646.35(2)
(2) Domestic insurer in liquidation. If a domestic insurer is in liquidation, the board shall, subject to the approval of the commissioner:
646.35(2)(a)
(a) Guarantee, assume or reinsure or cause to be guaranteed, assumed or reinsured all policies of the insurer within the scope of this section except contracts that are held by residents of a state that does not provide substantially equivalent coverage with regard to contracts of residents of this state other than policies and contracts under
s. 646.31 (2) (b) 3.;
646.35(2)(b)
(b) Assure performance of the contractual obligations of the insurer on such policies; and
646.35(2)(c)
(c) Provide the necessary money or other means necessary to discharge the duties under
pars. (a) and
(b).
646.35(3)
(3) Nondomestic insurer in liquidation. If a nondomestic insurer is in liquidation, the board shall, subject to the approval of the commissioner and on a determination by the commissioner that the insurer's domiciliary jurisdiction or state of entry does not provide by statute for protection to residents of this state substantially similar to that provided by this section:
646.35(3)(a)
(a) Guarantee, assume or reinsure or cause to be guaranteed, assumed or reinsured the policies of residents within the scope of this section;
646.35(3)(b)
(b) Assure performance of the contractual obligations of the insurer on such policies; and
646.35(3)(c)
(c) Provide the necessary money or other means necessary to discharge the duties under
pars. (a) and
(b).
646.35(4)
(4) Claims against liquidator. The fund has a claim against the liquidator for reasonable payments made to discharge its duties under this section. If the board and the liquidator disagree regarding the reasonableness of such payments, either may apply to the court to determine the question. Such payments shall have the same priority as the class of claims under
s. 645.68 (3).
646.35(5)
(5) Rate increases. The board may increase any rates or premiums on policies during continuation of coverage under
sub. (2) (b) or
(3) (b) to the extent the policies permit the insurer to increase the rates or premiums. If the board determines that the rates or premiums on policies which do not permit an increase or the rates or premiums as increased to the extent permitted by the policies are inadequate under
s. 625.11 (3), the board may offer the policyholders the option of terminating the coverage or continuing the coverage at adequate rates or premiums as determined by the board.
646.35(6)
(6) Limitations. In performing its duties under this section:
646.35(6)(a)
(a) In the case of an annuity contract, the board may limit its performance to payment of the then current value of the loss claim under
s. 645.68 (3) as of the date of the order of liquidation, with interest to the date of payment, in lieu of the requirements of
sub. (2) or
(3).
646.35(6)(b)
(b) In the case of a disability insurance policy which is neither guaranteed renewable nor noncancelable, the board is not obligated to continue the policy in force beyond the time required under
s. 645.43 or the date established in the liquidation order of another state, but may continue the coverage under any disability insurance policy for up to 180 days after the date of the liquidation order. The commissioner may adopt rules defining "guaranteed renewable" and "noncancelable" for the purposes of this paragraph.
646.35(6)(bm)
(bm) For coverages continued pursuant to
par. (b), the board may substitute a comprehensive health insurance policy approved by the commissioner for a health maintenance organization policy that is subject to
sub. (2) or
(3), and increase rates or premiums for the substituted coverage as provided in
sub. (5).
646.35(6)(c)
(c) In the case of a life insurance or annuity contract, the board is not obligated to perform the responsibilities set forth in
sub. (2) or
(3) with respect to either of the following:
646.35(6)(c)1.
1. Any benefit payment liability, arising on or after the date of entry of the order of liquidation, to the extent that the payment is based upon a rate of interest that exceeds the larger of the following:
646.35(6)(c)1.b.
b. The rate of interest determined by subtracting 3 percentage points from the monthly corporate bond yield average, as published by Moody's investors service or its successor and as adjusted on a monthly basis.
646.35(6)(c)2.
2. Any benefit payment liability, arising before the date of entry of the order of liquidation, to the extent that the payment is based upon a rate of interest that exceeds the larger of the following:
646.35(6)(c)2.b.
b. The rate of interest determined by subtracting 2 percentage points from the monthly corporate bond yield average, as published by Moody's investors service or its successor, when averaged for the 4-year period ending on the date the fund becomes obligated with respect to the contract or averaged for such lesser period if the contract was issued less than 4 years before that date.
646.41
646.41
Tax exemption. The fund is exempt from payment of all fees and taxes levied by this state or any of its subdivisions or instrumentalities, except for fees and taxes levied by virtue of employment under
s. 646.12 (2) (d).
646.41 History
History: 1979 c. 109.
646.51(1)(1)
Duty to assess. As soon as practicable after a liquidation order has been issued, the board shall estimate separately for each of the accounts of
s. 646.11 (2), the amounts necessary to make the payments provided by this chapter and shall order assessments separately for each account.
646.51(2)
(2) Exemptions from assessments. If the commissioner finds that a nondomestic insurer is subject to another security fund law providing substantially the same protection to claimants as would be provided by
s. 646.31 or
646.35 and that under the law of the other jurisdiction would have a prior obligation to pay those claims or assume those obligations, the commissioner shall exempt the insurer from the assessments on the classes of business to which the other law applies.
646.51(3)(a)1.1. In this section, "premiums" means gross premiums and other considerations received for direct insurance and annuities, including considerations for a plan established under
ss. 185.981 to
185.985, less return premiums and other considerations, dividends and experience credits paid or credited to policyholders on the direct business. The term "premiums" does not include any amounts received for any contracts or for the portions of any contracts for which coverage is excluded under
s. 646.01 (1) (b).
646.51(3)(a)2.
2. Except as provided in
pars. (b) and
(c), assessments shall be calculated as a percentage of premiums written in this state by each insurer in the classes protected by the account, for the year preceding the year of entry of the order of liquidation.
646.51(3)(b)1.1. Assessments to provide protection under
s. 646.35 (2) shall for each account be made separately for each state in which the domestic insurer in liquidation was authorized to transact business at any time, excluding every state that does not provide substantially equivalent coverage with regard to contracts of residents of this state. The assessment attributable to each state shall be in the proportion that the average annual premiums the insurer received on business in that state on policies covered by the account for 3 years preceding the year of the liquidation order, bears to the average annual premiums it received in all such states in that period. Assessments against insurers shall be in the proportion that those premiums received on business in each such state by each assessed insurer on contracts covered by each account bears to such premiums received on business in each state by all assessed insurers.
646.51(3)(b)2.
2. Assessments to provide protection under
s. 646.35 (3) shall be calculated as a percentage of average annual premiums received in this state by each insurer in the classes protected by the account for the 3 years preceding the year of entry of the order of liquidation.
646.51(3)(c)
(c)
Administrative assessments. The board may make assessments on a prorated or nonprorated basis to meet administrative costs and other expenses whether or not related to the liquidation or rehabilitation of a particular insurer. Nonprorated assessments may not exceed $200 per insurer in any year.
646.51(4)
(4) Limits. The maximum assessment under this section in any calendar year is 2% of the assessable premiums under
sub. (3). If the maximum assessment does not enable the fund to meet its obligations, an additional assessment shall be made in each succeeding year until the amounts available enable the fund to meet its obligations. No assessment may be levied if the assets held in the appropriate account of the fund are sufficient to cover all estimated payments for liquidations in progress.
646.51(5)
(5) Collection. After the rate of assessment has been fixed, the board shall send to each insurer a statement of the amount it is to pay. The board shall designate whether the assessments shall be made payable in one sum or in installments. Assessments shall be collected by the same procedures as premium taxes or license fees under
ch. 76.
646.51(6)
(6) Appeal and review. Within 30 days after the board sends the statement under
sub. (5), an insurer, after paying the assessment under protest, may appeal the assessment to the board or a committee thereof. The decision of the board on the appeal is subject to judicial review.
646.51(7)(a)(a) An insurer's premium rates are not excessive because they contain an amount reasonably calculated to recoup assessments made under this chapter.
646.51(7)(b)
(b) If the premium rates on a class of business are fixed, so that it is not possible for an insurer to recoup its assessments by increasing premium rates on the class of business, the insurer may offset 20% of the amount of the Wisconsin portion of the assessment against its tax liabilities to this state, other than real property taxes, in each of the 5 calendar years following the year in which the assessment was paid.
646.51(7)(c)
(c) If an insurer ceases doing business in this state, all assessments not yet offset may be offset against its tax liabilities to this state for the year it ceases doing business. If the offset exceeds the tax liabilities, no refund will be made and there will be no carry-forward of the deficit to later years.
646.51(7)(d)
(d) Any amount available for credit against future tax liabilities under this subsection may be regarded as an asset of the insurer under rules promulgated by the commissioner.
646.51(8)
(8) Abatement and deferral. The board may abate or defer the assessment of an insurer in whole or part if payment of the assessment would endanger the ability of the insurer to fulfill its contractual obligations. The amount by which an assessment is abated or deferred may be assessed under this section against other insurers.
646.51(9)
(9) Obligation to contribute ceases. 646.51(9)(a)(a) Except as provided in
par. (b), if an insurer's license or certificate of authority to do business in this state terminates or expires, the insurer's obligation to pay assessments under this section ceases beginning on the day after the insurer's license or certificate of authority terminates or expires.
646.51(9)(b)
(b) An insurer whose license or certificate of authority to do business in this state terminates or expires remains liable after the termination or expiration to pay all of the following:
646.51(9)(b)1.
1. Assessments made or called before the insurer's license or certificate of authority terminated or expired.
646.51(9)(b)2.
2. Assessments made or called after the insurer's license or certificate of authority terminated or expired that relate to a liquidation order entered before the insurer's license or certificate of authority terminated or expired.
646.51 Annotation
Sub. (7) is applicable to franchise taxes, income taxes, and fire department dues. Only Wisconsin assessments are used for offsets against Wisconsin taxes. Section 76.66 applies. If assessments are reimbursed, tax credits should be recaptured.
72 Atty. Gen. 17.
646.60
646.60
Claims by security funds. 646.60(1)(a)(a) Settlements by the fund. The liquidator is bound by determinations and settlements of covered loss claims, and by payments of claims, made by the board under this chapter.
646.60(1)(b)
(b)
Settlements by comparable funds. The liquidator is bound by determinations and settlements of covered loss claims, and by payments of claims, made by funds or organizations of other states that are comparable to the fund under this chapter if all of the following apply:
646.60(1)(b)1.
1. The laws of the other states give equivalent recognition to the determinations and settlements of loss claims, and to payments of claims, made by the fund.
646.60(1)(b)2.
2. If the same claim is reported as paid by 2 or more funds, payment shall be to the fund with a prior obligation under
s. 646.31 (9).
646.60(2)
(2) Priorities. The subrogation claims of funds under
sub. (1) for settlements of claims, including expenses in settling them, have the priority the claims would have under
s. 645.68.
646.60 History
History: 1979 c. 109;
1999 a. 30.
646.61
646.61
Disposal and transfer of assets. 646.61(1)
(1) After termination of all liquidations under any account of
s. 646.11 (2), remaining assets in that account shall be redistributed among those who paid assessments under rules promulgated to ensure treatment that is as equitable to the contributing insurers as is practicable. Partial distributions may be made to insurers who were assessed after all claims against the fund arising from such liquidations have been paid.
646.61(2)
(2) To meet the needs of the fund the board may temporarily transfer assets from one account to another.
646.61 History
History: 1979 c. 109;
1983 a. 120.
646.73
646.73
Liquidations to which the chapter is applicable. This chapter applies in full to all liquidations commenced after February 16, 1980. For each liquidation in process on February 16, 1980 the board shall apply to the court which issued the liquidation order for an order specifying the extent to which this chapter, 1979 stats., applies to that liquidation. The court shall apply this chapter, 1979 stats., to the maximum extent possible without affecting vested rights or creating serious administrative difficulties.
646.73 History
History: 1979 c. 109.
