AB877,5,323 (c) With respect to an insurer member of an insurance holding company system,
24if the commissioner wishes to review the disclosure under par. (a) or make a request
25for additional information about the disclosure under par. (a), the commissioner

1shall request the disclosure or additional information through the lead state before
2seeking the information from the insurer member of the insurance holding company
3system.
AB877,5,104 (d) The insurer or insurance holding company system has discretion over
5responses to inquiries regarding the disclosure under this section, provided that the
6disclosure is consistent with rules established by the commissioner regarding the
7disclosure and contains the material information necessary to permit the
8commissioner to gain an understanding of the insurer's or insurer member of an
9insurance holding company system's corporate governance structure, policies, and
10practices.
AB877,5,1611 (e) Insurers providing information substantially similar to the information
12required by this section in other documents provided to the commissioner, including
13proxy statements or other state or federal filings provided to the commissioner, are
14not required to also provide that information in the corporate governance annual
15disclosure but are required to reference in the corporate governance annual
16disclosure the document in which the information is included.
AB877,5,18 17(3) Contents of disclosure. The disclosure under sub. (2) (a) shall include all
18of the following:
AB877,5,2419 (a) The signature of the chief executive officer or corporate secretary of the
20insurer or insurance holding company system attesting that, to the best of that
21individual's knowledge, the insurer has implemented the corporate governance
22practices described in the disclosure and that a copy of the disclosure was provided
23to the insurer's board of directors or an appropriate committee of the insurer's board
24of directors.
AB877,6,11
1(b) An explanation of the level of corporate governance at which the disclosure
2provides its reporting, the criteria used to determine the level of reporting, and, if
3applicable, any change in the level of reporting from the previous disclosure. The
4insurer or insurance holding company system may provide information regarding
5corporate governance at the ultimate controlling parent, intermediate holding
6company, or individual legal entity level, depending upon how the insurer or
7insurance holding company system has structured its corporate governance. In
8determining at which level of reporting an insurer or insurance holding company
9system will make its disclosure, the insurer or insurance holding company system
10shall consider at which level the insurer or insurance holding company system does
11each of the following:
AB877,6,1212 1. Determines risk appetite.
AB877,6,1313 2. Collectively oversees earnings, capital, liquidity, operations, and reputation.
AB877,6,1514 3. Coordinates and exercises supervision over earnings, capital, liquidity,
15operations, and reputation.
AB877,6,1616 4. Places liability for failure to perform corporate governance duties.
AB877,6,20 17(4) Confidentiality. (a) All of the following apply to documents, materials, and
18other information in the possession or control of the commissioner that are obtained
19by, created by, or disclosed to the commissioner or any other person under this
20section:
AB877,6,2221 1. The documents, materials, and other information are considered proprietary
22and contain trade secrets.
AB877,6,2423 2. The documents, materials, and other information are confidential and
24privileged.
AB877,7,2
13. The documents, materials, and other information are not open to inspection
2or copying under s. 19.35 (1).
AB877,7,43 4. The documents, materials, and other information are not subject to subpoena
4or discovery and are not admissible as evidence in a civil action.
AB877,7,75 5. The commissioner may use the documents, materials, and other information
6in the furtherance of any regulatory or legal action brought as a part of the
7commissioner's official duties.
AB877,7,98 6. The commissioner may not make the documents, materials, or other
9information public without first obtaining written consent of the insurer.
AB877,7,1410 (b) Neither the commissioner nor any person who received documents,
11materials, or other information related to the corporate governance annual
12disclosure required under this section may testify or be required to testify in any
13private civil action regarding documents, materials, or other information related to
14the corporate governance annual disclosure required under this section.
AB877,8,315 (c) Notwithstanding par. (a), the commissioner may share, upon request,
16documents, materials, or other information related to the corporate governance
17annual disclosure required under this section with other state, federal, and
18international financial regulatory agencies if the recipient agrees in writing to
19maintain the confidentiality and privileged status of the documents, materials, or
20other information and has verified that it has the legal authority to maintain
21confidentiality. The commissioner may receive documents, materials, or other
22information related to similar corporate governance disclosures from other state,
23federal, and international financial regulatory agencies and shall maintain as
24confidential or privileged any documents, materials, or other information that is
25treated as confidential or privileged under the laws of the jurisdiction that is the

1source of the documents, materials, or other information. The sharing of documents
2under this paragraph does not constitute a delegation of regulatory authority and
3does not act as a waiver of privilege.
AB877,8,94 (d) Notwithstanding par. (a), the commissioner may share documents,
5materials, or other information related to the corporate governance annual
6disclosure required under this section with 3rd-party contractors and the National
7Association of Insurance Commissioners if the contractor or the National
8Association of Insurance Commissioners enters into an agreement with the
9commissioner that provides for all of the following:
AB877,8,1110 1. Procedures and protocols for maintaining the confidentiality and security of
11documents, materials, and other information shared under this section.
AB877,8,1812 2. Procedures for sharing by the National Association of Insurance
13Commissioners only with other state regulators in which the insurance group has
14domiciled insurers and who receive the information confidentially. The agreement
15shall provide that the recipient agrees in writing to maintain the confidentiality and
16privileged status of the documents, materials, or other information related to the
17corporate governance annual disclosure required to be filed under this section and
18has verified in writing the legal authority to maintain confidentiality.
AB877,8,2119 3. A provision specifying that the ownership of documents, materials, or other
20information shared under this section remains with the commissioner and the use
21of the information is at the direction of the commissioner.
AB877,8,2422 4. A provision that prohibits the National Association of Insurance
23Commissioners or 3rd-party contractor from storing information shared under this
24paragraph in a permanent database after the underlying analysis is complete.
AB877,9,4
15. A provision requiring the National Association of Insurance Commissioners
2or 3rd-party contractor to provide prompt notice to the commissioner and to the
3insurer regarding any subpoena, request for disclosure, or request for production of
4information shared under this paragraph.
AB877,9,95 6. A requirement that the National Association of Insurance Commissioners
6or the 3rd-party contractor consent to intervention by an insurer in any judicial or
7administrative action in which the National Association of Insurance
8Commissioners or the 3rd-party contractor may be required to disclose confidential
9information about the insurer shared under this paragraph.
AB877,9,13 10(5) Consultants. The commissioner may retain, at the insurer's or insurer
11member of an insurance holding company system's expense, consultants that the
12commissioner determines are necessary to assist the commissioner in reviewing
13documents, materials, or other information submitted under this section.
AB877,9,15 14(6) Construction. This section may not be read to prescribe or impose any
15standards or procedures with respect to corporate governance.
AB877,9,17 16(7) Rule making. The commissioner may promulgate any rules necessary to
17carry out the purposes of this section.
AB877,9,22 18(8) Initial filing deadline. Notwithstanding the June 1 deadline under sub.
19(2) (a), an insurer, or the insurance holding company system of which the insurer is
20a member, that is required to file a corporate governance annual disclosure under
21this section shall file its first corporate governance annual disclosure no later than
2260 days after the date the final rules implementing this section are promulgated.
AB877,6 23Section 6. 626.31 (1) (b) of the statutes is amended to read:
AB877,9,2524 626.31 (1) (b) Representation. The rating committee shall consist of 10
25members
an even number of members, up to 12 and no fewer than 8. Two members

1of the rating committee shall represent noninsurer, employer interests and shall be
2appointed by and serve at the pleasure of the governor. Of the remaining 8 members,
3 4 half of the members shall be chosen by stock insurers and 4 half of the members
4shall be chosen
by mutual insurers. Both stock and mutual insurers shall be
5represented equally on all other committees, including the managing committee.
6Each member of a committee shall have one vote, with the commissioner deciding the
7matter in the event of a tie.
AB877,7 8Section 7. 645.31 (16) of the statutes is created to read:
AB877,10,119 645.31 (16) That the insurer has corporate governance deficiencies such that
10the commissioner determines that the continued operation of the insurer may be
11hazardous to the insurer's policyholders, creditors, or the general public.
AB877,8 12Section 8. Nonstatutory provisions.
AB877,10,2213 (1) Emergency rules concerning corporate governance disclosure. The
14commissioner of insurance may promulgate emergency rules under section 227.24
15of the statutes implementing section 610.80 of the statutes. Notwithstanding section
16227.24 (1) (c) and (2) of the statutes, emergency rules promulgated under this
17subsection remain in effect until January 1, 2019, or the date on which permanent
18rules take effect, whichever is sooner. Notwithstanding section 227.24 (1) (a) and (3)
19of the statutes, the commissioner is not required to provide evidence that
20promulgating a rule under this subsection as an emergency rule is necessary for the
21preservation of the public peace, health, safety, or welfare and is not required to
22provide a finding of emergency for a rule promulgated under this subsection.
AB877,10,2323 (End)
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