Rule-Making Notices (Hearing Notices)

Hearing Information

Date:   Monday, April 18, 2005

Time:   10:00 a.m., or as soon thereafter as the matter may be reached.

Place:   OCI, Room 223

  125 South Webster St 2nd Floor

  Madison, WI

Written comments or comments submitted through the Wisconsin Administrative Rule website at: https://adminrules.wisconsin.gov on the proposed rule will be considered. The deadline for submitting comments is 4:00 p.m. on the 7th day after the date for the hearing stated in this Notice of Hearing.

Written comments should be sent to:

Fred Nepple

Legal Unit - OCI Rule Comment for Rule Ins 3.09 (19)

Office of the Commissioner of Insurance

PO Box 7873

Madison WI 53707-7873

Analysis Prepared by the Office of the Commissioner of Insurance (OCI)

Statutes interpreted

Sections 600.01, 601.42, 611.19 (1), 611.24, 618.21, 623.02, 623.03, 623.04, 623.11, 627.05, 628.34 (12), and ch. 617 Stats.

Statutory authority

Sections 601.41 (3), 601.42, 611.19 (1), 618.21, 623.02, 623.04, 623.11, 627.05, 628.34 (12), and ch. 617, Stats.

Explanation of the OCI's authority to promulgate the proposed rule under these statutes:

The proposed rule modifies the current restriction on issuance of mortgage guaranty insurance to or for the benefit of affiliates, and is authorized as governing an unfair trade practice under s. 628.34 (12), Wis. Stats., and as addressing financial risk to the insurer governed by statutes allowing the commissioner to establish standards and reporting requirements, including ss. under 601.42, 611.19 (1), 618.21, 623.02, 623.04, 623.11, 627.05, and for affiliate transactions under ch. 617, Stats.

Related Statutes or rules

None

The plain language analysis and summary of the proposed rule

Under current rules a mortgage guaranty insurer may not directly or indirectly issue coverage for mortgages originated by an affiliate, unless the insurer is no more than 50% owned or controlled by the affiliate. The proposed rule would permit the insurer to issue coverage for mortgages originated by the affiliate but only subject to the same underwriting standards as are applied to non-affiliates. The proposed rule requires the insurer to annually file an officer's certification of compliance.

Summary of and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule

None

Comparison of similar rules in adjacent states as found by OCI

Iowa: None

Illinois: Section 50 ILAC 202.60 (e) of Illinois insurance regulations prohibits a mortgage insurer from covering loans originated by a lender if the lender or its affiliate owns an equity interest in the mortgage insurer.

Minnesota: None

Michigan: None

A summary of the factual data and analytical methodologies that OCI used in support of the proposed rule and how any related findings support the regulatory approach chosen for the proposed rule

The proposed rule is based on the experience of the Office regulating and examining mortgage guaranty insurers, and the expertise of the financial analysts and examiners responsible for their regulation, including the application of the existing exception in s. Ins 3.09 (19) (c), Wis. Adm. Code.

Any analysis and supporting documentation that OCI used in support of OCI's determination of the rule's effect on small businesses under s. 227.114:

The Office reviewed the annual financial reports of licensed mortgage guaranty insurers. There are no such insurers that are small businesses.

If these changes may have a significant fiscal effect on the private sector, the anticipated costs that will be incurred by private sector in complying with the rule:

There is no significant fiscal effect on the private sector. The proposed rule will establish an exception from an existing prohibition. The limited reporting requirement included will not impose any significant cost beyond the existing reporting requirements.

A description of the Effect on Small Business:

This rule will have no effect on small businesses.

Agency contact person:

A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the WEB sites at: http://oci.wi.gov/ocirules.htm

or by contacting Inger Williams, OCI Services Section, at:

Phone:   [phone]

Email:   [e-mail]

Address:   125 South Webster St – 2nd Floor

  Madison WI 53702

Mail:   PO Box 7873, Madison WI 53707-7873

Place where comments are to be submitted and deadline for submission

The deadline for submitting comments is 4:00 p.m. on the 7th day after the date for the hearing stated in the Notice of Hearing.

Mailing address:

Fred Nepple

Legal Unit - OCI Rule Comment for Rule Ins 3.09 (19)

Office of the Commissioner of Insurance

PO Box 7873

Madison WI 53707-7873

Street address:

Fred Nepple

Legal Unit - OCI Rule Comment for Rule Ins 3.09 (19)

Office of the Commissioner of Insurance

125 South Webster St – 2nd Floor

Madison WI 53702

WEB Site: http://oci.wi.gov/ocirules.htm

Summary of Proposed Rule and Fiscal Estimate

For a summary of the rule see the analysis contained in the attached proposed rulemaking order. There will be no state or local government fiscal effect. The full text of the proposed changes, a summary of the changes and the fiscal estimate are attached to this Notice of Hearing.

Initial Regulatory Flexibility Analysis

This rule does not impose any additional requirements on small businesses.

OCI Small Business Regulatory Coordinator

The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266- 7843 or at email address [e-mail]

Contact Person

A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet WEB site at http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, Services Section, OCI, at: [e-mail], [phone], 125 South Webster Street – 2nd Floor, Madison WI or PO Box 7873, Madison WI 53707-7873.