(8) Delivery of illustration and record retention. Ins 2.17(8)(a)(a)
If a basic illustration is used by an agent or other authorized representative of the insurer in the sale of a life insurance policy and the policy is applied for as illustrated, a copy of that illustration, signed in accordance with this section, shall be submitted to the insurer at the time of policy application. A copy also shall be provided to the applicant. If the policy is issued other than as applied for, a revised basic illustration conforming to the policy as issued shall be sent with the policy. The revised illustration shall conform to the requirements of this section, shall be labeled “Revised Illustration" and shall be signed and dated by the applicant or policy owner and agent or other authorized representative of the insurer no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.
If no illustration is used by an agent or other authorized representative in the sale of a life insurance policy or if the policy is applied for other than as illustrated, the agent or representative shall certify to that effect in writing on a form provided by the insurer. On the same form the applicant shall acknowledge that no illustration conforming to the policy applied for was provided and shall further acknowledge an understanding that an illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. This form shall be submitted to the insurer at the time of policy application. If the policy is issued, a basic illustration conforming to the policy as issued shall be sent with the policy and signed no later than the time the policy is delivered. A copy shall be provided to the insurer and the policy owner.
If the basic illustration or revised illustration is sent to the applicant or policy owner by mail from the insurer, it shall include instructions for the applicant or policy owner to sign the duplicate copy of the numeric summary page of the illustration for the policy issued and return the signed copy to the insurer. The insurer's obligation under this subsection shall be satisfied if it can demonstrate that it has made a diligent effort to secure a signed copy of the numeric summary page. The requirement to make a diligent effort shall be deemed satisfied if the insurer includes in the mailing a self-addressed postage prepaid envelope with instructions for the return of the signed numeric summary page.
A copy of the basic illustration and a revised basic illustration, if any, signed as applicable, along with any certification that either no illustration was used or that the policy was applied for other than as illustrated, shall be retained by the insurer until 3 years after the policy is no longer in force. A copy need not be retained if no policy is issued.
(9) Annual report; notice to policy owners. Ins 2.17(9)(a)(a)
Except as provided in par. (b)
, in the case of a policy designated as one for which illustrations will be used, the insurer shall provide each policy owner with an annual report on the status of the policy that shall contain at least the following information:
For universal life policies, the report shall include the following:
The policy value at the end of the previous report period and at the end of the current report period.
The total amounts that have been credited or debited to the policy value during the current report period, identifying each by type (e.g., interest, mortality, expense and riders).
The current death benefit at the end of the current report period on each life covered by the policy.
The net cash surrender value of the policy as of the end of the current report period.
The amount of outstanding loans, if any, as of the end of the current report period.
For fixed premium policies, in addition to the information described in subd. 1. a.
if, assuming guaranteed interest, mortality and expense loads and continued scheduled premium payments, the policy's net cash surrender value is such that it would not maintain insurance in force until the end of the next reporting period, a notice to this effect shall be included in the report.
For flexible premium policies, in addition to the information described in subd. 1. a.
if, assuming guaranteed interest, mortality and expense loads, the policy's net cash surrender value will not maintain insurance in force until the end of the next reporting period unless further premium payments are made, a notice to this effect shall be included in the report.
Insurers writing life insurance policies that do not build nonforfeiture values shall only be required to provide an annual report with respect to these policies for those years when a change has been made to nonguaranteed policy elements by the insurer.
If the annual report does not include an in force illustration, it shall contain the following notice displayed prominently: “IMPORTANT POLICY OWNER NOTICE:
You should consider requesting more detailed information about your policy to understand how it may perform in the future. You should not consider replacement of your policy or make changes in your coverage without requesting a current illustration. You may annually request, without charge, such an illustration by calling [insurer's phone number], writing to [insurer's name] at [insurer's address] or contacting your agent. If you do not receive a current illustration of your policy within 30
days from your request, you should contact your state insurance department." The insurer may vary the sequential order of the methods for obtaining an in force illustration.
Within 25 calendar days of receipt of a request from the policy owner, the insurer shall furnish an in force illustration of current and future benefits and values based on the insurer's present illustrated scale. This illustration shall comply with the requirements of subs. (5) (a)
, (5) (b)
, (6) (a)
and (6) (e)
. No signature or other acknowledgment of receipt of this illustration is required.
If an adverse change in non-guaranteed elements that could affect the policy has been made by the insurer since the last annual report, the annual report shall contain a notice of that fact and the nature of the change prominently displayed.
The board of directors of each insurer shall appoint one or more illustration actuaries.
The illustration actuary shall certify that the disciplined current scale used in illustrations is in conformity with the actuarial standard of practice for compliance with the national association of insurance commissioners model regulation on life insurance illustrations promulgated by the actuarial standards board, and that the illustrated scales used in insurer-authorized illustrations meet the requirements of this section.
Be a member in good standing of the American academy of actuaries.
Be familiar with the standard of practice regarding life insurance policy illustrations.
Not have been found by the commissioner, following appropriate notice and hearing to have done any of the following:
Violated any provision of, or any obligation imposed by, the insurance law or other law in the course of the actuary's dealings as an illustration actuary.
Demonstrated the actuary's incompetence, lack of cooperation, or untrustworthiness to act as an illustration actuary.
Resigned or been removed as an illustration actuary within the past 5 years as a result of acts or omissions indicated in any adverse report on examination or as a result of a failure to adhere to generally acceptable actuarial standards.
Not fail within
days to notify the commissioner of any action taken by a commissioner of another state similar to that under subd. 3.
Disclose in the annual certification whether, since the last certification, a currently payable scale applicable for business issued within the previous 5 years and within the scope of the certification has been reduced for reasons other than changes in the experience factors underlying the disciplined current scale. If nonguaranteed elements illustrated for new policies are not consistent with those illustrated for similar in force policies, this shall be disclosed in the annual certification. If nonguaranteed elements illustrated for both new and in force policies are not consistent with the non-guaranteed elements actually being paid, charged or credited to the same or similar forms, this shall be disclosed in the annual certification.
Disclose in the annual certification which of the following methods is used to allocate overhead expenses for all illustrations:
A generally recognized expense table based on fully allocated expenses representing a significant portion of insurance companies and approved by the commissioner.
The illustration actuary shall file a certification with the board and with the commissioner annually for all policy forms for which illustrations are used and before a new policy form is illustrated. If an error in a previous certification is discovered, the illustration actuary shall notify the board of directors of the insurer and the commissioner within 30 calendar days of discovery.
If an illustration actuary is unable to certify the scale for any policy form illustration the insurer intends to use, the actuary shall notify the board of directors of the insurer and the commissioner of the actuary's inability to certify within 30 calendar days of that determination.
A responsible officer of the insurer, other than the illustration actuary, shall certify annually all of the following:
That the illustration formats meet the requirements of this section and that the scales used in insurer-authorized illustrations are those scales certified by the illustration actuary.
That the insurer has provided its agents with information about the expense allocation method used by the insurer in its illustrations and disclosed as required in par. (c) 6.
The annual certifications shall be provided to the commissioner each year by a date determined by the insurer.
If an insurer changes the illustration actuary responsible for all or a portion of the insurer's policy forms, the insurer shall notify the commissioner of that fact within 30 calendar days and disclose the reason for the change.
In addition to any other penalties provided by the laws of this state, an insurer or agent that violates a requirement of this section is guilty of a violation of s. 628.34
Ins 2.17 History
Cr. Register, September, 1997, No. 501
, eff. 1-1-98.
Life settlement contracts. Ins 2.18(1)(1)
The purpose of this regulation is to interpret and implement s. 632.69
In addition to the definitions contained in s. 632.69 (1)
, Stats., in this section:
“Commissioner" means the commissioner of insurance.
“Firm" means a corporation, partnership or other legal entity.
“Office" means the office of the commissioner of insurance.
“Term life insurance" means life insurance which provides coverage at a fixed rate of payment for a limited period of time and which provides no guaranteed nonforfeiture or endowment benefits.
An individual or firm applying for an initial or renewal license as a broker or provider shall submit an application to the office in the form prescribed by the office. With the application, the individual or firm shall submit all of the following:
If the applicant is a broker, with the initial application, a professional liability insurance policy in the amount of $1 million total annual aggregate for all claims during the policy period. Proof that the required professional liability insurance policy continues in force shall accompany each renewal application.
If the applicant is a provider, audited financial statements of the applicant for the most recently completed fiscal year. The financial statements shall be available for public inspection.
Electronic confirmation of completion of the training requirements under s. 632.69 (3)
, Stats., and sub. (4)
if electronic confirmation is available. If electronic confirmation is not available the applicant shall provide evidence satisfactory to the commissioner of completion of the training requirements.
Any documentation required in answer to questions on the application.
If the applicant is an individual, his or her social security number or, if the applicant does not have a social security number, a statement made or subscribed under oath or affirmation that the applicant does not have a social security number, and a statement that he or she intends to act as a broker or provider in good faith and in compliance with all applicable laws of this state and rules and orders of the commissioner.
If the applicant is a firm applying for a broker's license, the applicant must identify a designated responsible Wisconsin-licensed individual representative on the application.
If the applicant is a firm, its federal identification number, the state and year of its incorporation, or year of its formation and a statement that it intends to act as a broker or provider in good faith and in compliance with all applicable laws of this state, and with rules and orders of the commissioner and the courts of this state with respect to all matters pertaining to activities as a licensee.
If the applicant is an individual who is not a resident of this state or a firm that is not organized under the laws of this state, a statement that the applicant agrees to be subject to the jurisdiction of the commissioner and the courts of this state with respect to all matters pertaining to activities as a licensee and to accept service of process as provided under ss. 601.72
, Stats. A firm that is organized under the laws of another state shall provide a certificate of good standing from the state of domicile.
Fingerprint identification may be required for individual resident
broker applicants and the Wisconsin-licensed individual
representative of a broker firm, in a format specified by the commissioner, and an electronic confirmation of criminal history from the Wisconsin department of justice, crime information bureau, and the federal bureau of investigation, to be completed not more than 180 days prior to making application.
Renewal application deadline.
Applications for license renewal shall be submitted pursuant to par. (a)
on or before July 1 of each year.
Competence and trustworthiness.
The following criteria may be used in assessing trustworthiness and competence:
1. `Criminal record.'
The conviction for crimes which are substantially related to the circumstances of holding a broker or provider license.
2. `Accuracy of information.'
Any material misrepresentation in the information submitted on the application form.
3. `Regulatory action.'
Any regulatory action taken with regard to any occupational license held, including insurance licenses, real estate licenses, and security licenses.
4. `Other criteria.'
Other criteria which the commissioner considers relevant in assessing trustworthiness or competence, including any of the following:
Providing incorrect, misleading, incomplete, or materially untrue information in the license application.
Violating any insurance laws, or violating any rule, subpoena, or order of the insurance commissioner or of another state's insurance commissioner.
Obtaining or attempting to obtain a license through misrepresentation or fraud.
Improperly withholding, misappropriating, or converting any monies or properties received in the course of engaging in the business of life settlements.
Misrepresenting the terms of an actual or proposed life settlement contract.
Having been convicted of any felony or misdemeanor of which criminal fraud is an element or having plead other than not guilty with respect to any felony or misdemeanor of which criminal fraud or moral turpitude is an element, regardless whether a judgment of conviction has been entered by the court.
Having admitted or been found to have committed any unfair trade practice or fraud.
Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere.
Having a life settlement license or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory.