SECTION 15. Ins 8.59 (4) is repealed.
SECTION 16. Ins 8.60 (1) (a), (d), and (e) are repealed.
SECTION 17. Ins 8.61 (2) and (6) are repealed.
SECTION 18. Ins 8.68 (3) (b) and (c) are repealed.
SECTION 19. Ins 8.68 (4) is amended to read:
Ins 8.68 (4) A small employer insurer shall provide written notice of the information described under sub. (3) (a) to (c) to each small employer who applies for a basic health benefit plan within 10 working days of the date the small employer insurer receives the small employer's application. The small employer insurer shall provide the notice directly or through an authorized insurance intermediary. The small employer insurer shall provide the employer with sufficient copies of the notice to distribute to each eligible employee and shall ask the employer to promptly distribute a copy to each eligible employee. The small employer insurer shall make reasonable efforts to obtain, within 20 business days after the small employer insurer issues a basic health benefit plan to a small employer, certification that the small employer promptly distributed the notice to all eligible employees.
Section 4.
SECTION 20. Ins 9.40 (1) (intro.) and (b) are consolidated, renumbered Ins 9.40 (1) and amended to read:
Ins. 9.40 Required quality assurance and remedial action plans. (1) In this section: (b) “Quality “quality assurance” means the measurement and evaluation of the quality and outcomes of medical care provided.
SECTION 21. Ins 9.40 (1) (a), (5), and (6) are repealed.
SECTION 22. Ins 16.01 (4) (c) is amended to read:
Ins 16.01 (4) (c) In the event that the sum of a year's billings under this rule exceeds differs from the actual cost of administering the insurer examinations program, the amount of the excess difference shall be applied as an offset adjustment to the estimated cost for the next year’s examinations program.
SECTION 23. Ins. 16.01 (6) (a) is amended to read:
Ins. 16.01 (6) (a) The amount to be billed each domestic insurer subject to this rule shall be determined so that the billing is equal to a constant of proportionality times the square root of the insurer’s premiums, where the constant of proportionality is determined each year so that the total of all billings equals the estimated cost of administering the insurer examinations program described in sub. (4). The formula is stated algebraically as follows:
A = kxP k x √P
where A = Annual Amount to be billed each domestic insurer
k = Constant of Proportionality
P = Net Premiums Earned or Premiums and Annuity Considerations Reported in the applicable annual statement, for business of the second calendar year preceding the year of billing.
SECTION 24. Ins 16.01 (7) (a) and (b) are amended to read:
Ins 16.01 (7) (a) The maximum annual billing for any insurer shall be 1% of net premiums earned or premiums and annuity considerations reported in the applicable annual statement listed in s. Ins. 7.02 for business of the second calendar year preceding the year of billing, subject to a requirement that the minimum bill is $1000 for domestic insurers located primarily out of state for examination purposes and $300 for all other domestic insurers.
(b) The annual bill for any insurer billed the previous year shall not exceed 1.2 times the immediately preceding year’s bill adjusted for premium growth by multiplying by a factor equal to the second prior year’s premium divided by the third prior year's premium. In calculating this adjustment, the year a billing is due shall be considered the current year. This paragraph does not apply if the second prior year’s premium is less than the third prior year’s premium.
SECTION 25. Ins 16.01 (7) (c) is created to read:
Ins 16.01 (7) (c) Notwithstanding the limitations in pars. (a) and (b), the minimum annual bill shall be $10,000 for domestic insurers located primarily out of state for examination purposes and $3,000 for all other domestic insurers. This paragraph first applies to annual billings beginning February 1, 2018.
SECTION 26. Ins 50.01 (1r) is amended to read:
Ins 50.01 (1r) “Audit committee” means a committee or equivalent body established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or group of insurers, and audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers may be deemed to be the audit committee for one or more of the controlled insurers solely for the purposes of this chapter at the election of the controlling person under s. Ins 50.15 (6). If an audit committee is not designated by the insurer, the insurer's entire board of directors shall constitute the audit committee. SECTION 27. Ins 50.01 (6g) is created to read:
Ins 50.01 (6g) “Internal audit function” means a person or persons who provide independent, objective, and reasonable assurance designed to add value and improve an organization’s operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
SECTION 28. Ins 50.14 (2) is amended to read:
Ins 50.14 (2) The commissioner may photocopy obtain copies of work papers and retain the copies. If copies of work papers are requested in electronic format, the electronic copies must be as fully functional as the original documents. Password protection of the storage medium used to transmit electronic work papers is acceptable in order to securely transfer electronic work papers to the commissioner. Passwords on individual electronic work papers, or passwords that disable features of individual electronic work papers, are not permitted. All working papers and communications obtained by the commissioner under this section may be treated by the commissioner as are confidential under s. 601.465, Stats. SECTION 29. Ins 50.15 (2m) is created to read:
Ins 50.15 (2m) The audit committee shall be responsible for overseeing the insurer’s internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by s. Ins 50.155. SECTION 30. Ins 50.155 and is created to read:
Ins 50.155 Internal audit function requirements. (1) An insurer is exempt from the requirements of this section if both of the following conditions are true:
(a) The insurer has total annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000.
(b) The insurer is a member of a group of insurers and the group has total annual direct written and unaffiliated assumed premiums, including international direct and assumed premiums but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000.
(2) An insurer or group of insurers shall establish an internal audit function providing independent, objective, and reasonable assurance to the audit committee and insurer management regarding the insurer’s governance, risk management, and internal controls. This assurance shall be provided by performing general and specific audits, reviews, and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations.
(3) In order to ensure that internal auditors remain objective, the internal audit function must be organizationally independent. Specifically, the internal audit function will not defer ultimate judgment on audit matters to others, and the insurer or group of insurers shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships.
(4) The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit function’s independence or effectiveness, material findings from completed audits, and the appropriateness of corrective actions implemented by management as a result of audit findings.
(5) If an insurer is a member of an insurance holding company system, as defined in s. Ins 40.01 (6), or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level, or the individual legal entity level. SECTION 31. Ins 50.18 (8) is created to read:
Ins 50.18 (8) The requirements of s. Ins 50.155 first apply on January 1, 2018. If an insurer or group of insurers that was exempt under s. Ins 50.155 (1) no longer qualifies for such exemption, it shall have one year following the year the threshold is exceeded to comply with the internal audit requirements. SECTION 32. Effective Date. These changes will take effect on the first day of the month after publication in the Wisconsin Administrative Register, as provided in s. 227.22 (2) (intro.), Stats. Dated at Madison, Wisconsin, this 18th day of December, 2017.
