AB681, s. 69 5Section 69. 646.13 (3) (intro.) of the statutes is amended to read:
AB681,27,76 646.13 (3) No duty or liability. (intro.) The board fund has no duty or liability
7with respect to any claim filed as follows:
AB681, s. 70 8Section 70. 646.13 (3) (a) of the statutes is amended to read:
AB681,27,139 646.13 (3) (a) With the liquidator under s. 645.61 after the original date for
10filing specified by the liquidator under s. 645.47 (2), unless the liquidator determines
11that the claim is considered to have been timely filed under s. 645.61 (2) and the claim
12participates fully in every distribution to the same extent as other timely filed claims
13in the same class.
AB681, s. 71 14Section 71. 646.13 (3) (b) of the statutes is amended to read:
AB681,27,1915 646.13 (3) (b) With a liquidator or court under the laws of any other state after
16the original date for filing specified by the liquidator or court, unless the liquidator
17or court determines that the claim is considered to have been timely filed under a law
18substantially similar to s. 645.61 (2) and the claim participates fully in every
19distribution to the same extent as other timely filed claims in the same class.
AB681, s. 72 20Section 72. 646.13 (3) (c) (intro.) of the statutes is amended to read:
AB681,27,2521 646.13 (3) (c) (intro.) Except for claims under life insurance policies, annuities
22and, or noncancelable or guaranteed renewable disability insurance policies, and
23except for claims determined to be excused late filings as provided in pars. (a) and
24(b), if the original date for filing is extended by the liquidator or court, with a
25liquidator or court after the earlier of the following:
AB681, s. 73
1Section 73. 646.13 (3) (c) 2. of the statutes is amended to read:
AB681,28,32 646.13 (3) (c) 2. The final extended date for filing specified by the liquidator or
3court.
AB681, s. 74 4Section 74. 646.13 (4) of the statutes is amended to read:
AB681,28,95 646.13 (4) When duty to defend terminates. Any obligation of the board fund
6to defend an insured ceases upon the board's fund's payment, by settlement releasing
7the insured or on a judgment, of an amount equal to the lesser of the board's fund's
8covered claim obligation limit or the applicable policy limit, subject to any express
9policy terms regarding tender of limits.
AB681, s. 75 10Section 75. 646.15 (title) of the statutes is amended to read:
AB681,28,11 11646.15 (title) Proceedings involving nondomestic insurers.
AB681, s. 76 12Section 76. 646.15 (1) (a) (intro.) of the statutes is amended to read:
AB681,28,1613 646.15 (1) (a) (intro.) If a nondomestic an insurer is in liquidation, the board
14fund may apply to the circuit court for Dane County for, and the court may grant,
15restraining orders, temporary and permanent injunctions, and other orders
16considered necessary and proper to prevent any of the following:
AB681, s. 77 17Section 77. 646.15 (1) (a) 1. of the statutes is amended to read:
AB681,28,1918 646.15 (1) (a) 1. Interference with the board fund or with its administrative
19proceedings.
AB681, s. 78 20Section 78. 646.15 (1) (a) 2. of the statutes is amended to read:
AB681,28,2321 646.15 (1) (a) 2. The institution or further prosecution of any action or
22proceeding involving the insurer or in which the board fund is obligated to defend a
23party.
AB681, s. 79 24Section 79. 646.15 (1) (a) 4. of the statutes is amended to read:
AB681,29,3
1646.15 (1) (a) 4. Any other threatened or contemplated action that might
2prejudice the rights of policyholders or the administration of the liquidation or board
3fund proceedings.
AB681, s. 80 4Section 80. 646.16 of the statutes is created to read:
AB681,29,15 5646.16 Payment of deposits made for benefit of creditors. (1) The
6commissioner shall promptly pay to the fund any deposit held in this state that was
7paid, as required by law or the commissioner, by the insolvent insurer for the benefit
8of creditors, including policyholders, and not turned over to the domiciliary
9liquidator upon the entry of a final order of liquidation of an insurer domiciled in this
10state or in a reciprocal state, as defined in s. 645.03 (1) (i). Of the amount paid to the
11fund under this subsection, the fund may retain the percentage determined by
12dividing the aggregate amount of policyholders' claims that are related to the
13insolvency and for which the fund has provided benefits under this chapter by the
14aggregate amount of all policyholders' claims in this state that are related to the
15insolvency. The fund shall remit the balance to the domiciliary liquidator.
AB681,29,19 16(2) Any amount retained by the fund under sub. (1) shall be treated as a
17distribution of estate assets under s. 645.72 or a similar provision of the state of
18domicile of the insolvent insurer. Deposits subject to this section shall not be treated
19as deposits as security, escrow, or other security under s. 645.03 (1) (j).
AB681, s. 81 20Section 81. 646.21 (2) of the statutes is amended to read:
AB681,30,321 646.21 (2) Investment of assets. The board may request that assets of the fund
22not needed currently be invested by the investment board under s. 25.17. If so
23requested, the investment board shall invest those assets in investments with
24maturities and liquidity appropriate to the probable needs of the fund for money to
25perform its duties. All income attributable to the investments shall be credited to

1the fund, and both income and principal shall be transferred to the board of the fund
2on request of the board. Assets held by the board of the fund shall be invested in a
3similar manner.
AB681, s. 82 4Section 82. 646.31 (1) (d) 10. and 11. of the statutes are created to read:
AB681,30,65 646.31 (1) (d) 10. Based on an obligation that does not arise under the express
6written terms of the policy or contract, including any of the following:
AB681,30,77 a. A claim based on marketing materials.
AB681,30,88 b. A claim based on misrepresentations regarding policy benefits.
AB681,30,109 c. An extra-contractual claim, including a claim for punitive or exemplary
10damages.
AB681,30,1111 d. A claim for statutorily imposed multiple damages.
AB681,30,1212 e. A claim for penalties or consequential or incidental damages.
AB681,30,1313 f. A claim for bad faith damages.
AB681,30,1614 11. In the case of a life or disability insurance policy or an annuity contract,
15based on side letters, riders, or other documents that do not meet or comply with
16applicable policy form filing or approval requirements.
AB681, s. 83 17Section 83. 646.31 (2) (a) 1. of the statutes is amended to read:
AB681,30,2118 646.31 (2) (a) 1. The claim of a policyholder, including a ceding assessable
19domestic insurer which that is organized under ch. 612 and a domestic insurer which
20that is a bona fide policyholder of the insurer in liquidation, who at the time of the
21insured event or of the liquidation order was
is a resident of this state under sub. (13).
AB681, s. 84 22Section 84. 646.31 (2) (a) 2. of the statutes is amended to read:
AB681,31,223 646.31 (2) (a) 2. Except for a claim of a beneficiary, assignee, or payee under
24a life or disability insurance policy or annuity contract, the claim of an insured,
25including a certificate holder, under a policy or annuity contract who at the time of

1the insured event or of the liquidation order was
is a resident of this state under sub.
2(13)
.
AB681, s. 85 3Section 85. 646.31 (2) (b) 1. of the statutes is repealed.
AB681, s. 86 4Section 86. 646.31 (2) (b) 2. (intro.) and a. of the statutes are consolidated,
5renumbered 646.31 (2) (b) and amended to read:
AB681,31,126 646.31 (2) (b) Certain nonresidents. The claim is made under a life or disability
7insurance policy or annuity contract subject to this section and issued by a domestic
8insurer if all of the following conditions are met: a. The and the claimant is a resident
9of another state that provides coverage similar to the coverage provided under this
10chapter but does not provide coverage for the claimant because the insurer was not
11licensed in that state at the time specified as a requirement for coverage under that
12state's guaranty association law
.
AB681, s. 87 13Section 87. 646.31 (2) (b) 2. b. of the statutes is repealed.
AB681, s. 88 14Section 88. 646.31 (2) (b) 3. of the statutes is repealed.
AB681, s. 89 15Section 89. 646.31 (2) (f) (title) of the statutes is amended to read:
AB681,31,1716 646.31 (2) (f) (title) Beneficiaries, assignees, and payees; life or disability policy
17or annuity contract
.
AB681, s. 90 18Section 90. 646.31 (2) (f) 2. of the statutes is amended to read:
AB681,31,2019 646.31 (2) (f) 2. The person is a resident of this state or could have made a claim
20under par. (b) 2.
AB681, s. 91 21Section 91. 646.31 (2) (g) of the statutes is created to read:
AB681,32,222 646.31 (2) (g) Payees; structured settlement annuity. 1. Notwithstanding par.
23(f), the claim of a payee, or of a beneficiary of a deceased payee, under a structured
24settlement annuity if the payee, or deceased payee's beneficiary, is a resident of this

1state, regardless of where the policyholder of the structured settlement annuity
2resides.
AB681,32,93 2. Notwithstanding pars. (b) and (f), the claim of a payee, or of a beneficiary of
4a deceased payee, under a structured settlement annuity if the payee, or deceased
5payee's beneficiary, is not a resident of this state, if neither the payee, or deceased
6payee's beneficiary, nor the policyholder of the structured settlement annuity is
7eligible for coverage by an organization that is comparable to the fund in the state
8of which the payee, or deceased payee's beneficiary, or the policyholder is a resident,
9and if either of the following applies:
AB681,32,1010 a. The policyholder is a resident of this state.
AB681,32,1311 b. The policyholder is not a resident of this state, but the insurer that issued
12the structured settlement annuity is domiciled in this state, and the state in which
13the policyholder resides has an organization that is comparable to the fund.
AB681, s. 92 14Section 92. 646.31 (3) of the statutes is repealed.
AB681, s. 93 15Section 93. 646.31 (5) of the statutes is repealed.
AB681, s. 94 16Section 94. 646.31 (6) (a) of the statutes is amended to read:
AB681,32,2317 646.31 (6) (a) The portion of a an otherwise eligible loss claim for which
18indemnification is provided by other benefits or advantages, which may not be
19included in the classes of claims specified in s. 645.68 (intro.), may not be claimed
20from the fund under this chapter or from the insured or policyholder. The claimant
21must exhaust such collateral sources before pursuing payment from the fund. This
22paragraph does not apply to the claim of an insured or payee under a structured
23settlement annuity
.
AB681, s. 95 24Section 95. 646.31 (6) (b) of the statutes is amended to read:
AB681,33,3
1646.31 (6) (b) The board fund may waive the application of par. (a) to claims
2under contracts subject to s. 646.35 (2) or (3), to the extent that the board fund
3determines that application of par. (a) would be impracticable.
AB681, s. 96 4Section 96. 646.31 (7) of the statutes is amended to read:
AB681,33,85 646.31 (7) Setoffs and counterclaims. Section 645.56 applies to the
6settlement of loss claims. The board fund shall give the liquidator a reasonable
7opportunity to inform the board fund of possible setoffs and counterclaims before
8paying loss claims.
AB681, s. 97 9Section 97. 646.31 (8) of the statutes is amended to read:
AB681,33,1210 646.31 (8) Notice to claimants. The board fund shall provide notice under s.
11645.47 (2) to those potential loss claimants to whom the fund is liable under the
12section, if the liquidator has not done so.
AB681, s. 98 13Section 98. 646.31 (9) (a) of the statutes is amended to read:
AB681,33,1514 646.31 (9) (a) By any security fund with an obligation to pay all loss claims of
15the insurer;.
AB681, s. 99 16Section 99. 646.31 (9) (b) of the statutes is amended to read:
AB681,33,1817 646.31 (9) (b) If it is a first party claim for damage to property with a permanent
18location, by the fund of the location of the property; .
AB681, s. 100 19Section 100. 646.31 (9) (c) of the statutes is amended to read:
AB681,33,2120 646.31 (9) (c) If it is a workers' compensation claim, by the fund of the residence
21of the claimant;.
AB681, s. 101 22Section 101. 646.31 (9) (cm) of the statutes is created to read:
AB681,33,2423 646.31 (9) (cm) If it is a liability claim, by the fund of the residence of the
24policyholder.
AB681, s. 102 25Section 102. 646.31 (9) (d) of the statutes is amended to read:
AB681,34,1
1646.31 (9) (d) In any other case, by the fund of the residence of the insured; and.
AB681, s. 103 2Section 103. 646.31 (10) of the statutes is renumbered 646.31 (10) (intro.) and
3amended to read:
AB681,34,64 646.31 (10) Temporary moratoriums. (intro.) Before being obligated to make
5payments under this chapter to holders of life insurance or annuity contracts the
6fund may impose, with court approval, temporary any of the following:
AB681,34,20 7(a) Temporary moratoriums of not more than 90 days on payments of cash
8values and policy loans in addition to any deferrals of cash or policy loan value by
9contractual provision. A temporary moratorium may be renewed for successive
10periods of not more than 90 days with court approval
or liens on payments of cash
11values and policy loans, or on any other right to withdraw funds held in conjunction
12with those policies or contracts, in addition to any contractual provisions for deferral
13of cash or policy loan value. If the court imposes a temporary moratorium or a
14moratorium charge on the payment of cash values or policy loans out of the assets
15of the insolvent insurer, or on any other right to withdraw, out of those assets, funds
16held in conjunction with those policies or contracts, the fund may defer the payment
17of cash values and policy loans and other rights to withdraw funds for the period of
18the moratorium or moratorium charge imposed by the court, except for any claims
19covered by the fund to be paid in accordance with a hardship procedure established
20by the liquidator and approved by the court
.
AB681, s. 104 21Section 104. 646.31 (10) (b) of the statutes is created to read:
AB681,35,222 646.31 (10) (b) Permanent policy or contract liens in connection with a
23guarantee, assumption, or reinsurance agreement, if the board finds that the
24amounts that may be assessed under this chapter are insufficient to ensure full and
25prompt performance of the fund's duties under this chapter, or that economic or

1financial conditions, as they affect insurers, are such that imposing such permanent
2policy or contract liens is in the public interest.
AB681, s. 105 3Section 105. 646.31 (11) of the statutes is amended to read:
AB681,35,114 646.31 (11) Subrogation claims. The fund is not required to pay any amount
5due from the insurer to any reinsurer, insurer, insurance pool or underwriting
6association as subrogation, contribution, or indemnification recoveries or otherwise,
7except as provided in sub. (2) (a). A reinsurer, insurer, insurance pool or
8underwriting association that has paid a claim and thereby has become subrogated
9or otherwise entitled to the amount of that claim may assert that claim against the
10liquidator of the insurer in liquidation but not against the insured of the insurer in
11liquidation.
AB681, s. 106 12Section 106. 646.31 (13) of the statutes is renumbered 646.31 (13) (intro.) and
13amended to read:
AB681,35,1514 646.31 (13) Residency. (intro.) For purposes of determining residency in this
15section, the:
AB681,35,18 16(a) The residency of a claimant, insured, or policyholder that is not a natural
17person is the state in which the claimant's, insured's, or policyholder's principal place
18of business is located.
AB681, s. 107 19Section 107. 646.31 (13) (b) of the statutes is created to read:
AB681,35,2320 646.31 (13) (b) In the case of a life or disability insurance policy or an annuity
21contract, residency means residency at the time of the liquidation order. In the case
22of any other kind of insurance covered by this chapter, residency means residency at
23the time of the insured event.
AB681, s. 108 24Section 108. 646.31 (13) (c) of the statutes is created to read:
AB681,35,2525 646.31 (13) (c) A person's residency may be in only one state.
AB681, s. 109
1Section 109. 646.31 (13) (d) of the statutes is created to read:
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