646.15(1)(a)4.
4. Any other threatened or contemplated action that might prejudice the rights of policyholders or the administration of the liquidation or board proceedings.
646.15(1)(b)
(b) Upon granting an application under
par. (a), the court may retain jurisdiction of any further proceeding or relief, as the court considers necessary and proper, involving the insurer.
646.15(2)
(2) Exclusive proceedings. A court of this state does not have jurisdiction to entertain, hear or determine a proceeding or to grant relief if the proceeding or relief involves or is related to a nondomestic insurer which is in liquidation unless the court is so authorized under this chapter or
ch. 645.
646.15 History
History: 1987 a. 325;
1999 a. 30.
646.21
646.21
Custody and investment of assets. 646.21(1)
(1)
Custody. Except as provided in
sub. (2), the board controls the assets of the fund. The board shall select regulated financial institutions in this state which receive deposits in which to establish and maintain accounts for assets needed on a current basis. If practicable, the accounts shall earn interest.
646.21(2)
(2) Investment of assets. The board may request that assets of the fund not needed currently be invested by the investment board under
s. 25.17. If so requested, the investment board shall invest those assets in investments with maturities and liquidity appropriate to the probable needs of the fund for money to perform its duties. All income attributable to the investments shall be credited to the fund, and both income and principal shall be transferred to the board of the fund on request of the board. Assets held by the board of the fund shall be invested in a similar manner.
646.21 History
History: 1979 c. 109;
1983 a. 120.
CLAIMS PROCEDURES
646.31
646.31
Eligible claims. 646.31(1)(1)
Conditions of eligibility. A claim is not eligible for payment from the fund unless it is an unpaid claim for a loss insured under the policy or annuity and all of the following conditions are met:
646.31(1)(a)
(a)
Issued by authorized insurer. The claim arises out of an insurance policy or annuity issued by an insurer which was authorized to do business in this state either at the time the policy or annuity was issued or when the insured event occurred, and against which an order of liquidation, which is not stayed, has been entered by a court of competent jurisdiction in the insurer's domiciliary state.
646.31(1)(b)
(b)
Assessability of insurer. The claim arises out of business not exempt from assessment under
s. 646.01 (1).
646.31(1)(c)
(c)
Contact with state. The claim is a member of one of the classes of claims under
sub. (2).
646.31(1)(cm)
(cm)
Termination of coverage. Except for claims under life insurance policies, annuities or noncancelable or guaranteed renewable disability insurance policies, the claim arises within 30 days after the order of liquidation is entered or before any of the following occur:
646.31(1)(cm)1.
1. The policy expires, if the expiration date is less than 30 days after the order of liquidation is entered.
646.31(1)(cm)2.
2. The insured replaces or cancels the policy, if either action is taken within 30 days after the order of liquidation is entered.
646.31(1)(d)
(d)
Exceptions. The claim is not any of the following:
646.31(1)(d)9.
9. Made for health care costs, as defined in
s. 609.01 (1j), for which an enrollee, as defined in
s. 609.01 (1d), or policyholder of a health maintenance organization is not liable for any reason.
646.31(2)
(2) Classes of claims to be paid. No claim may be paid under this chapter unless the claim is in one of the following classes:
646.31(2)(a)1.1. The claim of a policyholder, including a ceding assessable domestic insurer which is organized under
ch. 612 and a domestic insurer which is a bona fide policyholder of the insurer in liquidation, who at the time of the insured event or of the liquidation order was a resident of this state.
646.31(2)(a)2.
2. Except for a claim of a beneficiary, assignee or payee under a life or disability insurance policy or annuity contract, the claim of an insured, including a certificate holder, under a policy or annuity who at the time of the insured event or of the liquidation order was a resident of this state.
646.31(2)(b)1.1. Except with regard to claims under contracts that are held by residents of a state that does not provide substantially equivalent coverage with regard to contracts of residents of this state, the claim is made under a life or disability insurance policy or annuity contract subject to this section and issued by a domestic insurer, whether or not the claimant is a resident of this state.
646.31(2)(b)2.
2. The claim is made under a life or disability insurance policy or annuity contract subject to this section and issued by a domestic insurer if all of the following conditions are met:
646.31(2)(b)2.a.
a. The claimant is a resident of another state that provides coverage similar to the coverage provided under this chapter but does not provide coverage for the claimant.
646.31(2)(b)2.b.
b. The insurer never held a license or certificate of authority in the state in which the claimant resides.
646.31(2)(b)3.
3. The claim is made before January 1, 1990, under a life or disability insurance policy or annuity contract subject to this section and issued by a domestic insurer if all of the following conditions are met:
646.31(2)(b)3.a.
a. The claimant was a resident of this state when the policy or contract was issued.
646.31(2)(b)3.b.
b. The claimant is a resident of a state which does not provide coverage similar to the coverage provided under this chapter.
646.31(2)(c)
(c)
Owners of property interests. The first-party claim of a person having an insurable interest in or related to property with a permanent location in this state at the time of the insured event.
646.31(2)(d)
(d)
Third party claimants. A claim under a liability or workers' compensation insurance policy, if either the insured or the 3rd party claimant was a resident of this state at the time of the insured event.
646.31(2)(e)
(e)
Assignees. The claim of a direct or indirect resident assignee, other than an insurer, of a person who except for the assignment could have claimed under
par. (a),
(b),
(c) or
(d).
646.31(2)(f)
(f)
Beneficiaries, assignees and payees. Except for a claim of a nonresident certificate holder under a group policy or contract, a claim made under a life or disability insurance policy or annuity contract by a resident or nonresident beneficiary, assignee or payee of a person who fulfills all of the following criteria:
646.31(2)(f)1.
1. The person is a policyholder of, or a certificate holder under, the life or disability insurance policy or annuity contract.
646.31(2)(f)2.
2. The person is a resident of this state or could have made a claim under
par. (b) 2.
646.31(3)(a)(a) In this subsection, "health insurance policy" does not include a policy providing income continuation coverage or benefits for loss of time.
646.31(3)(am)
(am) Except as provided in
pars. (b) and
(c), payment under this chapter is limited to the amount by which the claim exceeds $200. Claims may not be aggregated by assignment or otherwise for application of this deductible.
646.31(3)(b)
(b) With regard to contracts subject to
s. 646.35 (2) or
(3) other than health insurance policies, in lieu of the deductible under
par. (am), the board may impose a deductible not to exceed the lesser of 10% or $200 on any claim or other benefit payment if the board deems the imposition of this deductible more equitable or practical than that under
par. (am).
646.31(3)(c)
(c) A claim or other benefit payment under this chapter that is made under a health insurance policy may not be subject to the deductible under
par. (am) or
(b).
646.31(4)(a)(a) Except in regard to worker's compensation insurance and except as provided in
par. (b), the obligation of the fund on a single risk, loss or life may not exceed $300,000.
646.31(4)(b)
(b) The fund is not obligated to pay a claimant an amount in excess of the loss obligation of the insurer in liquidation under the policy or coverage from which the claim arises.
646.31(5)
(5) Punitive damages. No punitive damages may be paid out of the fund.
646.31(6)
(6) Collection from collateral sources. 646.31(6)(a)(a) The portion of a loss claim for which indemnification is provided by other benefits or advantages, which may not be included in the classes of claims specified in
s. 645.68 (intro.), may not be claimed from the fund under this chapter.
646.31(6)(b)
(b) The board may waive the application of
par. (a) to claims under contracts subject to
s. 646.35 (2) or
(3), to the extent that the board determines that application of
par. (a) would be impracticable.
646.31(6)(c)
(c) Any person having an eligible claim which also constitutes a claim or legal right of recovery under any governmental insurance or guaranty program shall first exhaust all rights under that program, and any amount payable on an eligible claim under this chapter shall be reduced by the amount of recovery under that program.
646.31(7)
(7) Setoffs and counterclaims. Section 645.56 applies to the settlement of loss claims. The board shall give the liquidator a reasonable opportunity to inform the board of possible setoffs and counterclaims before paying loss claims.
646.31(8)
(8) Notice to claimants. The board shall provide notice under
s. 645.47 (2) to those potential loss claimants to whom the fund is liable under the section, if the liquidator has not done so.
646.31(9)
(9) Collection from other funds. A claim recoverable from more than one security fund shall be paid in the following order:
646.31(9)(a)
(a) By any security fund with an obligation to pay all loss claims of the insurer;
646.31(9)(b)
(b) If it is a first party claim for damage to property with a permanent location, by the fund of the location of the property;
646.31(9)(c)
(c) If it is a workers' compensation claim, by the fund of the residence of the claimant;
646.31(9)(d)
(d) In any other case, by the fund of the residence of the insured; and
646.31(9m)
(9m) Recovery reduction. Any recovery under this chapter shall be reduced by the amount of recovery from any other security fund.
646.31(10)
(10) Temporary moratoriums. Before being obligated to make payments under this chapter to holders of life insurance or annuity contracts the fund may impose, with court approval, temporary moratoriums of not more than 90 days on payments of cash values and policy loans in addition to any deferrals of cash or policy loan value by contractual provision. A temporary moratorium may be renewed for successive periods of not more than 90 days with court approval.
646.31(11)
(11) Subrogation claims. The fund is not required to pay any amount due from the insurer to any reinsurer, insurer, insurance pool or underwriting association as subrogation recoveries or otherwise, except as provided in
sub. (2) (a). A reinsurer, insurer, insurance pool or underwriting association that has paid a claim and thereby has become subrogated to the amount of that claim may assert that claim against the liquidator of the insurer in liquidation but not against the insured of the insurer in liquidation.
646.31(12)
(12) Net worth of insured. Except for claims under
s. 646.35, payment of a first-party claim under this chapter to an insured whose net worth, as defined in
s. 646.325 (1), exceeds $10,000,000 is limited to the amount by which the aggregate of the insured's claims that satisfy
subs. (1) to
(7),
(9) and
(9m) plus the amount, if any, recovered from the insured under
s. 646.325 exceeds 10% of the insured's net worth.
646.31(13)
(13) Residency. For purposes of determining residency in this section, the residency of a claimant, insured or policyholder that is not a natural person is the state in which the claimant's, insured's or policyholder's principal place of business is located.
646.31 Annotation
An offset under sub. (6) (a) must include amounts available to the claimant and not just amounts settled for. An offset of the policy limits of an applicable policy rather than the amount settled for was correct. Belongia v. Wisconsin Insurance Security Fund,
195 Wis. 2d 835,
537 N.W.2d 51 (Ct. App. 1995).
646.31 Annotation
Where a claim against the insured of an insolvent insurer was not filed until after the effective date of sub. (12), each of the insured's claims were subject to the sub. (12) net worth limitation. A. O. Smith Corp. v. Wisconsin Insurance Security Fund,
217 Wis. 2d 252,
580 N.W.2d 348 (Ct. App. 1998).
646.32
646.32
Appeal and review. 646.32(1)(1)
Appeal. A claimant whose claim is reduced or declared ineligible shall promptly be given notice of the determination and of the right to object under this section. The claimant may appeal to the board within 30 days after the mailing of the notice.
646.32(2)
(2) Review. Decisions of the board under
sub. (1) are subject to judicial review.
646.32 History
History: 1979 c. 109.
646.325
646.325
Recovery of amounts paid to 3rd parties. 646.325(1)(1)
Definition. In this section, "net worth" means the amount of an insured's total assets less the insured's total liabilities at the end of the insured's fiscal year immediately preceding the date the liquidation order was entered, as shown on the insured's audited financial statement, or, if the insured is a natural person, the insured's total assets less the insured's total liabilities on December 31 immediately preceding the date the liquidation order was entered.
646.325(2)
(2) Recovery from certain insureds and affiliates. Except as provided in
sub. (3), the fund may recover from a person the amount of any claim paid on behalf of that person to a 3rd party, if all of the following conditions are satisfied:
646.325(2)(a)
(a) The person on whose behalf the claim was paid is any of the following:
646.325(2)(b)
(b) Payment of the claim satisfied all or part of the person's liability obligations to 3rd parties.
646.325(3)
(3) Limitation. The total amount recovered from an insured described in
sub. (2) (a) 1. plus the amount of the insured's claims that satisfy
s. 646.31 (1) to
(7),
(9) and
(9m) but are not eligible for payment under
s. 646.31 (12) may not exceed 10% of the insured's net worth.
646.325 History
History: 1987 a. 325.
646.33
646.33
Subrogation and cooperation.
