AB542: Bill Text

AB542,29,4 (g) If the commission determines that any compacting state has at any time defaulted ("defaulting state") in the performance of any of its obligations or responsibilities under this compact, the bylaws, or duly promulgated rules or operating procedures, then, after notice and hearing as set forth in the bylaws, all rights, privileges, and benefits conferred by this compact on the defaulting state shall be suspended from the effective date of default as fixed by the commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities and any other grounds designated in commission rules. The commission shall immediately notify the defaulting state in writing of the defaulting state's suspension pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state shall be terminated from the compact and all rights, privileges, and benefits conferred by this compact shall be terminated from the effective date of termination.

AB542,29,8 (h) Product approvals by the commission or product self-certifications, or any advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily under par. (a).

AB542,29,10 (i) Reinstatement following termination of any compacting state requires a reenactment of the compact.

AB542,29,13 (j) The compact dissolves effective upon the date of the withdrawal or default of the compacting state that reduces membership in the compact to one compacting state.

AB542,29,17 (k) Upon the dissolution of this compact, the compact becomes null and void and shall be of no further force or effect, and the business and affairs of the commission shall be wound up and any surplus funds shall be distributed in accordance with the bylaws.

AB542,29,20 (15) Article XV - Severability and Construction. (a) The provisions of this compact shall be severable; and if any phrase, clause, sentence, or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable.

AB542,29,22 (b) The provisions of this compact shall be liberally construed to effectuate its purposes.

AB542,29,25 (16) Article XVI - Binding Effect of Compact and Other Laws. (a) Nothing herein prevents the enforcement of any other law of a compacting state, except as provided in par. (b).

AB542,30,8 (b) For any product approved by or certified to the commission, the rules, uniform standards, and any other requirements of the commission shall constitute the exclusive provisions applicable to the content, approval, and certification of such products. For advertisement that is subject to the commission's authority, any rule, uniform standard, or other requirement of the commission that governs the content of the advertisement shall constitute the exclusive provision that a commissioner may apply to the content of the advertisement. Notwithstanding the foregoing, no action taken by the commission shall abrogate or restrict any of the following:

AB542,30,9 1. The access of any person to state courts.

AB542,30,11 2. Remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the product.

AB542,30,12 3. State law relating to the construction of insurance contracts.

AB542,30,15 4. The authority of the secretary of agriculture, trade and consumer protection or the attorney general of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.

AB542,30,17 (c) All insurance products filed with individual states shall be subject to the laws of those states.

AB542,30,24 (d) All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states. All agreements between the commission and the compacting states are binding in accordance with their terms. Upon the request of a party to a conflict over the meaning or interpretation of commission actions, and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute.

AB542,31,7 (e) In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers, or jurisdiction sought to be conferred by that provision upon the commission shall be ineffective as to that compacting state, and such obligations, duties, powers, or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which such obligations, duties, powers, or jurisdiction are delegated by law in effect at the time this compact becomes effective.

AB542, s. 5 Section 5. 605.03 (1) (a) of the statutes is amended to read:

AB542,31,12 605.03 (1) (a) Mandatory coverage. The property fund shall provide protection against fire and extended coverage perils. The coverage shall be at least as favorable as that customarily provided by policies approved by filed with the commissioner for the use of private insurers in insuring comparable property.

AB542, s. 6 Section 6. 607.02 (1) of the statutes is amended to read:

AB542,31,19 607.02 (1) Types of policies permitted. Subject to sub. (2), the life fund may issue to any resident of the state any kind of life insurance with any riders or endorsements thereto that would be filed with the commissioner would approve for issuance by private insurers authorized to do a life insurance business in this state. Coverages may be combined and granted in the same policy by the life fund to the same extent as by a private life insurer.

AB542, s. 7 Section 7. 612.51 (1) of the statutes is repealed.

AB542, s. 8 Section 8. 628.347 (title) of the statutes is amended to read:

AB542,31,22 628.347 (title) Suitability of annuity sales to senior consumers.

AB542, s. 9 Section 9. 628.347 (1) (b) of the statutes is amended to read:

AB542,32,2 628.347 (1) (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.

AB542, s. 10 Section 10. 628.347 (1) (c) of the statutes is repealed.

AB542, s. 11 Section 11. 628.347 (2) (a) of the statutes is amended to read:

AB542,32,11 628.347 (2) (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.

AB542, s. 12 Section 12. 628.347 (2) (b) 1. of the statutes is amended to read:

AB542,32,13 628.347 (2) (b) 1. The senior consumer's financial status.

AB542, s. 13 Section 13. 628.347 (2) (b) 2. of the statutes is amended to read:

AB542,32,15 628.347 (2) (b) 2. The senior consumer's tax status.

AB542, s. 14 Section 14. 628.347 (2) (b) 3. of the statutes is amended to read:

AB542,32,17 628.347 (2) (b) 3. The senior consumer's investment objectives.

AB542, s. 15 Section 15. 628.347 (2) (b) 4. of the statutes is amended to read:

AB542,32,20 628.347 (2) (b) 4. Any other information that is reasonably appropriate for determining the suitability of a recommendation to the senior consumer.

AB542, s. 16 Section 16. 628.347 (2) (c) (intro.) of the statutes is amended to read:

AB542,32,24 628.347 (2) (c) (intro.) An insurance intermediary, or insurer if no intermediary is involved, has no obligation under par. (a) to a senior consumer related to a recommendation if the senior consumer does any of the following:

AB542, s. 17 Section 17. 628.347 (3) (f) 2. of the statutes is amended to read:

AB542,33,3 628.347 (3) (f) 2. Include in its system of supervision an insurance intermediary's recommendations made to senior consumers of products other than annuities offered by the insurer, general agent, or independent agency.

AB542, s. 18 Section 18. 628.347 (5) (a) of the statutes is amended to read:

AB542,33,7 628.347 (5) (a) Order an insurer to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurer or the insurer's insurance intermediary.

AB542, s. 19 Section 19. 628.347 (5) (b) of the statutes is amended to read:

AB542,33,11 628.347 (5) (b) Order an insurance intermediary to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurance intermediary.

AB542, s. 20 Section 20. 628.347 (5) (c) of the statutes is amended to read:

AB542,33,16 628.347 (5) (c) Order a general agent or independent agency that employs or contracts with an insurance intermediary to sell, or solicit the sale of, annuities to senior consumers to take reasonably appropriate corrective action for any senior consumer harmed by a violation of this section by the insurance intermediary.

AB542, s. 21 Section 21. 628.347 (6) (b) of the statutes is amended to read:

AB542,33,21 628.347 (6) (b) A penalty under par. (a) for a violation of sub. (2) (a), (b), or (d), including a forfeiture, may be reduced or eliminated to the extent provided by rule of the commissioner if corrective action is taken for the senior consumer promptly after the violation is discovered.

AB542, s. 22 Section 22. 628.347 (6) (c) of the statutes is amended to read:

AB542,34,2 628.347 (6) (c) The commissioner may promulgate rules related to the reduction or elimination of penalties for violations of this section on the basis of prompt action taken to correct any harm caused to senior consumers by the violations.

AB542, s. 23 Section 23. 628.347 (7) of the statutes is amended to read:

AB542,34,11 628.347 (7) Record keeping. An insurer and an insurance intermediary, including a general agent and an independent agency, shall maintain, or be able to make available to the commissioner, records of the information collected from a senior consumer and other information used in making a recommendation that was the basis for an insurance transaction for 6 years after the insurance transaction is completed by the insurer, except as otherwise permitted by the commissioner by rule. An insurer may, but is not required to, maintain records on behalf of an insurance intermediary, including a general agent and an independent agency.

AB542, s. 24 Section 24. 628.347 (8) (a) of the statutes is amended to read:

AB542,34,14 628.347 (8) (a) Direct response solicitations in which no recommendation is made based on information collected from the senior consumer.

AB542, s. 25 Section 25. 631.01 (4m) of the statutes is amended to read:

AB542,34,19 631.01 (4m) Rustproofing warranties insurance. An insurer issuing a policy of insurance 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.

AB542, s. 26 Section 26. 631.20 (1) (a) of the statutes is amended to read:

AB542,35,2 631.20 (1) (a) No form subject to s. 631.01 (1), except as exempted under par. (c), sub. (1g), or s. 631.01 (2) to (5) or by rule under par. (b), may be used unless it has been filed with and approved by the commissioner and unless the insurer certifies that the form complies with chs. 600 to 655 and rules promulgated under chs. 600 to 655. It is deemed approved if it is not disapproved within 30 days after filing, or within a 30-day extension of that period ordered by the commissioner prior to the expiration of the first 30 days.

AB542, s. 27 Section 27. 631.20 (1) (c) of the statutes is created to read:

AB542,35,6 631.20 (1) (c) Subject to sub. (1m), a form first used and not already filed under par. (a) on or after the effective date of this paragraph .... [revisor inserts date], is exempt from par. (a) except for any of the following:

AB542,35,7 1. A form subject to s. 655.24 (1).

AB542,35,8 2. A form for a worker's compensation policy.

AB542,35,9 3. A form for a Medicare replacement policy or a Medicare supplement policy.

AB542,35,11 4. A form for a long-term care insurance policy, including a form for a nursing home or home health care policy.

AB542,35,12 5. A form filed under ch. 149.

AB542,35,16 6. A form issued by an insurer ordered by the commissioner under s. 601.41 (4) to file forms under par. (a). The commissioner may require an insurer to file forms under par. (a) to secure compliance with the law, including if the commissioner determines that the insurer violated sub. (1m).

AB542,35,19 7. A form that includes an appraisal or arbitration provision not specifically authorized by rule. The entire form, including the appraisal or arbitration provision, is subject to par. (a).

AB542,35,20 8. A form that contains a clause subject to s. 631.21, but only as to the clause.

AB542,35,21 9. A form subject to s. 618.41 (6m).

AB542,35,22 10. A warranty contract form.

AB542,35,24 11. A form required to be filed under par. (a) by a rule promulgated by the commissioner.

AB542, s. 28 Section 28. 631.20 (1g) of the statutes is created to read:

AB542,36,5 631.20 (1g) Exempt if approved by commission. A form for a product, as defined in s. 601.58 (2) (k), that is approved by or self-certified to, and not disapproved by, the Interstate Insurance Product Regulation Commission is exempt from subs. (1) (a) and (1m) (a), unless otherwise provided by a rule promulgated by the commissioner under s. 601.58.

AB542, s. 29 Section 29. 631.20 (1m) of the statutes is created to read:

AB542,36,11 631.20 (1m) Use of certain forms. (a) Except as exempted under sub. (1g) or s. 631.01 (2) to (5) or by a rule promulgated by the commissioner, an insurer may not, on or after the effective date of this paragraph .... [revisor inserts date], use a form that is exempt from sub. (1) (a) under sub. (1) (c) unless the insurer does all of the following:

AB542,36,12 1. Files the form with the commissioner 30 days before its use.

AB542,36,14 2. Files the form in the manner and format, and with the attachments, prescribed by the commissioner.

AB542,36,17 3. Certifies as required under par. (b) that the form complies with chs. 600 to 655 and rules promulgated under chs. 600 to 655. The commissioner may require an insurer to include specific compliance certifications.

AB542,36,22 (b) An insurer shall provide the certification under par. (a) 3. in the form prescribed by the commissioner. The certification shall be executed by a person who is an officer of the insurer and who is responsible for the form that is the subject of the filing. No insurer may file, and no insurer's officer may execute, a false certification.

AB542, s. 30 Section 30. 631.20 (2) (intro.) of the statutes is amended to read:

AB542,36,25 631.20 (2) Grounds for disapproval. (intro.) The commissioner may disapprove a form under sub. (1) (a) or (3) upon a finding:

AB542, s. 31 Section 31. 631.20 (3) of the statutes is amended to read:

AB542,37,7 631.20 (3) Subsequent disapproval. Whenever the commissioner finds, after a hearing, that a form approved or deemed to be approved under sub. (1) (a) would, a form filed under sub. (1m), or a form subject to subsequent disapproval under s. 601.58 (14) should be disapproved under sub. (2) if newly filed, the commissioner may order that on or before a date not less than 30 nor more than 90 days after the order the use of the form shall be discontinued or appropriate changes shall be made.

AB542, s. 32 Section 32. 631.20 (6) (title) of the statutes is amended to read:

AB542,37,9 631.20 (6) (title) Approved form which Form that violates statute or rule.

AB542, s. 33 Section 33. 631.20 (6) (a) of the statutes is renumbered 631.20 (6) (a) (intro.) and amended to read:

AB542,37,13 631.20 (6) (a) (intro.) The penalties under s. 601.64 (3) to (5) may not be imposed against an insurer for using any of the following:

AB542,37,17 1. Using a form that does not comply with a statute or rule, including a rule or uniform standard adopted by the Interstate Insurance Product Regulation Commission, if the statute or rule was in effect on the date the form was approved or deemed to be approved under sub. (1) (a) or s. 601.58.

AB542, s. 34 Section 34. 631.20 (6) (a) 2. of the statutes is created to read: