Date of enactment: April 6, 2012
2011 Senate Bill 378 Date of publication*: April 19, 2012
* Section 991.11, Wisconsin Statutes 2009-10 : Effective date of acts. "Every act and every portion of an act enacted by the legislature over the governor's partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication as designated" by the secretary of state [the date of publication may not be more than 10 working days after the date of enactment].
2011 WISCONSIN ACT 224
An Act to repeal subchapter III (title) of chapter 618 [precedes 618.39] and 618.43 (1) (b); to renumber and amend 646.31 (4) (a); to amend 618.41 (6m), 618.41 (8) (a) (intro.), 618.41 (8) (c), 618.41 (9) (a), 618.43 (1) (a) (intro.), 618.43 (1) (a) 3., 618.43 (1) (d), 618.43 (6), 628.03 (1), 628.05 (1), 628.34 (1) (a), 631.01 (4m), 631.20 (1) (a), 631.20 (1) (c) 9., 631.20 (1m) (a) (intro.), 631.85, 632.32 (2) (ac), 632.32 (4) (a) (intro.), 632.32 (4) (bc), 632.32 (4) (d), 632.32 (4m) (a), 632.32 (4m) (e), 646.01 (2) (b), 646.31 (1) (intro.), 646.35 (1) (b) and 646.35 (6) (b); and to create subchapter III (title) of chapter 618 [precedes 618.40], 618.40, 618.41 (12), 618.416, 618.43 (1) (bc), 631.20 (7), 632.32 (2) (ab), 646.03 (4m) and 646.31 (4) (ag) of the statutes; relating to: surplus lines insurance, insurance security fund, automobile insurance, and granting rule-making authority.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
224,1 Section 1. Subchapter III (title) of chapter 618 [precedes 618.39] of the statutes is repealed.
224,2 Section 2. Subchapter III (title) of chapter 618 [precedes 618.40] of the statutes is created to read:
chapter 618
Subchapter III
Permissible business by
unauthorized insurers
224,3 Section 3. 618.40 of the statutes is created to read:
618.40 Definitions. In this subchapter, unless the context requires otherwise:
(1) "Affiliated group" means all persons that control, are controlled by, or are under common control with, an insured.
(2) "Authorized insurer" means an insurer that is licensed, or authorized, to transact the business of insurance under the law of the home state.
(3) "Control" means, with respect to a person having control over another person, that the person does any of the following:
(a) Directly or indirectly, or acting through one or more other persons, owns, controls, or has the power to vote 25 percent or more of any class of voting securities of a person.
(b) Controls in any manner the election of a majority of the directors or trustees of a person.
(4) (a) Except as provided in par. (b), "home state" means, with respect to an insured, one of the following:
1. The state in which the insured maintains its principal place of business or, in the case of an insured who is an individual, the individual's principal residence.
2. If 100 percent of the insured risk is located outside of the state referred to in subd. 1., the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated.
(b) If more than one insured from an affiliated group are named insureds on a single surplus lines insurance contract, "home state" means the state, as determined under par. (a), of the member of the affiliated group that has the largest percentage of premium attributed to it under the insurance contract.
(5) "Premium tax" means, with respect to unauthorized insurance, any tax, fee, assessment, or other charge imposed by this state directly or indirectly based on any payment made as consideration for an insurance contract for such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance.
(6) "Principal place of business" means, with respect to determining the home state of an insured, the state where the insured maintains its headquarters and where the insured's high-level officers direct, control, and coordinate the business activities of the insured.
(7) "Principal residence" means, with respect to determining the home state of an insured who is an individual, the state where the individual resides for the greatest number of days during a calendar year.
(8) "State" includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.
(9) "Surplus lines broker" means a person that is licensed in a state to sell, solicit, or negotiate insurance on properties, risks, or exposures located or to be performed in that state with unauthorized insurers.
(10) "Surplus lines insurance" means any insurance to which all of the following apply:
(a) This state is the home state of the insured.
(b) The insurance is permitted under this subchapter to be placed through a surplus lines agent or broker with an unauthorized insurer eligible to accept the insurance.
(11) "Unauthorized insurance" means any insurance permitted in a state to be placed directly or through a surplus lines broker with an unauthorized insurer eligible to accept such insurance.
224,4 Section 4. 618.41 (6m) of the statutes is amended to read:
618.41 (6m) Rustproofing warranties insurance. An insurer issuing a policy of insurance under this section to cover a warranty, as defined in s. 100.205 (1) (g), shall comply with s. 632.18 and the policy shall be on a form approved by the commissioner under s. 631.20.
224,5 Section 5. 618.41 (8) (a) (intro.) of the statutes is amended to read:
618.41 (8) (a) Responsibility. (intro.) An agent or broker, or any other person who offers liability insurance coverage under a group policy, may not place insurance under this section with, or and a person who offers liability insurance coverage under a group policy may not solicit the purchase of coverage under a group policy issued by, an unauthorized insurer if all of the following exist:
224,6 Section 6. 618.41 (8) (c) of the statutes is amended to read:
618.41 (8) (c) Financially sound. To be financially sound for purposes of par. (a) 1., an insurer must be able to satisfy standards comparable to those applied under the laws of this state to authorized insurers, unless this state is the insured's home state, in which case s. 618.416 applies.
224,7 Section 7. 618.41 (9) (a) of the statutes is amended to read:
618.41 (9) (a) Required information. Every new or renewal insurance policy procured and delivered under this section shall bear the name and address of the insurance agent or broker who procured it and, except for ocean marine insurance, shall have stamped or affixed upon it the following: "This insurance contract is with an insurer which has not obtained a certificate of authority to transact a regular insurance business in the state of Wisconsin, and is issued and delivered as a surplus line coverage pursuant to s. 618.41 of the Wisconsin Statutes. Section 618.43 (1), Wisconsin Statutes, requires payment by the policyholder of 3 percent tax on gross premium." Every ocean marine insurance policy shall have stamped or affixed upon it the above statement except that the tax shall be one-half of one percent on gross premium.
224,8 Section 8. 618.41 (12) of the statutes is created to read:
618.41 (12) Application when this state is not the insured's home state. The placement of insurance under this section is not subject to subs. (4), (7m), (8), (9), or (10) if this state is not the insured's home state and the placement complies with the laws of the insured's home state.
224,9 Section 9. 618.416 of the statutes is created to read:
618.416 Qualification for placement of surplus lines insurance with an unauthorized insurer. An intermediary may not place surplus lines insurance under s. 618.41 with an unauthorized insurer if this state is the home state of the proposed insured, unless at the time of placement all of the following apply to the unauthorized insurer:
(1) If the unauthorized insurer is domiciled in a United States jurisdiction, the insurer satisfies all of the following:
(a) In its domiciliary jurisdiction, the unauthorized insurer is authorized to write the type of insurance to be placed with the insurer.
(b) Either the unauthorized insurer has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction that equals the greater of either the minimum capital and surplus requirements under the laws of this state or $15,000,000 or the commissioner affirmatively finds that the unauthorized insurer's capital and surplus are acceptable. The commissioner's finding shall be based on factors that include quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability, and company record and reputation within the industry. In no event may the commissioner find that the unauthorized insurer's capital and surplus are acceptable if the unauthorized insurer's capital and surplus are less than $4,500,000.
(c) The unauthorized insurer provides to the commissioner, no more than 6 months after the close of the period reported on, a certified copy of its current annual statement that is filed and approved by the regulatory authority in the unauthorized insurer's domicile and certified by an accounting or auditing firm licensed in the jurisdiction of the unauthorized insurer's domicile.
(2) If the unauthorized insurer is an alien insurer, the insurer is listed on the quarterly listing of alien insurers maintained by the international insurers department of the National Association of Insurance Commissioners and meets additional requirements regarding the use of the list established by rule of the commissioner.
224,10 Section 10. 618.43 (1) (a) (intro.) of the statutes is amended to read:
618.43 (1) (a) (intro.) Except as provided in Subject to par. (b) (bc), insurers, agents, brokers, and policyholders are liable, as provided in sub. (2), for a premium tax of 3% 3 percent of gross premiums charged for insurance, excluding annuities, if any of the following are is satisfied:
224,11 Section 11. 618.43 (1) (a) 3. of the statutes is amended to read:
618.43 (1) (a) 3. The insurance is transacted by an unauthorized insurer for a risk purchasing group for coverage of risks which reside or are otherwise located in this state.
224,12 Section 12. 618.43 (1) (b) of the statutes is repealed.
224,13 Section 13. 618.43 (1) (bc) of the statutes is created to read:
618.43 (1) (bc) Notwithstanding any other provision of this section, with respect to premiums charged on policies issued or renewed on or after July 21, 2011, for insurance to which par. (a) applies, the tax under par. (a) is required only if the home state of the insured is this state, and it shall be levied on the entire gross premium charged, including premium attributable to those portions of the risk located outside of this state.
224,14 Section 14. 618.43 (1) (d) of the statutes is amended to read:
618.43 (1) (d) Any insurance business transacted in violation of the law is subject to a premium tax of 5% 5 percent of gross premiums charged for the insurance, except that for ocean marine insurance the tax is 2% of gross premiums charged for the insurance.
224,15 Section 15. 618.43 (6) of the statutes is amended to read:
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