Detailed explanation of statutory authority for the rule (including the statutory citation and language):
The statutory authority for this rule is specifically Wis. Stat. § 623.02 that provides when promulgating accounting rules, the commissioner shall consider recommendations made by the NAIC. Wis. Stats. §§ 623.03 and 623.04, grant the commissioner authority to promulgate rules specifying how insurers should account for assets and liabilities which would include liquidity stress tests and group capital calculations. Wis. Stats. § 617.11 (1) grants the commissioner the authority to promulgate rules specifying the timing of reports on affiliates including requiring periodic reporting and the form and procedure for filing reports. Additionally, the commissioner has general rule-making authority under Wis. Stat. §§ 601.41 and 227.11 (2) (a). Estimate of amount of time that state employees will spend developing the rule and of other resources necessary to develop the rule:
200 hours and no other resources are necessary to develop the rule.
List with description of all entities that may be affected by the proposed rule:
The update of Wisconsin’s standards to match those in other states will create uniformity. The revisions will apply to insures who belong to an insurance holding company system.
Summary and preliminary comparison with any existing or proposed federal regulation that is intended to address the activities to be regulated by the proposed rule:
Currently, there are no existing federal regulations intended to address this area. The United States has entered into a covered agreement with the European Union and United Kingdom which could preempt state law if a state does not enact its requirements by September of 2022. There is also a provision where federal preemption could occur if substantial progress has not been made by September of 2021.
Anticipated economic impact of implementing the rule (note if the rule is likely to have a significant economic impact on small businesses):
The anticipated economic impact of implementing the rule is minimal as the proposed rule will primarily add an additional filing requirement to insurers that belong to a holding company system.
