LRB-5552/1
PJK:skg&mkd:km
1995 - 1996 LEGISLATURE
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.
AB992,3,2011
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](https://docs.legis.wisconsin.gov/assets/image/file_acrobat.gif)
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: