632.46(1)
(1)
Incontestability of individual policies. Except under
sub. (3) or
(4) or for nonpayment of premiums, no individual life insurance policy may be contested after it has been in force from the date of issue for 2 years during the lifetime of the person whose life is at risk.
632.46(2)
(2) Incontestability of group policies. Except under
sub. (3) or
(4) or for nonpayment of premiums, no group life insurance policy may be contested after it has been in force for 2 years from its date of issue and no coverage of any insured thereunder may be contested on the basis of a statement made by the insured relative to his or her insurability after the coverage has been in force on the insured for 2 years during the lifetime of the insured. No such statement may be used to contest coverage unless contained in a written instrument signed by the insured person.
632.46(3)(a)(a) Subject to
par. (b), if the age or sex of the person whose life is at risk is misstated in an application for a policy of life insurance and the error is not adjusted during the person's lifetime the amount payable under the policy is what the premium paid would have purchased if the age or sex had been stated correctly.
632.46(3)(b)
(b) If the person whose life is at risk was, at the time the insurance was applied for, beyond the maximum age limit designated by the insurer, the insurer shall refund at least the amount of the premiums collected under the policy.
632.46(4)
(4) Disability coverages and additional accident benefits. Despite
subs. (1) and
(2), disability coverages and additional accident benefits may be contested at any time on the ground of fraudulent misrepresentation.
632.46 History
History: 1975 c. 373,
375,
422;
1979 c. 102.
632.47
632.47
Assignment of life insurance rights. 632.47(1)
(1)
General. Except as provided in
sub. (3), the owner of any rights under a life insurance policy or annuity contract may assign any of those rights, including any right to designate a beneficiary and the rights secured under
s. 632.57 or any other statute. An assignment valid under general contract law vests the assigned rights in the assignee subject, so far as reasonably necessary for the protection of the insurer, to any provisions in the insurance policy or annuity contract inserted to protect the insurer against double payment or obligation.
632.47(2)
(2) Relative rights of assignee and beneficiary. The rights of a beneficiary under a life insurance policy or annuity contract are subordinate to those of an assignee, unless the beneficiary was effectively designated as an irrevocable beneficiary prior to the assignment.
632.47(3)
(3) Group annuities. Assignment may be expressly prohibited by a group contract providing annuities as retirement benefits.
632.47 History
History: 1975 c. 373,
375,
422.
632.475
632.475
Life insurance policy loans. 632.475(1)(a)
(a) "Policy" includes a life insurance policy, a certificate issued by a fraternal benefit society and an annuity contract.
632.475(1)(b)
(b) "Policy loan" means a loan by an insurer, including a premium loan, secured by the cash surrender value of a policy issued by the insurer.
632.475(1)(c)
(c) "Policy year" means a year beginning on the anniversary date of a policy.
632.475(2)
(2) Interest rates. A policy providing for policy loans shall contain a provision for a maximum interest rate on the loans in accordance with one but not both of the following:
632.475(2)(a)
(a) A provision permitting an adjustable maximum rate established from time to time by the insurer.
632.475(2)(b)
(b) A provision permitting a specified rate not exceeding 12% per year.
632.475(3)
(3) Adjustable maximum rate. The rate of interest charged on a policy loan under
sub. (2) (a) shall not exceed the higher of the following:
632.475(3)(a)
(a) The rate used to compute the cash surrender values under the policy during the applicable period plus 1% per year.
632.475(3)(b)
(b) Moody's corporate bond yield average (monthly average corporates), as published by Moody's investors service, inc., or its successor, for the month ending 2 months before the rate is applied. If such monthly average is no longer published, a comparable average shall be substituted by the commissioner by rule.
632.475(4)
(4) Frequency of changes. If the maximum rate of interest is determined under
sub. (2) (a) the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.
632.475(5)
(5) Intervals and limits on changes. The maximum rate of interest for a policy subject to
sub. (2) (a) shall be determined at regular intervals at least once every 12 months, but not more frequently than once in any 3-month period. At the intervals specified in the policy:
632.475(5)(a)
(a) The rate being charged may be changed as permitted under
sub. (3) but no such change shall be less than 0.5% per year; and
632.475(5)(b)
(b) The rate being charged must be reduced to or below the maximum rate as determined under
sub. (3) whenever the maximum is lower than the rate being charged by 0.5% or more per year.
632.475(6)(a)
(a) Notify the policyholder of the initial rate of interest on the loan at the time a policy loan is made, if the loan is not a premium loan.
632.475(6)(b)
(b) Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in
par. (c).
632.475(6)(c)
(c) Send to policyholders with loans 30 days' advance notice of any increase in the interest rate.
632.475(7)
(7) Coverage continuation. No policy may terminate in a policy year as the sole result of a change in the loan interest rate during that policy year. The insurer shall maintain coverage until it would have terminated if there had been no change.
632.475(8)
(8) Policy provisions. The pertinent provisions of
subs. (2) and
(4) shall be set forth in substance in the policies to which they apply.
632.475 History
History: 1981 c. 51;
1983 a. 215.
632.48
632.48
Designation of beneficiary. 632.48(1)
(1)
Powers of policyholders. Subject to
s. 632.47 (2), no life insurance policy or annuity contract may restrict the right of a policyholder or certificate holder:
632.48(1)(a)
(a)
Irrevocable designation of beneficiary. To make at any time an irrevocable designation of beneficiary effective at once or at some subsequent time; or
632.48(1)(b)
(b)
Change of beneficiary. If the designation of beneficiary is not explicitly irrevocable, to change the beneficiary without the consent of the previously designated beneficiary. Subject to
s. 853.17, as between the beneficiaries, any act that unequivocally indicates an intention to make the change is sufficient to effect it.
632.48(2)
(2) Protection of insurer. An insurer may prescribe formalities to be complied with for the change of beneficiaries, but formalities prescribed under this subsection shall be designed only for the protection of the insurer. The insurer discharges its obligation under the insurance policy or certificate of insurance if it pays a properly designated beneficiary unless it has actual notice of either an assignment or a change in beneficiary designation made under
sub. (1) (b). It has actual notice if the prescribed formalities are complied with or if the change in beneficiary has been requested in the form prescribed by the insurer and delivered to an intermediary representing the insurer.
632.48 History
History: 1975 c. 373,
375,
422;
1979 c. 93.
632.48 Annotation
Legislative Council Note, 1979: The amendment to sub. (2) adds a situation in which the insured has acted reasonably in dealing with a representative of the insurer. As between the insurer and the insured, the burden should fall upon the insurer if the agent makes an error of this kind. The insurer, of course, may have a cause of action against its agent. [Bill 20-S]
632.48 Annotation
Under facts of case, decedent's oral instruction to his attorney to change beneficiary was sufficient "act" under (1) (b) even though new beneficiary was not designated with sufficient specificity. Empire Gen. Life Ins. v. Silverman, 135 W (2d) 143, 399 NW (2d) 910 (1987).
632.485
632.485
Requirement that beneficiary not have intentionally killed the insured. 632.485(1)
(1) Except as provided in
sub. (1m), a beneficiary of a life insurance policy who intentionally and unlawfully kills the person on whose life the policy is issued may not receive any benefit under the policy. The policy is payable as if the killer had predeceased the decedent.
632.485(1m)
(1m) A policyholder may provide in a life insurance policy issued on the policyholder's life, by a specific provision which includes reference to
sub. (1), that
sub. (1) does not apply with respect to a beneficiary of the policy.
632.485 History
History: 1981 c. 228;
1987 a. 222.
632.50
632.50
Estoppel from medical examination. If under the rules of any insurer issuing life insurance, its medical examiner has authority to issue a certificate of health, or to declare the proposed insured acceptable for insurance, and so reports to the insurer or its agent, the insurer is estopped to set up in defense of an action on the policy issued thereon that the proposed insured was not in the condition of health required by the policy at the time of issue or delivery, or that there was a preexisting condition not noted in the certificate or report, unless the certificate or report was procured through the fraudulent misrepresentation or nondisclosure by the applicant or proposed insured.
632.50 History
History: 1975 c. 375.
632.50 Annotation
Estoppel under this section may apply against insurers who seek a medical examiner's opinion regarding fitness for insurance without establishing any formal rules regarding the examiner's authority. Grosse v. Protective Life Ins. Co. 182 W (2d) 97, 513 NW (2d) 592 (1994).
632.55
632.55
Limitations on group life insurance. No group life insurance policy may be issued on any group unless the group is formed in good faith for purposes other than to obtain insurance.
632.55 History
History: 1975 c. 371,
373,
375,
422;
1981 c. 40.
632.56
632.56
Required group life insurance provisions. Every group life insurance policy shall contain the following:
632.56(1)
(1) Evidence of insurability. A provision setting forth any conditions under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of that coverage.
632.56(2)
(2) Misstatement of age. A provision specifying that an equitable adjustment of premiums or of benefits or of both will be made if the age of an insured person has been misstated and clearly stating the method of adjustment.
632.56(3)
(3) Facility of payment. A provision that any sum becoming due by reason of the death of an insured person is payable to the beneficiary designated by the insured person, subject to policy provisions if there is no designated beneficiary, and to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of the sum not exceeding $1,000 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the insured person. This subsection does not apply to a policy issued to a creditor to insure his or her debtors.
632.56(4)
(4) Nonforfeiture. If it is not term insurance, equitable nonforfeiture provisions, but they need not be the same provisions as are in individual policies.
632.56(5)
(5) Grace period. A provision that the policyholder is entitled to a grace period of not less than 31 days for the payment of any premium due except the first. During the grace period the death benefit coverage shall continue in force, unless the policyholder gives the insurer advance written notice of discontinuance in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a proportional premium for the time the policy was in force during the grace period.
632.56 History
History: 1975 c. 375,
421;
1979 c. 110 s.
60 (11).
632.57
632.57
Conversion option in group and franchise life insurance. 632.57(1)(1)
Scope of application. This section applies to all group life insurance policies other than credit life insurance policies and applies to franchise life insurance policies providing term insurance renewable only while the insured is a member of the franchise unit.
632.57(2)
(2) Conversion right upon loss of eligibility. 632.57(2)(a)(a) If the insurance, or any portion of it, on a person insured under a policy covered by this section ceases because of termination of employment or of membership in the class or franchise unit eligible for coverage, the insurer shall, upon written application and payment of the first premium within 31 days after the termination, issue to the person, without evidence of insurability, an individual policy providing benefits reasonably similar in type and amount to those of the group or franchise insurance, but which need not include disability or other supplementary benefits.
632.57(3)(a)(a)
Form of policy. The individual policy shall, at the option of the applicant, be on any form then customarily issued by the insurer, except term insurance, at the age and for the amount applied for.
632.57(3)(b)
(b)
Amount of coverage. The individual policy shall, at the option of the applicant, be in an amount as large as in the group or franchise life insurance which ceases, less any amount of insurance which has then matured as an endowment payable to the insured person, whether in one sum or in instalments or in the form of an annuity.
632.57(3)(c)
(c)
Premium rates. The premium on the individual policy shall be at the customary rate then applied generally by the insurer to policies in the form and amount of the individual policy, to the class of risk to which the person then belongs without applying individual underwriting considerations, except as to occupation or avocation, and to the person's age on the effective date of the individual policy.
632.57(4)
(4) Conversion upon termination of group or franchise insurance. If the group or franchise policy terminates or is amended so as to terminate the insurance of any class of insured persons, the insurer shall, on written application and payment of the first premium within 31 days after the termination, issue to any person whose insurance is thus terminated or amended, after having been in effect for at least 5 years, an individual policy on the same conditions as in
subs. (2) and
(3), less the amount of any other group or franchise insurance made available to the person within 31 days thereafter as a consequence of the termination or amendment. The group policy may provide that the maximum amount of insurance available under this subsection is an amount not less than $2,000 without a conversion charge and an additional amount not less than $3,000 by paying the insurer's usual conversion charge on the additional amount.
632.57(5)
(5) Extension of claims under group or franchise policy. If a person insured under the group or franchise policy dies during the conversion period under
sub. (2) to
(4) and before an individual policy is effective, the amount of life insurance which the person would have been entitled to have issued as an individual policy shall be payable as a claim under the group or franchise policy, whether or not the person has applied for the individual policy or paid the first premium.
632.57 History
History: 1975 c. 375,
421.
632.60
632.60
Limitation on credit life insurance. Nothing in
chs. 600 to
646 authorizes licensees under
s. 138.09 to require or accept insurance not permitted under
s. 138.09 (7) (h).
632.60 History
History: 1975 c. 375;
1979 c. 89.
632.62
632.62
Participating and nonparticipating policies. 632.62(1)(a)(a)
Stock insurers. A stock insurer may issue both participating and nonparticipating life insurance policies and annuity contracts, subject to this section.
632.62(1)(b)
(b)
Fraternals and mutual insurers. A fraternal or mutual insurer issuing life insurance policies may issue only participating policies, except for the following situations in which it may issue nonparticipating policies:
632.62(1)(b)1.
1. Paid-up, temporary, pure endowment insurance and annuity settlements provided in exchange for lapsed, surrendered or matured policies;
632.62(1)(b)2.
2. Annuities beginning within one year of the making of the contract; and
632.62(1)(b)3.
3. Such term insurance policies as the commissioner may exempt by rule.
632.62(2)
(2) Participation. Every participating policy shall by its terms give its holder full right to participate annually in the part of the surplus accumulations from the participating business of the insurer that are to be distributed.
632.62(3)
(3) Accounting. Every insurer issuing both participating and nonparticipating policies shall separately account for the 2 classes of business and no part of the amounts accumulated or credited to the participating class may be voluntarily transferred to the nonparticipating class.
632.62(4)(a)(a)
Deferred dividends. No life insurance policy or certificate may be issued in which the accounting, apportionment and distribution of surplus is deferred for a period longer than one year.
632.62(4)(b)
(b)
Payment. Every insurer doing a participating business shall annually ascertain the surplus over required reserves and other liabilities. After setting aside such contingency reserves as may be considered necessary and be lawful, such reasonable nondistributable surplus as is needed to permit orderly growth, making provision for the payment of reasonable dividends upon capital stock and such sums as are required by prior contracts to be held on account of deferred dividend policies, the remaining surplus shall be equitably apportioned and returned as a dividend to the participating policyholders or certificate holders entitled to share therein. A dividend may be conditioned on the payment of the succeeding year's premium only on the first and second anniversaries of the policy.
632.62 History
History: 1975 c. 373,
375,
422;
1979 c. 102.
632.64
632.64
Certification of disability. Insurers doing a life insurance business in this state shall afford equal weight to a certification of disability signed by a physician with respect to matters within the scope of the physician's professional license and to a certification of disability signed by a chiropractor with respect to matters within the scope of the chiropractor's professional license for the purpose of insurance policies they issue. This section does not require an insurer to treat a certificate of disability as conclusive evidence of disability.
632.64 History
History: 1981 c. 55.
632.66
632.66
Annuity contracts without life contingencies. The commissioner may by rule authorize insurers to issue annuity contracts which are without life contingencies. If the commissioner authorizes insurers to issue annuity contracts without life contingencies, the commissioner shall promulgate rules regulating those contracts.
632.66 History
History: 1987 a. 247.
