateness of using an existing insurance policy to fund the prearranged funeral plan.

(3) The insurer shall train and monitor its insurance intermediaries to ensure compliance with the suitability standards in their sales practices.

(4) An insurer or an insurance intermediary shall take an application or issue a funeral policy only if the funeral policy is suitable for the applicant.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97; correction in (2) made under s. 13.93 (2m) (b) 1., Stats., Register, January, 2001, No. 541.

Wis. Admin. Code § Ins 23.90 Solicitation and disclosure requirements {#sec-ins-23.90 omnilex-key=us-wi-regs-official--agency-ins--Ins 23.90}

(1) Any insurance intermediary who solicits funeral policies shall comply with all applicable statutes and rules, including but not limited to s. 628.34 (1), Stats. and ch. Ins 20.

(2) Every insurance intermediary intending to solicit the sale of a funeral policy shall at the time of the initial contact or communication with the prospective buyer, clearly and expressly disclose:

(a) The name of the individual insurance intermediary who solicited the sale of the funeral policy.

(b) The name of the funeral home represented.

(d) The identity of the insurer.

(e) The type of insurance being solicited.

(3) Insurance intermediaries shall not:

(a) Make any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer.

(b) Employ undue pressure to purchase or recommend the purchase of insurance or any method of marketing having the effect of inducing or tending to induce, the purchase of insurance through force, fright, or threat, whether explicit or implied.

(c) Make use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose is solicitation of the purchase of insurance and that contact will be made by an insurance intermediary.

(d) Use any advertisement, or responses from any advertisement, which has not been approved by the insurer.

(4) No insurance intermediary may directly or indirectly prevent or dissuade or attempt to prevent or dissuade any person from filing a complaint with the office of the commissioner of insurance, cooperating with the office of the commissioner of insurance in any investigation or attending or giving testimony at any proceeding authorized by law.

(5) An insurance intermediary shall provide the insurer at the time the funeral policy application is submitted, a list of the funeral goods and services contracted for by the insured in the prearranged funeral plan.

(6) After receiving a funeral policy from the insurer, the insurance intermediary shall:

(a) Promptly deliver the policy to the policyholder.

(b) Obtain from the insured a signed policy delivery receipt.

(d) Forward a copy of the signed policy delivery receipt to the insurer within 7 days of delivery.

History

Cr. Register, July, 1997, No. 499, eff. 10-1-97.

Chapter Ins 25 PRIVACY OF CONSUMER FINANCIAL AND HEALTH INFORMATION

Subchapter I General Provisions

Wis. Admin. Code § Ins 25.01 Authority {#sec-ins-25.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.01}

This chapter is promulgated pursuant to the authority granted by ss. 601.41 (3), 610.70, 628.34 (12), and 633.17, Stats.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.02 Purpose and scope {#sec-ins-25.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.02}

(1) Purposes. This chapter governs the treatment of nonpublic personal health information and nonpublic personal financial information about individuals by all licensees of the office of the commissioner of insurance except to the extent that a licensee is excepted from a provision of this chapter. This chapter does all of the following:

(a) It requires a licensee to provide notice to individuals about its privacy policies and practices.

(b) It describes the conditions under which a licensee may disclose nonpublic personal health information and nonpublic personal financial information about individuals to affiliates and nonaffiliated third parties.

(2) Compliance. This chapter applies to:

(a) Nonpublic personal financial information about individuals who obtain or are beneficiaries of products or services primarily for personal, family or household purposes from licensees, about individuals who are beneficiaries under group health plans and claimants under workers’ compensation policies, and about individuals who are third-party claimants against products or services obtained for business, commercial or agricultural purposes. This chapter does not apply to information about companies or about individuals who obtain products or services for business, commercial or agricultural purposes; and

(b) All nonpublic personal health information about individuals who obtain or are beneficiaries of products or services primarily for personal, family or household purposes from licensees, about individuals who are beneficiaries under group health plans and claimants under workers’ compensation policies, and about individuals who are third-party claimants against products or services obtained for business, commercial or agricultural purposes, except to the extent the information is subject to s. 51.30, 146.81 to 146.84 or 610.70, Stats.

(3) Extra-territorial application. A licensee domiciled in this state that is in compliance with this chapter in a state that has not enacted laws or regulations that meet the requirements of Title V of the Gramm-Leach-Bliley Act (PL 102-106) is in compliance with Title V of the Gramm-Leach-Bliley Act in such other state.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.03 Rule of construction {#sec-ins-25.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.03}

The examples in this chapter and the sample clauses in Appendix A of this chapter are not exclusive. Compliance with an example or use of a sample clause, to the extent applicable, constitutes compliance with this chapter.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.04 Definitions {#sec-ins-25.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.04}

As used in this chapter, unless the context requires otherwise:

(1) “Affiliate” means any company that controls, is controlled by or is under common control with another company.

(2)

(a) “Clear and conspicuous” means that a notice is reasonably understandable and designed to call attention to the nature and significance of the information in the notice.

(b) The following are examples of the application of “clear and conspicuous:”

‘Reasonably understandable.’ A licensee makes its notice reasonably understandable if it does all of the following:

a. Presents the information in the notice in clear, concise sentences, paragraphs, and sections.

b. Uses short explanatory sentences or bullet lists whenever possible.

c. Uses definite, concrete, everyday words and active voice whenever possible.

d. Avoids multiple negatives.

e. Avoids legal and highly technical business terminology whenever possible.

f. Avoids explanations that are imprecise and readily subject to different interpretations.

‘Designed to call attention.’ A licensee designs its notice to call attention to the nature and significance of the information in it if the licensee does all of the following:

a. Uses a plain-language heading to call attention to the notice.

b. Uses typeface and type sizes that are easy to read.

c. Provides wide margins and ample line spacing.

d. Uses boldface or italics for key words.

e. In a form that combines the licensee’s notice with other information, uses distinctive type size, style, and graphic devices, such as shading or sidebars.

‘Notices on web sites.’ If a licensee provides a notice on a web page, the licensee designs its notice to call attention to the nature and significance of the information in it if the licensee uses text or visual cues to encourage scrolling down the page if necessary to view the entire notice and ensures that other elements on the web site, such as text, graphics, hyperlinks or sound, do not distract attention from the notice, and the licensee does any of the following:

a. Places the notice on a screen that consumers frequently access, such as a page on which transactions are conducted.

b. Places a link on a screen that consumers frequently access, such as a page on which transactions are conducted, that connects directly to the notice and is labeled appropriately to convey the importance, nature and relevance of the notice.

(3) “Collect” means to obtain information that the licensee organizes or can retrieve by the name of an individual or by identifying number, symbol or other identifying particular assigned to the individual, irrespective of the source of the underlying information.

(4) “Commissioner” means the commissioner of insurance.

(5) “Company” means a corporation, limited liability company, business trust, general or limited partnership, association, sole proprietorship or similar organization.

(6)

(a) “Consumer” means an individual about whom a licensee has nonpublic personal information, who:

Seeks to obtain, obtains or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family or household purposes;
Is a claimant under a workers’ compensation policy;
Is insured under a group health plan; or
Is a third-party claimant under an insurance product or service obtained for business, commercial or agricultural purposes,.

(b) The following are examples of consumers:

An individual who provides nonpublic personal information to a licensee in connection with obtaining or seeking to obtain financial, investment or economic advisory services relating to an insurance product or service is a consumer regardless of whether the licensee establishes an ongoing advisory relationship.
An applicant for insurance prior to the inception of insurance coverage is a licensee’s consumer.
An individual is a licensee’s consumer if all of the following conditions exist:

a. The individual is a beneficiary of a life insurance policy underwritten by the licensee, a claimant under an insurance policy issued by the licensee, a named insured or an annuitant under an insurance policy or an annuity, respectively, issued by the licensee, or a mortgagor of a mortgage covered under a mortgage insurance policy.

b. The licensee discloses nonpublic personal financial information about the individual to a nonaffiliated third party other than as permitted under ss. Ins 25.50, 25.55, and 25.60.

Provided that the licensee provides the initial notice under s. Ins 25.10 to the plan sponsor, group or blanket insurance policyholder, group annuity contract-holder, or workers’ compensation policyholder and that the licensee does not disclose to a nonaffiliated third party nonpublic personal financial information about such an individual other than as permitted under ss. Ins 25.50, 25.55, and 25.60, an individual is not the consumer of the licensee solely because the individual is any of the following:

a. A participant or a beneficiary of an employee benefit plan that the licensee administers or sponsors or for which the licensee acts as a trustee, insurer or fiduciary.

b. Covered under a group or blanket insurance policy or group annuity contract issued by the licensee.

c. A claimant under a workers’ compensation policy.

a. The individuals described in subd. 1. a. to c. are consumers of a licensee if the licensee does not meet all the conditions of subd. 1.

b. In no event shall the individuals, solely by virtue of the status described in subd. 1. a. to c., be deemed to be customers for purposes of this chapter.

An individual is not a licensee’s consumer solely because he or she is a beneficiary of a trust for which the licensee is a trustee.
An individual is not a licensee’s consumer solely because he or she has designated the licensee as trustee for a trust.
An individual who is a consumer of another financial institution is not a licensee’s consumer solely because the licensee is acting as agent for, or provides processing or other services to, that financial institution.

(d) “Consumer” includes the legal representative of an individual who is a consumer.

(7) “Consumer reporting agency” has the same meaning as in Section 603(f) of the federal Fair Credit Reporting Act (15 USC 1681a(f)).

(8) “Control” means any of the following:

(a) Ownership, control or power to vote 25 % or more of the outstanding shares of any class of voting security of the company, directly or indirectly, or acting through one or more other persons.

(b) Control in any manner over the election of a majority of the directors, trustees or general partners, or individuals exercising similar functions, of the company or by an agreement establishing an attorney in fact for a reciprocal as defined by s. 600.03 (41), Stats.

(c) The power to exercise, directly or indirectly, a controlling influence over the management or policies of the company.

(9) “Customer” means a consumer who has a customer relationship with a licensee.

(10)

(a) “Customer relationship” means a continuing relationship between a consumer and a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes.

(b) The following are examples relating to customer relationship:.

A consumer has a continuing relationship with a licensee if any of the following conditions exist:

a. The consumer is a current policyholder of an insurance product issued by or through the licensee.

b. The consumer obtains financial, investment or economic advisory services relating to an insurance product or service from the licensee for a fee.

A consumer does not have a continuing relationship with a licensee under any of the following conditions:

a. The consumer applies for insurance but does not purchase the insurance.

b. The licensee sells the consumer airline travel insurance in an isolated transaction.

c. The consumer is no longer a current policyholder of an insurance product or no longer obtains insurance services with or through the licensee.

d. The consumer is a beneficiary or claimant under a policy and has submitted a claim under that policy, choosing a settlement option involving an ongoing relationship with the licensee.

e. The consumer is a beneficiary or a claimant under a policy and has submitted a claim under that policy, choosing a lump sum settlement option.

f. The customer’s policy is lapsed, expired, or otherwise inactive or dormant under the licensee’s business practices, and the licensee has not communicated with the customer about the relationship for a period of twelve consecutive months, other than annual privacy notices, material required by law or regulation, communication at the direction of a state or federal authority, or promotional materials.

g. The consumer is an insured or an annuitant under an insurance policy or annuity, respectively, but is not the policyholder or owner of the insurance policy or annuity.

h. The consumer’s last known address according to the licensee’s records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the consumer have been unsuccessful.

(11)

(a) “Financial institution” means any institution the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in Section 4(k) of the Bank Holding Company Act of 1956 (12 USC 1843(k)).

(b) Financial institution does not include any of the following:

Any person or entity with respect to any financial activity that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act (7 USC 1 et seq.).
The Federal Agricultural Mortgage Corporation or any entity charged and operating under the Farm Credit Act of 1971 (12 USC 2001 et seq.).
Institutions chartered by Congress specifically to engage in securitizations, secondary market sales, including sales of servicing rights, or similar transactions related to a transaction of a consumer, as long as the institutions do not sell or transfer nonpublic personal information to a nonaffiliated third party.

(12)

(a) “Financial product or service” means any product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to such a financial activity under Section 4(k) of the Bank Holding Company Act of 1956 (12 USC 1843(k)).

(b) Financial service includes a financial institution’s evaluation or brokerage of information that the financial institution collects in connection with a request or an application from a consumer for a financial product or service.

(13) “Health care” means any of the following:

(a) Preventive, diagnostic, therapeutic, rehabilitative, maintenance or palliative care, services, procedures, tests or counseling that involves any of the following:

It relates to the physical, mental or behavioral condition of an individual.
It affects the structure or function of the human body or any part of the human body, including the banking of blood, sperm, organs or any other tissue.

(b) Prescribing, dispensing or furnishing to an individual drugs or biologicals, or medical devices or health care equipment and supplies.

(14) “Health care provider” means a physician or other health care practitioner licensed, accredited or certified to perform specified health services consistent with state law, or a health care facility.

(15) “Health information” means any information or data except age or gender, whether oral or recorded in any form or medium, created by or derived from a health care provider or the consumer that relates to any of the following:

(a) The past, present or future physical, mental or behavioral health or condition of an individual.

(b) The provision of health care to an individual.

(16)

(a) “Insurance product or service” means any product or service that is offered by a licensee pursuant to the insurance laws of this state.

(b) Insurance service includes a licensee’s evaluation, brokerage or distribution of information that the licensee collects in connection with a request or an application from a consumer for an insurance product or service.

(17)

(a) “Licensee” means all insurers, intermediaries, third party administrators and other persons licensed or required to be licensed, or authorized or required to be authorized, or registered or required to be registered under chs. 600 to 655, Stats.

(b) A licensee is not subject to the notice and opt out requirements for nonpublic personal financial information set forth in subchs. I to IV if the licensee is an employee, agent or other representative of another licensee (“the principal”) and all of the following conditions exist:

The principal otherwise complies with, and provides the notices required by, the provisions of this chapter.
The licensee does not disclose any nonpublic personal financial information to any person other than the principal or its affiliates in a manner permitted by this chapter.

(c)

Subject to subd. 2., “licensee” also includes an unauthorized insurer that accepts business placed through a licensed surplus lines broker or agent in this state, but only in regard to placements placed pursuant to s. 618.41, Stats.
A surplus lines broker or agent or surplus lines insurer shall be deemed to be in compliance with the notice and opt out requirements for nonpublic personal financial information set forth in subchs. I to IV provided all of the following occur:

a. The broker, agent or insurer does not disclose nonpublic personal financial information of a consumer or a customer to nonaffiliated third parties for any purpose, including joint servicing or marketing under s. Ins 25.50, except as permitted by s. Ins 25.55 or 25.60.

b. The broker, agent or insurer delivers a notice to the consumer at the time a customer relationship is established on which the following is printed in 16-point type:

(18)

(a) “Nonaffiliated third party” means any person except any of the following:

A licensee’s affiliate.
A person employed jointly by a licensee and any company that is not the licensee’s affiliate. Under these circumstances “nonaffiliated third party” does include the other company that jointly employs the person.

(b) “Nonaffiliated third party” includes any company that is an affiliate solely by virtue of the direct or indirect ownership or control of the company by the licensee or its affiliate in conducting merchant banking or investment banking activities of the type described in Section 4(k)(4)(H) or insurance company investment activities of the type described in Section 4(k)(4)(I) of the federal Bank Holding Company Act (12 USC 1843(k)(4)(H) and (I)).

(19) “Nonpublic personal information” means nonpublic personal financial information and nonpublic personal health information.

(20)

(a) “Nonpublic personal financial information” means all of the following:

Personally identifiable financial information.
Any list, description or other grouping of consumers, and publicly available information pertaining to them, that is derived using any personally identifiable financial information that is not publicly available.

(b) Nonpublic personal financial information does not include any of the following:

Health information.
Publicly available information, except as included on a list described in par. (a) 2.
Any list, description or other grouping of consumers, and publicly available information pertaining to them, that is derived without using any personally identifiable financial information that is not publicly available.

(c)

Nonpublic personal financial information includes any list of individuals’ names and street addresses that is derived in whole or in part using personally identifiable financial information that is not publicly available, such as account numbers.
Nonpublic personal financial information does not include any list of individuals’ names and addresses that contains only publicly available information, is not derived in whole or in part using personally identifiable financial information that is not publicly available, and is not disclosed in a manner that indicates that any of the individuals on the list is a consumer of a financial institution.

(21) “Nonpublic personal health information” means any of the following health information:

(a) Health information that identifies an individual who is the subject of the information.

(b) Health information with respect to which there is a reasonable basis to believe that the information could be used to identify an individual.

(22)

(a) “Personally identifiable financial information” means any of the following information:

Information a consumer provides to a licensee to obtain an insurance product or service from the licensee.
Information about a consumer resulting from a transaction involving an insurance product or service between a licensee and a consumer.
Information the licensee otherwise obtains about a consumer in connection with providing an insurance product or service to that consumer.

(b) The following are examples of personally identifiable financial information:

Personally identifiable financial information includes any of the following:

a. Information a consumer provides to a licensee on an application to obtain an insurance product or service.

b. Account balance information and payment history.

c. The fact that an individual is or has been one of the licensee’s customers or has obtained an insurance product or service from the licensee.

d. Any information about the licensee’s consumer if it is disclosed in a manner that indicates that the individual is or has been the licensee’s consumer.

e. Any information that a consumer provides to a licensee or that the licensee or its agent otherwise obtains in connection with collecting on a loan or servicing a loan.

f. Any information the licensee collects through an internet information-collecting device from a web server.

g. Information from a consumer report.

Personally identifiable financial information does not include any of the following:

a. Health information.

b. A list of names and addresses of customers of an entity that is not a financial institution.

c. Information that does not identify a consumer, such as aggregate information or blind data that does not contain personal identifiers such as account numbers, names or addresses.

(23)

(a) “Publicly available information” means any information that a licensee has a reasonable basis to believe is lawfully made available to the general public from any of the following:

Federal, state or local government records.
Widely distributed media.
Disclosures to the general public that are required to be made by federal, state or local law.

(b) A licensee has a reasonable basis to believe that information is lawfully made available to the general public if the licensee has taken steps to determine all of the following:

That the information is of the type that is available to the general public.
Whether an individual can direct that the information not be made available to the general public and, if so, that the licensee’s consumer has not done so.

Publicly available information in government records includes information in government real estate records and security interest filings.
Publicly available information from widely distributed media includes information from a telephone book, a television or radio program, a newspaper or a web site that is available to the general public on an unrestricted basis. A web site is not restricted merely because an Internet service provider or a site operator requires a fee or a password, so long as access is available to the general public.

a. A licensee has a reasonable basis to believe that mortgage information is lawfully made available to the general public if the licensee has determined that the information is of the type included on the public record in the jurisdiction where the mortgage would be recorded.

b. A licensee has a reasonable basis to believe that an individual’s telephone number is lawfully made available to the general public if the licensee has located the telephone number in the telephone book or the consumer has informed the licensee that the telephone number is not unlisted.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Subchapter II Privacy and Opt-Out Notices for Financial Information

Wis. Admin. Code § Ins 25.10 Initial privacy notice to consumers required {#sec-ins-25.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.10}

(1) Initial notice requirement. A licensee shall provide a clear and conspicuous notice that accurately reflects its privacy policies and practices regarding nonpublic personal financial information to all of the following:

(a) Customer. An individual who becomes the licensee’s customer, not later than when the licensee establishes a customer relationship, except as provided in sub. (5).

(b) Consumer. A consumer, before the licensee discloses any nonpublic personal financial information about the consumer to any nonaffiliated third party, if the licensee makes a disclosure other than as authorized by ss. Ins 25.55 and 25.60.

(2) When initial notice to a consumer is not required. A licensee is not required to provide an initial notice to a consumer under sub. (1) (b) if any of the following conditions apply:

(a) The licensee does not disclose any nonpublic personal financial information about the consumer to any nonaffiliated third party, other than as authorized by ss. Ins 25.55 and 25.60, and the licensee does not have a customer relationship with the consumer.

(b) An affiliated licensee has provided a notice, as long as the notice clearly identifies all licensees to whom the notice applies and is accurate with respect to the licensee and the other institutions.

(3) When the licensee establishes a customer relationship.

(a) General rule. A licensee establishes a customer relationship at the time the licensee and the consumer enter into a continuing relationship.

(b) Examples of establishing customer relationship. A licensee establishes a customer relationship when the consumer does any of the following:

Becomes a policyholder of a licensee that is an insurer when the insurer delivers an insurance policy or contract to the consumer, or in the case of a licensee that is an intermediary who is not acting as agent for an insurer licensee, obtains insurance through that licensee. A licensee does not establish a customer relationship due to issuance of a binder of coverage until the policy is issued, if the licensee allows the consumer to request delivery of the initial notice required under sub. (1) (a) and the licensee delivers the initial notice within a reasonable time after the licensee receives such a request.
Agrees to obtain financial, economic or investment advisory services relating to insurance products or services for a fee from the licensee.

(4) Existing customers. When an existing customer obtains a new insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, the licensee satisfies the initial notice requirements of sub. (1) if any of the following conditions are met:

(a) The licensee may provide a revised policy notice, under s. Ins 25.20, that covers the customer’s new insurance product or service.

(b) If the initial, revised or annual notice that the licensee most recently provided to that customer was accurate with respect to the new insurance product or service, the licensee does not need to provide a new privacy notice under sub. (1).

(5) Exceptions to allow subsequent delivery of notice.

(a) A licensee may provide the initial notice required by sub. (1) (a) within a reasonable time after the licensee establishes a customer relationship if any of the following conditions exist:

Establishing the customer relationship is not at the customer’s election.
Providing notice not later than when the licensee establishes a customer relationship would substantially delay the customer’s transaction and the customer agrees to receive the notice at a later time.

(b) The following are examples of when exceptions may or may not apply:

Establishing a customer relationship is not at the customer’s election if a licensee acquires or is assigned a customer’s policy from another financial institution or residual market mechanism and the customer does not have a choice about the licensee’s acquisition or assignment.
Providing notice not later than when a licensee establishes a customer relationship would substantially delay the customer’s transaction when the licensee and the individual agree over the telephone to enter into a customer relationship involving prompt delivery of the insurance product or service.
Providing notice not later than when a licensee establishes a customer relationship would not substantially delay the customer’s transaction when the relationship is initiated in person at the licensee’s office or through other means by which the customer may view the notice, such as on a web site.

(6) Delivery. When a licensee is required to deliver an initial privacy notice by this section, the licensee shall deliver it according to s. Ins 25.25. If the licensee uses a short-form initial notice for non-customers according to s. Ins 25.15 (4), the licensee may deliver its privacy notice according to s. Ins 25.15 (4) (c).

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.13 Annual privacy notice to customers required {#sec-ins-25.13 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.13}

(1) Annual notice.

(a) General rule. A licensee shall provide a clear and conspicuous notice to customers that accurately reflects its privacy policies and practices with regard to nonpublic personal financial information not less than annually during the continuation of the customer relationship. Annually means at least once in any period of twelve consecutive months during which that relationship exists. A licensee may define the twelve consecutive-month period, but the licensee shall apply it to the customer on a consistent basis.

(b) Example. A licensee provides a notice annually if it defines the twelve consecutive-month period as a calendar year and provides the annual notice to the customer once in each calendar year following the calendar year in which the licensee provided the initial notice. For example, if a customer opens an account on any day of year 1, the licensee shall provide an annual notice to that customer by December 31 of year 2.

(2) Terminated customer.

(a) Termination of customer relationship. A licensee is not required to provide an annual notice to a former customer. A former customer is an individual with whom a licensee no longer has a continuing relationship.

(b) Examples. The following are examples of the termination of a customer relationship:

A licensee no longer has a continuing relationship with an individual if the individual no longer is a current policyholder of an insurance product or no longer obtains insurance services with or through the licensee.
A licensee no longer has a continuing relationship with an individual if the individual’s policy is lapsed, expired or otherwise inactive or dormant under the licensee’s business practices, and the licensee has not communicated with the customer about the relationship for a period of twelve consecutive months, other than to provide annual privacy notices, material required by law or regulation, or promotional materials.
For the purposes of this chapter, a licensee no longer has a continuing relationship with an individual if the individual’s last known address according to the licensee’s records is deemed invalid. An address of record is deemed invalid if mail sent to that address by the licensee has been returned by the postal authorities as undeliverable and if subsequent attempts by the licensee to obtain a current valid address for the individual have been unsuccessful.
A licensee no longer has a continuing relationship with a customer in the case of providing real estate settlement services, at the time the customer completes execution of all documents related to the real estate closing, payment for those services has been received, or the licensee has completed all of its responsibilities with respect to the settlement, including filing documents on the public record, whichever is later.

(3) Delivery. When a licensee is required by this section to deliver an annual privacy notice, the licensee shall deliver it according to s. Ins 25.25.

(4) exceptions. The annual privacy notice requirement in this section does not apply when a licensee complies with either of the following:

(a) When a licensee provides nonpublic personal financial information to any person described by s. Ins 25.50 (1) (a) 2.

(b) When both of the following conditions are met:

The licensee provides nonpublic personal information only in accordance with the provisions of this chapter.
The licensee has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the licensee’s most recent disclosure to consumers in accordance with this section.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01; CR 03-083: cr. (4) Register March 2004 No. 579, eff. 4-1-04; CR 17-039: am. (4) (title), renum and am. (4) to (4) (intro.), (a), cr. (4) (b), Register February 2018 No. 746 eff. 3-1-18.

Wis. Admin. Code § Ins 25.15 Information to be included in privacy notices {#sec-ins-25.15 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.15}

(1) General rule. The initial, annual and revised privacy notices that a licensee provides under ss. Ins 25.10, 25.13, and 25.20 shall include all of the following items of information, in addition to any other information the licensee wishes to provide, that applies to the licensee and to the consumers to whom the licensee sends its privacy notice:

(a) The categories of nonpublic personal financial information that the licensee collects.

Note: See sample clause A-1 in Appendix A

(b) The categories of nonpublic personal financial information that the licensee discloses.

Note: See sample clauses A-2 and A-3 in Appendix A

(c) The categories of affiliates and nonaffiliated third parties to which the licensee discloses nonpublic personal financial information, other than those parties to whom the licensee discloses information under ss. Ins 25.55 and 25.60.

Note: See sample clauses A-2, A-3 and A-4 in Appendix A

(d) The categories of nonpublic personal financial information about the licensee’s former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information about the licensee’s former customers, other than those parties to whom the licensee discloses information under ss. Ins 25.55 and 25.60.

Note: See sample clauses A-2 and A-3 in Appendix A

(e) If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under s. Ins 25.50 (and no other exception in ss. Ins 25.55 and 25.60 applies to that disclosure), a separate description of the categories of information the licensee discloses and the categories of third parties with whom the licensee has contracted.

Note: See sample clauses A-5 in Appendix A

(f) An explanation of the consumer’s right under s. Ins 25.30 (1) to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the methods by which the consumer may exercise that right at that time.

Note: See sample clauses A-6 in Appendix A

(g) Any disclosures that the licensee makes under Section 603(d)(2)(A)(iii) of the federal Fair Credit Reporting Act (15 USC 1681a(d)(2)(A)(iii)) (that is, notices regarding the ability to opt out of disclosures of information among affiliates).

(h) The licensee’s policies and practices with respect to protecting the confidentiality and security of nonpublic personal financial information.

Note: See sample clauses A-7 in Appendix A

(i) Any disclosure that the licensee makes under sub. (2).

(2) Description of parties subject to exceptions. If a licensee discloses nonpublic personal financial information as authorized under ss. Ins 25.55 and 25.60, the licensee is not required to list those exceptions in the initial or annual privacy notices required by ss. Ins 25.10 and 25.13. When describing the categories of parties to whom disclosure is made, the licensee is required to state only that it makes disclosures to other affiliated or nonaffiliated third parties, as applicable, as permitted by law.

(3) Examples.

(a) Categories of nonpublic personal financial information that the licensee collects. A licensee satisfies the requirement to categorize the nonpublic personal financial information it collects if the licensee categorizes it according to all of the following sources of the information:

Information from the consumer.
Information about the consumer’s transactions with the licensee or its affiliates.
Information about the consumer’s transactions with nonaffiliated third parties.
Information from a consumer reporting agency.

(b) Categories of nonpublic personal financial information a licensee discloses.

A licensee satisfies the requirement to categorize nonpublic personal financial information it discloses if the licensee categorizes the information according to source, as described in par. (a), as applicable, and provides at least one example, and additional examples as are reasonably appropriate, to illustrate the types of information in each category. Examples may include any of the following:

a. Information from the consumer, including application information, such as assets and income and identifying information, such as name, address and social security number.

b. Transaction information, such as information about balances, payment history and parties to the transaction.

c. Information from consumer reports, such as a consumer’s creditworthiness and credit history.

A licensee does not adequately categorize the information that it discloses if the licensee uses only general terms, such as transaction information about the consumer.
If a licensee reserves the right to disclose all of the nonpublic personal financial information about consumers that it collects, the licensee may simply state that fact without describing the categories or examples of nonpublic personal financial information that the licensee discloses.

A licensee satisfies the requirement to categorize the affiliates and nonaffiliated third parties to which the licensee discloses nonpublic personal financial information about consumers if the licensee identifies the types of businesses in which they engage.
Types of businesses may be described by general terms only if the licensee uses at least one example, and additional examples as are reasonably appropriate, to illustrate the significant lines of business. For example, a licensee may use the term financial products or services if it includes appropriate examples of significant lines of businesses, such as life insurer, automobile insurer, consumer banking or securities brokerage.
A licensee also may categorize the affiliates and nonaffiliated third parties to which it discloses nonpublic personal financial information about consumers using more detailed categories than those described in this paragraph.

(d) Disclosures under exception for service providers and joint marketers. If a licensee discloses nonpublic personal financial information under the exception in s. Ins 25.50 to a nonaffiliated third party to market products or services that it offers alone or jointly with another financial institution, the licensee satisfies the disclosure requirement of sub. (1) (e) if it does all of the following:

Lists the categories of nonpublic personal financial information it discloses, using the same categories and examples the licensee used to meet the requirements of sub. (1) (b), as applicable.
States whether the third party is any of the following:

a. A service provider that performs marketing services on the licensee’s behalf or on behalf of the licensee and another financial institution.

b. A financial institution with whom the licensee has a joint marketing agreement.

(e) Simplified notices. If a licensee does not disclose, and does not wish to reserve the right to disclose, nonpublic personal financial information about customers or former customers to affiliates or nonaffiliated third parties except as authorized under ss. Ins 25.55 and 25.60, the licensee may simply state that fact, in addition to the information it shall provide under sub. (1) (a), (h), and (i) and (2).

(f) Confidentiality and security. A licensee describes its policies and practices with respect to protecting the confidentiality and security of nonpublic personal financial information if it does all of the following:

Describes in general terms who is authorized to have access to the information.
States whether the licensee has security practices and procedures in place to ensure the confidentiality of the information in accordance with the licensee’s policy. The licensee is not required to describe technical information about the safeguards that it uses.

(4) Short-form initial notice with opt-out notice for non-customers.

(a) A licensee may satisfy the initial notice requirements in ss. Ins 25.10 (1) (b) and 25.17 (3) for a consumer who is not a customer by providing a short-form initial notice at the same time as the licensee delivers an opt out notice as required in s. Ins 25.17.

(b) A short-form initial notice shall comply with all of the following:

It shall be clear and conspicuous.
It shall state that the licensee’s privacy notice is available upon request.
It shall explain a reasonable means by which the consumer may obtain that notice.

(c) The licensee shall deliver its short-form initial notice according to s. Ins 25.25. The licensee is not required to deliver its privacy notice with its short-form initial notice. The licensee instead may simply provide the consumer a reasonable means to obtain its privacy notice. If a consumer who receives the licensee’s short-form notice requests the licensee’s privacy notice, the licensee shall deliver its privacy notice according to s. Ins 25.25.

(d) Examples of obtaining privacy notice. The licensee provides a reasonable means by which a consumer may obtain a copy of its privacy notice if the licensee does any of the following:

Provides a toll-free telephone number that the consumer may call to request the notice.
For a consumer who conducts business in person at the licensee’s office, maintains copies of the notice on hand that the licensee provides to the consumer immediately upon request.

(5) Future disclosures. The licensee’s notice may include any of the following:

(a) Categories of nonpublic personal financial information that the licensee reserves the right to disclose in the future, but does not currently disclose.

(b) Categories of affiliates or nonaffiliated third parties to whom the licensee reserves the right in the future to disclose, but to whom the licensee does not currently disclose, nonpublic personal financial information.

(6) Sample clauses. Sample clauses illustrating some of the notice content required by this section are included in Appendix A of this chapter.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.17 Form of opt out notice to consumers and opt out methods {#sec-ins-25.17 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.17}

(1) Form.

(a) Form of opt out notice. If a licensee is required to provide an opt out notice under s. Ins 25.30 (1), it shall provide a clear and conspicuous notice to each of its consumers that accurately explains the right to opt out under that section. The notice shall include all of the following:

That the licensee discloses or reserves the right to disclose nonpublic personal financial information about its consumer to a nonaffiliated third party.
That the consumer has the right to opt out of that disclosure.
A reasonable means by which the consumer may exercise the opt out right.

(b) Examples.

A licensee provides notice that the consumer can opt out of the disclosure of nonpublic personal financial information to a nonaffiliated third party in compliance with this section if the licensee does all of the following:

a. Identifies all of the categories of nonpublic personal financial information that it discloses or reserves the right to disclose, and all of the categories of nonaffiliated third parties to which the licensee discloses the information, as described in s. Ins 25.15 (3) (b) and (c), and states that the consumer can opt out of the disclosure of that information.

b. Identifies the insurance products or services that the consumer obtains from the licensee, either singly or jointly, to which the opt out direction would apply.

A licensee provides a reasonable means to exercise an opt out right if it does any of the following:

a. Designates check-off boxes in a prominent position on the relevant forms with the opt out notice.

b. Includes a reply form together with the opt out notice.

c. Provides an electronic means to opt out, such as a form that can be sent via electronic mail or a process at the licensee’s web site, if the consumer agrees to the electronic delivery of information.

d. Provides a toll-free telephone number that consumers may call to opt out.

A licensee does not provide a reasonable means of opting out if any of the following exist:

a. The only means of opting out is for the consumer to write his or her own letter to exercise that opt out right.

b. The only means of opting out as described in any notice subsequent to the initial notice is to use a check-off box that the licensee provided with the initial notice but did not include with the subsequent notice.

A licensee may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer.

(2) Same form as initial notice permitted. A licensee may provide the opt out notice together with or on the same written or electronic form as the initial notice the licensee provides in accordance with s. Ins 25.10.

(3) Initial notice required when opt out notice delivered subsequent to initial notice. If a licensee provides the opt out notice later than required for the initial notice in accordance with s. Ins 25.10, the licensee shall also include a copy of the initial notice with the opt out notice in writing or, if the consumer agrees, electronically.

(4) Joint relationships.

(a) If two or more consumers jointly obtain an insurance product or service from a licensee, the licensee may provide a single opt out notice. The licensee’s opt out notice shall explain how the licensee will treat an opt out direction by a joint consumer, as explained in par. (e).

(b) Any of the joint consumers may exercise the right to opt out. The licensee may do either of the following:

Treat an opt out direction by a joint consumer as applying to all of the associated joint consumers.
Permit each joint consumer to opt out separately, subject to par. (c).

(c) If a licensee permits each joint consumer to opt out separately, the licensee shall permit one of the joint consumers to opt out on behalf of all of the joint consumers.

(d) A licensee may not require all joint consumers to opt out before it implements any opt out direction.

(e) Example. If John and Mary are both named policyholders on a homeowner’s insurance policy issued by a licensee and the licensee sends policy statements to John’s address, the licensee may do any of the following, but it shall explain in its opt out notice which opt out policy the licensee will follow:

Send a single opt out notice to John’s address, but the licensee shall accept an opt out direction from either John or Mary.
Treat an opt out direction by either John or Mary as applying to the entire policy. If the licensee does so and John opts out, the licensee may not require Mary to opt out as well before implementing John’s opt out direction.
If the licensee permits John and Mary to make different opt out directions, the licensee shall do all of the following:

a. It shall permit John and Mary to opt out for each other.

b. If both opt out, the licensee shall permit both of them to notify it in a single response, such as on a form or through a telephone call.

c. If John opts out and Mary does not, the licensee may only disclose nonpublic personal financial information about Mary, but not about John and not about John and Mary jointly.

(5) Time to comply with opt out. A licensee shall comply with a consumer’s opt out direction as soon as reasonably practicable after the licensee receives it.

(6) Continuing right to opt out. A consumer may exercise the right to opt out at any time.

(7) Duration of the consumer’s opt out direction.

(a) A consumer’s direction to opt out under this section is effective until the consumer revokes it in writing or, if the consumer agrees, electronically.

(b) When a customer relationship terminates, the customer’s opt out direction continues to apply to the nonpublic personal financial information that the licensee collected during or related to that relationship. If the individual subsequently establishes a new customer relationship with the licensee, the opt out direction that applied to the former relationship does not apply to the new relationship.

(8) Delivery. When a licensee is required to deliver an opt out notice by this section, the licensee shall deliver it according to s. Ins 25.25.

History

Cr. Register, June, 2001, No. 546, eff. 7-01-01.

Wis. Admin. Code § Ins 25.20 Revised privacy notices {#sec-ins-25.20 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.20}

(1) General rule. Except as otherwise authorized in this chapter, a licensee shall not, directly or through an affiliate, disclose any nonpublic personal financial information about a consumer to a nonaffiliated third party other than as described in the initial notice that the licensee provided to that consumer under s. Ins 25.10, unless all of the following have occurred:

(a) The licensee has provided to the consumer a clear and conspicuous revised notice that accurately describes its policies and practices.

(b) The licensee has provided to the consumer a new opt out notice.

(c) The licensee has given the consumer a reasonable opportunity, before the licensee discloses the information to the nonaffiliated third party, to opt out of the disclosure.

(d) The consumer does not opt out.

(2) Examples.

(a) Except as otherwise permitted by ss. Ins 25.50, 25.55, and 25.60, a licensee shall provide a revised notice before it does any of the following:

Discloses a new category of nonpublic personal financial information to any nonaffiliated third party.
Discloses nonpublic personal financial information to a new category of nonaffiliated third party.
Discloses nonpublic personal financial information about a former customer to a nonaffiliated third party, if that former customer has not had the opportunity to exercise any opt out right regarding that disclosure.

(b) A revised notice is not required if the licensee discloses nonpublic personal financial information to a new nonaffiliated third party that the licensee adequately described in its prior notice.

(3) Delivery. When a licensee is required to deliver a revised privacy notice by this section, the licensee shall deliver it according to s. Ins 25.25.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.25 Delivery {#sec-ins-25.25 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.25}

(1) How to provide notices. A licensee shall provide any notices that this chapter requires so that each consumer can reasonably be expected to receive actual notice in writing or, if the consumer agrees, electronically.

(2) Examples.

(a) Examples of reasonable expectation of actual notice. A licensee may reasonably expect that a consumer will receive actual notice of its privacy policies and practices if the licensee does any of the following:

Hand-delivers a printed copy of the notice to the consumer.
Mails a printed copy of the notice to the last known address of the consumer separately, or in a policy, billing or other written communication.
For a consumer who conducts transactions electronically, posts the notice on the electronic site and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining a particular insurance product or service.
For an isolated transaction with a consumer, such as the licensee providing an insurance quote or selling the consumer travel insurance, posts the notice and requires the consumer to acknowledge receipt of the notice as a necessary step to obtaining the particular insurance product or service.

(b) Examples of unreasonable expectation of actual notice. A licensee may not, however, reasonably expect that a consumer will receive actual notice of its privacy policies and practices if it does any of the following:

Only posts a sign in its office or generally publishes advertisements of its privacy policies and practices.
Sends the notice via electronic mail to a consumer who does not obtain an insurance product or service from the licensee electronically.

(3) Annual notices only. A licensee may reasonably expect that a customer will receive actual notice of the licensee’s annual privacy notice if it does any of the following:

(a) The customer uses the licensee’s web site to access insurance products and services electronically and agrees to receive notices at the web site and the licensee posts its current privacy notice continuously in a clear and conspicuous manner on the web site.

(b) The customer has requested that the licensee refrain from sending any information regarding the customer relationship, the licensee maintains a record of the request and the licensee’s current privacy notice remains available to the customer upon request.

(4) Oral description of notice insufficient. A licensee may not provide any notice required by this chapter solely by orally explaining the notice, either in person or over the telephone.

(5) Retention or accessibility of notices for customers.

(a) For customers only, a licensee shall provide the initial notice required by s. Ins 25.10 (1) (a), the annual notice required by s. Ins 25.13 (1), and the revised notice required by s. Ins 25.20 so that the customer can retain them or obtain them later in writing or, if the customer agrees, electronically.

(b) Examples of retention or accessibility. A licensee provides a privacy notice to the customer so that the customer can retain it or obtain it later if the licensee does any of the following:

Hand-delivers a printed copy of the notice to the customer.
Mails a printed copy of the notice to the last known address of the customer.
Makes its current privacy notice available on a web site or a link to another web site for the customer who obtains an insurance product or service electronically and agrees to receive the notice at the web site.

(6) Joint notice with other financial institutions. A licensee may provide a joint notice from the licensee and one or more of its affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to the licensee and the other institutions. A licensee also may provide a notice on behalf of another financial institution.

(7) Joint relationships. If two or more consumers jointly obtain an insurance product or service from a licensee, the licensee may satisfy the initial, annual and revised notice requirements of ss. Ins 25.10 (1), 25.13 (1), and 25.20 (1), respectively, by providing one notice to those consumers jointly.

(8) Multiple insurance products or services. If a consumer or two or more consumers jointly seek to obtain or obtain multiple insurance products or services from a licensee or its affiliates, the licensee may satisfy the initial, annual and revised notice requirements of ss. Ins 25.10 (1), 25.13 (1), and 25.20 (1), respectively, for the licensee and its affiliates by providing one notice to those consumers.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Subchapter III Limits on Disclosures of Financial Information

Wis. Admin. Code § Ins 25.30 Limits on disclosure of nonpublic personal financial information to nonaffiliated third parties {#sec-ins-25.30 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.30}

(1) Process.

(a) Conditions for disclosure. Except as otherwise authorized in this chapter, a licensee may not, directly or through any affiliate, disclose any nonpublic personal financial information about a consumer to a nonaffiliated third party unless all of the following have occurred:

The licensee has provided to the consumer an initial notice as required under s. Ins 25.10.
The licensee has provided to the consumer an opt out notice as required in s. Ins 25.17.
The licensee has given the consumer a reasonable opportunity, before it discloses the information to the nonaffiliated third party, to opt out of the disclosure.
The consumer does not opt out.

(b) Opt out definition. Opt out means a direction by the consumer that the licensee not disclose nonpublic personal financial information about that consumer to a nonaffiliated third party, other than as permitted by ss. Ins 25.50, 25.55, and 25.60.

(c) Examples of reasonable opportunity to opt out. A licensee provides a consumer with a reasonable opportunity to opt out if it does any of the following:

‘By mail.’ The licensee mails the notices required in par. (a) to the consumer and allows the consumer to opt out by mailing a form, calling a toll-free telephone number or any other reasonable means within thirty days from the date the licensee mailed the notices.
‘By electronic means.’ A customer purchases an insurance service or product from a licensee and agrees to receive the notices required in par. (a) electronically, and the licensee allows the customer to opt out by any reasonable means within 30 days after the date that the customer acknowledges receipt of the notices in conjunction the transaction.
‘Isolated transaction with consumer.’ For an isolated transaction such as providing the consumer with an insurance quote, a licensee provides the consumer with a reasonable opportunity to opt out if the licensee provides the notices required in par. (a) at the time of the transaction and requests that the consumer decide, as a necessary part of the transaction, whether to opt out before completing the transaction.

(2) Application of opt out to all consumers and all nonpublic personal financial information.

(a) A licensee shall comply with this section, regardless of whether the licensee and the consumer have established a customer relationship.

(b) Unless a licensee complies with this section, the licensee may not, except as permitted in ss. Ins 25.50, 25.55, and 25.60, directly or through any affiliate, disclose any nonpublic personal financial information about a consumer that the licensee has collected, regardless of whether the licensee collected it before or after receiving the direction to opt out from the consumer.

(3) Partial opt out. A licensee may allow a consumer to select certain nonpublic personal financial information or certain nonaffiliated third parties with respect to which the consumer wishes to opt out.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.35 Limits on re-disclosure and reuse of nonpublic personal financial information {#sec-ins-25.35 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.35}

(1) Redisclosure under exception.

(a) Information the licensee receives under an exception. If a licensee receives nonpublic personal financial information from a nonaffiliated financial institution under an exception in s. Ins 25.55 or 25.60, the licensee may use or disclose that information only under the following conditions:

The licensee may disclose the information to the affiliates of the financial institution from which the licensee received the information.
The licensee may disclose the information to its affiliates, but the licensee’s affiliates may, in turn, disclose and use the information only to the extent that the licensee may disclose and use the information.
The licensee may disclose and use the information pursuant to an exception in s. Ins 25.55 or 25.60, in the ordinary course of business to carry out the activity covered by the exception under which the licensee received the information.

(b) Example. If a licensee receives information from a nonaffiliated financial institution for claims settlement purposes, the licensee may disclose the information for fraud prevention, or in response to a properly authorized subpoena. The licensee may not disclose that information to a third party for marketing purposes or use that information for its own marketing purposes.

(2) Redisclosure outside exception.

(a) Information a licensee receives outside of an exception. If a licensee receives nonpublic personal financial information from a nonaffiliated financial institution other than under an exception in s. Ins 25.55 or 25.60, the licensee may not disclose the information except to any of the following:

To the affiliates of the financial institution from which the licensee received the information.
To its affiliates, but its affiliates may, in turn, disclose the information only to the extent that the licensee may disclose the information.
To any other person, if the disclosure would be lawful if made directly to that person by the financial institution from which the licensee received the information.

(b) Example. If a licensee obtains a customer list from a nonaffiliated financial institution outside of the exceptions in s. Ins 25.55 or 25.60 it may do any of the following:

The licensee may use that list for its own purposes.
The licensee may disclose that list to another nonaffiliated third party only if the financial institution from which the licensee purchased the list could have lawfully disclosed the list to that third party. That is, the licensee may disclose the list in accordance with the privacy policy of the financial institution from which the licensee received the list, as limited by the opt out direction of each consumer whose nonpublic personal financial information the licensee intends to disclose, and the licensee may disclose the list in accordance with an exception in s. Ins 25.55 or 25.60, such as to the licensee’s attorneys or accountants.

(3) Information a licensee discloses under an exception. If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under an exception in s. Ins 25.55 or 25.60, the third party may not disclose or use that information except under any of the following circumstances:

(a) The third party may disclose the information to the licensee’s affiliates.

(b) The third party may disclose the information to its affiliates, but its affiliates may, in turn, disclose and use the information only to the extent that the third party may disclose and use the information.

(c) The third party may disclose and use the information pursuant to an exception in s. Ins 25.55 or 25.60 in the ordinary course of business to carry out the activity covered by the exception under which it received the information.

(4) Information a licensee discloses outside of an exception. If a licensee discloses nonpublic personal financial information to a nonaffiliated third party other than under an exception in s. Ins 25.55 or 25.60, the third party may not disclose the information except under any of the following circumstances:

(a) To the licensee’s affiliates.

(b) To the third party’s affiliates, but the third party’s affiliates, in turn, may disclose the information only to the extent the third party can disclose the information.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

(1) General prohibition on disclosure of account numbers. A licensee shall not, directly or through an affiliate, disclose, other than to a consumer reporting agency, a policy number or similar form of access number or access code for a consumer’s policy or transaction account to any nonaffiliated third party for use in telemarketing, direct mail marketing or other marketing through electronic mail to the consumer.

(2) Exceptions. Subsection (1) does not apply if a licensee discloses a policy number or similar form of access number or access code to any of the following:

(a) To the licensee’s service provider solely in order to perform marketing for the licensee’s own products or services, as long as the service provider is not authorized to directly initiate charges to the account.

(b) To a licensee who is a producer solely in order to perform marketing for the licensee’s own products or services.

(c) To a participant in an affinity or similar program where the participants in the program are identified to the customer when the customer enters into the program.

(3) Examples.

(a) Policy number. A policy number, or similar form of access number or access code, does not include a number or code in an encrypted form, as long as the licensee does not provide the recipient with a means to decode the number or code.

(b) Policy or transaction account. For the purposes of this section, a policy or transaction account is an account other than a deposit account or a credit card account. A policy or transaction account does not include an account to which third parties cannot initiate charges.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Subchapter IV Exceptions to Limits on Disclosure of Financial Information

Wis. Admin. Code § Ins 25.50 Exception to opt out requirements for disclosure of nonpublic personal financial information for service providers and joint marketing {#sec-ins-25.50 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.50}

(1) Services.

(a) General rule. The opt out requirements in ss. Ins 25.17 and 25.30 do not apply when a licensee provides nonpublic personal financial information to either of the following:

A nonaffiliated third party to perform services for the licensee or functions on the licensee’s behalf, if the licensee complies with all of the following:

a. It provides the initial notice in accordance with s. Ins 25.10.

b. It enters into a contractual agreement with the third party that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the licensee disclosed the information, including use under an exception in s. Ins 25.55 or 25.60 in the ordinary course of business to carry out those purposes.

A nonaffiliated third party for the purpose of marketing goods or services under the brand name of a licensee under ch. Ins 15, or an affiliate of such a licensee, if the licensee complies with all of the following:

a. It provides the initial notice in accordance with s. Ins 25.10.

b. The licensee or its affiliate enters into a contractual agreement with the third party that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the licensee or its affiliate disclosed the information, including use under an exception in s. Ins 25.55 or 25.60 in the ordinary course of business to carry out those purposes.

c. The licensee or its affiliate contractually requires the third party to comply with the licensee’s or its affiliate’s standards that are reasonably designed to ensure the quality of the goods or services, and customer services.

d. The licensee or affiliate enters into a contractual agreement with the third party that requires the third party to implement reasonable safeguards to protect the security and confidentiality of its nonpublic personal financial information and take action that is necessary to enforce those safeguards.

(am) Solicitations. Nothing in this section shall be construed or otherwise permit telephone solicitation which would otherwise be prohibited under s. 100.52, Stats., or subch. V of ch. ATCP 127.

(b) Example. If a licensee discloses nonpublic personal financial information under this section to a financial institution with which the licensee performs joint marketing, the licensee’s contractual agreement with that institution meets the requirements of par. (b) if it prohibits the institution from disclosing or using the nonpublic personal financial information except as necessary to carry out the joint marketing or under an exception in s. Ins 25.55 or 25.60 in the ordinary course of business to carry out that joint marketing.

(2) Service may include joint marketing. The services a nonaffiliated third party performs for a licensee under sub. (1) may include marketing of the licensee’s own products or services or marketing of financial products or services offered pursuant to joint agreements between the licensee and one or more financial institutions.

(3) Definition of “joint agreement”. For purposes of this section, “joint agreement” means a written contract pursuant to which a licensee and one or more financial institutions jointly offer, endorse or sponsor a financial product or service.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01; CR: 03-083: am. (1) (a), cr. (1) (am) Register March 2004 No. 579, eff. 4-1-04.

Wis. Admin. Code § Ins 25.55 Exceptions to notice and opt out requirements for disclosure of nonpublic personal financial information for processing and servicing transactions {#sec-ins-25.55 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.55}

(1) Exceptions for processing transactions at a consumer’s request. The requirements for initial notice in s. Ins 25.10 (1) (b), the opt out in ss. Ins 25.17 and 25.30, and service providers and joint marketing in s. Ins 25.50 do not apply if the licensee discloses nonpublic personal financial information as necessary to effect, administer or enforce a transaction that a consumer requests or authorizes, or in connection with any of the following:

(a) Servicing or processing an insurance product or service that a consumer requests or authorizes.

(b) Maintaining or servicing the consumer’s account with a licensee, or with another entity as part of a private label credit card program or other extension of credit on behalf of such entity.

(c) A proposed or actual securitization, secondary market sale (including sales of servicing rights) or similar transaction related to a transaction of the consumer.

(d) Reinsurance or stop loss or excess loss insurance, including, but not limited to, for the purpose of placing, replacing or making a claim under reinsurance or stop-loss or excess loss insurance.

(2) Processing transaction. “Necessary to effect, administer or enforce a transaction” means that the disclosure is any of the following:

(a) Required, or is one of the lawful or appropriate methods, to enforce the licensee’s rights or the rights of other persons engaged in carrying out the financial transaction or providing the product or service.

(b) Required, or is a usual, appropriate or acceptable method to accomplish any of the following:

To carry out the transaction or the product or service business of which the transaction is a part, and record, service or maintain the consumer’s account in the ordinary course of providing the insurance product or service.
To administer or service benefits or claims relating to the transaction or the product or service business of which it is a part.
To provide a confirmation, statement or other record of the transaction, or information on the status or value of the insurance product or service to the consumer or the consumer’s agent or broker.
To accrue or recognize incentives or bonuses associated with the transaction that are provided by a licensee or any other party.
To underwrite insurance at the consumer’s request or for any of the following purposes as they relate to a consumer’s insurance: account administration, reporting, investigating or preventing fraud or material misrepresentation, processing premium payments, processing insurance claims, administering insurance benefits including utilization review activities, participating in research projects, workers compensation premium audits, workers’ compensation first reports of injury, workers’ compensation loss runs or as otherwise required or specifically permitted by federal or state law.
In connection with any of the following:

a. The authorization, settlement, billing, processing, clearing, transferring, reconciling or collection of amounts charged, debited or otherwise paid using a debit, credit or other payment card, check or account number, or by other payment means.

b. The transfer of receivables, accounts or interests therein.

c. The audit of debit, credit or other payment information.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.60 Other exceptions to notice and opt out requirements for disclosure of nonpublic personal financial information {#sec-ins-25.60 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.60}

(1) Exceptions to opt out requirements. The requirements for initial notice to consumers in s. Ins 25.10 (1) (b), the opt out in ss. Ins 25.17 and 25.30, and service providers and joint marketing in s. Ins 25.50 do not apply when a licensee discloses nonpublic personal financial information under any of the following circumstances:

(a) With the consent or at the direction of the consumer, provided that the consumer has not revoked the consent or direction.

(b)

To protect the confidentiality or security of a licensee’s records pertaining to the consumer, service, product or transaction.
To protect against or prevent actual or potential fraud or unauthorized transactions.
For required institutional risk control or for resolving consumer disputes or inquiries.
To persons holding a legal or beneficial interest relating to the consumer.
To persons acting in a fiduciary or representative capacity on behalf of the consumer.

(c) To provide information to insurance rate advisory organizations, guaranty funds or agencies, agencies that are rating a licensee, persons that are assessing the licensee’s compliance with industry standards, and the licensee’s attorneys, accountants and auditors.

(d) To the extent specifically permitted or required under other provisions of law and in accordance with the federal Right to Financial Privacy Act of 1978 (12 USC 3401 et seq.), to law enforcement agencies (including the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, National Credit Union Administration, the Securities and Exchange Commission, the Secretary of the Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records and Reports on Monetary Instruments and Transactions) and 12 U.S.C. Chapter 21 (Financial Recordkeeping), a state insurance authority, and the Federal Trade Commission), self-regulatory organizations or for an investigation on a matter related to public safety.

(e)

To a consumer-reporting agency in accordance with the federal Fair Credit Reporting Act (15 USC 1681 et seq.).
Disclosure from a consumer report reported by a consumer-reporting agency.

(f) In connection with a proposed or actual sale, merger, transfer or exchange of all or a portion of a business or operating unit if the disclosure of nonpublic personal financial information concerns solely consumers of the business or unit.

(g)

To comply with federal, state or local laws, rules and other applicable legal requirements.
To comply with a properly authorized civil, criminal or regulatory investigation, or subpoena or summons by federal, state or local authorities.
To respond to judicial process or government regulatory authorities having jurisdiction over a licensee for examination, compliance or other purposes as authorized by law.

(h) For purposes related to the replacement of a group benefit plan, a group health plan, a group welfare plan or a workers’ compensation policy.

(2) Example of revocation of consent. A consumer may revoke consent by subsequently exercising the right to opt out of future disclosures of nonpublic personal financial information as permitted under s. Ins 25.17 (6).

(3) Receivership. This chapter does not apply to a receiver for an insurer subject to a delinquency proceeding under ch. 645, Stats.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01; correction in (1) (intro.) made under s. 13.93 (2m) (b) 7., Stats., Register March 2004 No. 579.

Subchapter V Health Information

Wis. Admin. Code § Ins 25.70 When authorization required for disclosure of nonpublic personal health information {#sec-ins-25.70 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.70}

(1) A licensee shall not disclose nonpublic personal health information about a consumer or customer unless an authorization is obtained from the consumer or customer whose nonpublic personal health information is sought to be disclosed or unless disclosure of the health information is permitted under ss. 51.30, or 146.81 to 146.84, Stats., or otherwise authorized by law.

(2) Nothing in this section shall prohibit, restrict or require an authorization for the disclosure of nonpublic personal health information by a licensee for the performance of the following insurance functions by or on behalf of the licensee: claims administration; claims adjustment and management; detection, investigation or reporting of actual or potential fraud, misrepresentation or criminal activity; underwriting; policy placement or issuance; loss control; rate-making and guaranty fund functions; reinsurance and excess loss insurance; risk management; case management; disease management; quality assurance; quality improvement; performance evaluation; provider credentialing verification; utilization review; peer review activities; actuarial, scientific, medical or public policy research; grievance procedures; internal administration of compliance, managerial, and information systems; policyholder service functions; auditing; reporting; database security; administration of consumer disputes and inquiries; external accreditation standards; the replacement of a group benefit plan or workers compensation policy or program; workers’ compensation premium audits; workers’ compensation first reports of injury; workers’ compensation loss runs; activities in connection with a sale, merger, transfer or exchange of all or part of a business or operating unit; any activity that permits disclosure without authorization pursuant to the federal Health Insurance Portability and Accountability Act privacy rules promulgated by the U.S. department of health and human services; disclosure that is required, or is one of the lawful or appropriate methods, to enforce the licensee’s rights or the rights of other persons engaged in carrying out a transaction or providing a product or service that a consumer requests or authorizes; and any activity otherwise permitted by law, required pursuant to governmental reporting authority, or to comply with legal process. Additional insurance functions may be added with the approval of the commissioner to the extent they are necessary for appropriate performance of insurance functions and are fair and reasonable to the interest of consumers. A licensee may apply for approval of, and the commissioner may approve additional specific insurance functions that are subject to this subsection if the commissioner finds inclusion is fair and reasonable to the interests of consumers.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.73 Authorizations {#sec-ins-25.73 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.73}

(1) A valid authorization to disclose nonpublic personal health information pursuant to this subchapter shall be in written or electronic form and shall contain all of the following:

(a) The identity of the consumer or customer who is the subject of the nonpublic personal health information.

(b) A general description of the types of nonpublic personal health information to be disclosed.

(c) General descriptions of the parties to whom the licensee discloses nonpublic personal health information, the purpose of the disclosure and how the information will be used.

(d) The signature of the consumer or customer who is the subject of the nonpublic personal health information or the individual who is legally empowered to grant authority and the date signed.

(e) Notice of the length of time for which the authorization is valid and that the consumer or customer may revoke the authorization at any time and the procedure for making a revocation.

(2) An authorization for the purposes of this subchapter shall specify a length of time for which the authorization shall remain valid, which in no event shall be for more than the period permitted if the authorization were subject to s. 610.70 (2) (b), Stats., or twenty-four months, whichever is longer.

(3) A consumer or customer who is the subject of nonpublic personal health information may revoke an authorization provided pursuant to this subchapter at any time, subject to the rights of an individual who acted in reliance on the authorization prior to notice of the revocation.

(4) A licensee shall retain the authorization or a copy thereof in the record of the individual who is the subject of nonpublic personal health information.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.75 Authorization request delivery {#sec-ins-25.75 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.75}

A request for authorization and an authorization form may be delivered to a consumer or a customer as part of an opt-out notice pursuant to s. Ins 25.25, provided that the request and the authorization form are clear and conspicuous. An authorization form is not required to be delivered to the consumer or customer or included in any other notices unless the licensee intends to disclose protected health information pursuant to s. Ins 25.70 (1).

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.77 Relationship to federal rules {#sec-ins-25.77 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.77}

Irrespective of whether a licensee is subject to the federal Health Insurance Portability and Accountability Act privacy rule as promulgated by the U.S. Department of Health and Human Services, if a licensee complies with all requirements of that rule, regardless of whether it currently applies to the licensee, the licensee shall not be subject to the provisions of this subchapter.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.80 Insurers and agents compliance with s. 610.70, Stats {#sec-ins-25.80 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.80}

(1) An insurer that is subject to s. 610.70, Stats., or an intermediary acting solely as an agent of an insurer subject to s. 610.70, Stats., with respect to health information is not required to comply with this subchapter. An insurer is responsible for the acts or omissions of its agents that constitute violations of s. 610.70, Stats.

(2) For the purposes of s. 610.70 (1) (d), Stats., “insurance that is primarily for personal, family or household purposes” includes group or individual health insurance policies and personal automobile, homeowners, disability and life policies. It does not include workers’ compensation or commercial property and casualty policies.

(3) Nothing in this chapter or s. 610.70, Stats., restricts disclosure of nonpublic personal health information permitted under s. 102.13, Stats.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Subchapter VI Additional Provisions

Wis. Admin. Code § Ins 25.90 Nondiscrimination {#sec-ins-25.90 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.90}

(1) A licensee shall not unfairly discriminate against any consumer or customer because that consumer or customer has opted out from the disclosure of his or her nonpublic personal financial information pursuant to the provisions of this chapter.

(2) A licensee shall not unfairly discriminate against a consumer or customer because that consumer or customer has not granted authorization for the disclosure of his or her nonpublic personal health information pursuant to the provisions of this chapter.

(3) Failure to provide an insurance product or service based on usual and customary insurance underwriting practices and standards is not unfair discrimination under this section, even if such failure is the result of a consumer or customer’s refusal to authorize the disclosure of his or her nonpublic personal information.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01.

Wis. Admin. Code § Ins 25.95 Effective date {#sec-ins-25.95 omnilex-key=us-wi-regs-official--agency-ins--Ins 25.95}

(1) Applicability. Enforcement under section 505 of the Gramm-Leach-Bliley Act (PL 102-106) is effective only on and after the effective date of this rule.

(2) Phase in.

(a) Phased in notice requirement for consumers who are the licensee’s customers on the compliance date. Beginning on the first day of the fourth month commencing after the after publication of this rule and by not later than June 30, 2002 a licensee shall provide an initial notice, as required by s. Ins 25.10, to consumers who are the licensee’s customers on the first day of the fourth month commencing after the after publication of this rule.

(b) Example. A licensee provides an initial notice to consumers who are its customers on the first day of the fourth month commencing after the after publication of this rule, if, by that date, the licensee has established a system for providing an initial notice to all new customers and if by June 30, 2002 the licensee has mailed the initial notice to all the licensee’s existing customers.

History

Cr. Register, June, 2001, No. 546, eff. 7-1-01; CR 03-083: r. (3) Register March 2004 No. 579, eff. 4-1-04.

Chapter Ins 25 Appendix A SAMPLE CLAUSES

Wis. Admin. Code § Chapter Ins 25 SAMPLE CLAUSES {#sec-chapter-ins-25 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 25}

Licensees, including a group of financial holding company affiliates that use a common privacy notice, may use the following sample clauses, if the clause is accurate for each institution that uses the notice. (Note that disclosure of certain information, such as assets, income and information from a consumer reporting agency, may give rise to obligations under the federal Fair Credit Reporting Act, such as a requirement to permit a consumer to opt out of disclosures to affiliates or designation as a consumer reporting agency if disclosures are made to nonaffiliated third parties.)

A-1–Categories of information a licensee collects (all institutions)

A licensee may use this clause, as applicable, to meet the requirement of s. Ins 25.15 (1) (a) to describe the categories of nonpublic personal financial information the licensee collects.

Sample Clause A-1:

We collect nonpublic personal financial information about you from the following sources:

· Information we receive from you on applications or other forms;

· Information about your transactions with us, our affiliates or others; and

· Information we receive from a consumer reporting agency.

A-2–Categories of information a licensee discloses (institutions that disclose outside of the exceptions)

A licensee may use one of these clauses, as applicable, to meet the requirement of s. Ins. 25.15 (1) (b) to describe the categories of nonpublic personal financial information the licensee discloses. The licensee may use these clauses if it discloses nonpublic personal financial information other than as permitted by the exceptions in ss. Ins 25.50, 25.55, and 25.60.

Sample Clause A-2, Alternative 1:

We may disclose the following kinds of nonpublic personal financial information about you:

· Information we receive from you on applications or other forms, such as [provide illustrative examples, such as “your name, address, social security number, assets, income, and beneficiaries”];

· Information about your transactions with us, our affiliates or others, such as [provide illustrative examples, such as “your policy coverage, premiums, and payment history”]; and

· Information we receive from a consumer reporting agency, such as [provide illustrative examples, such as “your creditworthiness and credit history”].

Sample Clause A-2, Alternative 2:

We may disclose all of the information that we collect, as described [describe location in the notice, such as “above” or “below”].

A-3–Categories of information a licensee discloses and parties to whom the licensee discloses (institutions that do not disclose outside of the exceptions)

A licensee may use this clause, as applicable, to meet the requirements of s. Ins 25.15 (1) (b), (c) and (d) to describe the categories of nonpublic personal financial information about customers and former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses. A licensee may use this clause if the licensee does not disclose nonpublic financial personal information to any party, other than as permitted by the exceptions in ss. Ins 25.55 and 25.60.

Sample Clause A-3:

We do not disclose any nonpublic personal financial information about our customers or former customers to anyone, except as permitted by law.

A-4–Categories of parties to whom a licensee discloses (institutions that disclose outside of the exceptions)

A licensee may use this clause, as applicable, to meet the requirement of s. Ins 25.15 (1) (c) to describe the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic financial personal information. This clause may be used if the licensee discloses nonpublic financial personal information other than as permitted by the exceptions in ss. Ins 25.50, 25.55, and 25.60, as well as when permitted by the exceptions in ss. Ins 25.55 and 25.60.

Sample Clause A-4:

We may disclose nonpublic financial personal information about you to the following types of third parties:

· Financial service providers, such as [provide illustrative examples, such as “life insurers, automobile insurers, mortgage bankers, securities broker-dealers, and insurance agents”];

· Non-financial companies, such as [provide illustrative examples, such as “retailers, direct marketers, airlines, and publishers”]; and

· Others, such as [provide illustrative examples, such as “non-profit organizations”].

We may also disclose nonpublic financial personal information about you to nonaffiliated third parties as permitted by law.

A-5–Service provider/joint marketing exception

A licensee may use one of these clauses, as applicable, to meet the requirements of s. Ins 25.15 (1) (e) related to the exception for service providers and joint marketers in s. Ins 25.50. If a licensee discloses nonpublic personal financial information under this exception, the licensee shall describe the categories of nonpublic financial personal information the licensee discloses and the categories of third parties with which the licensee has contracted.

Sample Clause A-5, Alternative 1:

We may disclose the following information to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements:

· Information about your transactions with us, our affiliates or others, such as [provide illustrative examples, such as “your policy coverage, premium, and payment history”]; and

· Information we receive from a consumer reporting agency, such as [provide illustrative examples, such as “your creditworthiness and credit history”].

Sample Clause A-5, Alternative 2:

We may disclose all of the information we collect, as described [describe location in the notice, such as “above” or “below”] to companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements.

A-6–Explanation of opt out right (institutions that disclose outside of the exceptions)

A licensee may use this clause, as applicable, to meet the requirement of s. Ins 25.15 (1) (f) to provide an explanation of the consumer’s right to opt out of the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the method(s) by which the consumer may exercise that right. The licensee may use this clause if the licensee discloses nonpublic personal financial information other than as permitted by the exceptions in ss. Ins 25.50, 25.55, and 25.60.

Sample Clause A-6:

If you prefer that we not disclose nonpublic personal financial information about you to nonaffiliated third parties, you may opt out of those disclosures, that is, you may direct us not to make those disclosures (other than disclosures permitted by law). If you wish to opt out of disclosures to nonaffiliated third parties, you may [describe a reasonable means of opting out, such as “call the following toll-free number: (insert number)].

A-7–Confidentiality and security (all institutions)

A licensee may use this clause, as applicable, to meet the requirement of s. Ins 25.15 (1) (g) to describe its policies and practices with respect to protecting the confidentiality and security of nonpublic personal financial information.

Sample Clause A-7:

We restrict access to nonpublic personal financial information about you to [provide an appropriate description, such as “those employees who need to know that information to provide products or services to you”]. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal financial information.

Chapter Ins 26 PRELICENSING EDUCATION

Wis. Admin. Code § Ins 26.01 Purpose {#sec-ins-26.01 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.01}

The commissioner of insurance finds that prelicensing education should be required of all insurance applicants for major lines of insurance. This requirement will assist in assuring that insurance agents receive needed information regarding insurance, insurance ethics, and sales practices.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92.

Wis. Admin. Code § Ins 26.02 Scope {#sec-ins-26.02 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.02}

This chapter applies to all applicants for insurance intermediary licenses in the state of Wisconsin unless exempted under s. Ins 26.04 (2).

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92.

Wis. Admin. Code § Ins 26.03 Definitions {#sec-ins-26.03 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.03}

(1) “Accredited institution of higher education“ means a law school accredited by the American bar association or other schools accredited by any accrediting commission or association which has been recognized by the U.S. Department of Education.

(2) “Certificate of prelicensing education” means a completed form as described in Appendix 5.

(3) “Credit course” means a course which can be applied toward an associate degree or higher degree at an accredited institution of higher education.

(3m) “Credit hour” means a period of study, included as a part of a course, consisting of no less than 50 minutes of classroom instruction, or 4,500 words per credit hour for correspondence, self-study, audio or video courses, or on-line courses.

(4) “Evidence of attendance” means an official transcript, student grade report, or commissioner-approved certificate showing satisfactory completion of educational programs or training sessions.

(5) “Exemption request” means a completed request as prescribed by the commissioner.

(6) “Noncredit program” means an educational program or training session which does not satisfy the requirements for an associate degree or higher education degree at the entity offering the educational program or training session.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92; CR 05-111: cr. (3m) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (1), (3m) and (5) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (3m), (5) Register August 2020 No. 776, eff. 9-1-20; correction in (3m) made under s. 35.17, Stats., Register August 2020 No. 776.

Wis. Admin. Code § Ins 26.04 Prelicensing requirement {#sec-ins-26.04 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.04}

(1) Each applicant for a property, personal lines, casualty, life, or accident and health insurance license shall complete, not more than one year earlier than the date tested, at least 20 hours of a preliminary educational program approved by the commissioner in accordance with this chapter.

(2) Minimum prelicensing educational requirements shall not apply to the following:

(a) Any applicant applying for a limited line insurance license for credit insurance, legal expense insurance, miscellaneous limited line, title insurance, crop, surety, or travel insurance.

(b) Any nonresident applying for a nonresident license in the state of Wisconsin.

(c) Any applicant who has completed a 2-year Wisconsin vocational school degree in insurance who submits evidence of attendance with the application.

(d) Any applicant who has completed a 4-year college degree in business with an insurance emphasis who submits evidence of attendance with their application.

(e) An applicant for a reinsurance intermediary-broker, reinsurance intermediary-manager or managing general agent limited-line license.

(f) An applicant applying for an original resident license who held a license within the previous 12 months as a resident insurance agent in another state for each of the lines applied for in Wisconsin is exempt from prelicensing education and examination requirements. An application shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. A completed application shall include: the NAIC Uniform Application; payment of any fees; and any documentation required in answer to questions on the application. If confirmation of the previous home state, as defined by s. Ins 28.03 (3m), license status is not attainable from the National Insurance Producer Registry, evidence of licensing from the previous home state is required.

(g) An applicant applying for an original resident license for the Life line of authority who provides satisfactory evidence of currently holding any of the following professional designations or successor designations: Certified Employee Benefit Specialist (CEBS), Chartered Financial Consultant (ChFC), Certified Insurance Counselor (CIC), Certified Financial Planner (CFP), Chartered Life Underwriter (CLU), Fellow of the Life Management Institute (FLMI), or Life Underwriter Training Council Fellow (LUTCF).

(h) An applicant applying for an original resident license for the Accident & Health line of authority who provides satisfactory evidence of currently holding any of the following professional designations or successor designations: Registered Health Underwriter (RHU), Certified Employee Benefit Specialist (CEBS), Registered Employee Benefits Counselor (REBC), or Health Insurance Associate (HIA).

(i) An applicant applying for an original resident license for the Property, Casualty, or Personal Lines P&C lines of authority who provides satisfactory evidence of currently holding any of the following professional designations or successor designations: Accredited Advisor in Insurance (AAI), Associate in Risk Management (ARM), Certified Insurance Counselor (CIC), or Chartered Property and Casualty Underwriter (CPCU).

(3) If an applicant is exempt under sub. (2), the applicant shall submit an exemption request with all supporting documentation in a manner prescribed by the commissioner.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92; emerg. cr. (2) (e), eff. 3-12-93; cr. (2) (e), Register, July, 1993, No. 451, eff. 8-1-93; am. (1), cr. (2) (f), Register, January, 1999, No. 517, eff. 2-1-99; emerg. am. (1), (2) (a) and (f) and (3), eff. 11-9-01; CR 01-074: am. (1), (2) (a) and (f); Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (2) (f) and (3), cr. (2) (g) to (i) Register October 2006 No. 610, eff. 11-1-06; CR 07-096: am. (2) (a) Register March 2008 No. 627, eff. 4-1-08; CR 09-022: am. (2) (a) and (f) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (2) (f), (3) Register August 2020 No. 776, eff. 9-1-20; republished to correct an error in transcription in (2) (f), (i) Register December 2023 No. 816.

Wis. Admin. Code § Ins 26.05 Requirements for approval of certification of attendance at credit courses {#sec-ins-26.05 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.05}

(1) Approval of credit courses. An accredited institution of higher education seeking initial approval or reapproval of individual credit courses shall submit its application for course approval in a manner prescribed by the commissioner. The commissioner may require the following information and materials:

(a) The name of the department in the school which is offering the courses;

(b) The method of instruction for each course;

(d) Detailed outlines of each course with specific allocations of class room hours to each topic showing the minimum time allocated to the topics as described in appendices 1 through 4;

(e) A current school course catalogue;

(f) Evidence of prior approval or exemption by the Wisconsin educational approval board, if required by s. 440.52, Stats.; and

(g) Other information as specified by the commissioner.

(2) Application approval and expiration of approval. Upon receipt of an application for approval of a credit program, the commissioner shall determine if the application meets the requirements and if the program provides for instruction of appendices 1 to 4 in a manner required by this rule. The commissioner shall issue his or her decision on approval of an application no later than 60 days following the receipt of the completed application and all information required.

(2g) Provider approval fees. The initial application fee to be paid by each licensed provider will be set through a competitive bid process not to exceed limits identified in s. 601.31 (1) (x) 1., Stats. The biennial regulation fee paid by each licensed provider will be set through a competitive bid process not to exceed limits identified in s. 601.31 (1) (x) 2., Stats. Wisconsin governmental bodies, such as universities and technical colleges, shall be exempt from these fees.

(2r) Course approval fees.

(a) The fee to be paid for each course submission by each provider shall be set through a competitive bid process not to exceed statutory limits identified in s. 601.31 (1) (x) 3., Stats.

(b) The fee to be paid for each course renewal by each provider shall not exceed 4 times the credit hour fee per course.

(3) Evidence of attendance. The commissioner shall accept an official transcript or student grade report as evidence of satisfactory completion of credit courses. Certificates of prelicensing education shall be provided to each student in a hard copy or electronically.

(4) Attendance requirements. Students shall satisfy attendance requirements by successfully completing credit courses in accordance with the attendance requirements of the school. The commissioner shall not accept attendance at credit courses on an audit basis to satisfy the requirements of this chapter.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92.; cr. (5), Register, January, 1999, No. 517, eff. 2-1-99; correction in (1) (f) made under s. 13.93 (2m) (b) 7., Stats., Register September 2001 No. 549, eff. 10-1-01; CR 05-111: am. (5) Register October 2006 No. 610, eff. 11-1-06; correction in (1) (f) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610; CR 09-022: am. (1) (f), (2) and (3), cr. (2g) and (2r) Register August 2009 No. 644, eff. 9-1-09; correction in (1) (f) made under s. 13.92 (4) (b) 7., (2g) renumbered from (2g) (a) under s. 13.92 (4) (b) 1., Stats., Register November 2018 No. 755; CR 19-025: am. (1) (intro.), (3), r. (5) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 26.06 Requirements for approval of certification of attendance at noncredit programs {#sec-ins-26.06 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.06}

(1) Approval of noncredit educational programs. An entity seeking initial approval or reapproval from the commissioner of an insurance noncredit program shall submit an application in a manner prescribed by the commissioner. The commissioner may require the following information and materials:

(a) Evidence of prior approval or exemption by the Wisconsin educational approval board, if required by s. 440.52, Stats.;

(b) A description of the qualifications of each instructor and the subject matter the instructor will be teaching. Instructors of noncredit programs shall be approved by the commissioner. Instructors shall meet the criteria set forth in sub. (2) (b);

(c) Listing of the noncredit program’s organizational structure, registration policies, fee schedules and promotional material, for the school;

(d) Detailed outlines of the subject matter to be covered by the program with specific allocations of classroom, correspondence, self-study, or on-line hours to each topic meeting the minimum standards as set forth in appendices 1 through 4. This should include a description of textbooks, workbooks and other instructional materials. The operator of a noncredit program shall provide section A and section B. Each must be provided as a separate and discrete segment. Each section can be broken up into subsections as long as no other insurance-related instruction is provided by the noncredit program between the subsections;

(e) A description of the student record systems including a description of the methods for documenting attendance;

(f) The method used by the noncredit program for evaluating instructors and a summary of previous evaluations conducted;

(g) The time, date, and location of each noncredit classroom program. The commissioner may allow a noncredit program to apply for initial approval without specific information concerning dates, times, locations, and instructors, but the noncredit program shall provide this information in a format prescribed by the commissioner no later than 30 days prior to the start of the course;

(h) An original signature of the person authorized to sign certifications; and

(i) Other information as specified by the commissioner.

(2) Criteria for approval. In order to be approved, noncredit programs shall:

(a) Not discriminate against anyone on the basis of sex, race, religion, age, physical disability, sexual orientation, or national origin in their educational programs;

(b) Document that instructors are experienced and qualified in insurance and satisfy at least one of the following criteria:

An instructor who is or has been engaged in the practice of teaching insurance courses at an accredited institution of higher education for at least the last 3 years;
A properly licensed insurance intermediary for at least the past 5 years and demonstrates to the commissioner that he or she is of good character and has the knowledge and breadth of experience to instruct the scope of the subject area for which he or she will be responsible;
A member of the state bar in at least one state or the District of Columbia who is engaged in the field of insurance-related law; or,
A Life instructor who holds any of the following professional designations or successor designations: Certified Employee Benefit Specialist (CEBS); Chartered Financial Consultant (ChFC); Certified Insurance Counselor (CIC); Certified Financial Planner (CFP); Chartered Life Underwriter (CLU); Fellow of the Life Management Institute (FLMI); or Life Underwriter Training Council Fellow (LUTCF);
An Accident & Health instructor who holds any of the following professional designations or successor designations: Registered Health Underwriter (RHU); Certified Employee Benefit Specialist (CEBS); Registered Employee Benefits Counselor(REBC); or Health Insurance Associate (HIA);
A Property, Casualty, or Personal Lines P&C instructor who holds any of the following professional designations or successor designations: Accredited Advisor in Insurance (AAI); Associate in Risk Management (ARM); Certified Insurance Counselor (CIC); or Chartered Property and Casualty Underwriter (CPCU); or
A person who, in the judgment of the commissioner, is qualified to teach a session by reason of exemplary experience or education in the lines of insurance being taught.

(c) Show that information provided to comply with sub. (1) is likely to support a comprehensive and accurate treatment of the subjects required in each section.

(2r) Course approval fees.

(a) The fee to be paid for each course submission by each provider shall be set through a competitive bid process not to exceed statutory limits identified in s. 601.31 (1) (x) 3., Stats.

(b) The fee to be paid for each course renewal by each provider shall not exceed 4 times the credit hour fee per course.

(3) Application approval and expiration of approval. Upon receipt of an application for approval of a noncredit program, the commissioner shall determine if the application meets the requirements and if the program provides for instruction of appendices 1 to 4 in a manner required by this rule. The commissioner shall issue his or her decision on approval of an application no later than 60 days following the receipt of the completed application and all information required. Noncredit program approval shall expire on August 30, every 2 years starting on the August 30 after approval.

(4) Notification. Noncredit programs shall promptly notify the commissioner of any information filed with the commissioner which has changed.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92; correction in (1) (e) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1997, No. 498; am. (2) (b) 3., r. (2) (b) 4., Register, January, 1999, No. 517, eff. 2-1-99; correction in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register September 2001 No. 549, eff. 10-1-01; CR 01-074: am. (3), Register January 2002 No. 553, eff. 2-1-02; correction in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610; CR 09-022: am. (1) (intro.), (a), (d) and (g), cr. (2) (b) 4. to 7., (2g) and (2r) Register August 2009 No. 644, eff. 9-1-09; correction in (1) (a) made under s. 13.92 (4) (b) 7., (2g) renumbered from (2g) (a) under s. 13.92 (4) (b) 1., Stats., Register November 2018 No. 755; CR 19-025: am. (1) (intro.), (3) Register August 2020 No. 776, eff. 9-1-20; correction in (3) made under s. 35.17, Stats., Register August 2020 No. 776.

Wis. Admin. Code § Ins 26.07 Evidence of attendance for noncredit classroom, correspondence, self-study, or on-line programs {#sec-ins-26.07 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.07}

(1)

(a) Noncredit classroom, correspondence, self-study, audio, video or on-line programs shall provide an original certificate of prelicensing education to each student upon satisfactory completion of a noncredit program. Additional individual certificates of prelicensing education shall be provided to a student upon request and at no additional charge.

(b) Certificates of prelicensing education shall contain the minimum wording and format as prescribed by appendix 5.

(c) Certificates of prelicensing education shall be signed by authorized persons whose signatures are on file with the commissioner.

(d) The date indicated on certificates of prelicensing education shall be the date of the last class for section B in appendices 1 to 4 attended by the student.

(e) Certificates of prelicensing education shall be provided to each student in hard copy or electronically.

(f) The student needs to take section A of appendices 1 to 4 only once. If the student takes only section B of the requirements, the instructor shall verify that the student completed section A at any approved prelicensing school within one year before issuing a certificate.

(g) Certificates shall only be given to a student after the instructor verifies the identity of the student using a picture identification card. If the instructor uses a form of identification other than Wisconsin driver’s license or Wisconsin ID card, the instructor shall note the form of identification used on the certificate of prelicensing education.

(3) The operator of a noncredit program shall maintain attendance records for 3 years.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92; am. (2), Register, January, 1999, No. 517, eff. 2-1-99; CR 05-111: am. (1) (f) and (2) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (title), (1) (a), (e) and (2) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (1) (a), r. (2) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 26.08 Attendance requirements for noncredit programs {#sec-ins-26.08 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.08}

Students shall attend all of the required hours and receive all the required contents before a certificate of prelicensing education may be granted for satisfying any of the requirements in s. Ins 26.04. Noncredit classroom programs may make arrangements for make-up classes covering the same material as the class missed to enable students to meet the educational requirements. All prelicensing requirements must be completed prior to taking the licensing examination.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92; CR 09-022: am. Register August 2009 No. 644, eff. 9-1-09.

Wis. Admin. Code § Ins 26.09 Correspondence courses {#sec-ins-26.09 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.09}

(1) Correspondence, self-study, audio, video, and on-line courses may be approved if they meet the criteria under s. Ins 26.06 and the subsequent course requirements in appendices 1 to 4, and include successful completion of a certified proctored examination.

(2) The examination shall consist of a minimum of 25 questions for section A and 50 questions each for Section B of each line of authority identified in ch. Ins 26, appendices 1 to 4. A passing score of 70% or greater is required on each examination.

(3) An approved proctor is an impartial, disinterested third party or currently licensed agent with no family or financial relationship to the student. The proctor shall verify the applicant’s identity and complete an affidavit supplied by the approved provider testifying that the pplicant received no outside assistance. Membership in a professional association or organization does not constitute a financial relationship.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92; correction made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1997, No. 498; CR 09-022: r. and recr. Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (1), (3) Register August 2020 No. 776, eff. 9-1-20.

Wis. Admin. Code § Ins 26.10 Investigation and review {#sec-ins-26.10 omnilex-key=us-wi-regs-official--agency-ins--Ins 26.10}

(1) The commissioner or a duly appointed representative shall investigate and review all applications and may investigate or examine previously approved programs, courses, and instructors. The method and timing of the reviews shall be determined by the commissioner in each case and may consist of the following:

(a) Consideration of information available from state, federal, or local agencies, private organizations or agencies, or interested persons.

(b) Conferences with officials, representatives, and former students of the school involved.

(c) A public hearing respecting the noncredit program, course, or instructor involved, with adequate written notice to the school, instructor, or both.

(d) Investigation by visitation without notice to the noncredit program.

(e) Information furnished by the applicant with its application for approval.

(f) Any other information the commissioner or representative deems relative to the investigation.

(2) In addition to investigation or examination upon its own initiative, the commissioner may investigate or examine any noncredit program or instructor upon receipt of a complaint from any person.

(3) The commissioner may examine the program under ss. 601.43 and 601.44, Stats., and bill the costs to the program under s. 601.45, Stats.

(4) If, after investigation or examination, the commissioner denies or deems it proper to withdraw its approval of any program, course, or instructor, written notification shall be given with reasons for such action. The denial constitutes an order pursuant to s. 601.62 (3) (a), Stats., and the noncredit program or instructor may request a hearing before the commissioner under that section.

Note: A free copy of each form referenced in this chapter may be obtained from the Office of the Commissioner of Insurance, P. O. Box 7872, Madison, Wisconsin 53707-7872 or on the office of the commissioner of insurance website at http://oci.wi.gov/.

History

Cr. Register, June, 1992, No. 438, eff. 7-1-92.

Chapter Ins 26 Appendix 1 APPENDIX 1 — CASUALTY INSURANCE COURSE REQUIREMENTS

Wis. Admin. Code § Chapter Ins 26 APPENDIX 1 — CASUALTY INSURANCE COURSE REQUIREMENTS {#sec-chapter-ins-26 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 26}

SECTION A

I. Principles of Insurance -- 1 Hour

A. Definition of risk

B. Risk management

C. Insurable and noninsurable risk

D. Pooling concept--law of large numbers

E. Types of insurance companies

F. Reinsurance

II. General Wisconsin Insurance Laws -- 4 Hours

A. Duties and powers of Insurance Commissioner--statutory and rule-making

B. Knowledge of administrative action process, including hearings and penalties

C. Purpose of licensing, including procedures and who must be licensed

D. Record keeping and changes in agent status, including change of name or address

E. Agent license expiration, revocation, suspension, and limitation

F. General regulations regarding misrepresentation, knowledge of acts of agent, rebating

G. Regulation of specific insurance contract changes regarding cancellation, nonrenewal, notice of proof of loss, and payment of claims

H. Unfair claims methods and practices--timely payment of claims

I. Fair rating practices

J. Home and telephone solicitation requirements

K. Section 628.32, Wis. Stat., written disclosure of fees other than commissions

L. Controlled business

M. Proper exchange of business

N. Unfair marketing practices

Misrepresentation
Unfair inducement
Unfair discrimination
Extra charges
Influencing employers
Unfair use of official position
Returning indicia of agency
Churning
Twisting
Restraint of competition
Unfair restriction of contracting parties choice of insurer

O. Insurance contracts in Wisconsin

III. Ethics -- 3 Hours

A. Fiduciary duties, and responsibilities

B. Conflict of interest

C. Ethical marketing practices, including fair and ethical treatment of policyholders

D. Appropriate claims practices

E. Suitability of product to client

F. Social responsibility of insurance agent

G. Agent/company relationships

H. Maintaining appropriate insurance expertise

SECTION B

IV. Terms, Concepts and Policies -- 10 Hours

A. Insurance terms and related concepts

Risks
Hazards
Indemnity
Insurable interest
Actual cash value
Negligence

a. Contributory

b. Comparative

Liability
Accident
Occurrence
Burglary
Robbery
Theft
Mysterious disappearance
Fidelity (employe dishonesty)
Warranties
Representations
Concealment
Bodily injury liability
Property damage liability
Personal injury liability
Limits of liability
Deductibles
Incidental contracts
Binders
Custodian
Messenger
Guard or watchperson

B. Policy provisions

Declarations
Insuring agreement
Conditions
Exclusions
Definition of the insured
Duties of the insured
Cancellation and nonrenewal provisions
Supplementary payment (additional coverages)
Proof of loss
Notice of claim
Arbitration
Pro rata liability (other insurance)
Subrogation
Compliance with provisions of Fair Credit Reporting Act
Claims made policy form
Salvage
Consent to settle a loss
Limitations

C. Types of policies, bonds, and related terms

Automobile Insurance - personal & family auto and business & commercial auto

a. Bodily injury

b. Property damage

c. Limits

(1) Split

(2) Single

d. Medical payments

e. Supplementary payments

f. Physical damage

Collision
Comprehensive

g. Uninsured motorist

h. Underinsured motorist

i. Named insureds

j. Insureds

k. Owned automobile

l. Nonowned automobile

m. Temporary substitute auto

n. Hired auto

o. Cancellation and nonrenewal

p. Towing and labor

q. Personal auto policy

r. Family auto policy

s. Business auto policy

t. Garage liability policy

General liability

a. Exposures (hazards)

(1) Premises and operations

(2) Products and completed operations

(3) Contractual liability

(4) Vicarious liability/independent contractors

b. Coverage forms

(1) Commercial General Liability (CGL)

(a) Occurrence form

(b) Claims made form

(2) Owners and contractors protective liability

Commercial general liability
Bonding and commercial crime insurance

a. Theft, disappearance and destruction form

b. Robbery and safe burglary form

c. Premises burglary coverage form

d. Fidelity bonds

e. Surety bonds

f. Other miscellaneous bonds

Worker’s compensation
Professional liability

a. Errors and omissions

b. Directors and officers

Umbrella/excess liability

V. Wisconsin Casualty Insurance Law – 2 Hours

A. General rate standards

B. Prohibited classification of risks

C. Surplus lines

Definition
Prohibitions and restrictions
Responsibilities of agents and brokers

D. Oral contracts

E. Automobile liability

Financial responsibility

a. Definition

b. Persons required to show proof

Required coverages and prohibited exclusions

a. Uninsured motorist

Cancellation or nonrenewal
Responsibility for minors operating motor vehicles
Wisconsin Automobile Insurance Plan

F. Worker’s compensation

Purpose
Definitions
Wisconsin worker’s compensation insurance pool

Chapter Ins 26 Appendix 2 APPENDIX 2 - PROPERTY INSURANCE COURSE REQUIREMENTS

Wis. Admin. Code § Chapter Ins 26 APPENDIX 2 - PROPERTY INSURANCE COURSE REQUIREMENTS {#sec-chapter-ins-26 omnilex-key=us-wi-regs-official--agency-ins--Chapter Ins 26}