Scope and purposes. 646.01(1)(a)1.
All kinds and lines of direct insurance, except as provided in par. (b)
All insurers authorized to do business in this state except:
Fraternals that are not health maintenance organization insurers.
Service insurance corporations that offer only dental or vision care.
Nondomestic insurers that have not obtained a certificate of authority to do business in this state and that are doing business under s. 618.41
Subd. par. j. is shown as renumbered from subd. par. i., as created by 1995 Wis. Act 396
, by the revisor under s. 13.93 (1) (b).
This chapter does not apply to any of the following:
The nonguaranteed provisions of annuities and life insurance contracts.
Surety bonds, fidelity bonds and any other bonding obligations.
Mortgage guaranty, financial guaranty and other forms of insurance offering protection against investment risks.
Product liability or completed operations liability insurance, and comprehensive general liability including either of these coverages, provided to a risk purchasing group or a member of a risk purchasing group.
Any self-funded or partially or wholly uninsured plan of an employer or other person to provide life insurance, annuity or disability benefits to its employes or members to the extent that the plan is self-funded or uninsured, including benefits payable by an employer or other person under any of the following:
Any liability for dividends or experience rating credits payable after the date of entry of the order of liquidation under an insurance or annuity contract, and any fees or allowances due any person, including the policyholder, in connection with service to or administration of the contract.
Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of such insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk.
A policy issued by an insurer to the department of health and family services under s. 49.45 (2) (b) 2.
to provide prepaid health care to medical assistance recipients.
The purposes of this chapter are:
To maintain public confidence in the promises of insurers by providing a mechanism for protecting insureds from excessive delay and loss in the event of liquidation of insurers and by assessing the cost of such protection among insurers; and
To provide where appropriate for the continuation of protection under policies and supplemental contracts of life insurance, disability insurance and annuities.
Purpose of chapter is to protect insureds against losses caused by insolvent insurer; insureds of insolvent insurers are protected against subrogation claims to extent of policy limits. Fireman's Fund v. Pitco Frialator, 145 W (2d) 526, 427 NW (2d) 417 (Ct. App. 1988).
In this chapter, unless the context indicates otherwise:
"Board" means the board of directors of the insurance security fund created by s. 646.12
"Fund" means the insurance security fund created by s. 646.11
"Liquidator" includes receiver or conservator.
Organization and administration of fund. 646.11(1)(1)
There is created a fund to be known as the "insurance security fund". All insurers subject to this chapter are contributors to the fund as a result of their authority to transact business in this state. The fund shall consist of all payments made by insurers under s. 646.51
, of the earnings resulting from investments under s. 646.21 (2)
and of the amounts recovered under s. 645.72 (2)
The fund shall be composed of 6 segregated accounts, one for life insurance, one for annuities, one for disability insurance other than policies issued or coverage provided by a health maintenance organization insurer, one for health maintenance organization insurers, one for all other kinds of insurance subject to this chapter and an administrative account.
(3) Expenses of fund.
Necessary expenses of administration of the fund incurred in connection with actual liquidations or with continuation of contracts under s. 646.35
shall be charged to the appropriate account of the fund. All other expenses shall be charged to the administrative account.
No contributor to the fund or person acting on its behalf is personally liable for any obligations of the fund. The rights of creditors are solely against the assets of the fund.
No cause of action of any nature may arise against and no liability may be imposed upon the fund or its agents, employes, directors or contributor insurers, or the commissioner or the commissioner's agents, employes or representatives, for any act or omission by any of them in the performance of their powers and duties under this chapter.
Administration of the fund. 646.12(1)(a)(a)
The fund shall be administered by a board of directors which shall consist of not fewer than 7 nor more than 14 members. The attorney general, the state treasurer and the commissioner are members with full voting rights. Other members shall be chosen from representatives of insurers subject to this chapter under procedures specified by the commissioner by rule, provided that one member is a representative of a service insurance corporation. The rule may provide that, instead of natural persons, specific insurers or associations of insurers may be selected as members of the board and may act through any duly authorized representative.
The person to chair the board shall be elected by the members of the board under a rule promulgated by the commissioner.
(2) General powers and duties.
The board shall:
Subject to the commissioner's power to promulgate rules under sub. (1)
, adopt rules for the administration of this chapter, including delegation of any part of its powers and its own procedures.
Create standing or special committees as needed. A minority of the members of any committee may be persons not members of the board.
Delegate to the committees any of its powers and duties under this chapter, subject to review and reconsideration by the board.
Employ or retain the personnel necessary to carry out its duties and set compensation for the personnel, sue or be sued, make contracts and borrow money necessary to carry out its duties in the most efficient way, including money with which to pay claims under s. 646.31
or to continue coverage under s. 646.35
. The board may offer as security for such loans its claims against the liquidator or its power to levy assessments under this chapter. Personnel employed under this paragraph are not employes of the state and are not subject to s. 20.922
or ch. 230
Advise and make recommendations to the commissioner on any matter related to the possible insolvency of an insurer covered by this chapter, and respond to any reasonable questions presented by the commissioner. Information, recommendations and advice under this subsection are privileged and confidential and are not open to public inspection under s. 19.35 (1)
Keep records of all meetings of the fund and of its subcommittees that involve discussions of the activities of the fund in carrying out its powers and duties under this chapter.
Keep confidential the records under subd. 1.
pertaining to specific liquidation proceedings involving an insurer until the termination of the liquidation proceedings or until sooner ordered to make the records public by a court.
Keep confidential the records under subd. 1.
pertaining to specific rehabilitation proceedings involving an insurer unless ordered to make the records public by a court.
Negotiate and contract with any liquidator to achieve the purposes of this chapter.
Perform other acts necessary to achieve the purposes of this chapter.
Members of the board and other committee members shall receive no compensation for services but may receive reimbursement for all reasonable and necessary expenses incurred in the performance of their respective duties as directors or as committee members.
(4) Other powers.
The board may join an organization consisting of one or more entities of other states performing comparable functions, in order to assist the board in carrying out its powers and duties under this chapter and otherwise further the purposes of this chapter.
Special duties and powers of the board related to loss claims. 646.13(1)(a)
Establish procedures and acceptable forms of proof for eligible claims, which shall correspond as closely as practicable with the corresponding rules under ch. 645
Stand in the position of the insurer in the investigation, compromise, settlement, denial and payment of claims under s. 646.31
and the defense of 3rd party claims against insureds, subject to the limitations of s. 645.43
. The board shall consult and cooperate with the liquidator in carrying out these duties. The board has no duties or liabilities with respect to any claim filed as follows:
With the liquidator under s. 645.61
after the date for filing specified by the liquidator under s. 645.47 (2)
, unless the liquidator determines that the claim is timely filed and participates in the same distribution as timely filed claims.
With a liquidator or court under the laws of any other state after the date for filing specified by the liquidator or court, unless the liquidator or court determines that the claim is timely filed and participates in the same distribution as timely filed claims.
Review settlements, releases and judgments to which the insurer or its insureds were parties to determine the extent to which they may be properly contested.
Exercise with respect to loss claims the powers that the liquidator has with respect to other claims under ch. 645
With respect to any action against an insurer which is in liquidation, exercise the powers of the liquidator under s. 645.49 (1)
Have standing to appear in any liquidation proceedings in this state involving an insurer in liquidation.
Proceedings involving nondomestic insurers.