March 7, 1996 - Introduced by Representatives Lorge, Albers, Freese, Baldus,
Underheim, Cullen, Kreibich, Robson
and Notestein, cosponsored by
Senator Schultz. Referred to Committee on Insurance, Securities and
Corporate Policy.
AB992,1,4 1An Act to amend 15.01 (2); and to create 14.83, 20.145 (1) (c), 601.415 (11),
2601.59 and 601.595 of the statutes; relating to: ratifying the interstate
3insurance receivership compact, creating the interstate insurance receivership
4commission, granting rule-making authority and making an appropriation.
Analysis by the Legislative Reference Bureau
This bill ratifies the interstate insurance receivership compact (compact). The
main purposes of the compact are to promote and develop orderly, efficient,
cost-effective and uniform insurer receivership laws and operations and to
coordinate interaction between insurer receivership and guaranty fund operations.
Any state may join in the compact by ratifying it by statute. The functions under the
compact are performed by the interstate insurance receivership commission
(commission), which is created by the compact. The commission is composed of
members who represent the compacting states. Each compacting state has one
member, and one vote, on the commission. The commissioner of insurance, or his or
her designee, is the commission member representing this state.
The commission is a body corporate of each compacting state and has the usual
corporate powers, such as to elect or appoint officers, employes or attorneys, to
borrow money, to accept donations and grants of money, to prescribe bylaws for its
operation, to establish a budget and make expenditures, to lease or purchase real or
personal property, to sell or mortgage real or personal property, to bring or prosecute
legal proceedings, to establish and maintain offices and to purchase insurance and
bonds. In addition, the commission has the power to promulgate rules that are
binding on the compacting states and to enforce those rules, to oversee, supervise and
coordinate the activities of receivers in compacting states, to monitor the activities
and functions of guaranty funds in the compacting states, to act as a receiver of
insurers, to provide advice and training regarding receiverships in the compacting
states and to provide for dispute resolution among compacting states and receivers.

The primary functions of the commission are the oversight of receiverships in
the compacting states and the promulgation of rules related to the operation of
receiverships. To aid the commission in the first primary function, each compacting
state must keep the commission informed of receiverships in the state by providing
notice to the commission of those receiverships and by submitting certain reports
regarding those receiverships. Receivers in the compacting states must submit to
the commission reports and other information requested by the commission. The
commission will analyze the information received and may make recommendations
to a compacting state for improving the performance of its receivers. The commission
may act as receiver of any insurer in a compacting state upon the request of the
commissioner of the compacting state or if the commissioner, while acting as receiver,
fails to comply with commission rules or operating procedures. With regard to the
2nd primary function, within 3 years after ratification of the compact by at least 2
states, the commission is required to promulgate uniform provisions for the
operation of receiverships among the compacting states. The uniform provisions will
become law in the compacting states upon legislative enactment in a majority of the
compacting states. A compacting state, however, may exempt itself from the
application of a uniform provision if the state expressly rejects the provision by
legislative enactment.
The expenses of the commission are to be paid through annual assessments
against each compacting state and each insurer authorized to do a direct insurance
business in a compacting state. Under the bill, this state's portion of the annual
assessment will be paid by general purpose revenue. The commissioner of insurance
must request the joint committee on finance to supplement the general purpose
revenue appropriation if the appropriated amounts are insufficient and may not
impose an assessment against insurers to cover the deficiency. The commission is
exempt from taxation in the compacting states.
Any compacting state may withdraw from the compact by repealing the state's
statute that ratifies the compact. A compacting state may also be terminated from
the compact if it defaults on any of its obligations under the compact and fails to cure
the default within the time specified by the commission. The entire compact
dissolves if membership is at any time reduced to one state.
Current law provides for the grounds, and procedures to be followed, for the
rehabilitation and liquidation of insurers doing business in this state, actions in
which the insurers are subject to receivership.
This bill will be referred to the joint survey committee on tax exemptions for a
detailed analysis, which will be printed as an appendix to this bill.
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:
AB992, s. 1 1Section 1. 14.83 of the statutes is created to read:
AB992,3,8
114.83 Interstate insurance receivership commission. There is created an
2interstate insurance receivership commission as specified in s. 601.59 (3). The
3member of the commission representing this state shall be the commissioner of
4insurance or his or her designated representative. The commission member shall
5serve without compensation but shall be reimbursed from the appropriation under
6s. 20.145 (1) (g) for actual and necessary expenses incurred in the performance of his
7or her duties. The commission has the powers and duties granted and imposed under
8s. 601.59.
AB992, s. 2 9Section 2. 15.01 (2) of the statutes, as affected by 1995 Wisconsin Act 27, is
10amended to read:
AB992,3,2011 15.01 (2) "Commission" means a 3-member governing body in charge of a
12department or independent agency or of a division or other subunit within a
13department, except for the education commission which shall consist of 11 members,
14the Wisconsin waterways commission which shall consist of 5 members, the parole
15commission which shall consist of 5 members and the Fox river management
16commission which shall consist of 7 members. A Wisconsin group created for
17participation in a continuing interstate body, or the interstate body itself, shall be
18known as a "commission", but is not a commission for purposes of s. 15.06. The parole
19commission created under s. 15.145 (1) shall be known as a "commission", but is not
20a commission for purposes of s. 15.06.
AB992, s. 3 21Section 3. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
22the following amounts for the purposes indicated: - See PDF for table PDF
AB992, s. 4 1Section 4. 20.145 (1) (c) of the statutes is created to read:
AB992,4,52 20.145 (1) (c) Interstate insurance receivership commission assessment. The
3amounts in the schedule to pay all or $25,000 of this state's portion of the annual
4assessment levied by the interstate insurance receivership commission under s.
5601.59 (10) (c), whichever is less.
AB992, s. 5 6Section 5. 601.415 (11) of the statutes is created to read:
AB992,4,97 601.415 (11) Interstate insurance receivership commission. The
8commissioner or a designated representative shall serve as a member of the
9interstate insurance receivership commission under ss. 14.83 and 601.59 (3).
AB992, s. 6 10Section 6. 601.59 of the statutes is created to read:
AB992,4,14 11601.59 Interstate insurance receivership compact. The interstate
12insurance receivership compact is hereby enacted into law and entered into by this
13state with all other jurisdictions legally joining therein, in the form substantially as
14follows:
AB992,4,17 15(1) Article I — Purposes. Through means of joint and cooperative action
16among the compacting states, the purposes of this compact include all of the
17following:
AB992,4,1918 (a) To promote, develop and facilitate orderly, efficient, cost-effective and
19uniform insurer receivership laws and operations.
AB992,5,2
1(b) To coordinate interaction between insurer receivership and guaranty
2association operations.
AB992,5,33 (c) To create the interstate insurance receivership commission.
AB992,5,64 (d) To perform these and such other related functions as may be consistent with
5the state regulation of the business of insurance pursuant to the
6McCarran-Ferguson act.
AB992,5,7 7(2) Article II — Definitions. In this compact:
AB992,5,98 (a) "Bylaws" means those bylaws prescribed by the commission for its
9governance, or for directing or controlling the commission's actions or conduct.
AB992,5,1110 (b) "Compacting state" means any state which has enacted enabling legislation
11for this compact.
AB992,5,1312 (c) "Commission" means the interstate insurance receivership commission
13created by this compact.
AB992,5,1414 (d) "Commissioner" means the chief insurance regulatory official of a state.
AB992,5,1715 (e) "Deputy receiver" means any person appointed or retained by a receiver and
16who is the receiver's duly authorized representative for administering one or more
17estates.
AB992,5,2118 (f) "Domiciliary state" means the state in which an insurer is incorporated or
19organized; or, in the case of an alien insurer, its state of entry; or, in the case of an
20unauthorized insurer not incorporated, organized, or entered in any state, a state
21where the insurer is engaged in or doing business.
AB992,5,2222 (g) "Estate" means the assets and liabilities of any insurer in receivership.
AB992,6,223 (h) "Guaranty association" means an insurance guaranty fund or association
24or any similar entity now or hereafter created by statute in a compacting state, other

1than a receivership, to pay or assume, in whole or in part, the contractual claim
2obligations of insolvent insurers.
AB992,6,63 (i) "Insurer" means any person or entity that has done, purports to do, is doing
4or is licensed to do any insurance or reinsurance business, or that is or has been
5subject to the authority of, or to liquidation, rehabilitation, supervision, conservation
6or ancillary receivership by, any commissioner.
AB992,6,97 (j) "Member" means the commissioner of a compacting state or his or her
8designee, who shall be a person officially connected with the commissioner and who
9is wholly or principally employed by the commissioner.
AB992,6,1110 (k) "Noncompacting state" means any state which has not enacted enabling
11legislation for this compact.
AB992,6,1412 (L) "Operating procedures" means those procedures promulgated by the
13commission implementing a rule, an existing law in a compacting state or a provision
14of this compact.
AB992,6,1715 (m) "Publication" means the act of publishing in the official state publication
16in a compacting state or in such other publication as may be established by the
17commission.
AB992,6,1918 (n) "Receiver" means receiver, liquidator, rehabilitator, conservator or ancillary
19receiver as the context requires.
AB992,6,2120 (o) "Receivership" means any liquidation, rehabilitation, conservation or
21ancillary receivership proceeding as the context requires.
AB992,6,2422 (p) "Rules" means acts of the commission, duly promulgated pursuant to sub.
23(7), substantially affecting interested parties in addition to the commission, which
24shall have the force and effect of law in the compacting states.
AB992,6,2525 (q) "State" means any state, district or territory of the United States of America.
AB992,7,10
1(3) Article III — Establishment of the Commission and Venue. The
2compacting states hereby create the interstate insurance receivership commission.
3The commission is a body corporate of each compacting state. The commission is a
4not-for-profit entity, separate and distinct from the compacting states. The
5commission is solely responsible for its liabilities except as otherwise provided in this
6compact. Except as otherwise specifically provided in state or federal law in the
7jurisdiction where the commission's principal office is located or where the
8commission is acting as receiver, venue is proper, and judicial proceedings by or
9against the commission shall be brought, in a court of competent jurisdiction where
10the commission's principal office is located.
AB992,7,12 11(4) Article IV — Powers of the Commission. The commission shall have all
12of the following powers:
AB992,7,1513 (a) To promulgate rules which shall have the force and effect of statutory law
14and shall be binding in the compacting states to the extent and in the manner
15provided in this compact.
AB992,7,1716 (b) To promulgate operating procedures which shall be binding in the
17compacting states to the extent and in the manner provided in this compact.
AB992,7,1918 (c) To oversee, supervise and coordinate the activities of receivers in
19compacting states.
AB992,7,2320 (d) To act as receiver of insurers organized under the laws of, engaged in or
21doing the business of insurance in, a compacting state upon the request of the
22commissioner of such state or when grounds for receivership by the commission exist
23under sub. (9).
AB992,8,3
1(e) To act as deputy receiver of insurers organized under the laws of, engaged
2in or dong the business of insurance in, a noncompacting state in accordance with
3sub. (9).
AB992,8,54 (f) To act as ancillary receiver in a compacting state of an insurer domiciled in
5a noncompacting state.
AB992,8,76 (g) To monitor the activities and functions of guaranty associations in the
7compacting states.
AB992,8,98 (h) To delegate its operating authority or functions; provided, that its
9rule-making authority under sub. (7) shall not be delegated.
AB992,8,1110 (i) To bring or prosecute legal proceedings or actions in its name as the
11commission, or in the name of the commission acting as receiver.
AB992,8,1412 (j) To bring or prosecute legal proceedings or actions as receiver on behalf of an
13estate or its policyholders and creditors; provided, that any guaranty association's
14standing to sue or be sued under applicable law shall not be affected.
AB992,8,1615 (jm) To issue subpoenas requiring the attendance and testimony of witnesses
16and the production of evidence.
AB992,8,1717 (k) To establish and maintain offices.
AB992,8,1818 (L) To purchase and maintain insurance and bonds.
AB992,8,2019 (m) To borrow, accept or contract for services of personnel, including, but not
20limited to, members and their staff.
AB992,8,2421 (n) To elect or appoint such officers, attorneys, employes or agents, and to fix
22their compensation, define their duties and determine their qualifications; and to
23establish the commission's personnel policies and programs relating to, among other
24things, conflicts of interest, rates of compensation and qualifications of personnel.
AB992,9,2
1(o) To accept any and all donations and grants of money, equipment, supplies,
2materials and services, and to receive, utilize and dispose of the same.
AB992,9,43 (p) To lease, purchase, accept gifts or donations of, or otherwise to own, hold,
4improve or use, any property, real, personal or mixed.
AB992,9,65 (pm) To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise
6dispose of any property, real, personal or mixed.
AB992,9,87 (q) To enforce compliance with commission rules, operating procedures and
8bylaws.
AB992,9,99 (r) To provide for dispute resolution among compacting states and receivers.
AB992,9,1210 (s) To represent and advise compacting states on issues relating to insurers
11domiciled or doing business in noncompacting jurisdictions, consistent with the
12purposes of this compact.
AB992,9,1513 (t) To provide advice and training to receivership personnel of compacting
14states, and to be a resource for compacting states by maintaining a reference library
15of relevant materials.
AB992,9,1616 (u) To establish a budget and make expenditures.
AB992,9,1717 (v) To borrow money.
AB992,9,1918 (w) To appoint committees including, but not limited to, an industry advisory
19committee and an executive committee of members.
AB992,9,2120 (x) To provide and receive information relating to receiverships and guaranty
21associations, and to cooperate with law enforcement agencies.
AB992,9,2222 (y) To adopt and use a corporate seal.
AB992,9,2523 (z) To perform such other functions as may be necessary or appropriate to
24achieve the purposes of this compact as may be consistent with the state regulation
25of the business of insurance pursuant to the McCarran-Ferguson act.
AB992,10,6
1(5) Article V — Organization of the Commission. (a) Each compacting state
2shall have one member. Each member shall be qualified to serve in such capacity
3under the applicable law of the compacting state. Each compacting state retains the
4discretionary right to determine the due election or appointment and qualification
5of its own commissioner, and to fill all vacancies of its member. Each member shall
6be entitled to one vote.
AB992,10,97 (b) The commission shall, by a majority of the members, prescribe bylaws to
8govern its conduct as may be necessary or appropriate to carry out the purposes of
9the compact, including, but not limited to, all of the following:
AB992,10,1010 1. Establishing the fiscal year of the commission.
AB992,10,1311 2. Providing reasonable standards and procedures for the establishment of
12committees and governing any general or specific delegation of any authority or
13function of the commission.
AB992,10,1514 3. Providing reasonable procedures for calling and conducting meetings of the
15commission, and ensuring reasonable notice of each such meeting.
AB992,10,1616 4. Establishing the titles and responsibilities of the officers of the commission.
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