Under current law, the injured patients and families compensation fund pays
excess medical malpractice claims and other amounts. Certain health care providers
who are covered by the compensation fund must pay an annual assessment to the
compensation fund in an amount calculated under formulas in current law. When
calculating the fees assessed to physicians, current law requires the commissioner
to provide for not more than four payment classifications, based upon the amount of
surgery performed and the risk of diagnostic and therapeutic services provided or

procedures performed. The bill changes the number of payment classifications to no
fewer than four classifications.
Currently, the Injured Patients and Families Compensation Fund Peer Review
Council reviews claims made and determines any future changes to fees assessed
against the health care provider. The board of governors of the plan of health care
liability coverage for health care providers appoints members to the peer review
council and designates the chairperson and other officers of the council. The bill
dictates that the chairperson of the peer review council must be a physician. Current
law requires the peer review council to consist of five persons, not more than three
of whom are physicians who are actively engaged in the practice of medicine in
Wisconsin. The bill specifies that those physicians must be licensed and in good
standing to practice medicine instead of actively practicing. Current law requires
the chairperson of the peer review council to serve as an ex officio nonvoting member
of the Medical Examining Board. The bill allows the chairperson to designate
another peer review council member to be the ex officio member of the Medical
Examining Board and specifies that the chairperson or peer review council member
may attend meetings of the Medical Examining Board as appropriate.
Corporate governance annual disclosure initial filing deadline
This bill delays the date on which the first governance annual disclosure is due
to the first June 1 that occurs after the date the final rules implementing the
disclosure requirements are promulgated. 2017 Wisconsin Act 313 requires an
insurer or an insurance holding company system of which an insurer is a member
to annually submit to the commissioner a corporate governance annual disclosure
containing certain information.
Confidentiality of information
Under current law, the Office of the Commissioner of Insurance may refuse to
disclose and may prevent disclosure of testimony, reports, records, communications,
and information that are obtained from various entities under a pledge of
confidentiality or for the purpose of assisting or participating in the entity's
monitoring activities or in conducting an inquiry, investigation, or examination.
This bill adds to the list of entities whose information may not be disclosed a fund
or other entity in another state, or an association acting on behalf of the fund or other
entity, that is organized for the same purpose as the security fund created under
Wisconsin law.
Placement of surplus lines insurance
This bill eliminates the requirement that, for an intermediary to place surplus
lines insurance with an unauthorized insurer domiciled in the United States, the
unauthorized insurer must provide to the commissioner, no more than six months
after the close of the period reported on, a certified copy of its current annual
statement that is filed and approved by the regulatory authority in the unauthorized
insurer's domicile and certified by an accounting or auditing firm licensed in the
jurisdiction of the unauthorized insurer's domicile. The bill maintains the
requirements for placement of surplus lines insurance that the unauthorized insurer
that is domiciled in the United States is authorized to write the type of insurance to

be placed with the insurer in its place of domicile and has capital and surplus in an
amount specified under current law.
Financial statements of property service contract providers
This bill changes the deadline for submission of financial statements by
providers of property service contracts that use a deposit or irrevocable letter of
credit from the end of the fifth month following the end of the provider's fiscal year
to March 31 of each year.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB550,1 1Section 1. 600.03 (23) of the statutes is amended to read:
AB550,4,52 600.03 (23) A “group insurance policy" is a policy covering a group of persons,
3and issued to a policyholder in on behalf of the group for the benefit of group members
4who are selected under procedures defined in the policy or agreements collateral
5thereto, with or without members of their families or dependents.
AB550,2 6Section 2. 601.465 (1m) (c) 10. of the statutes is created to read:
AB550,4,97 601.465 (1m) (c) 10. A fund or other entity in another state, or an association
8acting on behalf of the fund or other entity, that is organized for the same purpose
9as the security fund created under ch. 646.
AB550,3 10Section 3. 610.80 (8) of the statutes is amended to read:
AB550,4,1611 610.80 (8) Initial filing deadline. Notwithstanding the June 1 deadline under
12sub. (2) (a), an
An insurer, or the insurance holding company system of which the
13insurer is a member, that is required to file a corporate governance annual disclosure
14under this section shall file its first corporate governance annual disclosure no later
15than 60 days the first June 1 that occurs after the date the final rules implementing
16this section are promulgated.
AB550,4 17Section 4. 614.19 (3) (b) of the statutes is amended to read:
1614.19 (3) (b) Except as provided in s. 614.24 (1m), every fraternal shall contain
2in its laws and in each certificate of insurance it issues, a provision, to which every
3certificate of insurance issued by the fraternal shall be subject, that if the financial
4position of the fraternal becomes impaired, the board of directors or the supreme
5governing body may, on an equitable basis, apportion the deficiency among the
6members of the fraternal, the insured employees or the owners, or any combination
7thereof. A member, insured employee or owner may then either pay the member's,
8insured employee's or owner's share of the deficiency, or accept the imposition of a
9lien on the certificate of insurance, to bear interest at the rate charged on policy loans
10under the certificate, compounded annually until paid, or may accept a proportionate
11reduction in benefits under the certificate. The fraternal may specify the manner of
12the election and which alternative is to be presumed if no election is made. No
13assessment of shares of a deficiency under this paragraph may take effect until 90
14days after the date the commissioner is notified of the assessment, unless the
15commissioner approves an earlier effective date. The commissioner may disapprove
16the assessment of shares of a deficiency under this paragraph if the commissioner
17finds that the assessment is not adopted in conformity with this chapter or is
18contrary to the interests of the members of the domestic fraternal.
AB550,5 19Section 5. 614.78 of the statutes is created to read:
AB550,6,4 20614.78 Maintenance of solvency. (1) Order declaring hazardous
When a domestic fraternal has an authorized control level event, as
22defined by the commissioner by rule, under circumstances the commissioner
23determines will not be promptly remedied, the commissioner, in addition to taking
24any other action required or allowed by law, may issue an order declaring the
25domestic fraternal to be in a hazardous condition and may order the fraternal to

1remedy the authorized control level event. This order may include authorization to
2the fraternal to negotiate an agreement to transfer, subject to sub. (2), all members,
3certificates, and other assets and liabilities of the fraternal to another fraternal or
4other insurer through merger, consolidation, assumption, or other means.
AB550,6,16 5(2) Specifications regarding transfer. (a) Any transfer under sub. (1) shall
6constitute a novation of the transferring fraternal's certificates that is effective on
7the date of transfer. The fraternal shall ensure the transfer is concluded within the
8time agreed to by the commissioner and subject to the approval by the commissioner.
9The transfer agreement under this paragraph is considered to be fully approved by
10the domestic fraternal upon a majority vote of the fraternal's board of directors,
11notwithstanding s. 614.73 and any other law or regulation that requires notice to or
12approval by the fraternal's members or supreme governing body. Any law of a
13fraternal requiring notice to or approval by the fraternal's members or supreme
14governing body shall be suspended by this section. The transferring fraternal shall
15provide notice to its members of the transfer by mail or in the manner provided by
16s. 614.41 (1) no later than 30 days after the transfer is approved by the commissioner.
AB550,6,2117 (b) If the fraternal seeks to make a transfer under sub. (1) to an organization
18that does not have a certificate of authority in this state, the commissioner may grant
19the organization a limited certificate of authority to service the existing certificates
20and fulfill all obligations owed to certificate holders following the transfer but not to
21otherwise transact insurance business in this state.
AB550,6,2522 (c) By order of the commissioner and notwithstanding any law or rules to the
23contrary and any laws of the fraternal, the board of directors of the fraternal may
24suspend or modify the qualifications for membership in the fraternal as necessary
25to facilitate a transfer under sub. (1).
1(d) Upon the effective date of a transfer to an organization that is not a fraternal
2and in consideration for the transfer, each member of the fraternal is considered to
3agree that any terms of a certificate subjecting the certificate to the laws of the
4fraternal or providing for the maintenance of the fraternal's solvency, except to the
5extent of any outstanding lien not released by the terms of the transfer, shall be null
6and void and the assuming organization shall endorse the certificate accordingly.
AB550,6 7Section 6. 614.79 of the statutes is created to read:
AB550,7,11 8614.79 Rehabilitation and liquidation. (1) Grounds for rehabilitation
9or liquidation.
In addition to the grounds for rehabilitation under s. 645.31 and the
10grounds for liquidation under s. 645.41, any of the following is grounds for
11rehabilitation under s. 645.31 or liquidation under s. 645.41:
AB550,7,1312 (a) Failure by a domestic fraternal to comply with an order of the commissioner
13under s. 614.78.
AB550,7,1614 (b) Failure by a domestic fraternal to remedy within the time specified by the
15commissioner a hazardous condition as determined by the commissioner under s.
AB550,7,21 17(2) Criteria for rehabilitation. For purposes of a proceeding commenced
18under this section, rehabilitation under s. 645.31 is presumed to be futile and to serve
19no useful purpose, unless the commissioner reasonably believes that rehabilitation
20has a high probability of returning the fraternal to long-term viability or will
21facilitate a transfer to another fraternal or insurer.
AB550,8,4 22(3) Assessments under liquidation. Notwithstanding ss. 614.19 (3) and
23645.68, after a petition for liquidation of a fraternal is filed, the fraternal may not
24assess payment of shares of a deficiency under s. 614.19. (3) (b), unless the
25commissioner determines that the assessment is for the purpose of satisfying the

1obligations of the fraternal to creditors described in s. 645.68 (1) and (3). The
2fraternal may not make an assessment for the purpose of any deficiency related to
3other claims including those described in s. 645.68 (3c), (3m), (3r), (4), (5), (6), (7), (8),
4(9), (10), or (11).
AB550,8,8 5(4) Conduct of liquidation proceedings. Liquidation proceedings under this
6section for a fraternal shall be conducted consistent with the purposes of s. 645.01
7(4) (c) in a manner designed to conserve assets, limit liquidation expenses, and avoid
8any assessment of shares of a deficiency.
AB550,9,2 9(5) Transfer by liquidator. The liquidator of a fraternal under this section
10shall attempt to transfer policies or certificates of the liquidating fraternal under s.
11645.46 (8) by way of assignment, assumption, or other means to a qualified fraternal,
12either domestic or foreign, or, if no qualified fraternal will accept the transfer, to an
13insurer authorized to transact life insurance business in this state. In determining
14whether a fraternal or insurer is qualified to accept a transfer under this subsection,
15the liquidator shall consider the solvency of the fraternal or other insurer among
16other things. No fraternal shall be obligated to accept a transfer under this
17subsection. Upon the effective date of a transfer under this subsection to an insurer
18that is not a fraternal and in consideration for the transfer, each member of the
19fraternal and owner of a policy or certificate being transferred is considered to agree
20that any terms of the insurance policy or certificate that provide for the maintenance
21of the fraternal's solvency or that subject the policy or certificate to the policies of the
22fraternal shall be null and void and to agree to any other changes to terms of the
23policy or certificate that are determined by the liquidator to be necessary to
24effectuate the transfer. The insurer accepting transfer shall endorse the policy or

1certificate accordingly. Any transfer under this subsection is a novation of the policy
2or certificate that is effective on the date of transfer.
AB550,7 3Section 7. 616.54 (8) of the statutes is amended to read:
AB550,9,94 616.54 (8) Financial statements. A provider using a deposit or irrevocable
5letter of credit as specified in sub. (7) to satisfy sub. (5) shall, by the end of the 5th
6month following the end of each fiscal year of the provider
each March 31, submit
7financial statements for the most recent fiscal year to the commissioner that are
8prepared on an accrual basis in accordance with generally accepted accounting
9principles and that are audited by an independent certified public accountant.
AB550,8 10Section 8. 618.416 (1) (c) of the statutes is repealed.
AB550,9 11Section 9. 655.27 (3) (b) 2. of the statutes is amended to read:
AB550,9,1512 655.27 (3) (b) 2. With respect to fees paid by physicians, the commissioner shall
13provide for not more no fewer than 4 payment classifications, based upon the amount
14of surgery performed and the risk of diagnostic and therapeutic services provided or
15procedures performed.
AB550,10 16Section 10. 655.275 (2) of the statutes is amended to read:
AB550,9,2417 655.275 (2) Appointment. The board of governors shall appoint the members
18of the council. Section 15.09, except s. 15.09 (4) and (8), does not apply to the council.
19The board of governors shall designate the chairperson who shall be a physician, vice
20chairperson and secretary of the council and the terms to be served by council
21members. The council shall consist of 5 persons, not more than 3 of whom are
22physicians who are actively engaged in the practice of licensed and in good standing
23to practice
medicine in this state. The chairperson shall be a physician and or
24another peer review council member designated by the chairperson
shall serve as an

1ex officio nonvoting member of the medical examining board and may attend
2meetings of the medical examining board, as appropriate
AB550,10,33 (End)