Office of the Commissioner of Insurance
Rule No. Agency 145 – Ins 6.57, 6.58, 6.59, 6.595, 6.61, 6.63, 6.92, 6.93, 26.03, 26.04, 26.05, 26.06, 26.07, 26.09, 28.01, 28.03, 28.04, 28.05, 28.06, 28.07, and 28.08, Wis. Adm. Code.
The statement of scope for this rule SS: 063-15, was approved by the Governor on July 23, 2015, published in Register No. 716A1, on August 3, 2015, and approved by the Commissioner on August 18, 2015.
Statutes interpreted:
ss. 600.01, 628.10, Wis. Stats.
  2.   Statutory authority:
ss. 600.01 (2), 601.41 (2) and (3), 628.04, 628.11, 628.34, 628.98, Wis. Stats.
Explanation of OCI’s authority to promulgate the proposed rule under these statutes:
The Commissioner has the general authority to promulgate rules necessary to administer and enforce chs. 600 to 655, Wis. Stat., and as provided under ss. 227.11 (2) (a) and 601.41, Wis. Stat. Section 601.41 (2) and (3) (a), Wis. Stat., read in combination with ss. 628.04, 628.10, and 628.98, Wis. Stat., authorize the Commissioner to determine by rule the procedures for administering the agent licensing process, including identifying the forms and procedures for submitting applications and renewing individual, firm and navigator licenses. In addition, 601.41 (2) and (3) (a), Wis. Stat., read in combination with 628.34, Wis. Stat., authorize the Commissioner to establish minimum standards for intermediary records which includes requiring intermediaries to update any name, e-mail or address changes. Further, s. 628.11, Wis. Stat., specifically authorizes the Commissioner to establish reporting requirements for insurers regarding all agent appointments, including renewals and terminations of appointments. Finally, it should be noted that s. 628.10 (2) (a) and (am), Wis. Stat., require notification of renewal fees and failure to comply with continuing education credits to be sent by first-class mail 60 days prior to the due date. These two paragraphs are currently being revised to permit notification to be done through e-mail. Accordingly, the amended provisions referencing 628.10, Wis. Stat., specifically ss. Ins 6.58 (5), 6.63 (2) and (4), 6.92 (6) and 6.93 (2), and 28.04 (1) (f), Wis. Adm. Code, will be consistent with the revised version of s. 628.10 (2) (a) and (am), Wis. Stat.
Related statutes or rules:
Please see listing of rules and related statutes noted in #3 above.
The plain language analysis and summary of the proposed rule:
The Office of the Commissioner of Insurance (OCI) recently switched to the National Association of Insurance Commissioner’s (NAIC) State Based System (SBS), which is a comprehensive web-based application that was developed to assist state regulators with many services relating to the agent licensing process. SBS was created by the NAIC in coordination with the National Insurance Producers Registry (NIPR) as an initiative to promote greater national licensing uniformity. Accordingly, the switch to SBS is creating greater uniformity between OCI’s agent licensing process and those in other states.
The switch to SBS also provides OCI with a more efficient and effective tool for administering the agent licensing process by affording a streamlined process in which many aspects of agent licensing, including pre-licensing requirements, applications, company appointment and billings, terminations, notices, and continuing education are consolidated in one place. The comprehensive nature of the SBS application is necessary to facilitate an integrated online platform that will allow OCI and licensees to easily locate, update, and track important information, access and process licensing requirements, and more effectively and efficiently communicate with each other through electronic means.
General Changes to chs. 6, 26, and 28: Electronic Communications, Flexibility, and Uniformity
One of the key challenges with the switch to SBS and the agent licensing process in general is modernization in which new technology is being utilized to create more effective and efficient processes—largely in the form of consolidated services and electronic communications. Accordingly, the proposed rule seeks to utilize electronic means as the primary form of communication, particularly the use of e-mail. Current notice provisions, including provisions relating to renewal fees, appointment fees, and continuing education requirements, all require the notice to be sent through the mail, which is inefficient and expensive. The proposed rule will permit the Commissioner to specify the manner in which notices shall be provided to the individuals and entities. This will allow our office to shift to e-mail in the short-term while providing the flexibility to adopt new forms of communication as they develop in the future (i.e. an online platform). In addition, the proposed rule will require individuals and entities to provide a contact e-mail address.
Similarly, the proposed rule will also permit the Commissioner to specify the manner in which applications, forms, and notices shall be filed. Under the current rules, applications and forms are generally required to be filed with OCI; for example, appointment requests and notices and intermediary licenses under ss. Ins 6.57, 6.58, and 6.59, Wis. Adm. Code., all require filing applications with OCI. However, under SBS many of these services will be handled through the SBS platform. Moreover, the proposed rule removes any reference to OCI specific applications or forms in favor of NAIC Uniform Applications to ensure uniformity with other states.
Finally, the proposed rule makes a distinction between the different causes for license revocation, which are governed by s. 628.10, Wis. Stats. Under the proposed rule, revocations for failing to comply with continuing education requirements or failing to pay regulation fees are referred to as terminations, while revocations for delinquent taxes and unemployment contributions are still referred to as revocations. This revision is not meant to create a substantive distinction, but rather is a way to more accurately reflect how the different revocations are both treated and viewed. For example, under s. Ins 6.61 (16) (a), Wis. Adm. Code, read in combination with s. Ins 6.61 (3) (e), Wis. Adm. Code, intermediaries are required to notify the Commissioner of any revocation for delinquent taxes or for failing to pay unemployment contributions, but they do not have to report revocations for failing to comply with continuing education requirements or failing to pay regulation fees.
Specific Changes to chs. 6, 26, and 28: Clarity, Efficiency, and Uniformity
In addition to the general changes outlined above, the proposed rule will also make a number of revisions that clarify, simplify, and/or remove existing requirements that are confusing and outdated. In general, these changes seek to streamline various aspects of the agent licensing process by removing unnecessary language and requirements and to create greater uniformity with other states.
Section Ins 6.57, Wis. Adm. Code—Appointment of Agents
First, under s. Ins 6.57 (1), Wis. Adm. Code, the proposed rule will clarify that appointment requests must be made either within 15 days of the date the agent contract is executed or the date the first insurance application is submitted. The same language is also added to subs. (5) and (6) in order to clarify appointment requirements regarding an insurer accepting business from an agent and for an agent soliciting on behalf of and submitting business to an insurer. In addition, the proposed rule also specifies that billing shall be done at the time of initial appointment. Finally, the proposed rule will remove specific fees details under subs. (4) and instead reference the statutory citation that governs the fees.
Sections Ins 6.58 and 6.59, Wis. Adm. CodeFirm and Individual Intermediary Licensing
The proposed rule will make a number of changes to OCI’s individual and firm intermediary licensing provisions under ss. Ins 6.58 and 6.59, Wis. Adm. Code, which are intended to streamline the licensing procedures and create greater uniformity with other states. First, under s. Ins 6.58, Wis. Adm. Code, the proposed rule will allow travel intermediaries to apply for firm licensure, remove the certification requirement for the articles of incorporation, permit the application to be either signed or submitted by an officer or partner as opposed to being signed by an officer or partner, and require the intermediary firm to designate a responsible licensed producer (DRLP).
Under s. Ins 6.59, Wis. Adm. Code, the proposed rule requires applicants to provide a copy of the certificate of prelicensing that was presented to the exam proctor in order to sit for the exam, removes the requirement that applicants notify the testing vendor one day in advance of their scheduled examination, and increases the time period in which exam scores are valid from 30 to 180 days. In addition, the proposed rule clarifies the meaning of criminal “conviction” under ss. Ins 6.58 (4) (b) 1. and 6.59 (5) (a), Wis. Adm. Code, to align with the meaning of criminal conviction” in the NAIC’s Uniform Applications. Finally, s. Ins 6.59 (8), Wis. Adm. Code, currently requires nonresident intermediaries to provide OCI with a letter of certification when they become a resident of a new state, which is an outdated practice. The proposed rule replaces “new state of residence” with “home state” as a matter of uniformity and will only require the letter of certification if OCI cannot independently verify the nonresident license status in the new home state first.
Section Ins 6.63, Wis. Adm. Code—Regulation Changes
The proposed rule adds failure to pay unemployment insurance contributions as a basis for license revocation under s. Ins 6.63 (3) and (4), Wis. Adm. Code, which is provided for by statute under s. 628.10 (2) (cm), Wis. Stat. In addition, the proposed rule eliminates the last sentence in s. Ins 6.63 (4), Wis. Adm. Code, which outlines the requirements for re-licensure depending on the length of time the license was terminated or revoked. This sentence is unnecessary as the requirement is already set forth by statute under s. 628.10 (5) (a), Wis. Stat.
Links to Admin. Code and Statutes in this Register are to current versions, which may not be the version that was referred to in the original published document.