AB420,35,2121
(m) "Netting agreement" means any of the following:
AB420,36,522
1. A contract or agreement, or terms and conditions in a contract or agreement,
23including a master agreement together with all schedules, confirmations,
24definitions, and addenda, that documents one or more transactions between the
25parties to the agreement for, or involving, one or more qualified financial contracts
1and that provides for either the netting, liquidation, setoff, termination,
2acceleration, or close-out under, or in connection with, one or more qualified
3financial contracts or present or future payment or delivery obligations or
4entitlements, including related liquidation or close-out values, among the parties to
5the netting agreement.
AB420,36,76
2. Any master agreement or bridge agreement for one or more master
7agreements described in subd. 1.
AB420,36,108
3. Any security agreement or arrangement or other credit enhancement or
9guarantee or reimbursement obligation related to any contract or agreement
10described in subd. 1. or 2.
AB420,36,1411
(n) "Qualified financial contract" means a commodity contract, forward
12contract, repurchase agreement, securities contract, swap agreement, or any similar
13agreement that the commissioner determines by rule or order to be a qualified
14financial contract.
AB420,36,1515
(o) "Repurchase agreement" has the meaning given in
12 USC 1821 (e) (8) (D).
AB420,36,1816
(p) "Second-method provision" means a contract provision requiring a
17nondefaulting party to pay if a net or settlement amount is owed to the defaulting
18party.
AB420,36,1919
(q) "Securities contract" has the meaning given in
12 USC 1821 (e) (8) (D).
AB420,36,2020
(r) "Swap agreement" has the meaning given in
12 USC 1821 (e) (8) (D).
AB420,36,2221
(s) "Two-way payment provision" means a contract provision under which both
22parties to the contract may have payment obligations to each other.
AB420,37,423
(t) "Walkaway clause" means a provision in a netting agreement or a qualified
24financial contract that, after calculation of a value of a party's position or an amount
25due to or from one of the parties in accordance with its terms upon termination,
1liquidation, or acceleration of the netting agreement or qualified financial contract,
2either does not create a payment obligation of a party or extinguishes a payment
3obligation of a party, in whole or in part, solely because of the party's status as a
4nondefaulting party.
AB420,37,10
5(2) (a) On or after 5 p.m. central time on the business day following the date
6of appointment of a receiver, with regard to qualified financial contracts with an
7insurer that are subject to a proceeding under this chapter, no person may be stayed
8or prohibited from exercising any of the following rights, unless that person has
9received written notice that the contract has been sold or transferred under s. 645.33
10(2) or 645.46 (9):
AB420,37,1311
1. A contractual right to cause the termination, liquidation, acceleration, or
12close-out of obligations under, or in connection with, any netting agreement or
13qualified financial contract with an insurer on account of any of the following:
AB420,37,1514
a. The insolvency, financial condition, or default of the insurer at any time, if
15the right is enforceable under applicable law other than this chapter.
AB420,37,1616
b. The commencement of a formal delinquency proceeding under this chapter.
AB420,37,2017
2. Any right under a pledge, security, collateral, reimbursement, or guarantee
18agreement or arrangement, or any other similar security agreement or arrangement
19or other credit enhancement, relating to one or more netting agreements or qualified
20financial contracts.
AB420,38,221
3. Subject to s. 645.56 (2), any right to set-off or net-out any termination value,
22payment amount, or other transfer obligation arising under, or in connection with,
23one or more qualified financial contracts in which the counterparty or its guarantor
24is organized under the laws of the United States or a state or foreign jurisdiction
1approved by the National Association of Insurance Commissioners office responsible
2for securities validation as eligible for netting.
AB420,38,83
(b) If a counterparty to a master netting agreement or a qualified financial
4contract with an insurer subject to a proceeding under this chapter terminates,
5liquidates, closes-out, or accelerates the agreement or contract, damages will be
6measured as of the date of the termination, liquidation, close-out, or acceleration.
7The amount of a claim for damages is the actual direct compensatory damages
8calculated in accordance with sub. (6).
AB420,38,20
9(3) Upon termination of a netting agreement or qualified financial contract,
10notwithstanding any walkaway clause in the netting agreement or qualified
11financial contract, the net or settlement amount, if any, owed by a nondefaulting
12party to an insurer against which an application or petition has been filed under this
13chapter shall be transferred to the receiver of the insurer or as directed by the
14receiver of the insurer, even if the insurer is the defaulting party. Any limited 2-way
15payment provision or first-method provision in a netting agreement or qualified
16financial contract with an insurer that has defaulted shall be considered to be a full
172-way payment provision or 2nd-method provision as against the defaulting
18insurer. Any such property or amount is a general asset of the insurer, except to the
19extent that it is subject to one or more secondary liens or encumbrances or rights of
20netting or setoff.
AB420,38,23
21(4) (a) With respect to transferring a netting agreement or qualified financial
22contract of an insurer that is the subject of a proceeding under this chapter, the
23receiver of the insurer shall do one of the following:
AB420,39,224
1. Transfer to one party, other than an insurer subject to a proceeding under
25this chapter, all netting agreements and qualified financial contracts between the
1counterparty and the insurer that is subject to a proceeding under this chapter,
2including all of the following:
AB420,39,43
a. All rights and obligations of each party under each netting agreement and
4qualified financial contract.
AB420,39,75
b. All property, including any guarantee or other credit enhancement, securing
6any claims of each party under each netting agreement and qualified financial
7contract.
AB420,39,108
2. Transfer none of the netting agreements, qualified financial contracts,
9rights, obligations, or property referred to in subd. 1. with respect to the
10counterparty.
AB420,39,1411
(b) If a receiver of an insurer transfers a netting agreement or qualified
12financial contract, the receiver shall use its best efforts to notify any person who is
13a party to the netting agreement or qualified financial contract of the transfer by
14noon, central time, on the business day following the transfer.
AB420,39,20
15(5) Notwithstanding s. 645.52 or 645.54, a receiver may not avoid a transfer
16of money or other property arising under or in connection with a netting agreement
17or qualified financial contract, or any pledge, security, collateral, or guarantee
18agreement or any other similar security arrangement or credit support document
19relating to a netting agreement or qualified financial contract, that is made before
20the commencement of a formal delinquency proceeding under this chapter.
AB420,39,24
21(6) (a) In exercising the rights of disaffirmance or repudiation with respect to
22a netting agreement or qualified financial contract between a counterparty and an
23insurer that is the subject of a proceeding under this chapter, the receiver of the
24insurer shall do one of the following:
AB420,40,2
11. Disaffirm or repudiate all netting agreements and qualified financial
2contracts between the counterparty and the insurer.
AB420,40,43
2. Disaffirm or repudiate none of the netting agreements or qualified financial
4contracts between the counterparty and the insurer.
AB420,40,155
(b) Notwithstanding any provision of this section to the contrary, any claim of
6a counterparty against the estate arising from the receiver's disaffirmance or
7repudiation of a netting agreement or qualified financial contract that has not been
8previously affirmed in the liquidation or immediately preceding conservation or
9rehabilitation case shall be determined and shall be allowed or disallowed as if the
10claim had arisen before the date on which the petition for liquidation was filed or, if
11a conservation or rehabilitation proceeding is converted to a liquidation proceeding,
12as if the claim had arisen before the date on which the petition for conservation or
13rehabilitation was filed. The amount of the claim is the actual direct compensatory
14damages determined as of the date of the disaffirmance or repudiation of the netting
15agreement or qualified financial contract.
AB420,40,23
16(7) All rights of counterparties under this chapter that apply to netting
17agreements and qualified financial contracts entered into on behalf of a general
18account are available only to counterparties of netting agreements and qualified
19financial contracts entered into on behalf of that general account. All rights of
20counterparties under this chapter that apply to netting agreements and qualified
21financial contracts entered into on behalf of a separate account are available only to
22counterparties of netting agreements and qualified financial contracts entered into
23on behalf of that separate account.
AB420,40,25
24(8) (a) This section does not apply to persons who are affiliates of an insurer
25subject to a proceeding under this chapter.
AB420,41,2
1(b) This section does not apply to qualified financial contracts entered into with
2an insurer authorized to write financial guaranty insurance.
AB420,68
3Section
68. 646.51 (3) (am) (intro.) and 2. of the statutes are consolidated,
4renumbered 646.51 (3) (am) and amended to read:
AB420,41,95
646.51
(3) (am)
General. Except as provided in pars.
(ar), (b) and (c),
6assessments shall be calculated as
follows: 2. For assessments authorized by the
7board on or after April 30, 2004, as a percentage of premium written in this state by
8each insurer in the classes protected by the accounts for the year preceding the year
9in which the assessment is authorized by the board.
AB420,69
10Section
69. 646.51 (3) (am) 1. of the statutes is repealed.
AB420,70
11Section
70. 646.51 (3) (ar) of the statutes is created to read:
AB420,41,1412
646.51
(3) (ar)
Disability. Except as provided in par. (c), with respect to
13disability insurance policies, including policies issued by health maintenance
14organization insurers, assessments shall be calculated as follows:
AB420,41,1815
1. For assessments authorized by the board before the effective date of this
16subdivision .... [LRB inserts date], as a percentage of average annual premium
17received in this state by each insurer in the classes protected by the accounts for the
183 most recent years preceding the year of entry of the order of liquidation.
AB420,41,2219
2. For assessments authorized by the board on or after the effective date of this
20subdivision .... [LRB inserts date], as a percentage of premium written in this state
21by each insurer in the classes protected by the accounts for the year preceding the
22year in which the assessment is authorized by the board.
AB420,71
23Section
71. 646.51 (3) (b) of the statutes is amended to read:
AB420,42,424
646.51
(3) (b)
Life and health annuities. Except as provided in par. (c), with
25respect to annuity contracts or life
or disability insurance policies,
including policies
1issued by health maintenance organizations, assessments shall be calculated as a
2percentage of average annual premium received in this state by each insurer in the
3classes protected by the accounts for the 3 most recent years preceding the year of
4the entry of the order of liquidation.
AB420,72
5Section
72. 646.51 (4) (a) of the statutes is amended to read:
AB420,42,106
646.51
(4) (a) Subject to pars. (b) and (d), the total of all assessments for an
7amount authorized by the board under this section with respect to an insurer may
8not, in one calendar year, exceed 2 percent of the insurer's assessable premiums
9under sub. (3) (am)
, (ar), or (b) on the types of policies and contracts that are covered
10by the account.
AB420,73
11Section
73. 646.51 (9) (a) of the statutes is amended to read:
AB420,42,1612
646.51
(9) (a) Except as provided in par. (b), if an insurer's license or certificate
13of authority to do business in this state terminates
or
, expires
, or is surrendered, the
14insurer's obligation to pay assessments under this section ceases beginning on the
15day after the insurer's license or certificate of authority terminates
or, expires
, or is
16surrendered.
AB420,74
17Section
74. 646.51 (9) (b) of the statutes is amended to read:
AB420,42,2018
646.51
(9) (b) An insurer whose license or certificate of authority to do business
19in this state terminates
or, expires
, or is surrendered remains liable after the
20termination
or, expiration
, or surrender to pay all of the following:
AB420,42,2221
1. Assessments authorized or called before the insurer's license or certificate
22of authority terminated
or, expired
, or was surrendered.
AB420,43,223
2. Assessments authorized or called after the insurer's license or certificate of
24authority terminated
or, expired
, or was surrendered that relate to a liquidation
1order entered before the insurer's license or certificate of authority terminated
or, 2expired
, or was surrendered.
AB420,75
3Section
75. 646.51 (10) of the statutes is created to read:
AB420,43,74
646.51
(10) Assessment of converting insurers. When an insurer converts to
5a different type of entity or license and the effect of the conversion is to subject the
6insurer to the liabilities of a different account or accounts of the fund, the converting
7insurer's obligation to pay assessments is as follows:
AB420,43,128
(a)
Assessments authorized prior to or during the year of conversion. For
9assessments authorized by the board prior to or during the year in which the
10insurer's conversion to a different type of entity or license is effective, the insurer is
11liable for assessments to cover the obligations of the account or accounts to which it
12was subject prior to conversion.
AB420,43,1613
(b)
Assessments authorized after the year of conversion. For assessments
14authorized by the board after the year in which the insurer's conversion to a different
15type of entity or license is effective, the insurer is liable for assessments to cover the
16obligations of the account or accounts to which it is subject after conversion.
AB420,76
17Section
76. 655.27 (3) (b) 1. of the statutes is amended to read:
AB420,43,2418
655.27
(3) (b) 1. The commissioner, after approval by the board of governors,
19shall
by rule set the fees under par. (a). The
rule shall provide that fees may be paid
20annually or in semiannual or quarterly installments. In addition to the prorated
21portion of the annual fee, semiannual and quarterly installments shall include an
22amount sufficient to cover interest not earned and administrative costs incurred
23because the fees were not paid on an annual basis. This paragraph does not impose
24liability on the board of governors for payment of any part of a fund deficit.
AB420,77
25Section
77. 655.27 (3) (b) 2. of the statutes is amended to read:
AB420,44,4
1655.27
(3) (b) 2. With respect to fees paid by physicians, the
rule commissioner 2shall provide for not more than 4 payment classifications, based upon the amount of
3surgery performed and the risk of diagnostic and therapeutic services provided or
4procedures performed.
AB420,78
5Section
78. 655.27 (3) (b) 2m. of the statutes is amended to read:
AB420,44,116
655.27
(3) (b) 2m. In addition to the fees and payment classifications described
7under subds. 1. and 2., the commissioner, after approval by the board of governors,
8may
by rule establish a separate payment classification for physicians satisfying s.
9655.002 (1) (b) and a separate fee for nurse anesthetists satisfying s. 655.002 (1) (b)
10which take into account the loss experience of health care providers for whom
11Michigan is a principal place of practice.
AB420,79
12Section
79. 655.27 (3) (bg) 1. of the statutes is amended to read:
AB420,44,2013
655.27
(3) (bg) 1.
Every rule under par. (b) The commissioner shall provide for
14an automatic increase in a health care provider's fees, except as provided in subd. 2.,
15if the loss and expense experience of the fund and other sources with respect to the
16health care provider or an employee of the health care provider exceeds either a
17number of claims paid threshold or a dollar volume of claims paid threshold, both as
18established
in the rule by the commissioner. The
rule commissioner shall specify
19applicable amounts of increase corresponding to the number of claims paid and the
20dollar volume of awards in excess of the respective thresholds.
AB420,80
21Section
80. 655.27 (3) (bg) 2. of the statutes is amended to read:
AB420,45,222
655.27
(3) (bg) 2. The
rule commissioner shall provide that the automatic
23increase does not apply if the board of governors determines that the performance
24of the injured patients and families compensation fund peer review council in
1making recommendations under s. 655.275 (5) (a) adequately addresses the
2consideration set forth in par. (a) 2m.
AB420,81
3Section
81. 655.27 (3) (br) (intro.) of the statutes is amended to read:
AB420,45,64
655.27
(3) (br)
Limit on fees. (intro.)
Every rule The commissioner, in setting
5fees for a particular fiscal year under par. (b)
, shall ensure that the fees assessed do
6not exceed the greatest of the following:
AB420,82
7Section
82. 655.27 (3) (bt) of the statutes is created to read:
AB420,45,208
655.27
(3) (bt)
Report to joint committee on finance. Annually, no later than
9April 1, the commissioner shall send to the cochairpersons of the joint committee on
10finance a report detailing the proposed fees set for the next fiscal year under par. (b)
11and under s. 655.61 (1). If, within 14 working days after the date that the
12commissioner submits the report, the cochairpersons of the committee notify the
13commissioner that the committee has scheduled a meeting for the purpose of
14reviewing the proposed fees, the commissioner may not impose the fees until the
15committee approves the report. If the cochairpersons of the committee do not notify
16the commissioner, the commissioner may impose the proposed fees. In addition to
17any other method prescribed by rule for advising health care providers of the amount
18of the fees, the commissioner shall post the fees set under par. (b) for the next fiscal
19year on the office's Internet site and the director of state courts shall post the fees set
20under s. 655.61 (1) for the next fiscal year on the mediation fund's Internet site.
AB420,83
21Section
83. 655.27 (3) (d) of the statutes is amended to read:
AB420,46,722
655.27
(3) (d)
Rule not effective; Late establishment or approval of fees. If the
23rule establishing fees under par. (b)
does not take effect prior to for any particular
24fiscal year are not established by the commissioner, approved by the board of
25governors, or approved under par. (bt) by the joint committee on finance before June
12 of
any that fiscal year, the commissioner may elect to collect fees as established for
2the previous fiscal year. If the commissioner so elects and the
rule fees for that fiscal
3year are subsequently
takes effect established by the commissioner, approved by the
4board of governors, or approved under par. (bt) by the joint committee on finance, the
5balance for the fiscal year shall be collected or refunded or the remaining semiannual
6or quarterly installment payments shall be adjusted except the commissioner may
7elect not to collect, refund
, or adjust for minimal amounts.
AB420,84
8Section
84. 655.27 (3) (e) of the statutes is amended to read:
AB420,46,129
655.27
(3) (e)
Podiatrist fees. The commissioner, after approval by the board
10of governors, may
by rule assess fees against podiatrists for the purpose of paying the
11fund's portion of medical malpractice claims and expenses resulting from claims
12against podiatrists based on occurrences before July 1, 1986.
AB420,85
13Section
85. 655.61 (1) of the statutes is amended to read:
AB420,46,2214
655.61
(1) The mediation fund created under s. 655.68 shall be financed from
15fees charged to health care providers. The director of state courts shall, by February
161 annually, determine the revenues needed for the operation of the mediation system
17during the succeeding fiscal year and inform the board of governors of that amount.
18The director of state courts shall also inform the board of governors of the number
19of requests for mediation involving each type of health care provider set out in s.
20655.002 for the most recent fiscal year for which statistics are available. The board
21of governors shall
, by rule, set fees to charge health care providers at a level sufficient
22to provide the necessary revenue.
AB420,86
23Section
86. 655.61 (3) of the statutes is created to read:
AB420,47,624
655.61
(3) If the fees under sub. (1) for any particular fiscal year are not
25established by the board of governors or approved by the joint committee on finance
1under s. 655.27 (3) (bt) before June 2 of that fiscal year, the commissioner may elect
2to collect fees as established for the previous fiscal year. If the commissioner so elects
3and the fees for that fiscal year are subsequently established by the board of
4governors or approved by the joint committee on finance under s. 655.27 (3) (bt), the
5balance for the fiscal year shall be collected or refunded, except that the
6commissioner may elect not to collect or refund minimal amounts.
AB420,87
7Section
87
.
Nonstatutory provisions.
AB420,47,138
(1)
Operative date of the valuation manual. As soon as possible after the
9requirements under section 623.06 (9) (b) of the statutes, as created by this act, are
10met, the office of the commissioner of insurance shall submit to the legislative
11reference bureau for publication in the Wisconsin Administrative Register a notice
12specifying the date that is the operative date of the valuation manual, as provided
13in section 623.06 (9) (b) of the statutes, as created by this act.
AB420,88
14Section
88.
Effective dates. This act takes effect on the day after publication,
15except as follows:
AB420,47,1816
(1)
Operative date of valuation manual. The repeal and recreation of section
17623.06 (1) (f) of the statutes takes effect on the date specified in the notice published
18in the Wisconsin Administrative Register under
Section 87 (1
) of this act.