618.26
618.26
Requirements for nondomestic fraternals. 618.26(1)(1)
Strict compliance. No nondomestic fraternal may be authorized to do business in this state unless it complies strictly with the following requirements:
618.26(1)(c)
(c)
Requirements applicable to new fraternals. For 5 years after the initial issuance of a certificate of authority in its domiciliary jurisdiction, the requirements of
s. 614.29 (2); and if the fraternal has transacted an insurance business for less than 5 years or has not paid in full all organizational and promotional expenses, it must still have initial expendable surplus considered by the commissioner to be adequate, subject to the limits of
s. 614.19.
618.26(2)(a)(a)
General. No nondomestic fraternal may be authorized to do business in this state unless it everywhere complies substantially with
ss. 611.24 to
611.26 as incorporated by
s. 614.24, except that the approval requirement of
s. 611.25 (2) does not apply.
618.26(2)(b)
(b)
Corporate reorganization or transformation. When any corporate reorganization, transformation or liquidation of a nondomestic fraternal, or any levy to cover a deficiency under a law comparable to
s. 614.19 (3), is proposed by it or approved by the domiciliary commissioner or by another official act, notice shall be given to the commissioner promptly.
618.26(3)
(3) Orders imposing and eliminating restrictions. The commissioner may issue orders under
s. 614.03 that are applicable to nondomestic fraternals.
618.26(4)
(4) Other requirements. After a hearing, the commissioner may by order apply any provision of
ch. 614 to a nondomestic fraternal upon a finding that it is necessary for the protection of the interests of its members, creditors or the public in this state.
618.26 History
History: 1975 c. 373,
421;
1989 a. 303.
618.26 Annotation
Legislative Council Note, 1975: This section closely parallels s. 618.21. [Bill 643-S]
618.28
618.28
Exemptions from Wisconsin law. 618.28(1)
(1)
Exemptions. Any nondomestic insurer authorized to do business in this state may apply for and the commissioner may make an order exempting it from any requirement otherwise applicable to it, if the commissioner finds after a hearing:
618.28(1)(a)
(a) That in the absence of the statutory requirement in this state the requirement would not be imposed on the insurer or on a similar Wisconsin insurer by the law of the insurer's domicile;
618.28(1)(b)
(b) That exemption from the requirement will not endanger the interests of insureds, creditors or the public in this state; and
618.28(1)(c)
(c) That the exemption will not give the insurer an unfair competitive advantage over domestic insurers.
618.28(2)
(2) Notice and hearing. The hearing may not be held until at least 30 days after notice has been given to competing insurers authorized to do business in this state by publication in the administrative register or otherwise in a manner considered adequate by the commissioner. Any such insurer may appear in the hearing and state its position on
sub. (1) (c).
618.28 History
History: 1971 c. 260;
1991 a. 316.
618.31
618.31
Changes in business plan. 618.31(1)
(1)
Notification. Within 5 years after the initial issuance of a certificate of authority to a nondomestic insurer by its domiciliary jurisdiction no substantial change may be made in the business plan and the insurer may not substantially deviate from it unless notice of the proposed action is filed with the commissioner 30 days in advance of the proposed effective date. The commissioner at least 5 days before the proposed effective date may request that the effective date be deferred for an additional period not exceeding 30 days.
618.31(2)(a)(a)
Applicability in this state. If the commissioner finds that effectiveness of the proposed change within this state would be contrary to the laws of this state or to the interests of insureds, creditors or the public in this state, the commissioner may prohibit the application of the change to this state.
618.31(2)(b)
(b)
Changes outside state. If the commissioner finds after a hearing that the application of the change outside of this state would endanger the interests of insureds, creditors or the public in this state, the commissioner may revoke the insurer's certificate of authority unless it agrees not to make such a change.
618.32
618.32
Transfer of business. 618.32(1)
(1)
Report to commissioner. Any action by which a nondomestic insurer proposes to transfer to another person or to reinsure any part of its insurance business in this state, other than in the normal and usual course of business, shall be reported to the commissioner not less than 30 days in advance of the proposed effective date. The commissioner may defer the effective date for an additional period not exceeding 30 days by written notice to the insurer before expiration of the initial 30-day period.
618.32(2)
(2) Disapproval. The commissioner may, within the 30-day period or its extension, prohibit the proposed action if it would be contrary to the law or to the interests of insureds, creditors or the public in this state.
618.32 History
History: 1971 c. 260.
618.34
618.34
Assessment by nondomestic company. Every nondomestic mutual insurer authorized in this state shall, immediately after making an assessment upon any of its members in this state, notify the commissioner thereof with a statement of the condition of the insurer, setting forth the facts showing the necessity for the assessment. No such insurer may make or increase any assessment because of its inability to collect assessments from its members in other states in which its policies were written in violation of law.
618.34 History
History: 1971 c. 260.
618.36
618.36
Release from regulation. 618.36(1)
(1)
Continuance of regulation. A nondomestic insurer authorized under this chapter is subject to regulation under the applicable provisions of
chs. 600 to
646 until released from regulation under this section.
618.36(2)
(2) Application for release. A nondomestic insurer may apply for release from regulation by filing with the commissioner:
618.36(2)(b)
(b) A schedule of its outstanding liabilities from policies issued in this state, to residents of this state, or on risks located in this state and from other business transactions in this state;
618.36(2)(c)
(c) A plan for securing the discharge of such liabilities; and
618.36(2)(d)
(d) Such other information as the commissioner reasonably requires.
618.36(3)
(3) Release order. The commissioner shall release the insurer from regulation if he or she finds:
618.36(3)(a)
(a) That the insurer has ceased to do any new business in this state;
618.36(3)(b)
(b) That the discharge of existing liabilities to creditors in this state is sufficiently secured; and
618.36(3)(c)
(c) That the release would not otherwise be prejudicial to the interests of insureds, creditors or the public in this state, or of all insureds, creditors and the public in the United States if this state is the state of entry of the insurer into the United States.
618.36(4)
(4) Notification or publication. The commissioner may, before deciding on the release, require the insurer to notify all agents or other classes of potentially interested persons in a manner he or she prescribes, or in a manner he or she prescribes to publish at its own expense its intention to withdraw. The notice shall advise affected persons to communicate to the commissioner any objections they may have to the withdrawal.
618.36(5)
(5) Deposits and subjection to jurisdiction. The commissioner may, as a prerequisite for releasing the insurer, require a deposit under
s. 601.13, a bond issued by a surety authorized in this state, or other appropriate security or reinsurance in an amount sufficient to secure the proper discharge of the insurer's liabilities in this state. The commissioner may also require an agreement to remain subject to the jurisdiction of the commissioner and the courts of this state with respect to any matter arising out of business done in this state prior to the release.
618.37
618.37
Revocation of certificate of authority. Whenever there are grounds for delinquency proceedings against a nondomestic insurer under
ch. 645, the commissioner may, after a hearing, revoke, suspend or limit its certificate of authority. No such action shall affect insurance already issued and the insurer shall remain subject to regulation until released under
s. 618.36.
618.37 History
History: 1971 c. 260.
PERMISSIBLE BUSINESS BY UNAUTHORIZED INSURERS
618.39
618.39
Assisting unauthorized insurers. 618.39(1)
(1)
Conduct prohibited. No person may do an insurance business in this state if the person knows or should know that the result is or might be the illegal placement of insurance with an unauthorized insurer or the subsequent servicing of an insurance policy illegally placed with an unauthorized insurer.
618.39(2)
(2) Personal liability for violation. Any person who violates
sub. (1) is personally liable to any claimant under the policy for any damage proximately caused by the person's violation. That damage may include damage resulting from the necessity of replacing the insurance in an authorized insurer or the failure of the unauthorized insurer to perform the insurance contract.
618.39 History
History: 1971 c. 260;
1975 c. 371,
421.
618.39 Annotation
Legislative Council Note, 1975: Sub. (2) is added as an effective sanction to suppress knowing placement of insurance with unauthorized insurers. It is adapted from Conn. Insurance Laws, Sec. 38-90. Insurance agents and others should guarantee performance of insurance contracts they negotiate knowingly with unlicensed insurers, unless legally negotiated under the surplus lines law. In addition, the sanctions of s. 601.64 apply to violators of this provision. [Bill 16-S]
618.41
618.41
Surplus lines insurance. 618.41(1)
(1)
General permission. A nondomestic insurer which has not obtained a certificate of authority to do business in this state under
s. 618.12 may negotiate for and make insurance contracts with persons in this state and on risks located in this state, subject to the limitations and requirements specified in this section.
618.41(2)
(2) Incidental acts permitted. With respect to contracts made under this section, the insurer may in this state also inspect risks to be insured, collect premiums and adjust losses, and do all other acts reasonably incidental to the contract.
618.41(3)
(3) Solicitation prohibited. Nothing in
subs. (1) and
(2) permits the solicitation of business in this state by or on behalf of an insurer without a certificate of authority. The commissioner may by rule prescribe the manner in which insurance agents or brokers may advertise the availability of their services in procuring, on behalf of persons seeking insurance, contracts with insurers without a certificate of authority.
618.41(4)
(4) Information to policyholder. The insurer and any agent or broker are obligated promptly to furnish the policyholder a statement in a form prescribed or approved by the commissioner, informing the policyholder that the insurer has not obtained a certificate of authority to do business in this state and is not regulated in this state except as provided in this section.
618.41(5)
(5) Trade practices. With respect to contracts made under this section, nondomestic insurers are subject to
s. 628.34 and rules promulgated thereunder.
618.41(6)
(6) Prohibited and restricted surplus lines business. 618.41(6)(a)(a) Prohibited classes. The commissioner may by rule prohibit the making of contracts under
sub. (1) in a specified class of insurance if authorized insurers provide an established market for the class in this state which is adequate and reasonably competitive with reputable unauthorized insurers.
618.41(6)(b)
(b)
Restricted classes. The commissioner may by rule place restrictions and limitations on and create special procedures for the making of contracts under
sub. (1) for a specified class of insurance if there have been abuses of placements in the class or if the policyholders in the class, because of limited financial resources, business experience or knowledge, cannot be expected to protect their own interests adequately.
618.41(6)(c)
(c)
Exclusion of individual insurers. The commissioner may prohibit an individual insurer or group policyholder, including but not limited to a risk purchasing group, from making any contracts under
sub. (1) or issuing evidence of coverage and may prohibit all insurance agents and brokers from dealing with the insurer or group policyholder, if:
618.41(6)(c)3.
3. The commissioner has reason to believe that the insurer, or the insurer which issued the policy to a group policyholder, is in an unsound condition or the insurer or group policyholder is operated in a fraudulent, dishonest or incompetent manner or in violation of the law of its domicile.
618.41(6)(d)
(d)
Evaluations. The commissioner may issue lists of unauthorized nondomestic insurers whose solidity he or she believes to be doubtful or whose practices he or she believes to be objectionable. The commissioner may issue lists of unauthorized nondomestic insurers he or she believes to be reliable and solid. The commissioner may also issue other relevant evaluations of unauthorized insurers. No action may lie against the commissioner or any employe of the office for anything said in the issuance of such lists and evaluations.
618.41(6m)
(6m) 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.
618.41(7)(a)(a) The commissioner may, pursuant to
s. 628.04 (2), issue to any licensed agent or broker a surplus lines license granting authority to procure insurance under this section.
618.41(7m)
(7m) Risk purchasing groups; licensed agents. A natural person may not solicit, negotiate or obtain liability insurance for a risk purchasing group from an unauthorized insurer unless the natural person is licensed as a surplus lines agent under
sub. (7).
618.41(8)
(8) Surplus lines agents, brokers and group policyholders. 618.41(8)(a)(a)
Responsibility. An agent or broker, or any other person who offers liability insurance coverage under a group policy, may not place insurance under this section with, or solicit the purchase of coverage under a group policy issued by, an unauthorized insurer if all of the following exist:
618.41(8)(a)1.
1. The insurer is financially unsound, engaging in unfair practices or otherwise substandard.
618.41(8)(a)2.
2. The agent, broker or other person fails to give the applicant written notice of the insurer's deficiencies.
618.41(8)(a)3.
3. The agent, broker or other person either knows of, or fails to adequately investigate, the insurer's financial condition and general reputation.
618.41(8)(b)
(b)
Retention of notice. An agent, broker or group policyholder shall keep in its office for at least 5 years any notice provided under
par. (a) 2.
618.41(8)(c)
(c)
Financially sound. To be financially sound for purposes of
par. (a) 1., an insurer must be able to satisfy standards comparable to those applied under the laws of this state to authorized insurers.
618.41(9)
(9) Requirements for surplus lines policies. 618.41(9)(a)(a)
Required information. Every new or renewal insurance policy procured and delivered under this section shall bear the name and address of the insurance agent or broker who procured it and, except for ocean marine insurance, shall have stamped or affixed upon it the following: "This insurance contract is with an insurer which has not obtained a certificate of authority to transact a regular insurance business in the state of Wisconsin, and is issued and delivered as a surplus line coverage pursuant to
s. 618.41 of the Wisconsin Statutes.
Section 618.43 (1), Wisconsin Statutes, requires payment by the policyholder of 3% tax on gross premium". Every ocean marine insurance policy shall have stamped or affixed upon it the above statement except that the tax shall be one-half of one per cent on gross premium.
618.41(9)(b)
(b)
Additional required information. The policy shall include a description of the subject of the insurance, and indicate the coverage, conditions and term of the insurance, the premium charged and premium taxes to be collected from the policyholder, and the name and address of the policyholder and insurer. If the direct risk is assumed by more than one insurer, the policy shall state the names and addresses of all insurers and the portion of the entire direct risk each has assumed.
618.41(10)
(10) Issuance of evidence of insurance. Upon placing a new or renewal coverage under this section, the agent or broker shall promptly deliver to the policyholder or his or her agent evidence of the insurance consisting either of the policy as issued by the insurer or, if the policy is not then available, a certificate, cover note or other confirmation of insurance.
618.41(11)
(11) Form regulation. The commissioner may by rule subject policies written under this section to as much of the regulation provided by
chs. 600 to
646 and
655 for comparable policies written by authorized insurers as the commissioner finds to be necessary to protect the interests of insureds and the public in this state.
618.41 Annotation
Independent actual notice to policyholder in absence of stamping or affixing information required under (9) (a) to policy held insufficient. Combined Investigative v. Scottsdale Ins., 165 W (2d) 262, 477 NW (2d) 82 (Ct. App. 1991).
618.415
618.415
Group liability insurance issued by an unauthorized insurer. 618.415(1)(1)
Notice before taking application. A person may not take an application for liability insurance coverage under a group liability insurance policy which is issued by an unauthorized insurer and which is for a risk that resides or is otherwise located in this state, unless before taking the application the person gives the applicant clear and prominent written notice of all of the following:
