612.33(2)(d)1.
1. That any claimant who could recover from the town mutual may, if the town mutual would be unable to fully satisfy its financial obligations to the claimant, recover from the town mutual, the reinsurer, or both, and that the claimant may recover from the reinsurer in the same way that he or she could recover from the town mutual but only in the amount for which the reinsurer is liable according to the terms of the reinsurance contract; and
612.33(2)(d)2.
2. That there shall be no diminution in the amount recoverable from the reinsurer under
subd. 1. as a result of any delinquency proceedings pertaining to the town mutual, nor as a result of a breach of the reinsurance contract by the town mutual.
612.33(2)(e)
(e)
Approval of reinsurance contract. Every reinsurance contract required under this subsection shall be on a form approved by the commissioner under
s. 612.51. The commissioner shall approve the form unless he or she finds that it would be contrary to the law or to the interests of insureds or the public.
612.34(1)(1)
Regulation of assessments. Town mutuals need not file information under
ch. 625 about special assessments unless ordered to do so by rule or order of the commissioner.
612.34(2)
(2) Classifications. No classification plan for the purpose of determining premiums or assessment shares may be used unless it has been approved by the commissioner. The commissioner shall approve the plan unless he or she finds that it would be contrary to the law, including the standards of
s. 625.11, or contrary to the interests of insureds or of the public.
612.34(3)
(3) Mandatory advance premiums. Notwithstanding members' liability for subsequent assessments under
s. 612.54, town mutuals shall charge advance premiums expected to be adequate for any insurance for which they must obtain reinsurance under
s. 612.33 (2) (b).
612.34 History
History: 1973 c. 22;
1979 c. 102 s.
236 (5).
612.35
612.35
Borrowing and repayment. A town mutual may borrow money to pay losses or expenses, but before obtaining a loan which would bring its indebtedness, including debit balances from reinsurance arrangements under
s. 612.33 (1) above 50 percent of its assets including assessments levied and collectible which are not overdue, it shall report the amount and purpose of the loan and all outstanding loans and debit balances to the commissioner. The commissioner may thereupon order the town mutual to levy an assessment to repay its indebtedness, establish a surplus, or both, within a reasonable time not less than 60 days after notice.
612.35 History
History: 1973 c. 22.
612.36(1)(1)
General. Except as provided in
sub. (2), town mutuals are subject to
ch. 620 but shall be restricted as provided in
s. 620.03 (1) unless individually exempted by the commissioner under
s. 620.03 (2). In applying the restrictions of
ch. 620 all assets of town mutuals shall be treated as if they were required to satisfy the compulsory surplus requirement, except to the extent that the commissioner by rule determines otherwise.
612.36(2)
(2) Real estate. Section 620.23 (1) (c) does not apply to town mutuals. Except under
s. 620.21 (2), no town mutual may own real estate that in the aggregate exceeds, in value measured at cost, one mill on the dollar of the insurance in force.
612.36 History
History: 1973 c. 22;
1977 c. 339.
612.36 Annotation
Legislative Council Note, 1977: Sub. (2) continues in effect that portion of s. 201.24 (2) that applies to town mutuals. [Bill 258-S]
612.51(2)(2)
Rules. The commissioner may by rule prescribe forms to be used for policies, applications or for particular clauses.
612.51(3)
(3) Articles and bylaws. The articles and bylaws shall be attached to or clearly incorporated by reference in every policy issued by a town mutual. They may be incorporated by reference only if each new member is supplied a copy of them and each policy specifies how additional copies may be obtained.
612.51(4)
(4) Limited coverage. Recovery as to any or all items of personal property insured under a policy may be limited to a percentage of the value at the time of the loss, by a clearly expressed statement to that effect in that policy.
612.52
612.52
Undertaking to pay premiums and assessments. An applicant for insurance shall sign an undertaking agreeing to pay the advance premiums for any insurance on the applicant's behalf and any assessment which may be levied in accordance with the terms of the policy, the articles, the bylaws, the statutes, and the reasonable expenses of collecting the assessment and any reasonable penalties for nonpayment. The undertaking may provide that for such collection the applicant shall waive any exemptions otherwise applicable to the property covered by the policy.
612.53
612.53
Loss adjustment. The commissioner may promulgate rules for loss adjustment procedures.
612.53 History
History: 1973 c. 22;
2015 a. 90.
612.54(1)(1)
Conditions for levying assessments. 612.54(1)(a)(a)
Mandatory assessments. The board of a town mutual shall levy an assessment whenever the amount of any loss or expense that is due exceeds the assets or whenever any required surplus is impaired.
612.54(1)(b)
(b)
Optional assessments. The board may at any time levy assessments as provided in the articles, for the purpose of paying losses or expenses, repaying borrowed money or creating a reasonable surplus.
612.54(2)
(2) Limitations on assessability. The commissioner may by order authorize a town mutual to limit assessability of policies to a multiple of the advance premium if the town mutual's surplus and business practices satisfy the commissioner of its solidity even with the limited assessability.
612.54(3)
(3) Classification. Assessments may be levied at the same rate on all members or according to a classification plan approved under
s. 612.34 (2). Assessments not exceeding the annual premium of the terminated policy may also be levied on persons whose membership has terminated within 4 months before the assessment, to pay losses incurred before the end of the month of termination of membership, to repay money borrowed to pay those losses and to pay other expenses.
612.54(4)
(4) Notice. Notice of any assessment shall be sent by mail to each person subject to it, at least 30 days prior to the date it is payable. The notice shall state:
612.54(4)(a)
(a) The rate of the assessment and the class of business or coverage to which it applies;
612.54(4)(c)
(c) The amount to be paid by the individual person;
612.54(4)(e)
(e) The person to whom payment is to be made; and
612.54(4)(f)
(f) The consequences of failure to pay, as provided in
sub. (5).
612.54(5)(a)(a)
Penalty. Every person who fails to pay his or her assessment within the time specified in the notice under
sub. (4) shall pay to the town mutual a penalty of 2 percent of the assessment for each week or part thereof during which the assessment remains unpaid, until the accumulated penalty equals 100 percent of the assessment. Thereafter the amount of the assessment and accumulated penalty shall bear interest at the legal rate.
612.54(5)(b)
(b)
Termination of coverage. If, at the time of a loss, any assessment any part of which is to cover losses or expenses already incurred under the same policy or under a previous policy covering the same property and the same insureds has remained unpaid in any part for 30 days after it is due, the loss shall not be paid except to a mortgagee under a mortgagee clause that provides for payment despite policy defenses. The policy shall also terminate after the loss. This paragraph shall apply only to any assessment some part of which is to cover incurred losses or expenses.
612.54(5)(c)
(c)
Enforcement. An assessment shall constitute a personal obligation of each member and payment may be enforced by appropriate action.
612.54(6)
(6) Notice to mortgagee. If losses under any policy are payable to a mortgagee despite default on an assessment and the assessment on the policy is not paid within the time specified in the notice to the member, the secretary shall, within 30 days after the expiration of such time, give like notice to the mortgagee. If the mortgagee pays the assessment within 20 days from the date of notice, the policy shall continue in force, as to the mortgagee's interest only, until the expiration of its regular term, subject to subsequent assessments of which the mortgagee is notified, and to cancellation by either party.
612.61
612.61
Licensing of agents. Persons soliciting insurance for town mutuals shall comply with
s. 628.05.
612.61 History
History: 1973 c. 22;
1975 c. 371.
612.61 Annotation
Legislative Council Note, 1975: Present s. 612.61 is replaced by s. 628.05, which is part of this act. The terms remain the same. It is preserved only as a cross reference to s. 628.05. [Bill 16-S]
612.70
612.70
Waiver of notice and informal action. Sections 181.0704,
181.0706,
181.0821 and
181.0823 apply to town mutuals.
Section 181.0821 applies to a committee of the board except that references to “board" shall be read as “committee".
612.70 History
History: 1973 c. 22;
1997 a. 79.
612.81
612.81
Register of deeds. No town mutual need file any corporate documents with any register of deeds for corporation law or regulatory purposes. All such documents held by registers of deeds on May 24, 1973, may be disposed of under
s. 59.43 (12) (b).
612.81 History
History: 1973 c. 22;
1995 a. 201.
