SB316,15,1916
(c) Order a general agent or independent agency that employs or contracts with
17an insurance intermediary to sell, or solicit the sale of, annuities to senior consumers
18to take reasonably appropriate corrective action for any senior consumer harmed by
19a violation of this section by the insurance intermediary.
SB316,15,22
20(6) Penalties; mitigation. (a) Any person who violates this section is subject
21to the penalties provided under s. 601.64, suspension or revocation of a license or
22certificate of authority, and an order under s. 601.41 (4).
SB316,16,223
(b) A penalty under par. (a) for a violation of sub. (2) (a), (b), or (d), including
24a forfeiture, may be reduced or eliminated to the extent provided by rule of the
1commissioner if corrective action is taken for the senior consumer promptly after the
2violation is discovered.
SB316,16,53
(c) The commissioner may promulgate rules related to the reduction or
4elimination of penalties for violations of this section on the basis of prompt action
5taken to correct any harm caused to senior consumers by the violations.
SB316,16,12
6(7) Record keeping. An insurer and an insurance intermediary shall maintain,
7or be able to make available to the commissioner, records of the information collected
8from a senior consumer and other information used in making a recommendation
9that was the basis for an insurance transaction for 6 years after the insurance
10transaction is completed by the insurer, except as otherwise permitted by the
11commissioner by rule. An insurer may, but is not required to, maintain records on
12behalf of an insurance intermediary.
SB316,16,13
13(8) Exemptions. This section does not apply to any of the following:
SB316,16,1514
(a) Direct response solicitations in which no recommendation is made based on
15information collected from the senior consumer.
SB316,16,1616
(b) Recommendations related to contracts used to fund any of the following:
SB316,16,1817
1. An employee pension or welfare benefit plan that is covered by the federal
18Employee Retirement and Income Security Act.
SB316,16,20192. A plan described in section
401 (a) or (k),
403 (b), or
408 (k) or (p) of the
20Internal Revenue Code, if the plan is established or maintained by an employer.
SB316,16,24213. A government or church plan as defined in section
414 of the Internal
22Revenue Code, a government or church welfare benefit plan, or a deferred
23compensation plan of a state or local government or tax exempt organization under
24section
457 of the Internal Revenue Code.
SB316,17,2
14. A nonqualified deferred compensation arrangement established or
2maintained by an employer or plan sponsor.
SB316,17,43
5. A settlement or assumption of liability associated with personal injury
4litigation or any dispute or claim resolution process.
SB316,17,55
6. A formal prepaid funeral or burial contract.
SB316, s. 27
6Section
27. 632.435 (1) (a) of the statutes is amended to read:
SB316,17,107
632.435
(1) (a) Upon cessation of payment of considerations under a contract
,
8or upon the written request of the contract owner, the company
will shall grant a
9paid-up annuity on a plan stipulated in the contract of such value as is specified in
10subs. (5) to (8) and (10).
SB316, s. 28
11Section
28. 632.435 (1) (b) of the statutes is amended to read:
SB316,17,2012
632.435
(1) (b) If a contract provides for a lump sum settlement at maturity or
13at any other time, upon surrender of the contract at or prior to the commencement
14of any annuity payments, the company
will shall pay in lieu of any paid-up annuity
15benefit a cash surrender benefit of such amount as is specified in subs. (5), (6), (8)
, 16and (10). The company
shall may reserve the right to defer the payment of such cash
17surrender benefit
, for a period
of
not exceeding 6 months after demand therefor with
18surrender of the contract
, if the company receives written approval from the
19commissioner upon the company's written request, which shall address the deferral's
20necessity and equitability to all policyholders.
SB316, s. 29
21Section
29. 632.435 (4) of the statutes is repealed and recreated to read:
SB316,17,2422
632.435
(4) (a) In this subsection, "net considerations" means, for a given
23contract year, an amount equal to 87 percent of the gross considerations credited to
24the contract during that contract year.
SB316,18,4
1(b) The minimum nonforfeiture amount at or prior to the commencement of any
2annuity payments shall be equal to an accumulation up to such time, at one or more
3rates of interest as indicated in pars. (c) to (e), of the net considerations paid prior
4to such time, decreased by the sum of all of the following:
SB316,18,65
1. Any prior withdrawals from or partial surrenders of the contract
6accumulated at one or more rates of interest as indicated in pars. (c) to (e).
SB316,18,87
2. An annual contract charge of $50, accumulated at one or more rates of
8interest as indicated in pars. (c) to (e).
SB316,18,109
3. Any premium tax paid by the company for the contract, accumulated at one
10or more rates of interest as indicated in pars. (c) to (e).
SB316,18,1211
4. The amount of any indebtedness to the company on the contract, including
12interest due and accrued.
SB316,18,1513
(c) The interest rate used to determine minimum nonforfeiture amounts shall
14be an annual rate of interest that is the lower of 3 percent and the higher of either
15of the following:
SB316,18,2216
1. The 5-year constant maturity treasury rate reported by the federal reserve
17board as of a date, or average over a period, specified in the contract no longer than
1815 months prior to the contract issue date or redetermination date under par. (d), less
19125 basis points or, if the contract provides substantive participation in an equity
20indexed benefit during the period or term, the contract may increase the reduction
21by up to an additional 100 basis points to reflect the value of the equity index benefit,
22and rounded to the nearest one-twentieth of 1 percent.
SB316,18,2323
2. One percent.
SB316,19,524
(d) The interest rate determined under par. (c) shall apply for an initial period
25and may be redetermined for additional periods. The redetermination date, basis,
1and period, if any, shall be stated in the contract. The basis is the date or average
2over a specified period that produces the value of the 5-year constant maturity
3treasury rate to be used at each redetermination date. The method for determining
4the interest rate under par. (c) shall be specified in the contract if the interest rate
5will be reset.
SB316,19,126
(e) The present value at the contract issue date, and at each redetermination
7date, of the additional reduction under par. (c) 1. for substantive participation in an
8equity index benefit may not exceed the market value of the benefit. The
9commissioner may require a demonstration that the present value of the additional
10reduction does not exceed the market value of the benefit. The commissioner may
11disallow or limit the additional reduction if the commissioner determines that the
12demonstration is unacceptable.
SB316,19,1713
(f) The commissioner may promulgate rules for the implementation of par. (e)
14and to provide for further adjustments to the calculation of minimum nonforfeiture
15amounts for contracts that provide substantive participation in an equity index
16benefit and for other contracts for which the commissioner determines adjustments
17are justified.
SB316, s. 30
18Section
30. 632.435 (5) of the statutes is amended to read:
SB316,19,2419
632.435
(5) Any paid-up annuity benefit available under a contract shall be
20such that its present value on the date annuity payments are to commence is at least
21equal to the minimum nonforfeiture amount on that date. Such present value shall
22be computed using the mortality table, if any, and the interest rate
or rates specified
23in the contract for determining the minimum paid-up annuity benefits guaranteed
24in the contract.
SB316, s. 31
25Section
31. 632.435 (12) of the statutes is amended to read:
SB316,20,11
1632.435
(12) After
November 8, 1977 the effective date of this subsection ....
2[revisor inserts date], any company may
file with the commissioner a written notice
3of its election elect to comply with this section
after a specified date on a contract
4form-by-contract form basis, for contracts newly issued, before the 2nd anniversary
5of
November 8, 1977. After the filing of such notice, then upon such specified date,
6which shall be the operative date of this section for such company
the effective date
7of this subsection .... [revisor inserts date]. In all other instances, this section shall
8become operative with respect to annuity contracts
thereafter issued
by such
9company. If a company makes no such election, the operative date of this section for
10such company shall be on or after the 2nd anniversary of
November 8, 1977 the
11effective date of this subsection .... [revisor inserts date].
SB316,20,2116
645.58
(1) Liability. (intro.) Except as provided in this subsection
and in s.
17646.35 (8) (e), the amount recoverable by the liquidator from a reinsurer shall not be
18reduced as a result of delinquency proceedings, regardless of any provision in the
19reinsurance contract or other agreement. Payment made directly to an insured or
20other creditor shall not diminish the reinsurer's obligation to the insurer's estate
21except when any of the following applies:
SB316, s. 34
22Section
34. 646.01 (1) (a) 2. k. of the statutes is created to read:
SB316,20,2323
646.01
(1) (a) 2. k. Risk-sharing plans under chs. 149 and 619.
SB316, s. 35
24Section
35. 646.01 (1) (a) 2. L. of the statutes is created to read:
SB316,20,2525
646.01
(1) (a) 2. L. The patients compensation fund under s. 655.27.
SB316, s. 36
1Section
36. 646.01 (1) (b) 1. of the statutes is repealed and recreated to read:
SB316,21,42
646.01
(1) (b) 1. Any portion of a life insurance policy or annuity contract that
3is not guaranteed by the insurer or under which the risk is borne by the policy or
4policyholder.
SB316, s. 37
5Section
37. 646.01 (1) (b) 9. (intro.) of the statutes is renumbered 646.01 (1)
6(b) 9. and amended to read:
SB316,21,117
646.01
(1) (b) 9. Any self-funded
, self-insured, or partially or wholly uninsured
8plan of an employer or other person to provide life insurance, annuity
, or disability
9benefits to its employees or members to the extent that the plan is self-funded
,
10self-insured, or uninsured
, including benefits payable by an employer or other
11person under any of the following:.
SB316, s. 38
12Section
38. 646.01 (1) (b) 9. a. of the statutes is repealed.
SB316, s. 39
13Section
39. 646.01 (1) (b) 9. b. of the statutes is repealed.
SB316, s. 40
14Section
40. 646.01 (1) (b) 9. c. of the statutes is repealed.
SB316, s. 41
15Section
41. 646.01 (1) (b) 9. d. of the statutes is repealed.
SB316, s. 42
16Section
42. 646.01 (1) (b) 11. of the statutes is repealed and recreated to read:
SB316,21,1717
646.01
(1) (b) 11. Any warranty or service contract.
SB316, s. 43
18Section
43. 646.01 (1) (b) 11m. of the statutes is created to read:
SB316,21,2219
646.01
(1) (b) 11m. Any contractual liability policy that is issued to a warrantor,
20warranty plan, warranty plan administrator, or service contract provider and that
21provides coverage of any liability or performance arising out of or in connection with
22a warranty or service contract.
SB316, s. 44
23Section
44. 646.01 (1) (b) 15. of the statutes is created to read:
SB316,21,2424
646.01
(1) (b) 15. An unallocated annuity contract.
SB316, s. 45
25Section
45. 646.01 (1) (b) 16. of the statutes is created to read:
SB316,22,4
1646.01
(1) (b) 16. A contractual agreement that obligates an insurer to provide
2a book value accounting guarantee for defined contribution benefit plan participants
3by reference to a portfolio of assets that is owned by the benefit plan or its trustee,
4neither of which is an affiliate of the insurer.
SB316, s. 46
5Section
46. 646.01 (1) (b) 17. of the statutes is created to read:
SB316,22,166
646.01
(1) (b) 17. Any liability under a policy or contract to the extent that it
7provides for interest or other changes in value that are to be determined by the use
8of an index or other external reference stated in the policy or contract and to the
9extent that the interest or other changes in value have not been credited to the policy
10or contract as of the date of the entry of the order of liquidation and are subject to
11forfeiture. If a policy's or contract's interest or other changes in value are credited
12less frequently than annually, for purposes of determining the values that have been
13credited and that are not subject to forfeiture, the interest or change in value
14determined by using the procedures specified in the policy or contract will be credited
15as if the contractual date of crediting interest or other changes in value was the date
16of entry of the order of liquidation and will not be subject to forfeiture.
SB316, s. 47
17Section
47. 646.01 (1) (b) 18. of the statutes is created to read:
SB316,22,2418
646.01
(1) (b) 18. The deductible, self-funded, or self-insured portion of a claim
19under a liability or worker's compensation insurance policy, regardless of the timing
20or method provided in the policy, endorsement, or any other agreement for payment
21of the deductible, self-funded, or self-insured amount by the insured. This
22subdivision does not apply to a worker's compensation insurance policy if the insured
23under the policy is a debtor under
11 USC 701, et seq., as of the deadline set by the
24liquidator for filing claims against the insolvent insurer.
SB316, s. 48
25Section
48. 646.03 (1m) of the statutes is created to read:
SB316,23,2
1646.03
(1m) "Direct insurance" does not include a policy or contract of
2reinsurance, except for the following:
SB316,23,43
(a) Reinsurance for which the reinsurer has issued assumption certificates
4under the reinsurance policy or contract.
SB316,23,55
(b) Reinsurance ceded by an assessable town mutual company.
SB316, s. 49
6Section
49. 646.03 (2n) of the statutes is created to read:
SB316,23,97
646.03
(2n) "Impaired insurer" means an insurer subject to this chapter that
8is placed under an order of rehabilitation or conservation by a court of competent
9jurisdiction.
SB316, s. 50
10Section
50. 646.03 (2p) of the statutes is created to read:
SB316,23,1311
646.03
(2p) "Insolvent insurer" means an insurer subject to this chapter that
12is placed under an order of liquidation by a court of competent jurisdiction with a
13finding of insolvency.
SB316, s. 51
14Section
51. 646.03 (4) of the statutes is created to read:
SB316,23,2115
646.03
(4) With respect to a life or disability insurance policy or an annuity
16contract, "owner" or "policyholder" means the person who is identified as the legal
17owner under the terms of the policy or contract or who is otherwise vested with legal
18title to the policy or contract through a valid assignment completed in accordance
19with the terms of the policy or contract and properly recorded as the owner on the
20books of the insurer. "Owner" or "policyholder" does not include a person with only
21a beneficial interest in a policy or contract.
SB316, s. 52
22Section
52. 646.03 (5) of the statutes is created to read:
SB316,24,223
646.03
(5) "Unallocated annuity contract" means an annuity contract or group
24annuity certificate that is not issued to and owned by an individual, except to the
1extent of any annuity benefits guaranteed to an individual by an insurer under the
2contract or certificate.
SB316, s. 53
3Section
53. 646.11 (1) of the statutes is renumbered 646.11 (1) (intro.) and
4amended to read:
SB316,24,85
646.11
(1) (intro.)
Organization. There is created
a fund an organization to be
6known as the "insurance security fund
".." All insurers subject to this chapter are
7contributors to the fund as a result of their authority to transact business in this
8state. The fund shall consist of all
of the following:
SB316,24,9
9(a) All payments made by insurers under s. 646.51
, of the.
SB316,24,10
10(b) The earnings resulting from investments under s. 646.21 (2)
and of the.
SB316,24,12
11(c) The amounts recovered under s. 645.72 (2)
or a substantially similar law in
12the state of domicile of the insolvent insurer.
SB316, s. 54
13Section
54. 646.11 (1) (d) of the statutes is created to read:
SB316,24,1514
646.11
(1) (d) Amounts reimbursed to the fund through its subrogation and
15assignment rights.
SB316, s. 55
16Section
55. 646.11 (1) (e) of the statutes is created to read:
SB316,24,1717
646.11
(1) (e) Any other moneys received by the fund from time to time.
SB316, s. 56
18Section
56. 646.12 (2) (d) of the statutes is amended to read:
SB316,25,219
646.12
(2) (d) Employ or retain the personnel necessary to carry out
its the
20fund's duties and set compensation for the personnel
, sue or be sued, make contracts
21and borrow money necessary to carry out its duties in the most efficient way,
22including money with which to pay claims under s. 646.31 or to continue coverage
23under s. 646.35. The board may offer as security for such loans its claims against the
24liquidator or its power to levy assessments under this chapter. Personnel employed
1under this paragraph are not employees of the state and are not subject to s. 20.922
2or ch. 230.
SB316, s. 57
3Section
57. 646.12 (2) (f) 2. of the statutes is amended to read:
SB316,25,74
646.12
(2) (f) 2. Keep confidential the records under subd. 1. pertaining to
5specific liquidation proceedings involving an insurer until the termination of the
6liquidation proceedings or until sooner ordered to make the records public by a court
7of competent jurisdiction.
SB316, s. 58
8Section
58. 646.12 (2) (f) 3. of the statutes is amended to read:
SB316,25,119
646.12
(2) (f) 3. Keep confidential the records under subd. 1. pertaining to
10specific rehabilitation proceedings involving an insurer unless ordered to make the
11records public by a court
of competent jurisdiction.