LRB-3036/2
JTK:wlj:jf
2005 - 2006 LEGISLATURE
May 25, 2005 - Introduced by Senator Kanavas. Referred to Committee on Job
Creation, Economic Development and Consumer Affairs.
SB217,1,4
1An Act relating to: expenditure of a sum sufficient from the general fund equal
2to $13,103,428 plus interest calculated at the legal rate in payment of the claims
3against the state made by 10 claimants for overpayment of insurance license
4fees.
Analysis by the Legislative Reference Bureau
This bill directs expenditure of $13,103,428 plus interest from the general fund
in payment of claims against the state made by ten claimants for overpayment of
insurance license fees. Under ss. 76.63 (1) and 76.65 (2), stats., life and property
insurers doing business in this state, other than those headquartered in this state,
must pay an insurance license fee (tax) of 2 percent of their gross premiums collected
on policies or contracts that are written on the lives of Wisconsin residents or on
property located in this state. However, s. 76.67, stats., provides, with certain
limitations, that if the state in which an insurer is headquartered imposes a lower
tax on Wisconsin insurers doing business in that state, the total fee payable under
ss. 76.63 (1) and 76.65 (2), stats., is reduced to the same amount that a Wisconsin
insurer would be required to pay to that state. During one or more of the years 1992
to 1996, the claimants paid a 2 percent premium fee to this state because at that time
they were all headquartered in the state of Illinois and they believed that Illinois
would impose a tax at that rate upon Wisconsin insurers doing business in that state.
However, in Milwaukee Safeguard Ins. Co. v. Selcke, 179 Ill. 2d. 94 (1997), the Illinois
Supreme Court ruled that the Illinois tax was invalid, and as a result, Illinois
imposed no tax on Wisconsin insurers doing business in that state for those years.
The claimants claimed amounts totaling $13,103,428, representing the full amount
of insurance license fees that they paid to this state during the years 1992 to 1996,
plus interest calculated at the legal rate of 5 percent from the date that the fees were
paid to the date that the claims are paid. The Office of the Commissioner of
Insurance contends that the claims should be denied under applicable Wisconsin
case law, that the claimants should have brought suit for recovery of the claimed
overpayments as permitted under s. 76.68 (2), stats., that the claimants failed to
protest their payments at the time they were made, and that payment of the claims
would unjustly enrich Illinois insurers to the detriment of Wisconsin insurers. In a
report dated May 10, 2005, the Claims Board recommended denial of this claim (see
Senate Journal, PP. 227-228).
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:
SB217,2,82
(1) There is directed to be expended from the appropriation under section
320.505 (4) (d) of the statutes, as affected by the acts of 2005, the following amounts
4to the following claimants in payment of claims against the state for overpayment
5of insurance license fees imposed under sections 76.63 (1) and 76.65 (2) of the
6statutes for one or more of the calendar years 1992 to 1996, plus interest calculated
7at the legal rate under section 138.04 of the statutes from the date of payment of the
8fees to the date of payment of these claims:
- See PDF for table 
SB217,3,41
(2) Acceptance of this payment releases this state and its officers, employees,
2and agents from any further liability resulting from any overpayments by these
3claimants of fees imposed under sections 76.63 (1) and 76.65 (2) of the statutes during
4the years 1992 to 1996.
