645.04(3)
(3) Exclusiveness of proceedings; arbitration clauses. No court of this state has jurisdiction to entertain, hear or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation or receivership of any insurer, or praying for an injunction or restraining order or other relief preliminary to, incidental to or relating to such proceedings other than in accordance with this chapter. An arbitration provision of any contract with an insurer that is subject to a delinquency proceeding under
subch. III is not enforceable unless the receiver elects to accept arbitration. Only the court that has jurisdiction of the delinquency proceeding may entertain, hear or determine any matter that otherwise would be subject to an arbitration provision.
645.04(4)
(4) Change of venue. Venue for proceedings arising under this chapter shall be laid initially as specified in this chapter. All other actions and proceedings initiated by the receiver may be commenced and tried where the delinquency proceedings are then pending, or where venue would be laid by
ss. 801.50 to
801.62 or other applicable law. All other actions and proceedings against the receiver shall be commenced and tried in the county where the delinquency proceedings are pending. At any time upon motion of any party, venue may be changed by order of the court or the presiding judge thereof to any other circuit court in this state, as the convenience of the parties and witnesses and the ends of justice may require. This subsection relates only to venue and is not jurisdictional.
645.04(5)
(5) Personal jurisdiction, grounds for. In addition to other grounds for jurisdiction provided by the law of this state, a court of this state having jurisdiction of the subject matter has jurisdiction over a person served pursuant to
s. 801.11 in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this state:
645.04(5)(a)
(a) If the person served is obligated to the insurer in any way as an incident to any agency or brokerage arrangement that may exist or has existed between the insurer and the agent or broker, in any action on or incident to the obligation;
645.04(5)(b)
(b) If the person served is a reinsurer who has at any time written a policy of reinsurance for an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced, or is an agent or broker of or for the reinsurer, in any action on or incident to the reinsurance contract; or
645.04(5)(c)
(c) If the person served is or has been an officer, manager, trustee, organizer, promoter or person in a position of comparable authority or influence in an insurer against which a rehabilitation or liquidation order is in effect when the action is commenced, in any action resulting from the relationship with the insurer.
645.04(6)
(6) Change of forum. If the court on motion of any party finds that any action commenced under
sub. (5) should as a matter of substantial justice be tried in a forum outside this state, the court may enter an order under
s. 801.63 to stay further proceedings on the action in this state.
645.04 History
History: Sup. Ct. Order,
67 Wis. 2d 585, 776 (1975);
1979 c. 93;
1979 c. 110;
1981 c. 390;
1989 a. 23.
645.04 Annotation
The exercise of jurisdiction under sub. (5) over a foreign person obligated to a domestic receiver does not violate due process. Liquidation of All-Star Insurance Corporation,
110 Wis. 2d 72,
327 N.W.2d 648 (1983).
645.05
645.05
Injunctions and orders. 645.05(1)
(1)
Injunctions in this state. Any receiver appointed in a proceeding under this chapter may at any time apply for and any court of general jurisdiction in this state may grant, under the relevant sections of
ch. 813, such restraining orders, temporary and permanent injunctions, and other orders as are deemed necessary and proper to prevent:
645.05(1)(c)
(c) Interference with the receiver or with the proceedings;
645.05(1)(f)
(f) The institution or further prosecution of any actions or proceedings;
645.05(1)(g)
(g) The obtaining of preferences, judgments, attachments, garnishments or liens against the insurer or its assets;
645.05(1)(h)
(h) The levying of execution against the insurer or its assets;
645.05(1)(i)
(i) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;
645.05(1)(j)
(j) The withholding from the receiver of books, accounts, documents or other records relating to the business of the insurer; or
645.05(1)(k)
(k) Any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors or shareholders, or the administration of the proceeding.
645.05(2)
(2) Injunctions elsewhere. The receiver may apply to any court outside of this state for the relief described in
sub. (1).
645.05 History
History: Sup. Ct. Order,
67 Wis. 2d 585, 776 (1975).
645.06
645.06
Costs and expenses of litigation. In any proceeding or action brought by the commissioner or a receiver under this chapter, the court may award such costs and other expenses of litigation to the commissioner or receiver as justice requires, without regard to the limitations otherwise prescribed by law.
645.06 History
History: 1989 a. 23.
645.07
645.07
Cooperation of officers and employees. 645.07(1)(1)
Duty to cooperate. Any officer, manager, trustee or general agent of any insurer, any attorney representing an insurer on any matter, and any other person with executive authority over or in charge of any segment of the insurer's affairs shall cooperate with the commissioner in any proceeding under this chapter or any investigation preliminary or incidental to the proceeding. "To cooperate" includes:
645.07(1)(a)
(a) To reply promptly in writing to any inquiry from the commissioner requesting a reply; and
645.07(1)(b)
(b) To make available and deliver to the commissioner any books, accounts, documents or other records, or information or property of or pertaining to the insurer and in the person's possession, custody or control.
645.07(2)
(2) Duty not to obstruct. No person may obstruct or interfere with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto.
645.07(3)
(3) Right to defend. This section does not make it illegal to resist by legal proceedings the petition for liquidation or other delinquency proceedings, or other orders.
645.07(4)
(4) Sanction. Any person included within
sub. (1) who fails to cooperate with the commissioner, or any person who obstructs or interferes with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto, is subject to
s. 601.64.
645.08
645.08
Bonds; immunity. 645.08(1)(1)
Bonds. In any proceeding under this chapter the commissioner and the commissioner's deputies are responsible on their official bonds for the faithful performance of their duties. If the court deems it desirable for the protection of the assets, it may at any time require an additional bond from the commissioner or the commissioner's deputies.
645.08(2)
(2) Immunity. No civil cause of action may arise against and no civil liability may be imposed upon the state, commissioner, special deputy commissioner, rehabilitator or liquidator, or their employees or agents, or the insurance security fund under
ch. 646 or its agents, employees, directors or contributor insurers, for an act or omission by any of them in the performance of their powers and duties under this chapter or in the performance of their powers and duties relating to regulation of the capital or solvency of an insurer under
chs. 600 to
646, including the compulsory or security surplus requirements under
ch. 623. This subsection does not apply to a civil cause of action arising from an act or omission that is criminal under
ch. 943. Such a cause of action, however, may be barred or limited by common law, sovereign immunity, governmental immunity or otherwise by law.
645.09
645.09
Commissioner's reports. 645.09(1)
(1)
General report of proceedings. The commissioner may include in his or her annual report:
645.09(1)(a)
(a)
Formal proceedings. The names of the insurers proceeded against under
ss. 645.31,
645.41,
645.45,
645.81,
645.82 and
645.84, and such other facts as indicate in reasonable detail the commissioner's formal proceedings under this chapter; and
645.09(1)(b)
(b)
Informal proceedings. Such facts as generally indicate the utilization and effectiveness of proceedings under
ss. 645.21,
645.22 and
645.23.
645.09(2)(a)(a)
Causes of delinquency. The commissioner may include in his or her annual report, not later than the 2nd annual report following the initiation of any formal proceedings under this chapter, a detailed analysis of the basic causes and the contributing factors making the initiation of formal proceedings necessary, and may make recommendations for remedial legislation. For this purpose the commissioner may appoint a special assistant qualified in insurance, finance and accounting to conduct the study and prepare the analysis, and may determine the special assistant's compensation, which shall be paid from the appropriation under
s. 20.145 (1) (g).
645.09(2)(b)
(b)
Final study. The commissioner may include in his or her annual report, not later than the 2nd annual report following discharge of the receiver, a detailed study of the delinquency proceeding for each insurer subjected to a formal proceeding, with an analysis of the problems faced and their solutions. The commissioner may also suggest alternative solutions, as well as other material of interest, for the purpose of assisting and guiding liquidators or rehabilitators in the future. For this purpose the commissioner may appoint a special assistant qualified to conduct the study and prepare the analysis, and may determine his or her compensation, which shall be paid from the appropriation under
s. 20.145 (1) (g).
645.09(3)
(3) Reports on insurers subject to proceedings. The commissioner as receiver shall make and file annual reports and any other required reports for the companies proceeded against under
ss. 645.31,
645.41,
645.45,
645.81,
645.82 and
645.84 in the manner and form and within the time required by law of insurers authorized to do business in this state, and under the same penalties for failure to do so.
645.09 History
History: 1979 c. 102 ss.
197,
236 (13), (14);
1979 c. 221.
645.10
645.10
Continuation of delinquency proceedings. Every proceeding commenced before August 5, 1967 is deemed to have commenced under this chapter for the purpose of conducting the proceeding thereafter, except that in the discretion of the commissioner the proceeding may be continued, in whole or in part, as it would have been continued had this chapter not been enacted.
645.11
645.11
Effect of amendments of this chapter. Every proceeding commenced under this chapter before December 9, 1979, is subject to the amendments of this chapter by
chapter 93, laws of 1979, except as to rights which have fully vested before December 9, 1979.
645.11 History
History: 1979 c. 93,
109,
154.
SUMMARY PROCEEDINGS
645.21
645.21
Commissioner's summary orders. 645.21(1)
(1)
Summary order after hearing. Whenever the commissioner has reasonable cause to believe, and determines, after a hearing held as prescribed in
s. 601.62, that any insurer has committed or engaged in, or is committing or engaging in or is about to commit or engage in any act, practice or transaction, or is in or is about to get into a situation that would subject it to formal delinquency proceedings under this chapter, the commissioner may make and serve upon the insurer and any other persons involved, such orders other than seizure orders under
ss. 645.22 and
645.23 as are reasonably necessary to correct, eliminate or remedy such conduct, condition or ground.
645.21(2)
(2) Summary order before hearing. If the conditions of
sub. (1) are satisfied, and if it appears to the commissioner that irreparable harm to the property or business of the insurer or to the interests of its policyholders, creditors or the public may occur unless the commissioner issues with immediate effect the orders described in
sub. (1), the commissioner may make and serve such orders without notice and before hearing, simultaneously serving upon the insurer notice of hearing under
s. 601.62.
645.21(4)
(4) Judicial relief. If the commissioner issues a summary order before hearing under
sub. (2), the insurer may at any time waive the commissioner's hearing and apply for immediate judicial relief by means of any remedy afforded by law without first exhausting administrative remedies. Subsequent to a hearing the insurer or any person whose interests are substantially affected is entitled to judicial review of any order issued by the commissioner.
645.22
645.22
Court's seizure order. 645.22(1)
(1)
Issuance. Upon the filing by the commissioner in any circuit court in this state of a verified petition alleging any ground that would justify a court order for a formal delinquency proceeding against an insurer under this chapter and that the interests of policyholders, creditors or the public will be endangered by delay, and setting out the order considered necessary by the commissioner, the court shall issue forthwith, ex parte and without a hearing, the requested order, which may do any of the following:
645.22(1)(a)
(a) Direct the commissioner to take possession and control of all or a part of the property, books, accounts, documents and other records of an insurer and of the premises occupied by it for the transaction of its business.
645.22(1)(b)
(b) Until further order of the court, enjoin the insurer and its officers, managers, agents, and employees from disposition of its property and from transaction of its business except with the written consent of the commissioner.
645.22(2)
(2) Duration. The court shall specify in the order what its duration shall be, which shall be such time as the court deems necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may hold such hearings as it deems desirable after such notice as it deems appropriate, and may extend, shorten or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under this chapter after having had a reasonable opportunity to do so. The issuance of an order of the court pursuant to a formal proceeding under this chapter vacates the seizure order.
645.22(3)
(3) Anticipatory breach. Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.
645.23
645.23
Commissioner's seizure order. 645.23(1)
(1)
Issuance. If it appears to the commissioner that the interests of creditors, policyholders or the public will be endangered by the delay incident to asking for a court seizure order, then on any ground that would justify a court seizure order under
s. 645.22, without notice and without applying to the court, the commissioner may issue a seizure order which must contain a verified statement of the grounds for the action. As directed by the seizure order, the commissioner's representatives shall forthwith take possession and control of all or part of the property, books, accounts, documents and other records of the insurer, and of the premises occupied by the insurer for the transaction of its business. The commissioner shall retain possession and control until the order is vacated or is replaced by an order of the court pursuant to a proceeding commenced under
sub. (2) or a formal proceeding under this chapter.
645.23(2)
(2) Judicial review. At any time after seizure under
sub. (1), the insurer may apply to the circuit court for Dane County or for the county in which the insurer's principal office is located. The court shall thereupon order the commissioner to appear forthwith and shall proceed thereafter as if the order were a court seizure order issued under
s. 645.22.
645.23(3)
(3) Duty to assist commissioner. Every law enforcement officer shall assist the commissioner in making and enforcing any such seizure, and every sheriff's and police department shall furnish the commissioner with such deputies, patrolmen or officers as are necessary to assist in the seizure.
645.23(4)
(4) Anticipatory breach. Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.
645.23 History
History: 1979 c. 93,
102.
645.24
645.24
Conduct of hearings in summary proceedings. 645.24(1)(1)
Confidentiality of commissioner's hearings. The commissioner shall hold all hearings in summary proceedings privately unless the insurer requests a public hearing, in which case the hearing shall be public.
645.24(2)
(2) Confidentiality of court hearings. The court may hold all hearings in summary proceedings and judicial reviews thereof privately in chambers, and shall do so on request of the insurer proceeded against.
645.24(3)
(3) Records. In all summary proceedings and judicial reviews thereof, all records of the company, other documents, and all office of the commissioner of insurance files and court records and papers, so far as they pertain to or are a part of the record of the summary proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless the court, after hearing arguments from the parties in chambers, orders otherwise, or unless the insurer requests that the matter be made public. Until the court order is issued, all papers filed with the clerk of the court shall be held by the clerk in a confidential file.
645.24(4)
(4) Parties. If at any time it appears to the court that any person whose interest is or will be substantially affected by an order did not appear at the hearing and has not been served, the court may order that notice be given and the proceedings be adjourned to give the person opportunity to appear on just terms.
645.24(5)
(5) Sanctions. Any person having possession or custody of and refusing to deliver any of the property, books, accounts, documents or other records of an insurer against which a seizure order or a summary order has been issued by the commissioner or by the court, is subject to
s. 601.64.
645.24 History
History: 1979 c. 93,
102.
FORMAL PROCEEDINGS
645.31
645.31
Grounds for rehabilitation. The commissioner may apply by verified petition to the circuit court for Dane County or for the county in which the principal office of the insurer is located for an order directing rehabilitation of a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds:
645.31(1)
(1) Any ground on which the commissioner may apply for an order of liquidation under
s. 645.41, whenever he or she believes that the insurer may be successfully rehabilitated without substantial increase in the risk of loss to creditors of the insurer or to the public;
645.31(2)
(2) That the commissioner has reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting the insurer or other illegal conduct in, by or with respect to the insurer, that if established would endanger assets in an amount threatening the solvency of the insurer;
645.31(3)
(3) That information coming into the commissioner's possession has disclosed substantial and not adequately explained discrepancies between the insurer's records and the most recent annual report or other official company reports;
645.31(4)
(4) That the insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, employee or other person, if the person has been found by the commissioner after notice and hearing to be dishonest or untrustworthy in a way affecting the insurer's business;
645.31(5)
(5) That control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in one or more persons who are dishonest or untrustworthy;
645.31(6)
(6) That any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, employee or other person, has refused to be examined under oath by the commissioner concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact the insurer has failed promptly and effectively to terminate the employment and status of the person and all his or her influence on management;
645.31(7)
(7) That after demand by the commissioner the insurer has failed to submit promptly any of its own property, books, accounts, documents or other records, or those of any subsidiary or other affiliate within the control of the insurer, or those of any person having executive authority in the insurer so far as they pertain to the insurer, to reasonable inspection or examination by the commissioner or the commissioner's authorized representative. If the insurer is unable to submit the property, books, accounts, documents or other records of a person having executive authority in the insurer, it shall be excused from doing so if it promptly and effectively terminates the relationship of the person to the insurer;
645.31(8)
(8) That less than 30 days after reporting the proposed action to the commissioner unless it is earlier approved by the commissioner, or after the action has been disapproved by the commissioner, the insurer has transferred, or attempted to transfer, substantially its entire property or business, or has entered into any transaction the effect of which is to merge, consolidate or reinsure substantially its entire property or business in or with the property or business of any other person;
645.31(9)
(9) That the insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator or sequestrator or similar fiduciary of the insurer or its property otherwise than as authorized under this chapter, and that such appointment has been made or is imminent, and that such appointment might oust the courts of this state of jurisdiction or prejudice orderly delinquency proceedings under this chapter;
