SB287,17,2121 d. The District of Columbia.
SB287,17,2222 e. Guam.
SB287,17,2323 f. Puerto Rico.
SB287,18,224 (c) Unless a change in the valuation manual specifies a later effective date,
25changes to the valuation manual shall be effective on the first January 1 after the

1date when such changes have been adopted by the National Association of Insurance
2Commissioners by an affirmative vote representing all of the following:
SB287,18,53 1. At least three-fourths of the members of the National Association of
4Insurance Commissioners voting, but not less than a majority of the total
5membership.
SB287,18,96 2. Members of the National Association of Insurance Commissioners
7representing the jurisdictions specified in par. (b) 3. with more than 75 percent of the
8direct premiums written as reported in all of the following annual statements most
9recently available before the vote under subd. 1.:
SB287,18,1010 a. Life, accident, and health annual statements.
SB287,18,1111 b. Health annual statements.
SB287,18,1212 c. Fraternal annual statements.
SB287,18,1313 (d) The valuation manual must specify all of the following:
SB287,18,1614 1. Minimum valuation standards for and definitions of the policies and
15contracts subject to sub. (1f) (b). The minimum valuation standards shall be all of
16the following:
SB287,18,1817 a. The commissioners reserve valuation method for life insurance contracts,
18other than annuity contracts, subject to sub. (1f) (b).
SB287,18,2019 b. The commissioners annuity reserve valuation method for annuity contracts
20subject to sub. (1f) (b).
SB287,18,2121 c. Minimum reserves for all other policies and contracts subject to sub. (1f) (b).
SB287,18,2422 2. Which policies or contracts, or types of policies or contracts, are subject to the
23requirements of a principle-based valuation in sub. (10) (a) and the minimum
24valuation standards consistent with those requirements.
SB287,19,2
13. For policies and contracts subject to a principle-based valuation under sub.
2(10), all of the following:
SB287,19,53 a. Requirements for the format of reports to the commissioner under sub. (10)
4(b) 3., which reports shall include information necessary to determine if the
5valuation is appropriate and in compliance with this section.
SB287,19,76 b. Requirements regarding the treatment of risks over which the insurance
7company does not have significant control or influence.
SB287,19,98 c. Procedures for corporate governance and oversight of the actuarial function
9and a process for appropriate waiver or modification of such procedures.
SB287,19,1210 4. The minimum valuation standard for policies not subject to a
11principle-based valuation under sub. (10), which minimum valuation standard shall
12be the greater of the following:
SB287,19,1413 a. Reserves that are consistent with the minimum standard of valuation before
14the operative date of the valuation manual.
SB287,19,1915 b. Reserves that quantify the benefits, guarantees, and funding associated with
16the contracts and their risks at a level of conservatism that reflects conditions that
17include unfavorable events that have a reasonable probability of occurring. This
18does not preclude, for policies with significant tail risk, reflecting in the reserve
19conditions appropriately adverse to quantify that tail risk.
SB287,19,2320 5. Other requirements, including those relating to reserve methods, models for
21measuring risk, generation of economic scenarios, assumptions, margins, use of
22insurance company experience, risk measurement, disclosure, certifications,
23reports, actuarial opinions and memoranda, transition rules, and internal controls.
SB287,20,3
16. The data and form of the data required under sub. (11) and to whom the data
2must be submitted. The valuation manual may specify other related requirements,
3including data analyses and reporting of analyses.
SB287,20,84 (e) In the absence of a specific valuation requirement, or if a specific valuation
5requirement in the valuation manual is not, in the opinion of the commissioner, in
6compliance with this section, the insurance company shall, with respect to such
7requirements, comply with minimum valuation standards prescribed by the
8commissioner by rule.
SB287,20,169 (f) The commissioner may engage a qualified actuary, at the expense of the
10insurance company, to perform an actuarial examination of the company and opine
11on the appropriateness of any reserve assumption or method used by the company,
12or to review and opine on a company's compliance with any requirement in this
13section. The commissioner may rely on the opinion, regarding provisions in this
14section, of a qualified actuary engaged by the commissioner of another state or
15district or territory of the United States. As used in this paragraph, the term
16"engage" includes both "employ" and "contract with."
SB287,20,2217 (g) The commissioner may require an insurance company to make any change
18to an assumption or method that, in the opinion of the commissioner, is necessary to
19comply with the requirements of the valuation manual or this section. An insurance
20company shall adjust the reserves as required by the commissioner. The
21commissioner may take any disciplinary action permitted under ss. 601.41 (4) and
22601.64.
SB287,20,2523 (h) 1. The commissioner may exempt specific product forms or product lines of
24a domestic company that is licensed and doing business only in Wisconsin from the
25requirements of this subsection if all of the following are satisfied:
SB287,21,2
1a. The commissioner has issued an exemption in writing to the company and
2has not subsequently revoked the exemption in writing.
SB287,21,53 b. The company computes reserves using assumptions and methods used
4before the operative date of the valuation manual in addition to any requirements
5established by the commissioner and promulgated by rule.
SB287,21,86 2. For policy forms and product lines for which a company is granted an
7exemption under subd. 1., subs. (1f) (a), (1m), and (2) to (7) apply, and any reference
8to the valuation manual does not apply.
SB287,42 9Section 42. 623.06 (10) of the statutes is created to read:
SB287,21,1310 623.06 (10) (a) For policies and contracts issued on or after the operative date
11of the valuation manual, an insurer must establish reserves for policies and
12contracts as specified in the valuation manual using a principle-based valuation
13that does all of the following:
SB287,21,1914 1. Quantifies the benefits, guarantees, and funding associated with the
15contracts and their risks at a level of conservatism that reflects conditions that
16include unfavorable events that have a reasonable probability of occurring during
17the lifetime of the contracts. For policies or contracts with significant tail risk, the
18principle-based valuation should reflect conditions appropriately adverse to
19quantify the tail risk.
SB287,21,2420 2. Incorporates assumptions, risk analysis methods and financial models, and
21management techniques that are consistent with, but not necessarily identical with,
22those used within the company's overall risk assessment process, while recognizing
23potential differences in financial reporting structures and any prescribed
24assumptions or methods.
SB287,21,2525 3. Incorporates assumptions that are derived in one of the following ways:
SB287,22,1
1a. The assumption is prescribed in the valuation manual.
SB287,22,62 b. For an assumption that is not prescribed in the valuation manual, the
3assumption is established using the company's available experience to the extent it
4is relevant and statistically credible. To the extent that company data is not
5available, relevant, or statistically credible, the assumption is established using
6other relevant, statistically credible experience.
SB287,22,97 4. Provides margins for uncertainty, including adverse deviation and
8estimation error, such that the greater the uncertainty, the larger the margin and
9resulting reserve.
SB287,22,1210 (b) A company using a principle-based valuation for one or more policies or
11contracts subject to this section as specified in the valuation manual shall do all of
12the following:
SB287,22,1413 1. Establish procedures for corporate governance and oversight of the actuarial
14valuation function consistent with those described in the valuation manual.
SB287,22,2115 2. Provide to the commissioner and the board of directors an annual
16certification of the effectiveness of the internal controls with respect to the
17principle-based valuation. The internal controls shall be designed to ensure that all
18material risks inherent in the liabilities and associated assets subject to the
19valuation are included in the valuation and that valuations are made in accordance
20with the valuation manual. The certification shall be based on the controls in place
21as of the end of the preceding calendar year.
SB287,22,2322 3. Develop, and file with the commissioner upon request, a principle-based
23valuation report that complies with standards prescribed in the valuation manual.
SB287,22,2524 (c) A principle-based valuation may include a prescribed formulaic reserve
25component.
SB287,43
1Section 43. 623.06 (11) of the statutes is created to read:
SB287,23,52 623.06 (11) Beginning on the operative date of the valuation manual, a
3company shall submit mortality, morbidity, policyholder behavior, or expense
4experience and other data for all policies and contracts in force as prescribed in the
5valuation manual.
SB287,44 6Section 44. 623.06 (12) of the statutes is created to read:
SB287,23,77 623.06 (12) (a) In this subsection:
SB287,23,98 1. "Experience data" means any documents, materials, data, or other
9information submitted by a company under sub. (11).
SB287,23,1410 2. "Experience materials" means any documents, materials, data, or other
11information, including all working papers and copies of working papers, created or
12produced in connection with experience data, in each case that include any
13potentially company-identifying or personally identifiable information, that is
14provided to or obtained by the commissioner, together with any experience data.
SB287,23,1615 (am) For purposes of pars. (b) and (c), all of the following are confidential
16information:
SB287,23,2017 1. A memorandum in support of an opinion submitted under sub. (1m) or (1r)
18and any other documents, materials, or other information, including all working
19papers and copies of working papers, created, produced, or obtained by or disclosed
20to the commissioner or any other person in connection with the memorandum.
SB287,24,421 2. All documents, materials, and other information, including all working
22papers and copies of working papers, created, produced, or obtained by or disclosed
23to the commissioner or any other person in the course of an examination made under
24sub. (9) (f), except that if an examination report or other material prepared in
25connection with an examination made under ss. 601.43 and 601.44 is not held as

1private and confidential information under s. 601.465 (1m) (b), an examination
2report or other material prepared in connection with an examination made under
3sub. (9) (f) is not confidential information to the same extent as if the examination
4report or other material had been prepared under ss. 601.43 and 601.44.
SB287,24,115 3. Any reports, documents, materials, or other information developed by a
6company in support of, or in connection with, an annual certification by the company
7under sub. (10) (b) 2. evaluating the effectiveness of the company's internal controls
8with respect to a principle-based valuation and any other documents, materials, or
9other information, including all working papers and copies of working papers,
10created, produced, or obtained by or disclosed to the commissioner or any other
11person in connection with the reports, documents, materials, and other information.
SB287,24,1512 4. Any principle-based valuation report developed under sub. (10) (b) 3. and
13any other documents, materials, or other information, including all working papers
14and copies of working papers, created, produced, or obtained by or disclosed to the
15commissioner or any other person in connection with the report.
SB287,24,1916 5. Experience data, experience materials, and any other documents, materials,
17data, or other information, including all working papers and copies of working
18papers, created, produced, or obtained by or disclosed to the commissioner or any
19other person in connection with experience materials.
SB287,24,2520 (b) 1. Information described as confidential under par. (am) is confidential and
21privileged; is not subject to receipt, inspection, or copying under s. 19.35 (1); is not
22subject to subpoena; and is not subject to discovery or admissible in evidence in any
23private civil action. The commissioner is authorized to use the confidential
24information in the furtherance of any regulatory or legal action brought against the
25company as a part of the commissioner's official duties.
SB287,25,3
12. Neither the commissioner nor any person who received confidential
2information while acting under the authority of the commissioner may testify in any
3private civil action concerning any confidential information.
SB287,25,114 3. a. In furtherance of the performance of the commissioner's regulatory duties,
5the commissioner may share confidential information with other state, federal, and
6international regulatory agencies; the National Association of Insurance
7Commissioners and its affiliates and subsidiaries; the Actuarial Board for
8Counseling and Discipline or its successor, in the case of confidential information
9under par. (am) 1. and 4. only, upon request stating that the confidential information
10is required for the purposes of professional disciplinary proceedings; and state,
11federal, and international law enforcement agencies.
SB287,25,1512 b. Confidential information may be shared under subd. 3. a. only if the recipient
13agrees, and has the legal authority to agree, to maintain the confidentiality and
14privileged status of such documents, materials, data, and other information in the
15same manner and to the same extent as required for the commissioner.
SB287,25,2416 c. The commissioner may receive documents, materials, or other information,
17including otherwise confidential and privileged documents, materials, data, or
18information from the National Association of Insurance Commissioners and its
19affiliates and subsidiaries, from regulatory or law enforcement agencies of other
20foreign or domestic jurisdictions, and from the Actuarial Board for Counseling and
21Discipline or its successor, and shall maintain as confidential or privileged any
22document, material, or other information received with notice or the understanding
23that it is confidential or privileged under the laws of the jurisdiction that is the source
24of the document, material, or information.
SB287,26,2
1d.   The commissioner may enter into agreements governing sharing and use of
2information consistent with this subsection.
SB287,26,73 e. No waiver of any applicable privilege or claim of confidentiality in the
4confidential information shall occur as a result of disclosure of such information or
5documents to the commissioner under this subsection or as a result of the
6commissioner sharing such information or documents as authorized in this
7subsection.
SB287,26,108 f. A privilege established under the law of any state or jurisdiction that is
9substantially similar to the privilege established under this subsection shall be
10available and enforced in any proceeding in, and in any court of, this state.
SB287,26,1211 (c) Notwithstanding par. (b), any confidential information specified in par. (am)
121. and 4. is subject to all of the following:
SB287,26,1713 1. The confidential information may be subject to subpoena for the purpose of
14defending an action seeking damages from the appointed actuary submitting the
15related memorandum in support of an opinion submitted under sub. (1m) or (1r) or
16the principle-based valuation report developed under sub. (10) (b) 3. by reason of an
17action required by this section or rules promulgated under this section.
SB287,26,1918 2. The confidential information may otherwise be released by the commissioner
19with the written consent of the company.
SB287,26,2520 3. If any portion of a memorandum in support of an opinion submitted under
21sub. (1m) or (1r) or any portion of the principle-based valuation report developed
22under sub. (10) (b) 3. is cited by the company in its marketing, is publicly volunteered
23to or before a government agency other than a state insurance department, or is
24released by the company to the news media, all portions of such memorandum or
25report shall no longer be confidential.
SB287,45
1Section 45. 623.06 (13) (b) of the statutes is created to read:
SB287,27,32 623.06 (13) (b) Subsections (1), (1f) (b), (1r), and (8m) to (12) shall become
3effective on the effective date of this paragraph .... [LRB inserts date].
SB287,46 4Section 46. 628.07 of the statutes is amended to read:
SB287,27,12 5628.07 Licensing of nonresidents. The commissioner may shall waive the
6any examination requirement of an examination for a nonresident applicant under
7s. 628.04 if the jurisdiction of the applicant's residence has imposed upon the
8applicant requirements substantially as rigorous as those of this state and has
9enforced them with comparable rigor
home state or state of residence has issued the
10applicant a license for which the qualifications are equivalent to the qualifications
11for a license issued by this state and if that license is in good standing at the time of
12application
.
SB287,47 13Section 47. 628.10 (2) (a) of the statutes is amended to read:
SB287,27,2514 628.10 (2) (a) For failure to comply with continuing education or annual
15training requirements.
The license of any intermediary or individual navigator who
16fails to produce evidence of compliance with continuing education standards set by
17the commissioner or with annual training requirements is revoked, effective on the
18date on which the evidence of compliance is due. At least 60 days before that date,
19the commissioner shall send by 1st class mail to the intermediary's or navigator's
20address that is on file with the commissioner notice
notify the intermediary or
21navigator
of the date by which the evidence of compliance is due and that the
22intermediary's or navigator's license will be revoked if the evidence is not received
23by that date. An intermediary or navigator whose license is revoked under this
24paragraph may have his or her license reinstated, or may be relicensed, as provided
25in sub. (5).
SB287,48
1Section 48. 628.10 (2) (am) of the statutes is amended to read:
SB287,28,102 628.10 (2) (am) Nonpayment of fees. The license of an intermediary or
3individual navigator who fails to pay a fee when due is revoked, effective on the date
4on which the fee is due. At least 60 days before that date, the commissioner shall send
5by 1st class mail to the intermediary's or navigator's address that is on file with the
6commissioner notice
notify the intermediary or navigator of the date by which the
7fee is due and that the intermediary's or navigator's license will be revoked if timely
8payment is not made. An intermediary who is a natural person, or an individual
9navigator, whose license is revoked under this paragraph may have his or her license
10reinstated, or may be relicensed, as provided in sub. (5).
SB287,49 11Section 49. 628.347 (1) (a) of the statutes is amended to read:
SB287,28,1412 628.347 (1) (a) "Annuity" means a fixed or variable an annuity that is an
13insurance product that is individually solicited, whether the product is classified as
14an individual or group annuity.
SB287,50 15Section 50. 628.347 (4) (c) of the statutes is amended to read:
SB287,28,1816 628.347 (4) (c) This subsection applies to FINRA broker-dealer sales of
17variable annuities and fixed annuities if the suitability and supervision are similar
18to those applied to variable annuity sales.
SB287,51 19Section 51. 628.347 (4m) (b) 3. c. of the statutes is amended to read:
SB287,28,2120 628.347 (4m) (b) 3. c. How fixed, variable, and indexed product-specific
21annuity contract provisions features affect consumers.
SB287,52 22Section 52. 628.81 of the statutes is repealed.
SB287,53 23Section 53. 631.95 (3) (a) of the statutes is amended to read:
SB287,29,424 631.95 (3) (a) Disability insurance. In establishing premiums for an individual
25or group disability insurance policy or a certificate of group disability insurance, an

1insurer may inquire about a person's existing medical condition and, based on the
2opinion of a qualified actuary, as defined in s. 623.06 (1c) (1) (h), use information
3related to a person's existing medical condition, regardless of whether that condition
4is or may have been caused by abuse or domestic abuse.
SB287,54 5Section 54. 632.43 (6m) (a) 3. of the statutes is renumbered 632.43 (6m) (a)
63. (intro.) and amended to read:
SB287,29,87 632.43 (6m) (a) 3. (intro.) "Nonforfeiture interest rate" means 125% either of
8the following:
SB287,29,11 9a. For all policies other than those described in subd. 3. b., 125 percent of the
10applicable calendar year valuation interest rate under s. 623.06 rounded to the
11nearest 0.25% 0.25 percent, but in no case less than 4 percent.
SB287,55 12Section 55. 632.43 (6m) (a) 3. b. of the statutes is created to read:
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