1. The agency planning to promulgate the rule prepares a statement of the
scope of the proposed rule, which the governor and the agency head must approve
before any state employee or official may perform any activity in connection with the
drafting of the proposed rule.
2. The agency drafts the proposed rule, together with an economic impact
analysis, plain language analysis, and fiscal estimate for the proposed rule, and
submits those materials to the Legislative Council Staff for review.
3. Subject to certain exceptions, a public hearing is held on the proposed rule.
4. The final draft of the proposed rule is submitted to the governor for approval.
5. The final draft of the proposed rule, together with an economic impact
analysis, plain language analysis, and fiscal estimate for the proposed rule, are

submitted to the legislature for review by one standing committee in each house and
by the Joint Committee for Review of Administrative Rules.
6. The proposed rule is filed with the Legislative Reference Bureau (LRB) for
publication in the Wisconsin Administrative Code (code) and the Wisconsin
Administrative Register (register), and, subject to certain exceptions, the rule
becomes effective on the first day of the first month beginning after publication.
Under this bill, if a bill that repeals or modifies a rule is enacted, the ordinary
rule-making procedures under current law do not apply. Instead, the LRB must
publish the repeal or modification, in the code and the register, and the repeal or
modification, subject to certain exceptions, takes effect on the first day of the first
month beginning after publication.
Compensating intermediaries for sale of long-term care insurance
Under current rules promulgated by the Office of the Commissioner of
Insurance, an insurer may provide compensation to an insurance intermediary or
other representative, and the intermediary or other representative may accept
compensation, for the sale of a long-term care policy or certificate only if 1) the
first-year compensation for the sale does not exceed 400 percent of the compensation
paid in the second year or period for the sale or for servicing the policy or certificate
and 2) the compensation provided in subsequent years is the same as provided in the
second year or period and is provided for at least five renewal years. The current
rules prohibit any person from providing compensation to an intermediary,
representative, or producer, and prohibit any intermediary, representative, or
producer from accepting compensation, relating to the replacement of a long-term
care policy or certificate for which the compensation is greater than the renewal
compensation provided by the replacing insurer for the replacing policy or certificate.
The bill removes from the rules references to other representatives or
procedures while retaining references to intermediaries. Under the bill, instead of
the current compensation restrictions, an insurer may compensate an intermediary,
and an intermediary may accept compensation, for the sale of a long-term care policy
or certificate only if the compensation provided in the second year or period and
subsequent years is the same and is provided for at least five renewal years. The bill
adds an exemption to the prohibition on certain compensation for replacement of a
long-term care policy. Under that exemption, a person may provide to an
intermediary, and an intermediary may accept, compensation relating to the
replacement of a long-term care policy or certificate for which the compensation is
not greater than the first-year compensation provided by the replacing insurer for
the replacing policy or certificate, if certain criteria that are created in the bill and
certain requirements that are in the current rules are satisfied.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB581,1 1Section 1. 13.92 (4) (bm) of the statutes is created to read:
SB581,3,10
113.92 (4) (bm) If 2 or more rules filed under s. 227.20 or modified under s.
2227.265 affect the same unit of the Wisconsin administrative code without taking
3cognizance of the effect thereon of the other rules and if the legislative reference
4bureau finds that there is no mutual inconsistency in the changes made by each such
5rule, the legislative reference bureau shall incorporate the changes made by each
6rule into the text of the unit and document the incorporation in a note to the unit.
7For each such incorporation, the legislative reference bureau shall include in a
8correction bill a provision formally validating the incorporation. Section 227.27 (2)
9is not affected by printing decisions made by the legislative reference bureau under
10this paragraph.
SB581,2 11Section 2. 13.92 (4) (c) of the statutes is amended to read:
SB581,3,1312 13.92 (4) (c) The legislative reference bureau may insert in the Wisconsin
13administrative code a note explaining any change made under par. (b) or (bm).
SB581,3 14Section 3. 13.92 (4) (d) of the statutes is amended to read:
SB581,3,1615 13.92 (4) (d) Sections 227.114, 227.116, 227.135, and 227.14 to 227.24 do not
16apply to any change made by the legislative reference bureau under par. (b) or (bm).
SB581,4 17Section 4. 13.92 (4) (e) of the statutes is amended to read:
SB581,3,1918 13.92 (4) (e) The legislative reference bureau shall prepare and keep on file a
19record of each change made under par. (b) or (bm).
SB581,5 20Section 5. 13.92 (4) (f) of the statutes is amended to read:
SB581,3,2221 13.92 (4) (f) The legislative reference bureau shall notify the agency involved
22of each change made under par. (b) or (bm).
SB581,6 23Section 6. 35.93 (2) (b) 4. of the statutes, as affected by 2013 Wisconsin Act 20,
24is amended to read:
SB581,4,3
135.93 (2) (b) 4. Copies of all rules filed with the legislative reference bureau
2under s. 227.20 (1) or modified under s. 227.265 since the compilation of the
3preceding register, including emergency rules filed under s. 227.24 (3).
SB581,7 4Section 7. 35.93 (2) (c) 1. of the statutes, as affected by 2013 Wisconsin Act 20,
5is amended to read:
SB581,4,86 35.93 (2) (c) 1. Each chapter of the Wisconsin administrative code that has been
7affected by rules filed with legislative reference bureau under s. 227.20 (1) or
8modified under s. 227.265
, in accordance with sub. (3) (e) 1.
SB581,8 9Section 8. 35.93 (3) of the statutes is amended to read:
SB581,4,2310 35.93 (3) The legislative reference bureau shall compile and deliver to the
11department for printing copy for a register which shall contain all the rules filed
12under s. 227.20 or modified under s. 227.265 since the compilation of rules for the
13preceding issue of the register was made and those executive orders which are to be
14in effect for more than 90 days or an informative summary thereof. The complete
15register shall be compiled and published before the first day of each month and a
16notice section of the register shall be compiled and published before the 15th day of
17each month. Each issue of the register shall contain a title page with the name
18"Wisconsin administrative register", the number and date of the register, and a table
19of contents. Each page of the register shall also contain the date and number of the
20register of which it is a part in addition to the other necessary code titles and page
21numbers. The legislative reference bureau may include in the register such
22instructions or information as in the bureau's judgment will help the user to correctly
23make insertions and deletions in the code and to keep the code current.
SB581,9 24Section 9. 35.93 (3) (e) (intro.) of the statutes, as affected by 2013 Wisconsin
25Act 20
, is amended to read:
SB581,5,5
135.93 (3) (e) (intro.) The legislative reference bureau shall incorporate into the
2appropriate chapters of the Wisconsin administrative code each permanent rule filed
3with the legislative reference bureau under s. 227.20 (1) or modified under s. 227.265
4and, for each chapter of the administrative code affected by a rule, do all of the
5following:
SB581,10 6Section 10. 35.93 (3) (e) 1. of the statutes, as affected by 2013 Wisconsin Act
720
, is amended to read:
SB581,5,138 35.93 (3) (e) 1. Publish the chapter in the appropriate end-of-month register
9in accordance with the filing deadline for publication established in the rules
10procedures manual published under s. 227.15 (7) or, in an end-of-month register
11agreed to by the submitting agency and the legislative reference bureau , or, in the
12case of a rule modified under s. 227.265, in the end-of-month register for the month
13in which the bill modifying the rule is enacted
.
SB581,11 14Section 11. 227.01 (13) (intro.) of the statutes is amended to read:
SB581,5,2115 227.01 (13) (intro.) "Rule" means a regulation, standard, statement of policy,
16or general order of general application which has the effect of law and which is issued
17by an agency to implement, interpret, or make specific legislation enforced or
18administered by the agency or to govern the organization or procedure of the agency.
19"Rule" includes a modification of a rule under s. 227.265. "Rule" does not include, and
20s. 227.10 does not apply to, any action or inaction of an agency, whether it would
21otherwise meet the definition under this subsection, which:
SB581,12 22Section 12. 227.11 (2) (intro.) of the statutes is amended to read:
SB581,5,2423 227.11 (2) (intro.) Rule-making authority is expressly conferred on an agency
24as follows:
SB581,13 25Section 13. 227.265 of the statutes is created to read:
SB581,6,5
1227.265 Repeal or modification of rules. If a bill to repeal or modify a rule
2is enacted, the procedures under ss. 227.114 to 227.21 and 227.26 do not apply.
3Instead, the legislative reference bureau shall publish the repeal or modification in
4the Wisconsin administrative code and register as required under s. 35.93, and the
5repeal or modification shall take effect as provided in s. 227.22.
SB581,14 6Section 14. 227.27 (2) of the statutes is amended to read:
SB581,6,127 227.27 (2) The code shall be prima facie evidence in all courts and proceedings
8as provided by s. 889.01, but this does not preclude reference to or, in case of a
9discrepancy, control over a rule filed with the legislative reference bureau or the
10secretary of state
under s. 227.20 or modified under s. 227.265, and the certified copy
11of a rule shall also and in the same degree be prima facie evidence in all courts and
12proceedings.
SB581,15 13Section 15. Ins 3.46 (13) (a) (intro.) and 2. of the administrative code are
14consolidated, renumbered Ins 3.46 (13) (a) and amended to read:
SB581,6,1915 Ins 3.46 (13) (a) An insurer may provide compensation to an intermediary or
16other representative
, and an intermediary or representative may accept
17compensation for the sale of a long-term care policy or certificate only if: 2. The the
18compensation provided in the 2nd year or period and subsequent years is the same
19as provided in the 2nd year or period and is provided for at least 5 renewal years.
SB581,16 20Section 16. Ins 3.46 (13) (a) 1. of the administrative code is repealed.
SB581,17 21Section 17. Ins 3.46 (13) (b) of the administrative code is amended to read:
SB581,7,422 Ins 3.46 (13) (b) No Except as provided in par. (c), no person may provide
23compensation to an intermediary, representative or producer, and no intermediary,
24representative or producer
may accept compensation, relating to the replacement of
25a long-term care policy or certificate which is greater than the renewal compensation

1provided by the replacing insurer for the replacing policy or certificate. Long-term
2care policies this paragraph applies and par. (c) apply to include, but are not limited
3to, long-term care policies, nursing home policies and home health care policies
4issued prior to June 1, 1991.
SB581,18 5Section 18. Ins 3.46 (13) (c) of the administrative code is created to read:
SB581,7,106 Ins 3.46 (13) (c) A person may provide to an intermediary, and an intermediary
7may accept, compensation relating to the replacement of a long-term care policy or
8certificate; which compensation is no greater than the first-year compensation
9provided by the replacing insurer for the replacing policy or certificate if, in addition
10to requirements contained in sub. (14), all of the following criteria are satisfied:
SB581,7,1211 1. The replacing insurer has established reasonable standards for which
12first-year compensation is appropriate for the replacement.
SB581,7,1313 2. The standards referenced in subd. 1. include all of the following standards:
SB581,7,1414 a. The replacing policy is suitable for the applicant.
SB581,7,1715 b. The replacing policy materially improves the position of the applicant,
16including, but not limited to, the coverage, price, premium stability, or financial
17strength ratings of the insurer.
SB581,7,2118 c. The intermediary has done an assessment of the replacement transaction
19justifying the replacement according to the insurer's replacement standards and this
20subd. 2. c. and submits that assessment to the insurer as part of the application for
21replacement.
SB581,7,2422 d. The insurer evaluates each replacement and affirmatively approves or
23denies the replacement's qualification for first-year compensation of the replacing
24policy.
SB581,8,2
1e. The standards and methodology are subject to review by the office of the
2commissioner of insurance.
SB581,8,43 3. The replacing insurer has established an auditable methodology for
4evaluating replacements that qualify for first-year compensation.
SB581,19 5Section 19. Effective dates. This act takes effect on the day after publication,
6except as follows:
SB581,8,87 (1) The treatment of section 35.93 (2) (b) 4. and (c) 1. and (3) (e) (intro.) and 1.
8of the statutes takes effect on January 1, 2015.
SB581,8,99 (End)
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