ARTICLES OF INCORPORATION AND BYLAWS
It is hereby mutually understood and agreed by and between this company and the insured, that this policy is made and accepted with reference to the Articles of Incorporation and Bylaws, which are hereby declared to be part of this contract. This provision applies whether or not the Articles of Incorporation and Bylaws are included in this policy.
NOTICE
The insured is notified that by virtue of this Policy he or she is a member of the Insurance Company, of _________________, County, Wisconsin, and that the annual meetings of said company are held in_______________, County, Wisconsin, on the (date) in (month) of each year at _____o'clock__M.
Ins 13.04(5)
(5)
Permissible variations. Provisions of a town mutual policy may be so arranged in the policy as to provide for convenience in its preparation and issuance. Blank spaces may be changed or altered, spaces may be provided for the listing of rates and premiums for coverages insured under the policy or by riders or by endorsements attached to or printed thereon, and spaces may be utilized for reference to forms and for listing the amount of insurance, provisions as to coinsurance, provisions as to mortgage clause, descriptions and locations of the insured property and other matters advisable and necessary to indicate a delineation of the insurance effective under the contract, and other data as may be included for duplication of daily reports for office records.
Ins 13.04(6)
(6)
Forms and endorsements. Riders, forms and endorsements may be attached to the town mutual policy to include perils in addition to fire and lightning and for other necessary purposes. Except when in contradiction with ch.
612, Stats., the contracts, endorsements, and other forms of town mutuals should be similar to like forms of insurers subject to chs.
631 and
632, Stats.
Ins 13.04(7)
(7)
Mortgagee clause. If a loss under a policy issued by a town mutual insurer is payable to a mortgagee who is not an insured, the mortgagee clause may provide:
Ins 13.04(7)(b)
(b) That the mortgagee is not liable for any premium or assessment, regardless of whether coverage has been extended after payment of a premium or assessment by the mortgagee.
Ins 13.04 History
History: Cr.
Register, August, 1974, No. 224, eff. 9-1-74; emerg. am. (4) (a) and (c), eff. 6-22-76; am. (4) (a) and (c),
Register, September, 1976, No. 249, eff. 10-1-76; am. (3), r. and recr. (4) and (5), cr. (6),
Register, April, 1982, No. 316, eff. 5-1-82; cr. (7),
Register, May, 1986, No. 365, eff. 6-1-86.
Ins 13.05
Ins 13.05
Accounting records, accounting controls and reports. Ins 13.05(1)(1)
Purpose. This rule is intended to implement and interpret s.
601.41, Stats., for the purpose of setting minimum standards and techniques for accounting and reporting of data relating to company financial transactions and other operations.
Ins 13.05(2)
(2)
Scope. This rule shall apply to all town mutual insurers organized or operating under ch.
612, Stats.
Ins 13.05(3)
(3)
Accounting records. The following journals, ledgers and subsidiary records or similar records from which the data indicated may be obtained shall be maintained:
Ins 13.05(3)(a)
(a) Policy Register: A register or other records which shall contain the policy number, policyholder's name, effective date of policy, term of policy, risk in force, amount of risk in force reinsured, premium amount, policy fee, reinsurance premium, and provision for miscellaneous data.
Ins 13.05(3)(b)
(b) Cash Receipts Journal: A journal which shall contain the date, payor, amount received, identification, and reference to the general ledger account and amount affected. All cash received by the company shall be recorded in the journal.
Ins 13.05(3)(c)
(c) Cash Disbursements Journal: A journal which shall contain the date, payee, check number, amount of check, and a reference to the general ledger account and amount affected. All cash disbursed by the company shall be recorded in the journal.
Ins 13.05(3)(d)
(d) General Journal: A journal for recording entries for all transactions affecting ledger items, which are not recorded in the cash receipts journal or cash disbursements journal. The general journal shall contain the date of the transaction, an explanation, the ledger account affected, and the amount of the transaction.
Ins 13.05(3)(e)
(e) General Ledger: A ledger which shall have an account for each asset and liability, surplus, income and expense items of the company. Each account shall contain an account title and/or number, a date for each transaction, a description, debit amounts, credit amounts and an account balance.
Ins 13.05(3)(f)
(f) Loss Claim Register: A register for recording all claims filed with the company. It shall list all claims in claim number order and contain the claimant's and policyholder's name, policy number, date of loss, date that loss was reported to the company, cause of the loss, estimated amount of the loss, and the date the claim was settled and the amount of loss payments, if any. Claims closed without payment should be so noted.
Ins 13.05(4)
(4)
Accounting controls. The following minimum controls of records and data handling should be maintained:
Ins 13.05(4)(a)
(a) Cash Receipts: All cash receipts shall be recorded on a cash receipts journal. The cash receipts and cash funds of the company shall at all times be kept separate and distinct from any personal, agency or other funds. All cash received shall be deposited in the bank intact, in the company's name. A duplicate deposit ticket shall be retained in the company's office for each deposit. All checks in payment of premiums or received by the company for other purposes shall be endorsed for deposit immediately upon receipt. All cash receipts shall be deposited at least weekly. All cash deposits shall be prepared and made, whenever possible, by some individual other than the one who records the receipts or reconciles the bank accounts.
Ins 13.05(4)(b)
(b) Cash Disbursements: All disbursements except those made from the petty cash fund shall be made by check. All checks issued by the company shall be recorded in chronological and numerical order in a cash disbursements journal. Each disbursement shall be supported and explained in the records of the company. All checks used for disbursements shall be pre-numbered and properly accounted for. All checks shall be mailed or delivered immediately after being signed. All disbursements over a specified amount shall be approved by more than one officer, director or employee of the company. Whenever possible, a person other than the person maintaining the company's cash disbursement journal or reconciling the bank accounts shall sign the checks.
Ins 13.05(4)(c)
(c) Petty Cash Fund: A petty cash fund may be maintained for the payment of small bills or for making change. Each disbursement shall be supported by a signed voucher or receipted invoice. At any time the total of the cash, checks and paid vouchers in the fund shall exactly equal the total of the fund as originally set up. The petty cash fund shall be reimbursed at regular intervals and always on the last business day of each year.
Ins 13.05(4)(d)
(d) Reconciliation of Bank Accounts: Bank statements shall be obtained from each of the banks in which the company maintains checking accounts at the end of each calendar month. The balance appearing on the bank statement shall be reconciled with the cash balance appearing on the company's records at the end of each month. Whenever possible, bank reconciliations should be made or reviewed by an individual other than the individuals preparing and making bank deposits, recording income and disbursements, and individuals signing company checks.
Ins 13.05(4)(e)
(e) Loss Claims: All claims reported to the company shall be assigned a claim number when reported. Claims in excess of a specified amount shall be approved by more than one officer, director or employee of the company. All claims shall be adequately documented so that amounts for settlement and coverage can be verified. The claim file shall contain the reason for denial if the claim is denied.
Ins 13.05(4)(f)
(f) General Internal Controls: Non-negotiable evidences of company investments such as registered bonds, certificates of deposits, notes, etc., shall be maintained to ensure their safekeeping with adequate safety controls. Negotiable evidences of company investments shall be maintained in a safety deposit box in a bank, or under a safekeeping agreement with a bank or banking and trust company pursuant to s.
610.23, Stats. Access to a company safety deposit box containing negotiable securities shall require the presence and signature of at least 2 officers, directors or employees of the company. Company accounting records shall be maintained in such detail that verification can be made to source documents supporting each transaction.
Ins 13.05(5)
(5)
Financial statements. Financial statements shall be prepared by the secretary and treasurer of the company showing the financial condition of the company as of December 31, of each year or whenever requested by the commissioner. The report shall be prepared as prescribed by the commissioner.
Ins 13.05(6)
(6)
Fidelity bond requirements. All insurers subject to this rule shall procure and maintain in force a fidelity bond or honesty insurance as a guaranty against financial loss caused by employee dishonesty. The bond shall cover all fraudulent or dishonest acts, including larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction or willful application, committed by employees acting alone or in collusion. The bond shall cover all officers, directors and employees having direct access to the company's assets and with responsibility for the handling and processing of income of the company and disbursements of the company. A blanket bond covering all officers, directors and employees satisfies this requirement. The minimum amount of the bond shall be determined on the basis of total admitted assets, plus gross income of the company as set forth in the following schedule:
- See PDF for table 
Ins 13.05 History
History: Cr.
Register, August, 1974, No. 224, eff. 9-1-74; reprinted to correct error,
Register, March, 1980, No. 291; am. (3)(e),
Register, April, 1982, No. 316, eff. 5-1-82; am. (3) (a) to (f), (4) and (6),
Register, July, 1991, No. 427, eff. 8-1-91; am. (6),
Register, June, 2001, No. 546, eff. 1-1-02.
Ins 13.06(1)(1)
Purpose. This rule implements and interprets ss.
612.31 and
612.33, Stats., for the purpose of setting minimum surplus requirements as a condition for the transaction of specified types of business.
Ins 13.06(2)
(2)
Scope. This rule shall apply to all town mutual insurers subject to ch.
612, Stats.
Ins 13.06(3)(a)(a) If a town mutual insurer retains any portion of a risk covered by nonproperty insurance, the town mutual shall obtain reinsurance on that nonproperty business with an insurer authorized to do business in this state. The maximum aggregate liability for incurred losses on nonproperty coverage retained by a town mutual insurer for any calendar year or contract year may not exceed the lesser of $200,000 or 20% of its surplus as of the preceding December 31.
Ins 13.06(3)(b)
(b) A town mutual may retain nonproperty insurance coverage not to exceed a proportional share of each limit of liability as shown in the following schedule:
- See PDF for table Ins 13.06(4)
(4)
Surplus requirements. A town mutual insurer shall maintain a surplus of the greater of $200,000 or 20% of the net written premiums and assessments in the 12-month period ending on or not more than 60 days before the date as of which the calculation is made. Every town mutual shall achieve and maintain this minimum surplus by December 31, 2001.
Ins 13.06(5)
(5)
Individual circumstances. The commissioner may take into consideration the experience, management and any other significant information about an individual town mutual insurer in determining whether to approve or disapprove town mutual property and nonproperty reinsurance and in setting of minimum surplus requirements.
Ins 13.06 History
History: Cr.
Register, December, 1974, No. 228, eff. 1-1-75; cr. (4) to (6),
Register, July, 1984, No. 343, eff. 8-1-84; am. (3) and (5), r. and recr. (6), cr. (3) (b) and (c),
Register, December, 1984, No. 348, eff. 1-1-85; r. (3) (a) and (5), renum. (3) (b) and (c) to be (3) (a) and (b), and (6) to be (5), and am. (4),
Register, June, 2001, No. 546, eff. 1-1-02; except (4), eff. 7-1-01.
Ins 13.08
Ins 13.08
Valuation of liabilities. Ins 13.08(1)(1)
Purpose. This rule implements and interprets s.
623.04, Stats., for the purpose of determining liabilities for financial statements filed with the commissioner.
Ins 13.08(2)
(2)
Scope. This rule shall apply to all town mutual insurers subject to ch.
612, Stats.
Ins 13.08(3)
(3)
Unearned premium reserve. The financial statements of town mutuals which charge advance premiums shall show as a liability an unearned premium reserve. The unearned premium reserve must be calculated on all advance premiums, on the original or full-term premium basis, less advance premiums on risks assumed by other insurers under reinsurance contract. The minimum unearned premium reserves shall be calculated on the premiums in force as follows:
Ins 13.08(3)(a)
(a) One year policies or policies on which premiums are paid annually.
Ins 13.08(3)(b)
(b) Two year policies on which the entire premium is paid in advance.
Ins 13.08(3)(c)
(c) Three year policies on which entire premium is paid in advance.
Ins 13.08(4)
(4) The unearned premium reserve shall be the sum of the amounts as calculated above. Any other method of calculating the unearned premium reserve must be approved by the commissioner.
Ins 13.08 History
History: Cr.
Register, December, 1974, No. 228, eff. 1-1-75; am. (3) (intro.),
Register, April, 1982, No. 316, eff. 5-1-82; r. (3) (d) and (e),
Register, June, 2001, No. 546, eff. 1-1-02;
CR 22-076: am. (3) (intro.) Register July 2023 No. 811, eff. 8-1-23.
Ins 13.09(1)(1)
Purpose. This rule implements and interprets s.
612.33, Stats., for the purpose of setting rules or guidelines for permitted and prohibited reinsurance and required reinsurance.
Ins 13.09(2)
(2)
Scope. This rule shall apply to all town mutual insurers subject to ch.
612, Stats.
Ins 13.09(3)
(3)
Definitions. For the purpose of this section only:
Ins 13.09(3)(a)
(a) ``Maximum attachment point" means the amount of losses, expressed as a percentage of net premiums written, which constitutes the limit of the town mutual's retention under the aggregate excess of loss reinsurance required by sub.
(4).
Ins 13.09(3)(b)
(b) ``Net premiums written" means gross premiums written less premiums ceded for reinsurance inuring to the benefit of an aggregate excess of loss reinsurance contract. Reinsurance premiums ceded for aggregate excess of loss reinsurance, reinsurance premiums paid or recovered related to coverage for other years, and dividends paid to policyholders shall not be considered in determining net premiums written.
Ins 13.09(4)(a)(a) Aggregate excess of loss reinsurance. Every town mutual shall obtain and continuously maintain unlimited aggregate excess of loss reinsurance for all risks covered by property and nonproperty insurance that is not otherwise ceded under another reinsurance contract. The aggregate excess of loss reinsurance shall provide a maximum attachment point expressed as a percentage of net premiums written, which is based on the relationship of the town mutual's prior year-end surplus to prior year-end gross premiums written, as set forth in the following schedule:
-
See PDF for table Ins 13.09(4)(a)2.
2. For purposes of this section 13.09, all calculations shall be based on the final annual statement filed with the commissioner.
Ins 13.09(4)(a)3.
3. The aggregate excess of loss reinsurance contract shall warrant by specific reference that it complies with this section.
Ins 13.09(4)(a)4.
4. Any town mutual that fails to comply, or has reason to believe that it is in imminent risk of failure to comply, with this section after its effective date shall notify the commissioner within 5 days of such failure or awareness.
Ins 13.09(4)(b)
(b) Reinsurance of nonproperty insurance. Any town mutual which provides nonproperty insurance coverage shall obtain reinsurance as required by s.
612.33 (2) (b), Stats.
Ins 13.09 History
History: Cr.
Register, December, 1974, No. 228, eff. 1-1-75; r. and recr.,
Register, June, 2001, No. 546, eff. 1-1-02.
