2017 - 2018 LEGISLATURE
November 30, 2017 - Introduced by Senators Lasee,
Craig, Bewley, Darling, L.
Taylor, Hansen and Johnson, cosponsored by Representatives Tusler,
Steffen, Nygren, Berceau, Doyle, Genrich, Goyke, Riemer, Felzkowski,
Horlacher, Kuglitsch, Murphy and Vorpagel. Referred to Committee on
Insurance, Housing and Trade.
1An Act to amend
631.36 (4) (b); and to create
628.34 (14) and 631.39 of the 2
statutes; relating to: insurance policy renewal in an affiliate and the use and
3contents of certificates of insurance.
Analysis by the Legislative Reference Bureau
This bill exempts renewals of insurance policies, including policies that provide
worker's compensation insurance, in an affiliate from certain requirements if certain
other requirements are satisfied. The bill also specifies certain restrictions on the
use of certificates of insurance.
Current law provides that, with certain exceptions, such as for substantial
contractual breaches, a policyholder has the right to have an insurance policy
renewed at the end of a term for an additional period of time that is the same as the
expiring term, unless the insurer gives the policyholder at least 60 days' notice that
the policy will not be renewed. Exceptions to this notice requirement include if the
policyholder has insured elsewhere, has accepted replacement coverage, or has
requested or agreed to nonrenewal, or if the policy is expressly designated as
Under the bill, an insurer is not required to comply with those renewal
requirements if the insurer renews a property or casualty insurance policy in an
affiliate and certain other requirements are satisfied, including that the affiliate is
authorized to write the type of policy being renewed, that all of the stock of, interest
in, or control of the affiliate is held by one or more persons in the same insurance
holding company system that includes the insurer, and that the insurer, at least 60
days before the renewal date, sends the policyholder notice of the renewal in the
affiliate. The notice must provide the affiliate's name, contact information, and A.M.
Best or similar rating if lower than the insurer's rating and must specify that there
will be no interruption of coverage, that, except for the rates, the terms and
conditions will be substantially the same as the current policy's terms and
conditions, and that the premiums will be determined according to the affiliate's
The bill specifies that a certificate of insurance or other document used for
evidence of insurance (certificate of insurance) is subject to certain restrictions with
regard to its use and the information it contains. Under current law, an insurer, the
insurer's agent or employee, and other certain specified persons are prohibited from
providing any false or misleading information relating to an insurance contract.
Current law prohibits an insurance intermediary, such as a person who negotiates
for insurance on behalf of an insurer, from providing a misleading certificate of
insurance. Current law also provides that a person who prepares, makes, or
subscribes to a false or fraudulent document, such as a certificate of insurance,
knowing that the document may be presented or used in support of an insurance
claim is guilty of a Class A misdemeanor if the value of the claim does not exceed
$2,500 and a Class I felony if the value of the claim exceeds $2,500.
The bill specifies that a certificate of insurance may not warrant that the
certificate fulfills an insurance or indemnity requirement in a specific contract.
Under the bill, no person may issue or require a certificate of insurance that contains
false, misleading, deceptive, or unfairly discriminatory information or that
otherwise violates public policy or law. Similarly, no person may prepare, issue,
request, or require a certificate of insurance that purports to alter, amend, or extend
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
628.34 (14) of the statutes is created to read:
628.34 (14) Evidence of insurance.
(a) No person may prepare, issue, request, 3
or require a certificate of insurance or other document used for evidence of insurance 4
to do any of the following:
1. Contain information concerning the policy referenced by the certificate of 6
insurance or other document that is false, misleading, deceptive, unfairly 7
discriminatory, or that otherwise violates public policy or law, as determined by the 8
2. Purport to alter, amend, or extend coverage provided by the policy referenced 2
by the certificate of insurance or other document.
3. Alter the terms and conditions of any notice requirement in the policy. A 4
person is entitled to notice of cancellation, nonrenewal, or any material change to the 5
policy, or to any similar notice concerning the policy only as provided in the policy or 6
(b) No person may alter a certificate of insurance or other document used for 8
evidence of insurance after it is issued.
(c) No certificate of insurance or other document used for evidence of insurance 10
may warrant that the policy referenced by the certificate of insurance or other 11
document fulfills the insurance or indemnification requirements of a specific 12
(d) 1. Except as provided in subd. 2., this subsection applies to any certificate 14
of insurance or other document used for evidence of insurance that is issued by an 15
insurer as evidence of property or casualty insurance.
2. This subsection does not apply to any of the following:
a. A policy or endorsement.
b. A binder.
c. Evidence of motor vehicle liability insurance required under s. 344.62 (2).
631.36 (4) (b) of the statutes is amended to read:
This subsection does not apply if the policyholder has 22
insured elsewhere, has accepted replacement coverage,
or has requested or agreed 23
to nonrenewal, if the policy is renewed in an affiliate in compliance with s. 631.39, 24
or if the policy is expressly designated as nonrenewable.
631.39 of the statutes is created to read:
1631.39 Renewals in affiliates. (1) Scope.
This section applies to property 2
and casualty lines of insurance, excluding disability insurance, as defined in s. 3
645.675 (1) (h).
4(2) Renewal requirements.
An insurer may renew a policy in an affiliate 5
without having to comply with s. 102.31 (2) (a) or 631.36 (4) or s. INS 21.01 (6), Wis. 6
Adm. Code, if all of the following are satisfied:
(a) All of the stock of, interest in, or control of the affiliate is held by one or more 8
persons in the same insurance holding company system, as defined in s. 622.03 (2), 9
that includes the insurer.
(b) The affiliate holds a valid certificate of authority in this state for the kind 11
of business necessary to write the policy being renewed.
(c) If the policy renewed in the affiliate contains terms and conditions, except 13
for the rates and rating plan, that are less advantageous to the policyholder than the 14
policyholder's current policy, the insurer complies with the requirements of s. 631.36 15
(d) The insurer provides notice to the policyholder at least 60 days before the 17
renewal date that the policy will be renewed in an affiliate.
(e) The notice under par. (d) includes or states all of the following information:
1. The name and contact information of the company in which the policy will 20
be renewed and that it is affiliated with the insurer.
2. That there will be no interruption of coverage.
3. That the premium for the renewal policy will be determined according to the 23
rates and rating plan of the affiliate.
4. If the policy currently held by the policyholder is written by a mutual 25
company and will be renewed in an affiliate that is a stock insurance company, that
the policy will be renewed in an affiliate that is a stock insurance company and the 2
policyholder will no longer have the rights that are granted to a mutual policyholder.
5. The A.M. Best or similar rating of the affiliate, if that rating is lower than 4
the current A.M. Best or similar rating of the insurer.
6. If the amount of the premium for the policy after it is renewed in the affiliate 6
will increase 25 percent or more from the amount of the premium prior to being 7
renewed in the affiliate, notice of the increased premium.
(f) If the policy is a worker's compensation insurance policy under ch. 102, the 9
insurer provides notice to the department of workforce development at least 60 days 10
prior to renewal of the policy in an affiliate notifying the department of the name of 11
the affiliate in which the policy is to be renewed.
12(3) Applicability of other law.
Sections 611.78 and 618.32 do not apply to 13
renewals under this section.
(1) This act first applies to policies that are renewable on the first day of the 16
3rd month beginning after the effective date of this subsection.