Small Business Impact
This rule will have little or no effect on small businesses.
Initial regulatory flexibility analysis
Pursuant to s.
227.114, Stats., the proposed rule may have an effect on small businesses. The initial regulatory flexibility analysis is as follows:
Types of small businesses affected:
Insurance agents, LSHO, Town Mutuals, Small Insurers.
Description of reporting and bookkeeping procedures required:
Adds the option of electronically filing forms to the OCI and requires attestation of the Flesch score and tool used to determine the Flesch score. No other bookkeeping or reporting requirements other than are currently required.
Description of professional skills required:
Some small businesses, not otherwise exempted by rule, will need to update the website to include information on how to request or access the insured's policy. Other than creating the notice, no other professional skills other than are currently required.
Small business regulatory coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address
eileen.mallow@wisconsin.gov.
Fiscal Estimate
State fiscal effect
None.
Local government fiscal effect
None.
Private sector fiscal effect
This rule change will have no significant effect on the private sector regulated by OCI.
Long-range fiscal implications
None.
Agency Contact Person
Inger Williams
OCI Services Section
Phone: (608) 264-8110
Address: 125 South Webster Street, 2nd Floor
Madison WI 53703-3474
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN That pursuant to the authority granted under s.
601.41 (3), Stats., and the procedures set forth under s.
227.18, Stats., the Office of the Commissioner of Insurance (OCI) will hold a public hearing to consider the adoption of a proposed rule revising section
Ins 51.01, Wis. Adm. Code, relating to the risk-based capital of health insurers, property and casualty insurers and fraternal insurers.
Hearing Information
Date: August 3, 2010
Time: 10:00 a.m., or as soon thereafter as
the matter may be reached
Location: OCI, Room 227, 2nd Floor
125 South Webster Street
Madison, WI
Submittal of Written Comments
Written comments can be mailed to:
James W. Harris
Legal Unit - OCI Rule Comment for Rule Ins 5101
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Written comments can be hand delivered to:
James W. Harris
Legal Unit - OCI Rule Comment for Rule Ins 5101
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Comments can be emailed to:
James W. Harris
The deadline for submitting comments is 4:00 p.m. on the 7th day after the date for the hearing stated in this Notice of Hearing.
Copies of Proposed Rule
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet Web site at
http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, Public Information and Communications, OCI, at:
inger.williams@wisconsin.gov, (608) 264-8110, 125 South Webster Street – 2
nd Floor, Madison WI or PO Box 7873, Madison WI 53707-7873.
Analysis Prepared by the Office of the Commissioner of Insurance
Statutes interpreted
Statutory authority
Explanation of agency authority
The commissioner may establish by rule minimum ratios for determination of the amount of compulsory surplus that an insurer is required to have in order not to be financially hazardous under s.
645.41, Stat., as an amount that will provide reasonable security against contingencies affecting the insurer's financial position, in relation to any relevant variables as set forth in s.
623.11 (2), Stat. The national association of insurance commissioners (NAIC) has by model regulation suggested updated ratios to apply to health insurers and property and casualty insurers. The commissioner has determined that solvency monitoring of fraternal insurers will be enhanced by including the insurers in RBC reporting requirements.
Related statutes or rules
None.
Plain language analysis and summary of the proposed rule
The proposed rule will modify the risk-based capital (RBC) requirements for insurers to include under the definition of a company action level event a trend test for property and casualty insurers and health insurers. The NAIC has amended instructions for property and casualty insurers and health insurers to include a trend test to improve the monitoring of insurer solvency. Under the proposed rule a company action level event would occur if the insurer's adjusted capital is between 2.0 and 3.0 times the authorized control level RBC and the insurer triggers a negative trend test determined in accordance with NAIC instructions.
Under the current rule, fraternal insurers are exempt from the RBC filing requirements, unless the commissioner finds that inclusion would improve solvency monitoring. The proposed rule will remove the general exemption and fraternal insurers will be subject to the same RBC reporting requirements as life insurers.
Comparison with federal regulations
There are no comparable federal regulations that are intended to address capital requirements for insurers.
Comparison of similar rules in adjacent states
Illinois:
215 IL Comp. Stat. 5/35 A-1-70, contains capital requirements for insurers comparable to the existing Wisconsin rule. To date there has been no formal adoption of language similar to the proposed rule.
Iowa:
Iowa Code ch.
521 F, contains capital requirements for insurers comparable to the existing Wisconsin rule. To date there has been no formal adoption of language similar to the proposed rule.
Michigan:
Mich. Comp. Laws s. 550:1204 a., contains capital requirements for insurers comparable to the existing Wisconsin rule. To date there has been no formal adoption of language similar to the proposed rule.
Minnesota:
Minn. Stat. s. 60.A.50, contains capital requirements for insurers comparable to the existing Wisconsin rule. To date there has been no formal adoption of language similar to the proposed rule.
Summary of factual data and analytical methodologies
NAIC models, insurer's financial information
Small Business Impact
This rule will have little or no effect on small businesses and does not impose any additional requirements on small businesses.
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address
eileen.mallow@wisconsin.gov
Fiscal Estimate
State fiscal effect
None.
Local government fiscal effect
None.
Private sector fiscal effect
