2003 WISCONSIN ACT 261
An Act to repeal 617.225 (5), 632.435 (12), chapter 641, 646.01 (1) (b) 9. a., 646.01 (1) (b) 9. b., 646.01 (1) (b) 9. c., 646.01 (1) (b) 9. d., 646.31 (2) (b) 1., 646.31 (2) (b) 2. b., 646.31 (2) (b) 3., 646.31 (3), 646.31 (5), 646.35 (2), 646.51 (2), 646.51 (3) (b) and 646.73; to renumber 646.51 (3) (a) (title); to renumber and amend 601.41 (4) (a), 611.26 (4), 612.22 (3), 646.01 (1) (b) 9. (intro.), 646.11 (1), 646.31 (10), 646.31 (13), 646.33 (1), 646.35 (3) (intro.) (except 646.35 (3) (title)), 646.35 (3) (a), 646.35 (3) (b), 646.35 (3) (c), 646.35 (4), 646.51 (1), 646.51 (3) (a) 1., 646.51 (3) (a) 2. and 646.51 (4); to consolidate, renumber and amend 646.31 (2) (b) 2. (intro.) and a.; to amend 600.03 (21), 601.31 (1) (k) (intro.), 601.465 (3) (intro.), 601.64 (1), 609.98 (1), 609.98 (4) (a), 609.98 (4) (b), 611.56 (1), 611.56 (2), 612.22 (title), 612.22 (1), 612.22 (4), 612.22 (6), 617.225 (1), 632.435 (1) (intro.), 632.435 (1) (a), 632.435 (1) (b), 632.435 (5), 645.58 (1) (intro.), 646.12 (2) (d), 646.12 (2) (f) 2., 646.12 (2) (f) 3., 646.12 (4), 646.13 (title), 646.13 (1) (intro.), 646.13 (1) (b), 646.13 (2) (intro.), 646.13 (2) (b), 646.13 (2) (c), 646.13 (2) (d), 646.13 (3) (intro.), 646.13 (3) (a), 646.13 (3) (b), 646.13 (3) (c) (intro.), 646.13 (3) (c) 2., 646.13 (4), 646.15 (title), 646.15 (1) (a) (intro.), 646.15 (1) (a) 1., 646.15 (1) (a) 2., 646.15 (1) (a) 4., 646.21 (2), 646.31 (2) (a) 1., 646.31 (2) (a) 2., 646.31 (2) (f) (title), 646.31 (2) (f) 2., 646.31 (6) (a), 646.31 (6) (b), 646.31 (7), 646.31 (8), 646.31 (9) (a), 646.31 (9) (b), 646.31 (9) (c), 646.31 (9) (d), 646.31 (11), 646.32 (1), 646.325 (1), 646.325 (2) (intro.), 646.325 (2) (a) (intro.), 646.325 (2) (b), 646.33 (2), 646.33 (3), 646.35 (3) (title), 646.35 (5), 646.35 (6) (a), 646.35 (6) (b), 646.35 (6) (bm), 646.35 (6) (c) (intro.), 646.35 (6) (c) 1. (intro.), 646.35 (6) (c) 1. b., 646.35 (6) (c) 2. (intro.), 646.35 (6) (c) 2. b., 646.51 (3) (c), 646.51 (5), 646.51 (6), 646.51 (7) (a), 646.51 (8), 646.51 (9) (b) 1., 646.51 (9) (b) 2., 646.60 (1) (a) and 646.61 (2); to repeal and recreate 632.435 (4), 646.01 (1) (b) 1. and 646.01 (1) (b) 11.; and to create 601.31 (1) (tc), 601.41 (4) (a) 1., 601.41 (4) (a) 2., 611.26 (4) (a), 611.26 (4) (b), 612.13 (1m), 612.22 (3) (b), 628.347, 646.01 (1) (a) 2. k., 646.01 (1) (a) 2. L., 646.01 (1) (b) 11m., 646.01 (1) (b) 15., 646.01 (1) (b) 16., 646.01 (1) (b) 17., 646.01 (1) (b) 18., 646.03 (1m), 646.03 (2n), 646.03 (2p), 646.03 (4), 646.03 (5), 646.11 (1) (d), 646.11 (1) (e), 646.13 (2) (g), 646.16, 646.31 (1) (d) 10. and 11., 646.31 (2) (g), 646.31 (9) (cm), 646.31 (10) (b), 646.31 (13) (b), 646.31 (13) (c), 646.31 (13) (d), 646.33 (1) (b), (c) and (d), 646.33 (2m) (b), 646.35 (4) (b), 646.35 (7), 646.35 (8), 646.35 (9), 646.35 (10), 646.51 (1c), 646.51 (3) (am) 2. and 646.51 (4) (a), (b) and (d) of the statutes; relating to: requirements for recommendations made by insurers and insurance intermediaries to senior consumers in annuity transactions; committees of the board of directors of domestic stock and mutual corporations; annuity minimum nonforfeiture amount; merger of town mutual and domestic mutual insurance corporation into a town mutual; the insurance security fund; other miscellaneous changes to the insurance provisions; and granting rule-making authority.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
261,1
Section
1. 600.03 (21) of the statutes is amended to read:
600.03 (21) "Form" means a policy, group certificate, or application prepared for general use and does not include one specially prepared for use in an individual case. See also "policy".
261,2
Section
2. 601.31 (1) (k) (intro.) of the statutes is amended to read:
601.31 (1) (k) (intro.) For filing an annual statement
, except as provided in s. 641.13:
261,3
Section
3. 601.31 (1) (tc) of the statutes is created to read:
601.31 (1) (tc) For each annual listing by the commissioner for surplus lines insurance under s. 618.41 (6) (d), $500.
261,4
Section
4. 601.41 (4) (a) of the statutes is renumbered 601.41 (4) (a) (intro.) and amended to read:
601.41 (4) (a) (intro.) The commissioner shall issue such prohibitory, mandatory, and other orders as are necessary to secure compliance with the law. An order requiring remedial measures or restitution may include any of the following:
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Section
5. 601.41 (4) (a) 1. of the statutes is created to read:
601.41 (4) (a) 1. Remedial measures or restitution under s. 628.347 (5).
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6. 601.41 (4) (a) 2. of the statutes is created to read:
601.41 (4) (a) 2. Remedial measures or restitution to enforce s. 611.72 or ch. 617, including seizure or sequestering of voting securities of an insurer owned directly or indirectly by a person who has acquired or who is proposing to acquire voting securities in violation of s. 611.72 or ch. 617.
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Section
7. 601.465 (3) (intro.) of the statutes is amended to read:
601.465 (3) (intro.) Testimony, reports, records, communications, and information that are obtained by the office from, or provided by the office to, any of the following, under a pledge of confidentiality or for the purpose of assisting in the conduct of an investigation or examination:
261,8
Section
8. 601.64 (1) of the statutes is amended to read:
601.64 (1) Injunctions and restraining orders. The commissioner may commence an action in circuit court in the name of the state to restrain by temporary or permanent injunction or by temporary restraining order any violation of chs. 600 to 655, s. 149.13 or 149.144, any rule promulgated under chs. 600 to 655 or any order issued under s. 601.41 (4). Except as provided in s. 641.20, the The commissioner need not show irreparable harm or lack of an adequate remedy at law in an action commenced under this subsection.
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Section
9. 609.98 (1) of the statutes is amended to read:
609.98 (1) Definition. In this section, "premiums" has the meaning given under s. 646.51 (3) (a) 1 (1c) (c).
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Section
10. 609.98 (4) (a) of the statutes is amended to read:
609.98 (4) (a) To pay an assessment under s. 646.51 (3) (a) or (b) (am).
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Section
11. 609.98 (4) (b) of the statutes is amended to read:
609.98 (4) (b) To the extent that the amount on deposit exceeds 1% of premiums written in this state by the health maintenance organization insurer in the preceding calendar year and the deposit is not necessary to pay an assessment under s. 646.51 (3) (a) or (b)
(am).
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Section
12. 611.26 (4) of the statutes is renumbered 611.26 (4) (intro.) and amended to read:
611.26 (4) Other subsidiaries. (intro.) An insurance corporation may form or acquire other subsidiaries than those under subs. (1) to (3). The investment in such subsidiaries may be counted toward satisfaction of the compulsory surplus requirement of s. 623.11 and the security surplus standard of s. 623.12 to the extent that the investment is a part of the leeway investments of s. 620.22 (9) for the first $200,000,000 of assets or to the extent that the investment is within the limitations under s. 620.23 (2) (a) and (b) for other assets. The commissioner may limit investment in subsidiaries under this subsection by rule or order. Unless approved by the commissioner, an insurance corporation may not do any of the following:
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Section
13. 611.26 (4) (a) of the statutes is created to read:
611.26 (4) (a) Invest in a subsidiary more than 10 percent of its assets or 50 percent of its capital and surplus, whichever is less.
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Section
14. 611.26 (4) (b) of the statutes is created to read:
611.26 (4) (b) Invest in a subsidiary to the extent that the insurer's capital and surplus with regard to policyholders will not be reasonable in relation to the insurer's outstanding liabilities or adequate to meet the insurer's financial needs.
261,15
Section
15. 611.56 (1) of the statutes is amended to read:
611.56 (1) Appointment. If the articles or bylaws of a corporation so provide, the board by resolution adopted by a majority of the full board may designate one or more committees, each consisting of at least 3 or more directors serving at the pleasure of the board. The board may designate one or more directors as alternate members of any committee to substitute for any absent member at any meeting of the committee. Any committee under this section may include one or more nonvoting members who are not directors. The designation of a committee and delegation of authority to it shall not relieve the board or any director of any responsibility imposed by law.
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Section
16. 611.56 (2) of the statutes is amended to read:
611.56 (2) Delegation; major committees. When the board is not in session, a committee satisfying all of the requirements for the composition of a board under s. 611.51 (2) to (4) may exercise any of the powers of the board in the management of the business and affairs of the corporation, including action under ss. 611.60 and 611.61, to the extent authorized in the resolution or in the articles or bylaws; except that any such committee may be composed of include 7 or more directors if the corporation has 9 or more directors.
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Section
17. 612.13 (1m) of the statutes is created to read:
612.13 (1m) Inside directors. (a) Beginning 2 years after the effective date of this paragraph .... [revisor inserts date], all of the following apply:
1. If a town mutual has fewer than 9 directors, no more than one director may be an employee or representative of the town mutual.
2. Employees and representatives of a town mutual may not constitute a majority of its board.
(b) Notwithstanding par. (a), the commissioner may allow a town mutual an extension of up to one year to come into compliance with the requirements under par. (a).
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Section
18. 612.22 (title) of the statutes is amended to read:
612.22 (title) Merger of town mutuals into and mutual insurance corporations.
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Section
19. 612.22 (1) of the statutes is amended to read:
612.22 (1) Conditions for merger. One or more town mutuals may merge with a single domestic mutual under ch. 611. The If the domestic mutual is nonassessable, the surviving corporation shall be a mutual under ch. 611. If the domestic mutual is assessable, the surviving corporation may be either a mutual under ch. 611 or a town mutual under this chapter.
261,20
Section
20. 612.22 (3) of the statutes is renumbered 612.22 (3) (a) and amended to read:
612.22 (3) (a) Each of the participating corporations shall file with the commissioner for approval a copy of the resolution and any explanatory material proposed to be issued to the members, together with so much of the information under s. 611.13 (2) or 612.02 (4), whichever is appropriate, for the surviving or new corporation as the commissioner reasonably requires. The commissioner shall approve the plan unless he or she finds, after a hearing, that it would be contrary to the law, or that the surviving or new corporation would not satisfy the requirements for a certificate of authority under s. 611.20 or 612.02 (6), whichever is appropriate, or that the plan would be contrary to the interest of insureds or of the public.
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Section
21. 612.22 (3) (b) of the statutes is created to read:
612.22 (3) (b) If the surviving corporation will be a town mutual, the plan filed with the commissioner under par. (a) shall include a time schedule for bringing the surviving corporation into compliance with this chapter. The commissioner may approve a reasonable time schedule that does not exceed 3 years.
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Section
22. 612.22 (4) of the statutes is amended to read:
612.22 (4) Approval by members of the
town mutuals. After being approved by the commissioner under sub. (3), the plan shall be submitted to the members of the participating town mutuals for their approval. The members of each town participating mutual shall vote separately.
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Section
23. 612.22 (6) of the statutes is amended to read:
612.22 (6) Reports to commissioner. Each participating town mutual shall file with the commissioner a copy of the resolution adopted under sub. (4), stating the number of members entitled to vote, the number of members voting, and the number of votes cast in favor of the plan, stating separately in each case the mail votes and the votes cast in person.
261,24
Section
24. 617.225 (1) of the statutes is amended to read:
617.225 (1) Except as provided under sub. (5), a A domestic insurer may not pay an extraordinary dividend to its shareholders and an affiliate of the insurer may not accept an extraordinary dividend unless the insurer reports the extraordinary dividend to the commissioner at least 30 days before payment and the commissioner does not disapprove the extraordinary dividend within that period.
261,25
Section
25. 617.225 (5) of the statutes is repealed.
261,26
Section
26. 628.347 of the statutes is created to read:
628.347 Suitability of annuity sales to senior consumers. (1) Definitions. In this section:
(a) "Annuity" means a fixed or variable annuity that is individually solicited, whether the product is classified as individual or group.
(b) "Recommendation" means advice provided by an insurance intermediary, or an insurer if no intermediary is involved, to an individual senior consumer that results in the purchase or exchange of an annuity in accordance with that advice.
(c) "Senior consumer" means a person who is 65 years of age or older. The term includes any joint owner of an annuity who is less than 65 years of age if at least one joint owner is 65 years of age or older, and any prospective joint purchaser of an annuity who is less than 65 years of age if at least one prospective joint purchaser is 65 years of age or older.
(2) Duties of insurers and insurance intermediaries with regard to recommendations. (a) Except as provided in par. (c), an insurance intermediary, or insurer if no intermediary is involved, may not recommend to a senior consumer the purchase or exchange of an annuity if the recommendation results in an insurance transaction or series of insurance transactions unless the intermediary or insurer has reasonable grounds to believe that the recommendation is suitable for the senior consumer on the basis of facts disclosed by the senior consumer as to his or her investments, other insurance products, and financial situation and needs.
(b) Before making a recommendation described in par. (a), an insurance intermediary, or insurer if no intermediary is involved, shall make reasonable efforts to obtain information concerning all of the following:
1. The senior consumer's financial status.
2. The senior consumer's tax status.
3. The senior consumer's investment objectives.
