2017 - 2018 LEGISLATURE
March 1, 2017 - Introduced by Representatives Steffen, Allen,
Duchow, Gannon, Genrich, Horlacher, Kessler, Kooyenga, Murphy,
Nygren and Skowronski, cosponsored by Senators Lasee,
Olsen and L. Taylor. Referred to Committee on Insurance.
1An Act to amend
618.41 (5); and
618.40 (3m), 618.41 (9) (c), 618.41 2
(13) and 646.01 (1) (b) 20. of the statutes; relating to: surplus lines insurance
3policies issued by domestic insurers.
Analysis by the Legislative Reference Bureau
This bill allows an insurer that is domiciled in this state to provide surplus lines
insurance in this state if the insurer meets certain requirements. Under current law,
only an unauthorized insurer that is not domiciled in this state may provide surplus
lines insurance in this state, subject to certain requirements and limitations. Under
this bill, an insurer domiciled in this state may apply to the commissioner of
insurance for a certificate allowing the insurer to provide surplus lines insurance in
this state as a domestic surplus lines insurer. In order to receive the certificate, the
insurer must have a resolution to become a domestic surplus lines insurer adopted
by its board of directors; have at least $15,000,000 in capital and surplus; and be
eligible to provide surplus lines insurance in at least one other state. The bill
specifies that an insurance policy issued by a domestic surplus lines insurer is not
protected by the Wisconsin insurance security fund and is subject to the same
taxation under current law as a surplus lines insurance policy. The bill also specifies
that a domestic surplus lines insurer may only offer surplus lines insurance.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
618.40 (3m) of the statutes is created to read:
“Domestic surplus lines insurer" means an insurer that has a 3
certificate to do business as a domestic surplus lines insurer under s. 618.41 (13).
618.41 (5) of the statutes is amended to read:
618.41 (5) Trade practices.
With respect to contracts made under this section, 6
nondomestic insurers and domestic surplus lines insurers
are subject to s. 628.34 7
and rules promulgated thereunder.
618.41 (9) (c) of the statutes is created to read:
(c) Surplus lines policies issued by domestic surplus lines insurers. 10
Notwithstanding par. (a), every new or renewal insurance policy procured and 11
delivered under this section by a domestic surplus lines insurer shall bear the name 12
and address of the insurance agent or broker who procured it and shall have stamped 13
or affixed upon it the following: “This insurance contract is issued and delivered as 14
a surplus line coverage pursuant to s. 618.41 of the Wisconsin Statutes. Section 15
618.43 (1), Wisconsin Statutes, requires payment by the policyholder of 3 percent tax 16
on gross premium. If the insurer that issued and delivered this policy becomes 17
insolvent, insureds or claimants will not be eligible for Wisconsin Insurance Security 18
Fund protection under chapter 646 of the Wisconsin Statutes."
618.41 (13) of the statutes is created to read:
618.41 (13) Domestic surplus lines insurers.
(a) An insurer domiciled in this 21
state may submit to the commissioner an application for a certificate that permits
the insurer to provide surplus lines insurance as a domestic surplus lines insurer. 2
The commissioner shall issue the certificate to the insurer if the insurer satisfies all 3
of the following requirements:
1. The insurer's board of directors has adopted a resolution requesting to be 5
certified as a domestic surplus lines insurer.
2. The insurer is eligible to provide surplus lines insurance in a state other than 7
3. The insurer has capital and surplus of no less than $15,000,000.
(b) A surplus lines insurance policy issued in this state by a domestic surplus 10
lines insurer is only subject to the requirements of this section in the same manner 11
as a surplus lines insurance policy issued by a nondomestic unauthorized insurer.
(c) A domestic surplus lines insurer shall be considered a nonadmitted insurer 13
as defined in 15 USC 8206
with respect to surplus lines insurance the domestic 14
surplus lines insurer issues in this state.
(d) Insurance transacted by a domestic surplus lines insurer under this section 16
is subject to taxation as specified under s. 618.43.
(e) A surplus lines insurance policy issued in this state by a domestic surplus 18
lines insurer under this section is not subject to the Wisconsin insurance security 19
fund under ch. 646.
(f) No domestic surplus lines insurer may offer insurance other than under this 21
646.01 (1) (b) 20. of the statutes is created to read:
(b) 20. A surplus lines insurance policy written by a domestic surplus 24
lines insurer under s. 618.41 (1).