December 3, 2009
The Honorable, The Legislature:
We have completed an audit of the financial statements of the Wisconsin State Life Insurance Fund for the years ended December 31, 2008, 2007, 2006, and 2005, as required by s. 13.94(1)(de)
, Wis. Stats. The Fund provides low-cost life insurance policies to Wisconsin residents, is self-funded through premiums and investment earnings, and is administered by the Office of the Commissioner of Insurance. As of December 31, 2008, it had 28,195 life insurance policies in effect, and $214.8 million of life insurance in force. The Fund operates under specific statutory restrictions, including a prohibition on employing insurance agents and a limitation on coverage of $10,000 to any insured person.
The Fund prepares its financial statements in accordance with insurance accounting practices prescribed by the Commissioner of Insurance. We found its financial statements to be fairly presented in accordance with these accounting practices.
State statutes require the Fund's net profits to be distributed annually as policy dividends, except that the Fund's surplus must be maintained at a level between 7.0 and 10.0 percent of assets to ensure benefits can be paid as they are claimed. However, as we reported previously (report 05-17), the Fund's surplus-to-assets ratio was only 2.7 percent as of December 31, 2004, which was below the statutorily required minimum. The Office of the Commissioner of Insurance worked with the Fund's actuary and implemented several changes, including a new dividend policy, beginning in 2005. As a result, the surplus-to-assets ratio was 7.3 percent and within the statutorily required range as of December 31, 2008.
In a separate letter dated December 3, 2009, we make recommendations to improve the Fund's financial reporting, reconcile cash recorded in the State's central accounting system to cash recorded in the Fund's general ledger, and improve its security over computer systems and data.
We appreciate the courtesy and cooperation extended to us by the staff of the Office of the Commissioner of Insurance in completing our audit.
State of Wisconsin
Office of the Governor
December 2, 2009
The Honorable, The Senate:
I am pleased to nominate and with the advice and consent of the Senate, do appoint Potter
of Mt. Pleasant, as a member of the Real Estate Appraisers Board, to serve for the term ending May 1, 2012.
Read and referred to committee on Judiciary, Corrections, Insurance, Campaign Finance Reform, and Housing.
Relating to the approved version of REScheck software used to show compliance with uniform dwelling code thermal envelope requirements.
Submitted by Department of Commerce.
Report received from Agency, December 2, 2009.
Referred to committee on Commerce, Utilities, Energy, and Rail, December 3, 2009.
The committee on Health, Health Insurance, Privacy, Property Tax Relief, and Revenue reports and recommends:
Relating to supervision and direction.
No action taken.