SB533: Bill Text

LRB-1379/4

PJK:skg:jlb

1995 - 1996 LEGISLATURE

1995 Senate BILL 533

February 7, 1996 - Introduced by Senators Schultz and Rude, cosponsored by Representatives Johnsrud and Baldus. Referred to Committee on Insurance.

SB533,1,8 An Act to renumber 623.06 (1); to renumber and amend 623.06 (5) and 646.31 (2) (a); to amend 601.31 (1) (p), 601.72 (1) (intro.), 601.72 (2), 601.72 (3), 601.73 (1) (intro.), 601.73 (2) (c), 623.06 (6), 645.08 (2) and 646.51 (6); to repeal and recreate 601.72 and 601.73 (1) (intro.); and to create 601.715, 623.06 (1c), 623.06 (1m), 623.06 (5) (b), 646.01 (1) (a) 2. i. and 646.31 (2) (f) of the statutes; relating to: accreditation for certain insurers, immunity for acts related to reg ulation of insurer solvency, claims under the insurance security fund, service of process on insurers and granting rule-making authority.

Analysis by the Legislative Reference Bureau

Current law requires the commissioner of insurance (commissioner) to value annually the reserves held in support of the outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing busi ness in this state to determine an insurance company's financial soundness. This bill requires every life insurance company doing business in this state to submit annual ly to the commissioner an actuary's opinion as to whether the company's reserves are computed accurately and are in compliance with requirements under law. With some exceptions specified by the commissioner by rule, each opinion submitted must also contain an opinion as to whether the company's reserves are adequate to cover the company's anticipated obligations under its policies and contracts. The commission er may by rule provide for a transition period for an insurance company to establish higher reserves if the actuary determines that the company's reserves are not ade quate. In support of the opinion regarding the adequacy of the reserves, the actuary must prepare a memorandum, which must be submitted to the commissioner if the commissioner so requests. The bill provides the actuary with immunity from liability for any act or omission with respect to an opinion, and also sets out requirements re garding the confidentiality of any memorandum or other material submitted to the commissioner in connection with an opinion.

Current law also provides for the creation of the insurance security fund and its administration by a board of directors that includes the attorney general, the state treasurer and the commissioner. The fund is composed primarily of assess ments paid by insurers. The purpose of the fund is to pay specified classes of claims against an insurer that is in liquidation. The bill creates another class of claims that may be paid from the fund: a claim under a life or disability insurance policy or annu ity contract that is made by a resident or nonresident beneficiary, assignee or payee of a policyholder or certificate holder who is a resident of this state or who, if a nonres ident, would have had a claim under the policy or annuity contract that would have been payable from the fund.

Current law also provides for immunity from civil suit for the state, commis sioner, special deputy commissioner, rehabilitator or liquidator, their employes or agents, and the insurance security fund and its agents, employes, directors and con tributor insurers for acts or omissions in the performance of their powers and duties under the portion of the statutes that regulates the rehabilitation and liquidation of insurers. The bill adds immunity for the same entities and persons for acts or omis sions in the performance of their powers and duties relating to regulation of capital or solvency of insurers.

Under current law, every insurer is required to maintain in this state a regis tered agent for service of process. The registered agent must be an individual who is a resident of this state, a domestic insurer or a nondomestic insurer authorized to do business in this state. If an insurer fails to maintain an agent or if the agent can not be found, substituted service may be made on the commissioner or, if the legal proceeding is brought by the state, on the secretary of state. The commissioner or secretary of state must send a copy of the process by certified mail to the person served at the person's last-known principal place of business, residence or post-of fice address. The fee for service on the commissioner is $10.

This bill requires every insurer authorized to do business in this state (autho rized insurer) to maintain a registered agent for service of process. The registered agent must be a natural person who resides in this state, a domestic corporation, non stock corporation or limited liability company incorporated or organized in this state with a business office in this state or a foreign corporation or limited liability compa ny authorized to transact business in this state with a business office in this state. The bill specifies how an authorized insurer may change its registered agent, how a registered agent may change its registered agent address and how a registered agent may resign. The bill provides that substituted service may be made on the com missioner, by the same procedure as under current law, if an authorized insurer has no registered agent or if the registered agent cannot with reasonable diligence be served. If substituted service is made on the commissioner, an affidavit must be at tached to the process served attesting that the authorized insurer has no registered agent or that the registered agent could not with reasonable diligence be served. The bill also provides that the commissioner is by law constituted attorney to receive ser vice (substituted service) of summons, notices, orders, pleadings and all other legal process for all authorized insurers, surplus lines insurers, unauthorized insurers, risk purchasing groups and nonresident intermediaries and specifies the action or inaction on the part of each of those entities which serves to authorize substituted service on the commissioner on behalf of the entity.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB533, s. 1 Section 1. 601.31 (1) (p) of the statutes, as affected by 1995 Wisconsin Act 27, is amended to read:

SB533,3,4 601.31 (1) (p) For substituted service of process on the commissioner under s. 601.72 (2), $10.

SB533, s. 2 Section 2. 601.715 of the statutes is created to read:

SB533,3,10 601.715 Registered agent for service of process. (1) Every authorized in surer shall continuously maintain in this state a registered agent for service of pro cess, notice or demand on the insurer. The authorized insurer shall file the name and address of the registered agent with the commissioner. The registered agent may be any of the following:

SB533,3,11 (a) A natural person who resides in this state.

SB533,3,13 (b) A domestic corporation, nonstock corporation or limited liability company incorporated or organized in this state with a business office in this state.

SB533,3,15 (c) A foreign corporation or limited liability company authorized to transact business in this state with a business office in this state.

SB533,3,18 (2) (a) An authorized insurer may change its registered agent by delivering to the commissioner for filing a statement of registered agent change that is signed by an officer of the insurer and that includes all of the following information:

SB533,4,1 1. The name and home office address of the authorized insurer.

SB533,4,2 2. The name of the registered agent, as changed.

SB533,4,3 3. The complete address of the registered agent, as changed.

SB533,4,4 4. Any other information that the commissioner may require.

SB533,4,7 (b) An authorized insurer may change its registered agent no more than one time per year. Any change of registered agent is effective on January 1 of the year following the delivery of the statement under par. (a).

SB533,4,9 (3) A registered agent of an authorized insurer may change its registered agent address by doing all of the following:

SB533,4,11 (a) Notifying in writing the authorized insurer for which the registered agent is acting.

SB533,4,13 (b) Delivering to the commissioner for filing a statement that includes all of the following:

SB533,4,15 1. The name and home office address of the authorized insurer for which the registered agent is acting.

SB533,4,16 2. The complete new registered agent address.

SB533,4,17 3. An attached copy of the notice under par. (a).

SB533,4,20 (4) (a) A registered agent of an authorized insurer may resign by signing and delivering to the commissioner for filing a statement of resignation that includes all of the following information:

SB533,4,22 1. The name and home office address of the authorized insurer for which the registered agent is acting.

SB533,4,23 2. The name of the registered agent.

SB533,4,24 3. A statement that the registered agent resigns.

SB533,5,2 (b) After filing the statement, the commissioner shall mail a copy to the autho rized insurer under par. (a) 1.

SB533,5,3 (c) The resignation is effective on the earlier of the following:

SB533,5,5 1. Sixty days after the commissioner receives the statement of resignation for filing.

SB533,5,7 2. The date on which the appointment of a successor registered agent is effec tive.

SB533,5,14 (5) If an authorized insurer has no registered agent for service of process in this state or if the registered agent cannot with reasonable diligence be served, substi tuted service may be made on the commissioner under ss. 601.72 and 601.73. If sub stituted service is made on the commissioner, an affidavit attesting that the autho rized insurer has no registered agent or that the registered agent could not with reasonable diligence be served shall be attached to the process, notice or demand that is served.

SB533,5,17 (6) Except as provided in sub. (5), this section does not limit or affect the right to serve summons, notice, orders, pleadings, demands or other process upon an au thorized insurer in any other manner provided by law.

SB533, s. 3 Section 3. 601.72 of the statutes, as affected by 1995 Wisconsin Act 27, is re pealed and recreated to read:

SB533,6,2 601.72 Service of process through state officer. (1) General. Under pro cedures specified in s. 601.73, the commissioner is by law constituted attorney, except in cases in which the proceeding is to be brought by the state against an insurer or intermediary other than a risk retention group or risk purchasing group, in which event the secretary of state is by law constituted attorney, to receive service of sum mons, notices, orders, pleadings and all other legal process relating to any court or administrative agency in this state for all of the following:

SB533,6,6 (a) Authorized insurers. All insurers authorized to do business in this state, while authorized to do business in this state, and thereafter in any proceeding aris ing from or related to any transaction having any connection with this state, provided the requirements under s. 601.715 (5) are satisfied.

SB533,6,9 (b) Surplus lines insurers. All insurers as to any proceeding arising out of any contract that is permitted by s. 618.41, or out of any certificate, cover note or other confirmation of such insurance.

SB533,6,12 (c) Unauthorized insurers. All insurers or other persons doing an unauthorized insurance business in this state, including but not limited to risk purchasing groups, as to any proceeding arising out of the unauthorized transaction.