Chapter Ins 6

Ins 6.09(2)(c) (c) Captive agent. An agent who is a director, officer, or employee of the lending institution which, in connection with a loan transaction, holds or acquires a security interest in real or personal property of a borrower.

Ins 6.09(2)(d) (d) Lending institution. Any person, firm, association, or corporation, whether or not licensed or chartered by any agency of government, which in the regular course of business lends money or credit to a borrower on the security of real or personal property in return for the borrower’s promise to repay the consideration at a time subsequent.

Ins 6.09(2)(e) (e) Policy of insurance. Any policy, certificate or memorandum of insurance affording in whole or in part any one or more of the kinds of insurance described, respectively, in any paragraph of s. Ins 6.75 (2).

Ins 6.09(3) (3) Declaration of policy.

Ins 6.09(3)(a) (a) Every borrower in this state should be afforded a reasonable opportunity to purchase any policy of insurance, the form, content, and provisions of which have previously been approved by the office of the commissioner of insurance for use in this state, for the purpose of providing insurance coverage on real or personal property required by a lending institution to be placed in force by the borrower at the borrower’s expense to protect its security interest in such real or personal property.

Ins 6.09(3)(b) (b) Every borrower in this state should be afforded a reasonable opportunity to purchase a policy of insurance, from any insurer and through any agent currently licensed by the office of the commissioner of insurance to issue or sell in this state, which is designed to protect and which affords protection for security interests in real or personal property and which is required by a lending institution to be placed in force by the borrower at the borrower’s expense for such purpose.

Ins 6.09(3)(c) (c) At the minimum, every borrower in this state should be afforded the opportunity at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy affording adequate limits of insurance with respect to such property provided that such replacement policy has been approved for use in this state, and the insurer currently licensed by the office of the commissioner of insurance.

Ins 6.09(4) (4) Prohibited acts. Each of the following acts is declared to constitute the commission, by concerted action, of an act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance and is prohibited:

Ins 6.09(4)(a) (a) Refusal to accept policy.

Ins 6.09(4)(a)1. 1. The solicitation or sale by a captive agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of such captive agent’s lending institution in real or personal property of the borrower if such lending institution has refused or then refuses to accept for such purpose the policy of any insurer licensed in this state, the form, content, and provisions of which have previously been approved as appropriate for the insurance of such security interest on the property of such borrower by the office of the commissioner of insurance for use in this state.

Ins 6.09(4)(a)2. 2. The solicitation or sale by an agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of any lending institution in real or personal property of such borrower if such agent knows or in the exercise of reasonable care should have known that such lending institution has refused or then refuses to accept for such purpose the policy of any insurer licensed in this state, the form, content, and provisions of which have previously been approved as appropriate for the insurance of such security interest on the property of such borrower by the office of the commissioner of insurance for use in this state.

Ins 6.09(4)(b) (b) Restriction on replacement of existing policy.

Ins 6.09(4)(b)1. 1. The solicitation or sale by a captive agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of such captive agent’s lending institution in real or personal property of the borrower if such lending institution then imposes or enforces any requirement or condition, whether or not assented thereto by a borrower, which abrogates or otherwise penalizes or restricts the right of any borrower, exercisable at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy effectively to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy approved by the office of the commissioner of insurance which affords adequate limits of insurance with respect to such property.

Ins 6.09(4)(b)2. 2. The solicitation or sale by an agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of any lending institution in real or personal property of such borrower if such agent knows or in the exercise of reasonable care should have known that such lending institution then imposes or enforces any requirement or condition, whether or not assented to by a borrower, which abrogates or otherwise penalizes or restricts the right of any borrower, exercisable at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy effectively to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy approved by the office of the commissioner of insurance which affords adequate limits of insurance with respect to such property.

Ins 6.09(5) (5) Free choice of insurance; town mutual insurers.

Ins 6.09(5)(a) (a) A person may not disapprove, under s. 628.34 (5), Stats., a policy of insurance issued by a town mutual insurer licensed in this state based wholly or partially on the ground that:

Ins 6.09(5)(a)1. 1. The insurer does not have an acceptable rating with a rating service or publication;

Ins 6.09(5)(a)2. 2. The policy of insurance is assessable; or

Ins 6.09(5)(a)3. 3. The financial condition of the insurer is unacceptable, unless the condition constitutes a violation of s. Ins 13.06 or 13.09.

Ins 6.09(5)(b) (b) A person may disapprove a policy issued by a town mutual insurer based wholly or partially on the ground that it does not have a mortgagee clause in the form permitted under s. Ins 13.04 (7) (b).

Ins 6.09(6) (6) Nonapplication. The provisions of this rule shall not apply to renewal of any policy of insurance where the obligation of the borrower to procure insurance for the security interest of the lending institution accrued prior to the effective date of this rule.

Ins 6.09 History History: Cr. Register, December, 1968, No. 156, eff. 1-1-69; am. (1), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (1) and (2) (e), eff. 6-22-76; am. (1) and (2) (e), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (e), Register, March, 1979, No. 279, eff. 4-1-79; renum. (5) to be (6), cr. (5), Register, May, 1986, No. 365, eff. 6-1-86.

Ins 6.10 Ins 6.10 Property and casualty premium restrictions.

Ins 6.10(1) (1) Purpose. This section requires insurers who may return a premium that is less than the pro rata unearned premium to disclose this to the insured. This section also establishes prohibitions concerning specified practices relating to premiums. This section implements and interprets ss. 227.10 (1), 601.01 (2), 625.13 (1), 628.34 (1), (3), (11), and (12), 631.20 and 631.36 (2), Stats.

Ins 6.10(2) (2) Scope. This section applies to all lines or classes of insurance classified as property and casualty insurance in s. Ins 6.75 (2), except lines or classes of insurance providing disability insurance under s. Ins 6.75 (2) (c) and (k).

Ins 6.10(3) (3) Definitions. In this section:

Ins 6.10(3)(a) (a) “Pro rata unearned premium” means the pro rata portion of the written premium covering the unexpired portion of the policy term for which the written premium has been charged by the insurer to the policyholder.

Ins 6.10(3)(b) (b) “Written premium” means the entire amount of premium charged a policyholder for the term of the policy.

Ins 6.10(4) (4) Premium in excess of pro rata earned premium: filing, restrictions, disclosures.

Ins 6.10(4)(a) (a) An insurer shall file with the commissioner in accordance with s. 625.13, Stats., and s. Ins 6.06 any schedule of return premium applicable in the event of policy cancellation wherein the return of premium is less than the pro rata unearned premium for that policy form. The rate filing shall include the basis of the premium calculation in the event of a policy cancellation.

Ins 6.10(4)(b) (b) Subject to par. (c), in any policy under which an insurer may return a premium that is less than the pro rata unearned premium, the insurer shall provide the policyholder with a separate written notice that the policyholder may pay a substantial penalty if the policyholder cancels the policy prior to its expiration date. No insurer may return a premium that is less than the pro rata unearned premium until at least 10 days after the insurer mails or delivers this written notice to the policyholder.

Ins 6.10(4)(c) (c) Notwithstanding pars. (a) and (b), no insurer may return to the policyholder a premium that is less than the pro rata unearned premium if the insurer initiates cancellation or for a cancellation due to the nonpayment of premium.

Ins 6.10(5) (5) Miscellaneous premium prohibition. No insurer may initiate cancellation of one policy solely to apply the pro rata unearned premium of that policy to the balance due on another policy.

Ins 6.10 History History: Cr. Register, August, 1989, No. 404, eff. 10-1-89; am. (2), Register, April, 1992, No. 436, eff. 5-1-92.

Ins 6.11 Ins 6.11 Insurance claim settlement practices.

Ins 6.11(1) (1) Purpose. This rule is to promote the fair and equitable treatment of policyholders, claimants and insurers by defining certain claim adjustment practices which are considered to be unfair methods and practices in the business of insurance. The rule implements and interprets applicable statutes including but not limited to ss. 601.04 (3), 601.01 (2), and 645.41 (3), Stats.

Ins 6.11(2) (2) Scope. This rule applies to the kinds of insurance identified in s. Ins 6.75, transacted by insurers as defined in s. 600.03 (27), Stats., and nonprofit service plans subject to ch. 613, Stats.

Ins 6.11(3) (3) Unfair claim settlement practices.

Ins 6.11(3)(a) (a) Any of the following acts, if committed by any person without just cause and performed with such frequency as to indicate general business practice, shall constitute unfair methods and practices in the business of insurance:

Ins 6.11(3)(a)1. 1. Failure to promptly acknowledge pertinent communications with respect to claims arising under insurance policies.

Ins 6.11(3)(a)2. 2. Failure to initiate and conclude a claims investigation with all reasonable dispatch.

Ins 6.11(3)(a)3. 3. Failure to promptly provide necessary claims forms, instructions and reasonable assistance to insureds and claimants under its insurance policies.

Ins 6.11(3)(a)4. 4. Failure to attempt in good faith to effectuate fair and equitable settlement of claims submitted in which liability has become reasonably clear.

Ins 6.11(3)(a)5. 5. Failure upon request of a claimant, to promptly provide a reasonable explanation of the basis in the policy contract or applicable law for denial of a claim or for the offer of a compromise settlement.

Ins 6.11(3)(a)6. 6. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.

Ins 6.11(3)(a)7. 7. Failure to affirm or deny coverage of claims within a reasonable time after proof of loss has been completed.

Ins 6.11(3)(a)8. 8. Failure to settle a claim under one portion of the policy coverage in order to influence a settlement under another portion of the policy coverage.

Ins 6.11(3)(a)9. 9. Except as may be otherwise provided in the policy contract, the failure to offer settlement under applicable first party coverage on the basis that responsibility for payment should be assumed by other persons or insurers.

Ins 6.11(3)(a)10. 10. Compelling insureds and claimants to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them.

Ins 6.11(3)(a)11. 11. Refusing payment of claims solely on the basis of the insured’s request to do so without making an independent evaluation of the insured’s liability based upon all available information.

Ins 6.11(3)(a)12. 12. Failure, where appropriate, to make use of arbitration procedures authorized or permitted under any insurance policy.

Ins 6.11(3)(a)13. 13. Adopting or making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration.

Ins 6.11(3)(b) (b) Any of the following acts committed by any person shall constitute unfair methods and practices in the business of insurance:

Ins 6.11(3)(b)1. 1. Knowingly misrepresenting to claimants pertinent facts or policy provisions relating to coverages involved.

Ins 6.11(3)(b)2. 2. Failure to make provision for adequate claims handling personnel, systems and procedures to effectively service claims in this state incurred under insurance coverage issued or delivered in this state.

Ins 6.11(3)(b)3. 3. Failure to adopt reasonable standards for investigation of claims arising under its insurance policies.

Ins 6.11(3)(b)4. 4. Violating the requirements established in s. 632.85, Stats.

Ins 6.11(4) (4) Prompt defined. Except where a different period is specified by statute or rule and except for good cause shown, the terms “prompt” and “promptly” as used in this rule shall mean responsive action within 10 consecutive days from receipt of a communication concerning a claim.

Ins 6.11(5) (5) Penalty. The commission of any of the acts listed in sub. (3) (a) or (b) 2. or 3. shall subject the person to revocation of license to transact insurance in this state. Violations of this rule or any order issued thereunder shall subject the person violating the same to s. 601.64, Stats.

Ins 6.11 History History: Cr. Register, October, 1971, No. 190, eff. 11-1-71; am. (1), Register, September, 1973, No. 213, eff. 10-1-73; am. (2), Register, February, 1974, No. 218, eff. 3-1-74; emerg. am. (2), eff. 6-22-76; am. (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436, eff. 5-1-92; cr. (3) (b) 4., Register, February, 2000, No. 530, eff. 3-1-00.

Ins 6.12 Ins 6.12 Qualification of actuaries.

Ins 6.12(1) (1) Purpose.

Ins 6.12(1)(a) (a) The purpose of this rule is to protect the interests of insurers, insureds, insurance beneficiaries, insurance claimants, insurance company stockholders, and trustees, employers, covered employees, retired employees and terminated employees of employee welfare funds by establishing requirements for use of the terms actuary or actuarial. This rule interprets and implements ss. 601.41, 601.42, 601.43, Stats., and ch. 628, Stats.

Ins 6.12(1)(b) (b) It is not the purpose of this rule to require any insurer or rate service organization to employ an actuary except as may be otherwise required by statute or other administrative rule, nor does this rule require that filings under ch. 625, Stats., be prepared or submitted by a qualified actuary. Further, this rule is not intended to prohibit the strictly internal use by insurers of job titles containing the term actuary.

Ins 6.12(2) (2) Scope. This rule shall apply to all reports or representations subject to supervision by the commissioner of insurance.

Ins 6.12(3) (3) Signature as an actuary. No document filed with this office which requires the signature of an actuary will be accepted unless the person signing as an actuary is a member of the American academy of actuaries or has otherwise demonstrated actuarial competence to the commissioner.

Ins 6.12(4) (4) Actuarial representation. No person in any representation made to the public or to this office in respect to any matter subject to this rule shall use the word actuary or actuarial to indicate a degree of professional competence unless that person is a member of the American academy of actuaries or has otherwise demonstrated actuarial competence to the commissioner.

Ins 6.12(5) (5) Level of competency. No member of the American academy of actuaries or a person who has otherwise demonstrated actuarial competence to the commissioner shall use the word actuary or actuarial in any presentation subject to this rule unless he or she is qualified to give the actuarial advice required or requested.

Ins 6.12(6) (6) Penalty. Violations of this rule or any order issued thereunder shall subject the person to s. 601.64, Stats., or other applicable statute.

Ins 6.12 History History: Cr. Register, October, 1971, No. 190, eff. 11-1-71; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (3) to (5) made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; corrections in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610.

Ins 6.13 Ins 6.13 Open records; privileged or confidential records.

Ins 6.13(1) (1) Records of the office of the commissioner of insurance are subject to subch. II of ch. 19, Stats., and are open to inspection as required under subch. II of ch. 19, Stats.

Ins 6.13(2) (2) The office of the commissioner may withhold and retain as confidential any record which may be withheld and retained as confidential under subch. II of ch. 19, Stats., including, but not limited to, a record which may be withheld or which is privileged under any law or the rules of evidence, as attorney-work product under the rules of civil procedure, as attorney-client privileged material under s. 905.03, Stats., as a medical record under ss. 146.81 to 146.84, Stats., or as privileged under s. 601.465, Stats.

Ins 6.13(3) (3) The office, under s. 601.465, Stats., may refuse to disclose and prevent any person from disclosing, in response to a request for production, deposition, subpoena, or otherwise, information obtained from the National Association of Insurance Commissioners or another state’s insurance department under pledge of confidentiality or for the purpose of conducting an investigation or examination or obtained, produced or created in the course of an inquiry under s. 601.42, Stats., or examination under s. 601.43, Stats. This privilege applies to information obtained, produced or created before or after the effective date of s. 601.465, Stats., and regardless of whether an inquiry, investigation or examination has been concluded, except it does not apply to a document which is an adopted examination report.

Ins 6.13 History History: Cr. Register, June, 1973, No. 210, eff. 7-1-73; am. (3) (b), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (2) (a), (4) and (5), made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; r. and recr. Register, July, 1993, No. 451, eff. 8-1-93.

Ins 6.17 Ins 6.17 Regulation of surplus lines insurance.

Ins 6.17(1) (1) Purpose. This rule implements and interprets ss. 601.42, 601.72, 601.73, 618.41 and 618.43, Stats., for the purpose of facilitating the regulation of surplus lines insurance business in this state.

Ins 6.17(2) (2) Prohibited placement. No licensed surplus lines agent may place contracts of insurance with any unauthorized insurer:

Ins 6.17(2)(a) (a) For the classes of insurance specified by s. Ins 6.75 (2) (h), (i) and (k), and

Ins 6.17(2)(b) (b) For any kind of insurance not specifically authorized by any of the other paragraphs of s. Ins 6.75.

Ins 6.17(3) (3) Responsibilities of surplus lines agent. Every licensed surplus lines agent who procures surplus lines insurance shall:

Ins 6.17(3)(a) (a) Forward promptly to the policyholder a completed copy of a Surplus Lines Insurance Proposal in a form substantially as in Appendix 1 to this rule.

Ins 6.17(3)(b) (b) When applicable, forward promptly to the policyholder a notice that the unauthorized insurer with which the insurance is to be placed is not on the list of unauthorized nondomestic insurers which the commissioner believes to be reliable and solid, along with notice of any other deficiencies of the insurer of which the agent has knowledge.

Ins 6.17(3)(c) (c) Keep in his or her office in this state a full and true record of each surplus lines insurance contract procured by him or her, evidenced by a copy of the daily report or other documents to show at least the following information:

Ins 6.17(3)(c)1. 1. Amount of the insurance and perils insured against;

Ins 6.17(3)(c)2. 2. Brief general description of property insured and where located;

Ins 6.17(3)(c)3. 3. Gross premium charged;

Ins 6.17(3)(c)4. 4. Return premium paid, if any;

Ins 6.17(3)(c)5. 5. Rate of premium charged upon the several items of property;