SB316, s. 132
11Section
132. 646.35 (6) (c) 1. (intro.) of the statutes is amended to read:
SB316,42,1712
646.35
(6) (c) 1. (intro.) Any benefit payment liability, arising on or after the
13date of entry of the order of liquidation, to the extent that the
payment is based upon
14a rate of interest that rate of interest on which it is based or the interest rate,
15crediting rate, or similar factor determined by use of an index or other external
16reference stated in the policy or contract and employed in calculating returns or
17changes in value exceeds the
larger smaller of the following:
SB316, s. 133
18Section
133. 646.35 (6) (c) 1. b. of the statutes is amended to read:
SB316,42,2219
646.35
(6) (c) 1. b. The rate of interest
, which may not be less than zero, 20determined by subtracting 3 percentage points from the monthly corporate bond
21yield average, as
most recently published by Moody's investors service or its
22successor
and as adjusted on a monthly basis.
SB316, s. 134
23Section
134. 646.35 (6) (c) 2. (intro.) of the statutes is amended to read:
SB316,43,3
1646.35
(6) (c) 2. (intro.) Any benefit payment liability, arising before the date
2of entry of the order of liquidation, to the extent that the payment
is based upon a
3rate of interest that exceeds the
larger smaller of the following:
SB316, s. 135
4Section
135. 646.35 (6) (c) 2. b. of the statutes is amended to read:
SB316,43,105
646.35
(6) (c) 2. b. The rate of interest
, which may not be less than zero, 6determined by subtracting 2 percentage points from the monthly corporate bond
7yield average, as published by Moody's investors service or its successor, when
8averaged
for over the 4-year period ending on the date
the fund becomes obligated
9with respect to the contract of entry of the order of liquidation or averaged
for over 10such lesser period if the contract was issued less than 4 years before that date.
SB316, s. 136
11Section
136. 646.35 (7) of the statutes is created to read:
SB316,43,1512
646.35
(7) Exclusion for coverage under another fund. (a) Notwithstanding
13s. 646.31 (9), the fund shall not provide coverage under this section to any person
14who, directly or indirectly, has coverage under any other state's security fund
15statutes.
SB316,43,1916
(b) In determining whether par. (a) applies in a situation in which a person
17could potentially be covered by security funds of more than one state, par. (a) shall
18be construed in conjunction with other states' laws in such a manner as to result in
19coverage for the person by only one security fund.
SB316, s. 137
20Section
137. 646.35 (8) of the statutes is created to read:
SB316,43,2221
646.35
(8) Reinsurance. (a) In this subsection, "coverage date" means the date
22on which the fund becomes responsible for the obligations of an insolvent insurer.
SB316,44,523
(b) At any time within one year after the coverage date, the fund may elect to
24succeed to the insolvent insurer's rights and obligations that accrue on or after the
25coverage date and that relate to contracts covered, in whole or in part, by the fund
1under one or more indemnity reinsurance agreements entered into by the insolvent
2insurer as a ceding insurer and selected by the fund. The election shall be effected
3by a notice to the liquidator and to any affected reinsurer. The fund may not exercise
4an election under this paragraph with respect to a reinsurance agreement that the
5liquidator has expressly disaffirmed.
SB316,44,76
(c) With respect to each indemnity reinsurance agreement for which the fund
7makes an election under par. (b):
SB316,44,138
1. The fund shall be responsible for all unpaid premiums under the agreement,
9for periods both before and after the coverage date, and for the performance of all
10other obligations to be performed under the agreement after the coverage date, that
11relate in each case to contracts covered, in whole or in part, by the fund. The fund
12may charge contracts covered in part by the fund, through reasonable allocation
13methods, for the costs of reinsurance in excess of the obligations of the fund.
SB316,44,2114
2. The fund is entitled to any amounts payable by the reinsurer under the
15agreement with respect to losses or events that occur in periods after the coverage
16date and that relate to contracts or contractual obligations covered, in whole or in
17part, by the fund. Upon receipt of any such amounts, the fund must pay to the
18beneficiary under the policy or contract on account of which the amounts were paid,
19the amount by which the benefits paid by the fund on account of the policy or contract
20less the retention of the insolvent insurer applicable to the loss or event is exceeded
21by the amount received by the fund.
SB316,45,422
3. Within 30 days after the election, the fund and the indemnity reinsurer must
23calculate the net balance due to or from the fund under the agreement as of the date
24of the election, giving full credit to all items paid by the insolvent insurer, the
25insurer's liquidator, and the indemnity reinsurer between the coverage date and the
1date of the election. The fund or the indemnity reinsurer shall pay the net balance
2due to the other within 5 days after the calculation is completed. The liquidator shall
3remit to the fund as promptly as practicable any amounts received by the liquidator
4that are due the fund under subd. 2.
SB316,45,105
4. If, within 60 days of the election, the fund pays all premiums due for periods
6both before and after the coverage date that relate to contracts covered, in whole or
7in part, by the fund, the reinsurer may not terminate the agreement insofar as it
8relates to contracts covered, in whole or in part, by the fund and may not set off
9against amounts due the fund any unpaid premium due for periods before the
10coverage date.
SB316,45,1611
(d) If the fund transfers its obligations to another insurer and the fund and
12other insurer agree, unless the the fund has previously expressly determined in
13writing that it will not exercise an election under par. (b), the other insurer succeeds
14to the rights and obligations of the fund under pars. (b) and (c), regardless of whether
15the fund has exercised an election under par. (b). If the other insurer succeeds to the
16fund's rights and obligations under pars. (b) and (c):
SB316,45,1917
1. The indemnity reinsurance agreements automatically terminate for new
18reinsurance, unless the indemnity reinsurer and the other insurer agree to the
19contrary.
SB316,45,2220
2. On and after the date on which an indemnity reinsurance agreement is
21transferred to the other insurer, the fund is no longer obligated to pay beneficiaries
22the amounts specified in par. (c) 2. with respect to that agreement.
SB316,46,423
(e) This subsection supersedes s. 645.58 (1), any applicable rules of the
24commissioner, and the provisions of any affected reinsurance agreement that
25provide for or require payment of reinsurance proceeds to the liquidator of the
1insolvent insurer on account of losses or events that occur after the coverage date.
2The liquidator remains entitled to any amounts payable by the reinsurer under the
3reinsurance agreement with respect to losses or events that occur before the coverage
4date, subject to any applicable setoff provisions.
SB316,46,55
(f) Nothing in this subsection, except as expressly provided in this subsection:
SB316,46,76
1. Alters or modifies the terms or conditions of the indemnity reinsurance
7agreements of the insolvent insurer.
SB316,46,98
2. Abrogates or limits any rights of any reinsurer to rescind a reinsurance
9agreement.
SB316,46,1210
3. Gives a policy owner or beneficiary an independent cause of action against
11an indemnity reinsurer that is not otherwise set forth in the indemnity reinsurance
12agreement.
SB316, s. 138
13Section
138. 646.35 (9) of the statutes is created to read:
SB316,46,1914
646.35
(9) Coverage obligations. Notwithstanding sub. (3), in performing its
15obligations to provide coverage under this section, the fund is not required to
16guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed,
17reinsured, or performed, the contractual obligations of an insolvent insurer under a
18covered policy or contract that do not materially affect the economic values or
19economic benefits of the covered policy or contract.
SB316, s. 139
20Section
139. 646.35 (10) of the statutes is created to read:
SB316,47,221
646.35
(10) Board determinations. The board shall have discretion to
22determine the means by which the fund may economically and efficiently provide
23benefits under this section. If the board has arranged or offered to provide benefits
24to a person under a plan or arrangement that fulfills the fund's obligations under this
1section, the person is not entitled to any benefits from the fund in addition to or other
2than those provided under the plan or arrangement.
SB316, s. 140
3Section
140. 646.51 (1) of the statutes is renumbered 646.51 (1m) and
4amended to read:
SB316,47,85
646.51
(1m) Duty to assess. As soon as practicable after a liquidation order
6has been issued, the board shall estimate separately for each of the accounts of s.
7646.11 (2), the amounts necessary to make the payments provided by this chapter
8and shall
order authorize assessments separately for each account.
SB316, s. 141
9Section
141. 646.51 (1c) of the statutes is created to read:
SB316,47,1010
646.51
(1c) Definitions. In this section:
SB316,47,1411
(a) "Authorize" means, with respect to assessments, to approve, by the adoption
12of a resolution by the board, that an assessment from insurers in a specified amount
13be called immediately or in the future. An assessment is authorized when the
14resolution is adopted by the board.
SB316,47,1815
(b) "Call" means, with respect to assessments, to require payment, by the
16mailing of a notice to insurers by the fund, of an authorized assessment within the
17time set forth in the notice. An assessment is called when notice is mailed to insurers
18by the fund.
SB316, s. 142
19Section
142. 646.51 (2) of the statutes is repealed.
SB316, s. 143
20Section
143. 646.51 (3) (a) (title) of the statutes is renumbered 646.51 (3) (am)
21(title).
SB316, s. 144
22Section
144. 646.51 (3) (a) 1. of the statutes is renumbered 646.51 (1c) (c) and
23amended to read:
SB316,48,1024
646.51
(1c) (c)
In this section, "premiums" "Premiums" means gross premiums
25and other considerations received for direct insurance and annuities, including
1considerations for a plan established under ss. 185.981 to 185.985, less return
2premiums and other considerations, dividends
, and experience credits paid or
3credited to policyholders on
the direct such business. The term "premiums" does not
4include
any amounts received for any contracts or for the portions of any contracts
5for which coverage is excluded under s. 646.01 (1) (b) premiums or other
6considerations received for policies or contracts, or for portions of policies or
7contracts, for which coverage is not provided under this chapter, except that the
8amount of assessable premiums or other considerations shall not be reduced on
9account of limitations with respect to a single risk, loss, or life under s. 646.31 (4) or
10on account of interest limitations under s. 646.35 (6) (c).
SB316, s. 145
11Section
145. 646.51 (3) (a) 2. of the statutes is renumbered 646.51 (3) (am)
12(intro.) and amended to read:
SB316,48,1413
646.51
(3) (am) (intro.) Except as provided in
pars. (b) and par. (c), assessments
14shall be calculated as
follows:
SB316,48,18
151. For assessments authorized by the board before the effective date of this
16subdivision .... [revisor inserts date], as a percentage of
premiums premium written
17in this state by each insurer in the classes protected by the
account, accounts for the
18year preceding the year of entry of the order of liquidation.
SB316, s. 146
19Section
146. 646.51 (3) (am) 2. of the statutes is created to read:
SB316,48,2320
646.51
(3) (am) 2. For assessments authorized by the board on or after the
21effective date of this subdivision .... [revisor inserts date], as a percentage of premium
22written in this state by each insurer in the classes protected by the accounts for the
23year preceding the year in which the assessment is authorized by the board.
SB316, s. 147
24Section
147. 646.51 (3) (b) of the statutes is repealed.
SB316, s. 148
25Section
148. 646.51 (3) (c) of the statutes is amended to read:
SB316,49,5
1646.51
(3) (c)
Administrative assessments. The board may
make authorize 2assessments on a prorated or nonprorated basis to meet administrative costs and
3other expenses whether or not related to the liquidation or rehabilitation of a
4particular insurer. Nonprorated assessments may not exceed $200 per insurer in
5any year.
SB316, s. 149
6Section
149. 646.51 (4) of the statutes is renumbered 646.51 (4) (c) and
7amended to read:
SB316,49,198
646.51
(4) (c)
The maximum assessment under this section in any calendar
9year is 2% of the assessable premiums under sub. (3). If the maximum assessment
10does not enable the fund to meet its obligations, an additional assessment shall be
11made in each succeeding year until the amounts available enable the fund to meet
12its obligations. No Assessments to meet the obligations of the fund with respect to
13an insurer in liquidation may not be authorized or called unless the board makes a
14finding that it is necessary for implementing the purposes of this chapter.
15Recognizing that exact determinations may not always be possible, the board shall
16endeavor to classify and calculate assessments with a reasonable degree of accuracy.
17No authorized assessment may be
levied called if the assets held in the appropriate
18account of the fund are sufficient to cover all estimated payments for liquidations in
19progress.
SB316, s. 150
20Section
150. 646.51 (4) (a), (b) and (d) of the statutes are created to read:
SB316,50,221
646.51
(4) (a) Subject to pars. (b) and (d), the total of all assessments for an
22amount authorized by the board under this section with respect to an insurer may
23not, in one calendar year, exceed 2% of the insurer's average annual premiums
24received in this state, during the 3 calendar years preceding the year of entry of the
1order of liquidation, on the types of policies and contracts that are covered by the
2account.
SB316,50,73
(b) If the maximum assessment under par. (a), together with the other assets
4of the fund in an account, does not provide in one year in the account an amount that
5is sufficient for the fund to meet its obligations, the board shall assess additional
6amounts in each succeeding year until the amounts available enable the fund to meet
7its obligations.
SB316,50,118
(d) If 2 or more assessments are authorized in one calendar year with respect
9to insurers placed in liquidation in different calendar years, the average annual
10premiums for purposes of the limitation in par. (a) shall be equal and limited to the
11higher of the 3-year annual premium average for the applicable account.
SB316, s. 151
12Section
151. 646.51 (5) of the statutes is amended to read:
SB316,50,1713
646.51
(5) Collection. After the rate of assessment has been fixed, the
board 14fund shall send to each insurer a statement of the amount it is to pay. The
board fund 15shall designate whether the assessments shall be made payable in one sum or in
16installments. Assessments shall be collected by the same procedures as premium
17taxes or license fees under ch. 76.
SB316, s. 152
18Section
152. 646.51 (6) of the statutes is amended to read:
SB316,50,2219
646.51
(6) Appeal and review. Within 30 days after the
board fund sends the
20statement under sub. (5), an insurer, after paying the assessment under protest, may
21appeal the assessment to the board or a committee thereof. The decision of the board
22on the appeal is subject to judicial review.
SB316, s. 153
23Section
153. 646.51 (7) (a) of the statutes is amended to read:
SB316,51,3
1646.51
(7) (a) An insurer's premium rates are not excessive because they
2contain an amount reasonably calculated to recoup assessments
made called under
3this chapter.
SB316, s. 154
4Section
154. 646.51 (8) of the statutes is amended to read:
SB316,51,115
646.51
(8) Abatement and deferral. The board may abate or defer the
6assessment of an insurer in whole or part if payment of the assessment would
7endanger the ability of the insurer to fulfill its contractual obligations. The amount
8by which an assessment is abated or deferred may be assessed under this section
9against other insurers.
When the conditions that prompted the board to defer
10assessment of an insurer no longer exist, the insurer shall pay all assessments that
11were deferred in accordance with a repayment plan approved by the board.
SB316, s. 155
12Section
155. 646.51 (9) (b) 1. of the statutes is amended to read:
SB316,51,1413
646.51
(9) (b) 1. Assessments
made
authorized or called before the insurer's
14license or certificate of authority terminated or expired.
SB316, s. 156
15Section
156. 646.51 (9) (b) 2. of the statutes is amended to read:
SB316,51,1916
646.51
(9) (b) 2. Assessments
made
authorized or called after the insurer's
17license or certificate of authority terminated or expired that relate to a liquidation
18order entered before the insurer's license or certificate of authority terminated or
19expired.
SB316, s. 157
20Section
157. 646.60 (1) (a) of the statutes is amended to read:
SB316,51,2321
646.60
(1) (a)
Settlements by the fund. The liquidator is bound by
22determinations and settlements of covered loss claims, and by payments of claims,
23made by the
board fund under this chapter.
SB316, s. 158
24Section
158. 646.61 (2) of the statutes is amended to read:
SB316,52,2
1646.61
(2) To meet the needs of the fund the
board fund may temporarily
2transfer assets from one account to another.
SB316,52,225
(1)
Insurance security fund. The treatment of sections 609.98 (1) and (4) (a)
6and (b), 645.58 (1) (intro.), 646.01 (1) (a) 2. k. and L. and (b) 1., 9. (intro.), a., b., c.,
7and d., 11., 11m., 15., 16., 17., and 18., 646.03 (1m), (2n), (2p), (4), and (5), 646.12 (2)
8(d) and (f) 2. and 3. and (4), 646.13 (title), (1) (intro.) and (b), (2) (intro.), (b), (c), (d),
9and (g), (3) (intro.), (a), (b), and (c) (intro.) and 2., and (4), 646.15 (title) and (1) (a)
10(intro.), 1., 2., and 4., 646.16, 646.21 (2), 646.31 (1) (d) 10. and 11., (2) (a) 1. and 2.,
11(b) 1., 2. (intro.), a., and b., and 3., (f) (title) and 2., and (g), (3), (5), (6) (a) and (b), (7),
12(8), (9) (a), (b), (c), (cm), and (d), and (11), 646.32 (1), 646.325 (1) and (2) (intro.), (a)
13(intro.), and (b), 646.33 (2), (2m) (b), and (3), 646.35 (2), (3) (title), (intro.) (except
14646.35 (3) (title)), (a), (b), and (c), (5), (6) (a), (b), (bm), and (c) (intro.), 1. (intro.) and
15b., and 2. (intro.) and b., (7), (8), (9), and (10), 646.51 (1), (1c), (2), (3) (a) (title), 1., and
162., (am) 2., (b), and (c), (5), (6), (7) (a), (8), and (9) (b) 1. and 2., 646.60 (1) (a), 646.61
17(2), and 646.73 of the statutes, the renumbering and amendment of sections 646.11
18(1), 646.31 (10) and (13), 646.33 (1), 646.35 (4), and 646.51 (4) of the statutes, and the
19creation of sections 646.11 (1) (d) and (e), 646.31 (10) (b) and (13) (b), (c), and (d),
20646.33 (1) (b), (c), and (d), 646.35 (4) (b), and 646.51 (4) (a), (b), and (d) of the statutes
21first apply to liquidation proceedings in which a liquidation order is issued on the
22effective date of this subsection.
SB316,52,2523
(2)
Suitability of annuity recommendations. The treatment of section 628.347
24of the statutes first applies to recommendations for the purchase or exchange of
25annuities that are made on the effective date of this subsection.
SB316, s. 161
1Section
161.
Effective dates. This act takes effect on the day after
2publication, except as follows:
SB316,53,53
(1)
Suitability of annuity recommendations. The treatment of section 628.347
4of the statutes and
Section 160 (2) of this act take effect on the first day of the 7th
5month beginning after publication.