There are no known existing or proposed federal regulations that are intended to address the activities regulated by this rule.
Surrounding states regulations
Although there are a number of governmental retirement plans in Illinois, Iowa, Minnesota and Michigan, their administrative rules are not directly relevant to interpreting the Wisconsin statutes governing the Wisconsin Retirement System. Governmental plans differ in the degree to which the terms of the plan are established by enabling legislation or left to subsequent administrative rulemaking or other means.
Illinois. There appear to be no Illinois administrative rules relating to the belated reporting of the severance or termination of employment of a person who subsequently dies, and the computation of death benefits from a public employee pension system.
A rule adopted by the State Employees Retirement System, Ill. Admin. Code title 80 § 1540.255 e), does not deal with the computation of a death benefit, but does provide that if the member has elected to use payroll deductions for the purchase of permissive service credits or reinstating past service credits, the deductions end upon the earliest of several alternative events, including the employee's death or termination of employment.
For purposes of making distributions, the rules governing the State of Illinois Employees Deferred Compensation Plan treat the employee's severance from employment or death as two distinctly different events. Death is not included in the definition of severance from employment. See Ill. Admin. Code title 80 §§ 2700.200 and 2700.700 b) 1) and 2).
Iowa. There appear to be no Iowa administrative rules relating to the belated reporting of the severance or termination of employment of a person who subsequently dies, and the computation of death benefits from a public employee pension system.
Michigan. There appear to be no Michigan administrative rules relating to the belated reporting of the severance or termination of employment of a person who subsequently dies, and the computation of death benefits from a public employee pension system.
Minnesota. There appear to be no Minnesota administrative rules relating to the belated reporting of the severance or termination of employment of a person who subsequently dies, and the computation of death benefits from a public employee pension system.
Factual data and analytical methodologies
The Department considered, and rejected, the alternative interpretation of the statute that would permit an employer to delay reporting a termination and thereby possibly increase the benefits payable if the former employee should die. The Department has a duty to administer benefits in accord with the laws governing the Wisconsin Retirement System. These laws include requirements for employers to make accurate, regular and timely reports to the Department concerning covered employees. The alternative interpretation would conflict with those duties by appearing to permit a delay in reporting terminations of employment. Any effort to administer such an interpretation would also likely give rise to differing treatment of similarly situated former employees. The Department has a duty to treat participants impartially within the laws governing the retirement system.
Analysis and supporting documents used to determine effect on small business
The rule can have no effect on small businesses because private employers and their employees do not participate in, and cannot be covered by, the Wisconsin Retirement System. The Wisconsin Retirement System is required to be maintained and administered as a qualified governmental plan, covering only governmental employees.
Anticipated costs incurred by private sector
None.
Effect on small business
No effect.
Agency Contact Person
Please direct any questions about the proposed rule to Robert Weber, Chief Counsel, Office of Legal Services, Department of Employee Trust Funds, P.O. Box 7931, Madison WI 53707. Telephone: (608) 266-5804. E-mail address:
rob.weber@etf.state.wi.us.
Submission of Comments
Written comments on the proposed rule may be submitted to Robert Weber, Department of Employee Trust Funds, 801 W. Badger Road, P.O. Box 7931, Madison, WI 53707-7931. Written comments must be received at the Department of Employee Trust Funds no later than 4:30 PM on Wednesday, August 15, 2007.
Initial Regulatory Flexibility Analysis
The proposed rule has no effect on small businesses.
Fiscal Estimate
The rule will have no effect on county, city, village, town, school district, technical college district or sewerage district fiscal liabilities or revenues. The rule will have no effect on state funds.
Copies of Rule
Copies of the proposed rule are available without cost from the Office of the Secretary, Department of Employee Trust Funds, P.O. Box 7931, Madison WI 53707-7931, telephone (608) 266-1071.
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN that pursuant to the authority granted under s.
601.41 (3), Stats., and the procedures set forth in under s.
227.18, Stats., the Office of the Commissioner of Insurance will hold a public hearing to consider the adoption of a proposed rule affecting s.
Ins 2.81, Wis. Adm. Code, relating to use of the 2001 CSO Preferred Class Structure Mortality Table in determining reserve liabilities.
Hearing Information
Date: August 22, 2007
Time: 10:00 a.m., or as soon thereafter as the matter
may be reached
Place: OCI, Room 227
125 South Webster St, 2nd Floor
Madison, WI
Submission of Comments
Written comments can be mailed to:
James W. Harris
Legal Unit - OCI Rule Comment for Rule Ins 281
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Written comments can be hand delivered to:
James W. Harris
Legal Unit - OCI Rule Comment for Rule Ins 281
Office of the Commissioner of Insurance
125 South Webster Street - 2nd Floor
Madison WI 53703-3474
Comments can be emailed to:
James W. Harris
Web site:
The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in this Notice of Hearing.
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
Statutes interpreted
Statutory authority
Agency authority
The proposed rule is promulgated under the commissioner's authority to prescribe valuation of reserve liabilities and accounting standards and reporting for insurers.
Related statutes or rules
The proposed rule relates to existing rules prescribing valuation of liabilities, non-forfeiture values, and actuarial reporting and analysis under ss.
601.42,
623.06 and
632.43, Stats., and ss.
Ins 2.80 and ch.
50, Wis. Adm. Code.
Plain language analysis
Existing provisions establish mortality tables to be used by insurers to calculate minimum reserves and requirements related to testing and reporting of actuarial information. The proposed rules will allow insurers, meeting prescribed conditions, to use the 2001 CSO Preferred Class Structure Mortality Table as adopted by the National Association of Insurance Commissioners (NAIC) at the September, 2006, national meeting and published in the NAIC Proceedings (Third Quarter 2006), in determining minimum reserves on policies written after January 1, 2007. The table will allow insurers to reflect differences in mortality between preferred and standard lives in establishing reserve liabilities to more precisely fit the characteristics of outstanding policies. The proposed rule will increase the ability of management and regulators to monitor financial status.
Federal regulation
There are no federal regulations which address use of mortality tables to establish reserve liabilities for insurers doing business in Wisconsin.
Surrounding states regulation
Illinois: Adoption of the NAIC model regulation permitting the recognition of preferred mortality tables for use in determining minimum reserve liabilities of insurers is under consideration.
Iowa: Iowa Adm. Code 191-94.3, permits the use for purposes of reserve valuation, under prescribed conditions, of the 2001 CSO Preferred Class Structure Mortality Table, adopting the NAIC model regulation.
Michigan: Mich. Comp. Laws, s.
500.838a, permits the use for purposes of reserve valuation, under prescribed conditions, of the 2001 CSO Preferred Class Structure Mortality Table, adopting the NAIC model regulation.
Minnesota: Minn. Stat. Ch. 61A.257, effective August 1, 2007, adopts the NAIC model regulation permitting the recognition of preferred mortality tables for use in determining minimum reserve liabilities of insurers.
Factual data and analytical methodologies
The National Association of Insurance Commissioners (NAIC) adopted a model regulation permitting the recognition of preferred mortality tables for use in determining minimum reserve liabilities at the September, 2006, national meeting and published in the NAIC proceedings (Third Quarter 2206). The model allows insurers, meeting prescribed conditions, to use the 2001 CSO Preferred Class Structure Mortality Table to reflect differences in mortality between preferred and standard lives in determining reserves to more precisely fit the characteristics of outstanding policies, and enhance the ability of insurers and regulators to monitor financial status. The proposed rule has been recommended by the NAIC and has been, or is in the process of being adopted by a significant number of states.
Analysis and supporting documentation used to determine effect on small businesses
This rule relates to insurer determination of minimum reserves, and there is no significant effect on small business.
Effect on small business
This rule will have little or 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 site at:
http://oci.wi.gov/ocirules.htm or by contacting:
Inger Williams, OCI Services Section, at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor,
Madison WI 53703-3474
Mail: PO Box 7873
Madison, WI 53707-7873
Initial Regulatory Flexibility Analysis
This rule does not impose any additional requirements on small businesses.
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address:
Eileen.Mallow@oci.state.wi.us
