CHAPTER 646
INSURANCE SECURITY FUND
SUBCHAPTER I
GENERAL ORGANIZATION
646.01 Scope and purposes.
646.11 Organization and administration of fund.
646.12 Administration of the fund.
646.13 Special duties and powers of the board related to loss claims.
646.15 Proceedings involving nondomestic insurers.
646.21 Custody and investment of assets.
SUBCHAPTER II
CLAIMS PROCEDURES
646.32 Appeal and review.
646.325 Recovery of amounts paid to 3rd parties.
646.33 Subrogation and cooperation.
646.35 Continuation of coverage.
646.60 Claims by security funds.
646.61 Disposal and transfer of assets.
646.73 Liquidations to which the chapter is applicable.
Ch. 646 Cross-reference
Cross-reference: See definitions in ss.
600.03 and
628.02.
Ch. 646 Note
NOTE: Chapter 109, laws of 1979, which repealed and recreated this chapter, contained notes explaining the revision.
GENERAL ORGANIZATION
646.01
646.01
Scope and purposes. 646.01(1)(a)1.
1. All kinds and lines of direct insurance, except as provided in
par. (b).
646.01(1)(a)2.
2. All insurers authorized to do business in this state except:
646.01(1)(a)2.a.
a. Fraternals that are not health maintenance organization insurers.
646.01(1)(a)2.i.
i. Service insurance corporations that offer only dental or vision care.
646.01(1)(a)2.j.
j. Nondomestic insurers that have not obtained a certificate of authority to do business in this state and that are doing business under
s. 618.41 or
618.42.
646.01 Note
NOTE: Subd. par. j. is shown as renumbered from subd. par. i., as created by
1995 Wis. Act 396, by the revisor under s. 13.93 (1) (b).
646.01(1)(b)
(b)
Exceptions. This chapter does not apply to any of the following:
646.01(1)(b)1.
1. The nonguaranteed provisions of annuities and life insurance contracts.
646.01(1)(b)3.
3. Surety bonds, fidelity bonds and any other bonding obligations.
646.01(1)(b)5.
5. Mortgage guaranty, financial guaranty and other forms of insurance offering protection against investment risks.
646.01(1)(b)8.
8. Product liability or completed operations liability insurance, and comprehensive general liability including either of these coverages, provided to a risk purchasing group or a member of a risk purchasing group.
646.01(1)(b)9.
9. Any self-funded or partially or wholly uninsured plan of an employer or other person to provide life insurance, annuity or disability benefits to its employes or members to the extent that the plan is self-funded or uninsured, including benefits payable by an employer or other person under any of the following:
646.01(1)(b)10.
10. Any liability for dividends or experience rating credits payable after the date of entry of the order of liquidation under an insurance or annuity contract, and any fees or allowances due any person, including the policyholder, in connection with service to or administration of the contract.
646.01(1)(b)13.
13. Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of such insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk.
646.01(1)(b)14.
14. A policy issued by an insurer to the department of health and family services under
s. 49.45 (2) (b) 2. to provide prepaid health care to medical assistance recipients.
646.01(2)
(2) Purposes. The purposes of this chapter are:
646.01(2)(a)
(a) To maintain public confidence in the promises of insurers by providing a mechanism for protecting insureds from excessive delay and loss in the event of liquidation of insurers and by assessing the cost of such protection among insurers; and
646.01(2)(b)
(b) To provide where appropriate for the continuation of protection under policies and supplemental contracts of life insurance, disability insurance and annuities.
646.01 Annotation
Purpose of chapter is to protect insureds against losses caused by insolvent insurer; insureds of insolvent insurers are protected against subrogation claims to extent of policy limits. Fireman's Fund v. Pitco Frialator, 145 W (2d) 526, 427 NW (2d) 417 (Ct. App. 1988).
646.03
646.03
Definitions. In this chapter, unless the context indicates otherwise:
646.03(1)
(1) "Board" means the board of directors of the insurance security fund created by
s. 646.12.
646.03(2)
(2) "Fund" means the insurance security fund created by
s. 646.11.
646.03(3)
(3) "Liquidator" includes receiver or conservator.
646.11
646.11
Organization and administration of fund. 646.11(1)(1)
Organization. There is created a fund to be known as the "insurance security fund". All insurers subject to this chapter are contributors to the fund as a result of their authority to transact business in this state. The fund shall consist of all payments made by insurers under
s. 646.51, of the earnings resulting from investments under
s. 646.21 (2) and of the amounts recovered under
s. 645.72 (2).
646.11(2)
(2) Accounts. The fund shall be composed of 6 segregated accounts, one for life insurance, one for annuities, one for disability insurance other than policies issued or coverage provided by a health maintenance organization insurer, one for health maintenance organization insurers, one for all other kinds of insurance subject to this chapter and an administrative account.
646.11(3)
(3) Expenses of fund. Necessary expenses of administration of the fund incurred in connection with actual liquidations or with continuation of contracts under
s. 646.35 shall be charged to the appropriate account of the fund. All other expenses shall be charged to the administrative account.
646.11(4)
(4) Liability. No contributor to the fund or person acting on its behalf is personally liable for any obligations of the fund. The rights of creditors are solely against the assets of the fund.
646.11(5)
(5) Immunity. No cause of action of any nature may arise against and no liability may be imposed upon the fund or its agents, employes, directors or contributor insurers, or the commissioner or the commissioner's agents, employes or representatives, for any act or omission by any of them in the performance of their powers and duties under this chapter.
646.12
646.12
Administration of the fund. 646.12(1)(a)(a)
Members. The fund shall be administered by a board of directors which shall consist of not fewer than 7 nor more than 14 members. The attorney general, the state treasurer and the commissioner are members with full voting rights. Other members shall be chosen from representatives of insurers subject to this chapter under procedures specified by the commissioner by rule, provided that one member is a representative of a service insurance corporation. The rule may provide that, instead of natural persons, specific insurers or associations of insurers may be selected as members of the board and may act through any duly authorized representative.
646.12(1)(b)
(b)
Chairperson. The person to chair the board shall be elected by the members of the board under a rule promulgated by the commissioner.
646.12(2)
(2) General powers and duties. The board shall:
646.12(2)(a)
(a) Subject to the commissioner's power to promulgate rules under
sub. (1), adopt rules for the administration of this chapter, including delegation of any part of its powers and its own procedures.
