SUBCHAPTER II
MOTOR CLUB SERVICE CONTRACTS
616.71 Motor club service; definitions.
616.72 License to sell motor club service.
616.74 Manner of obtaining company license; fee.
616.76 Form of service contract.
616.77 Execution of service contract.
616.78 Contents of contract.
616.79 Only agents to solicit business.
616.80 Misrepresentations forbidden.
616.81 Company always bound by contract.
Ch. 616 Cross-reference
Cross-reference: See definitions in ss.
600.03,
610.01 and
628.02.
SCHOOL BENEFIT PLANS
Subch. I of ch. 616 Note
NOTE: Chapter 261, laws of 1979, which created this subchapter, contained extensive comments. See the 1979 session law volume.
616.03
616.03
Designation of a mutual insurer as a school benefit insurer. A mutual insurer engaged in no activities other than those specified in
s. 616.06 may apply to the commissioner for designation as a school benefit insurer. If the commissioner finds that the insurer is engaged in no other activities, the commissioner shall declare it to be a school benefit insurer. As long as the insurer's activities are thus restricted and it uses the term "school benefit" or its equivalent in its name, it is deemed to be operating under this subchapter, within the meaning of
s. 601.31 (2) and shall have the tax exemptions under
s. 616.10.
616.03 History
History: 1979 c. 261;
1981 c. 314 s.
146.
616.06
616.06
Continuation of existing school benefit plans. A plan directed by schools or school authorities in this state, which was organized under s.
185.991, 1977 stats., prior to May 11, 1980 and is operating on a nonprofit basis without capital stock, may continue to operate under this subchapter, if its purpose is exclusively to provide benefits for accidental injury to or accidental death of pupils attending the school.
616.06 History
History: 1979 c. 261.
616.07
616.07
Certificate of authority. 616.07(1)
(1)
Issuance. Within 90 days after May 11, 1980, each plan authorized under
s. 616.06 shall apply to the commissioner for a certificate of authority to continue the business it was doing on that date. The commissioner shall issue the certificate unless the commissioner finds after a hearing that the plan is in substantial or willful noncompliance with the law. No charge may be made for the initial issuance of the certificate under this subsection.
616.07(2)
(2) Termination. A certificate issued under
sub. (1) remains in force until it is revoked after a hearing for a substantial violation of
chs. 600 to
646.
616.07 History
History: 1979 c. 261;
1981 c. 314.
616.08
616.08
Organization of new insurers. 616.08(1)
(1)
General. Except as provided in
sub. (2), new insurers may be organized exclusively for the purposes stated in
s. 616.06 pursuant to the procedures for mutual insurers specified in
ch. 611.
616.08(2)(b)
(b) After issuance of the certificate of authority, incorporators of an insurer under this section who have advanced money or incurred obligations for the reasonable and authorized expenses of organization may be reimbursed in cash from the proceeds of subscriptions for bonds and contribution notes, on itemized receipts audited by the commissioner. The total reimbursement may not exceed 5% of the amount received for the bonds and notes.
616.08(2)(c)
(c) Upon request by the incorporators, the commissioner may modify any requirements in the organizational process specified in
ch. 611 if the commissioner considers the modification justified by the simplicity of the proposed operation or by the circumstances surrounding the organizational process.
616.08 History
History: 1979 c. 261.
616.09
616.09
Applicability of other statutes. 616.09(1)
(1)
Existing organizations under s. 616.06. 616.09(1)(a)2.
2. Plans authorized under s.
616.06 are subject to s.
610.21, 1977 stats., s.
610.55, 1977 stats., s.
610.57, 1977 stats., and ss.
628.34 to
628.39, 1977 stats., to
chs. 600,
601,
620,
625,
627 and
645, to
ss. 632.72,
632.755,
632.86 and
632.87 and to this subchapter except
s. 616.08.
616.09(1)(c)2.
2. In all actions commenced after May 11, 1980, in those provisions of
ch. 185 which apply under
subd. 1. to plans authorized under
s. 616.06, "department" shall be deemed to read "department of financial institutions and commissioner", except in
s. 185.48, where "department" shall be deemed to read "commissioner".
616.09(1)(d)1.
1. File with the commissioner for approval its rules and regulations and schedules of the benefits contemplated, together with the forms of agreement entered into with students, parents, guardians or others;
616.09(1)(d)2.
2. File with the commissioner its constitution and bylaws; and
616.09(1)(d)3.
3. Maintain sufficient reserves to discharge its obligations and for any prepayment of dues or fees collected.
616.09(2)
(2) Corporations organized under s. 616.08. 616.09(2)(a)(a) Except as provided in
par. (b), corporations organized under
s. 616.08 are subject to all applicable provisions of
chs. 600 to
646.
616.10
616.10
Exemption from taxation. Every mutual designated a school benefit insurer under
s. 616.03, every plan authorized under
s. 616.06, and every corporation organized under
s. 616.08 is declared to be a charitable and benevolent corporation, and its property, real, personal and mixed, and its income and property transferred to it, are exempt from taxation as provided in
ss. 70.11,
71.26 (1) (a) and
71.45 (1).
616.14
616.14
Limitations applicable to plans under s. 616.06. 616.14(1)(1)
Governing body. The governing body of a plan shall be the same as the governing body of the sponsoring organization, but must have at least 3 members. If the governing body of the sponsoring organization consists of fewer than 3 members, the governing body of the sponsoring organization shall appoint to the governing body of the plan the number of persons necessary to comply with this subsection. Appointments under this subsection shall be made under rules adopted by the governing body of the sponsoring organization.
616.14(2)
(2) Size. No plan under
s. 616.03,
616.06 or
616.08 may operate unless the plan covers a number of students large enough to give stability to its loss experience.
616.14 History
History: 1979 c. 261.
616.18
616.18
Restrictions on transactions. 616.18(1)
(1)
Voidable transactions. Any material transaction between a plan or corporation authorized under this subchapter and one or more of its management or members of its governing board, or with any person in a position to influence the vote of any member of its governing board or the decision of any of its management or with any person having power to control the plan or corporation is voidable by the plan or corporation unless:
616.18(1)(a)
(a) The transaction at the time it is entered into is reasonable and fair to the interests of the plan or corporation and its members;
616.18(1)(b)
(b) The transaction has, with full knowledge of its terms and of the interests involved, been approved in advance by the governing board or by the members; and
616.18(1)(c)
(c) The transaction has been reported to the commissioner immediately after approval under
par. (b).
616.18(2)(a)(a) This section does not apply to policies of insurance issued by the plan or corporation in the normal course of its business.
616.18(2)(b)
(b) The commissioner may by rule exempt other classes of transactions from the reporting requirement of
sub. (1) (c), if the purposes of this section can be achieved without the report.
616.18 History
History: 1979 c. 261.
616.20
616.20
Conversion of plans under s. 616.06 to mutuals under ch. 611 or service insurance corporations under ch. 613. 616.20(1)(1)
Authorization. Under a proposal proposed by the officers of a plan operating under
s. 616.06 and approved by the commissioner and by a majority of the members voting, the plan may be converted to a mutual under
ch. 611 or a service insurance corporation under
ch. 613.
616.20(2)
(2) Notice and voting rights. Voting on the conversion is required only if the bylaws provide for it. Voting shall be as provided in the bylaws. If voting is required, but there is no notice provision in the bylaws, the officers shall give notice of the plan to convert under
sub. (1) to all members entitled to vote on the conversion at least 30 days before the plan is submitted to the members for a vote. Whether or not voting is required, any member who feels aggrieved by the conversion plan may communicate objections to the commissioner who shall give them consideration before approving the plan. If voting is required by the bylaws, the commissioner may not approve the plan until at least 60 days after notice has been given to all members and 30 days after the voting on the plan. In all cases the commissioner may approve the plan only if the conversion plan protects the legitimate interests of the members.
616.20(3)
(3) Membership and ownership of assets. Members of the plan shall be the members of the mutual or service insurance corporation created by conversion under this section. Assets of the plan shall become assets of the new corporation, and all existing contracts shall become the contracts of the new corporation.
616.20(4)
(4) Liability of officers. If the commissioner approves a conversion under this section, no officer is liable to any member for losses suffered solely as a result of the conversion.
616.20(5)
(5) Fees. A new corporation formed under this section is not subject to the fees under
s. 601.31 (1) or
(2).
616.20 History
History: 1979 c. 261.
MOTOR CLUB SERVICE CONTRACTS
616.71
616.71
Motor club service; definitions. As used in this subchapter, unless the context or subject matter otherwise requires:
616.71(1)
(1) "Agent" means one who solicits the purchase of service contracts, as herein defined, or transmits for another any such contract, or application therefor, to or from the company, or acts or aids in any manner in the delivery or negotiation of any such contract, or in the renewal or continuance thereof.
616.71(2)
(2) "Bail bond service" means any act by a company, as herein defined, the purpose of which is to furnish to, or procure for, any person accused of violation of any law of this state a cash deposit, bond or other undertaking required by law in order that the accused might enjoy personal freedom pending trial.
616.71(3)
(3) "Buying and selling service" means any act by a company, as herein defined, whereby the holder of a service contract with any such company is aided in any way in the purchase or sale of an automobile.
616.71(4)
(4) "Commissioner" means the commissioner of insurance, or the commissioner's assistants or deputies, or other persons authorized to act for the commissioner.
616.71(5)
(5) "Company" means any person, firm, partnership, company, association or corporation engaged in selling, furnishing or procuring, as principal, for a consideration, motor club service.
616.71(6)
(6) "Discount service" means any act by a company, as herein defined, resulting in the giving of special discounts, rebates or reductions of price on gasoline, oil, repairs, parts, accessories or service for motor vehicles, to holders of service contracts with any such company.
616.71(7)
(7) "Emergency road service" means any act by a company, as herein defined, consisting of the adjustment, repair or replacement of the equipment, tires or mechanical parts of an automobile so as to permit it to be operated under its own power.
616.71(8)
(8) "Financial service" means any act by a company, as herein defined, whereby loans or other advances of money, with or without security, are made to holders of service contracts with any such company.
616.71(9)
(9) "Insurance service" means any act by a company, as herein defined, consisting of the selling or giving with a service contract, as herein defined, or as a result of membership in or affiliation with a company, as herein defined, a policy of insurance covering liability or loss by the holder of a service contract with any such company as the result of injury to the person of such service contract holder following an accident resulting from the ownership, maintenance, operation or use of a motor vehicle.
616.71(10)
(10) "Legal service" means any act by a company, as herein defined, consisting of the hiring, retaining, engaging or appointing of an attorney or other person to give professional advice to, or represent, holders of service contracts with any such company, in any court, as the result of liability incurred by the right of action accruing to the holder of a service contract as a result of the ownership, operation, use or maintenance of a motor vehicle.
616.71(11)
(11) "Map service" means any act by a company, as herein defined, by which road maps are furnished without cost to holders of service contracts with any such company.
616.71(12)
(12) "Motor club service" means the rendering, furnishing or procuring of 3 or more of the following, to any person, in connection with that person's ownership, operation, use, or maintenance, of a motor vehicle, in consideration of that person's being or becoming a member of, affiliated with or entitled to membership or other motor club service from any company rendering, procuring or furnishing those services by virtue of any agreement or understanding with any such company:
