645.64 History
History: 1979 c. 102;
1995 a. 225.
645.64 Annotation
Third parties and insureds are not required to file their claims with the liquidator. Riley v. Heil,
624 F. Supp. 695 (1985)
645.65
645.65
Disputed claims. 645.65(1)(1)
Notice of rejection and request for hearing. When a claim is denied in whole or in part by the liquidator, written notice of the determination and of the right to object shall be given promptly to the claimant and the claimant's attorney by first class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claimant may file objections with the court. If objections are not filed within that period, the claimant may not further object to the determination.
645.65(2)
(2) Notice of hearing. Whenever objections are filed with the court, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or the claimant's attorney and to any other persons directly affected, not less than 10 nor more than 20 days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee.
645.65 History
History: 1979 c. 93,
102;
1991 a. 316.
645.66
645.66
Claims of surety. Whenever a creditor whose claim against an insurer is secured in whole or in part by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor's name, and is subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any dividend until the amount paid to the creditor on the undertaking plus the dividends paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held in trust for such other person.
645.66 History
History: 1979 c. 93,
102,
177.
645.67
645.67
Secured creditors' claims. 645.67(1)
(1) The value of any security held by a secured creditor shall be determined in one of the following ways, as the court directs:
645.67(1)(a)
(a) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to such creditor;
645.67(1)(b)
(b) By agreement, arbitration, compromise or litigation between the creditor and the liquidator.
645.67(2)
(2) The determination shall be under the supervision and control of the court. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant surrenders his or her security to the liquidator, the entire claim shall be allowed as if unsecured.
645.67 History
History: 1979 c. 102 s.
236 (13).
645.68
645.68
Order of distribution. The order of distribution of claims from the insurer's estate shall be as stated in this section. The first $50 of the amount allowed on each claim in the classes under
subs. (3) to
(6), except for claims of the federal government under
subs. (3) and
(3c), shall be deducted from the claim and included in the class under
sub. (8). Claims may not be cumulated by assignment to avoid application of the $50 deductible provision. Subject to the $50 deductible provision, every claim in each class shall be paid in full or adequate funds retained for the payment before the members of the next class receive any payment. No subclasses shall be established within any class. That portion of any loss for which indemnification is provided by other benefits or advantages recovered or recoverable by the claimant shall not be included in the classes under
subs. (3) and
(3m), other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment made by an employer to an employee shall be treated as a gratuity. The claims described in
s. 645.69 are among the claims not subject to
subs. (3) and
(3m).
645.68(1)
(1) Administration costs. The costs and expenses of administration, including but not limited to the following: the actual and necessary costs of preserving or recovering the assets of the insurer; compensation for all services rendered in the liquidation; any necessary filing fees; the fees and mileage payable to witnesses; and reasonable attorney fees.
645.68(3)
(3) Loss claims. All claims under policies for losses incurred, including third party claims and federal, state and local government claims, except the first $200 of losses otherwise payable to any claimant under this subsection other than the federal government. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds or investment values, shall be treated as loss claims. Claims may not be cumulated by assignment to avoid application of the $200 deductible provision.
645.68(3c)
(3c) Federal government claims and interest. Claims of the federal government not included under
sub. (3), and interest at the legal rate compounded annually on all claims in the class under this subsection, and on all claims of the federal government in the class under
sub. (3), from the date of the petition for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the dividend is declared.
645.68(3m)
(3m) Certain injury claims. Claims against the insurer that are not under policies and that are for liability for bodily injury or for injury to or destruction of tangible property.
645.68(3r)(a)(a) Debts due to employees for services performed, not to exceed $1,000 to each employee which have been earned within one year before the filing of the petition for liquidation. Officers shall not be entitled to the benefit of this priority.
645.68(3r)(b)
(b) Such priority shall be in lieu of any other similar priority authorized by law as to wages or compensation of employees.
645.68(3r)(c)
(c) Notwithstanding
pars. (a) and
(b) and
subs. (3),
(3c) and
(3m), if there are no claims of the federal government, the claims in the class under this subsection shall have priority over all claims in the classes under
subs. (3) to
(11).
645.68(4)
(4) Unearned premiums and small loss claims. Claims under nonassessable policies for unearned premiums or other premium refunds and the first $200 of loss excepted by the deductible provision in
sub. (3).
645.68(5)
(5) Residual classification. All other claims, including claims of any state or local government, not falling within other classes under this section and claims described in
s. 645.69. Claims, including those of any state or local governmental body, for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to the class of claims under
sub. (8).
645.68(6)
(6) Judgments. Claims based solely on judgments. If a claimant files a claim and bases it both on the judgment and on the underlying facts, the claim shall be considered by the liquidator who shall give the judgment such weight as he or she deems appropriate. The claim as allowed shall receive the priority it would receive in the absence of the judgment. If the judgment is larger than the allowance on the underlying claim, the remaining portion of the judgment shall be treated as if it were a claim based solely on a judgment.
645.68(7)
(7) Interest on claims already paid. Interest at the legal rate compounded annually on all claims in the classes under
subs. (1) to
(6), except for claims of the federal government in the classes under
subs. (3) and
(3c), from the date of the petition for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the dividend is declared. The liquidator, with the approval of the court, may make reasonable classifications of claims for purposes of computing interest, may make approximate computations and may ignore certain classifications and time periods that are trifling.
645.68(8)
(8) Miscellaneous subordinated claims. The remaining claims or portions of claims not already paid, with interest as in
sub. (7):
645.68(8)(a)
(a) Except for claims of the federal government under
subs. (3) and
(3c), the first $50 of each claim in the classes under
subs. (3) to
(6) subordinated under this section.
645.68(8)(f)
(f) Claims or portions of claims payment of which is provided by other benefits or advantages recovered or recoverable by the claimant.
645.68(11)
(11) Proprietary claims. The claims of shareholders or other owners, including policyholders of a mutual insurance corporation within the limits of
s. 645.72 (2).
645.69
645.69
Claims for certain health care costs. Unless a lower class is applicable, a claim is included among the claims that are subject to the classification under
s. 645.68 (5) if the claim is any of the following:
645.69(1)
(1) A claim against a health maintenance organization insurer or an insurer described in
s. 609.91 (1m) for health care costs, as defined in
s. 609.01 (1j), for which an enrollee, as defined in
s. 609.01 (1d), policyholder or insured of the health maintenance organization insurer or other insurer is not liable under
ss. 609.91 to
609.935.
645.69(2)
(2) A claim 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.
645.69 History
History: 1989 a. 23;
1997 a. 237.
645.71
645.71
Liquidator's recommendations to the court. 645.71(1)(1)
Recommended claims. The liquidator shall review all claims duly filed in the liquidation and shall make all further investigation deemed necessary by the liquidator. The liquidator may compound, compromise or in any other manner negotiate the amount for which claims will be recommended to the court. Unresolved disputes shall be determined under
s. 645.65. As often as practicable, the liquidator shall present to the court reports of claims against the insurer with his or her recommendations. The liquidator shall notify claimants of the liquidator's recommendations. The reports shall include the name and address of each claimant, the particulars of the claim and the amount of the claim finally recommended, if any. As soon as reasonably possible after the last day for filing claims, the liquidator shall present a list of all claims not already reported. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment values and the amounts owed. If the insurer has issued policies on the advance premium plan, the liquidator shall report the persons to whom, according to the records of the insurer, unearned premiums are owed and the amounts owed.
645.71(2)
(2) Allowance of claims. The court may approve, disapprove or modify any report on claims by the liquidator, except that the liquidator's agreements with other parties shall be final and binding on the court on claims of any size settled for $500 or less. No claim under a policy of insurance may be allowed for an amount in excess of the applicable policy limits.
645.71 History
History: 1979 c. 93,
102.
645.72
645.72
Distribution of assets. 645.72(1)
(1)
Payments to creditors. Subject to
ch. 646 and under the direction of the court, the liquidator shall pay dividends as promptly as possible to security funds under
sub. (2) and to other creditors in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including 3rd party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.
645.72(2)
(2) Payment of dividends to security funds. The liquidator shall pay dividends to security funds under
sub. (1) to satisfy their subrogation claims under
s. 646.33 or similar laws of other states, if the claims have been filed pursuant to rules established under
s. 645.61 (4). The total dividends to security funds paid under this subsection may not exceed the total of the claims properly made by the funds under
s. 645.61 (4). The liquidator shall pay dividends as frequently as practicable and in sums as large as possible without sacrificing of asset values by untimely disposition or inequitable allocation of available assets among the subrogated funds. The liquidator may protect against inequitable allocations by making payments to funds subject to binding agreements by the funds to repay any portions of the dividends found later to be in excess of an equitable allocation. If assets are available, the liquidator may also lend to security funds, subject to court approval.
645.72(3)
(3) Reports to the court. The liquidator shall report to the court within 120 days after the issuance of the liquidation order under
s. 645.42, and every 3 months thereafter, on the status of the assets and the payment of dividends and loans under
sub. (2). The court may order the liquidator to pay dividends to security funds under
sub. (2) more expeditiously to minimize the need for assessments under
s. 646.51.
645.72(4)(a)(a) Upon liquidation of a domestic mutual insurance company, any assets held in excess of its liabilities and the amounts which may be paid to its members as provided under
sub. (4) (b) shall be paid into the state treasury to the credit of the common school fund.
645.72(4)(b)
(b) The maximum amount payable upon liquidation to any member for and on account of his or her membership in a domestic mutual insurance company, in addition to the insurance benefits promised in the policy, shall be the total of all premium payments made by the member with interest at the legal rate compounded annually.
645.72 History
History: 1979 c. 102 s.
236 (13);
1979 c. 109 ss.
9 to
11,
16.
645.73
645.73
Unclaimed and withheld funds. 645.73(1)
(1)
Unclaimed funds. The liquidator, as provided in
ch. 177, shall report and deliver to the state treasurer all unclaimed funds subject to distribution remaining in the liquidator's hands when he or she is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member or other person who is unknown or cannot be found or who is under disability with no person legally competent to receive a distributive share.
645.73(2)
(2) Withheld funds. All funds withheld under
s. 645.64 and not distributed shall upon discharge of the liquidator be deposited with the state treasurer and paid by the treasurer in accordance with
s. 645.64. Any sums remaining which under
s. 645.64 would revert to the undistributed assets of the insurer shall be transferred to the state treasurer and become the property of the state under
sub. (1), unless the commissioner petitions the court to reopen the liquidation under
s. 645.75.
645.73 History
History: 1979 c. 102 ss.
220,
236 (23);
1983 a. 408.
645.74
645.74
Termination of proceedings. 645.74(1)
(1)
Liquidator's application. When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders deemed appropriate, including an order to transfer to the state treasury for the common school fund any remaining funds that are uneconomic to distribute.
645.74(2)
(2) Application by others. Any other person may apply to the court at any time for an order under
sub. (1). If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee.
645.75
645.75
Reopening liquidation. After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the court to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order.
645.76
645.76
Disposition of records during and after termination of liquidation. Records of any insurer in the process of liquidation or completely liquidated under this chapter shall be disposed of by the public records board in the same manner as state records under
s. 16.61.
645.76 Annotation
Legislative Council Note, 1979: This section makes disposition of the records of insurers subject to liquidation under this chapter subject to the procedures established in s. 16.61, a system which did not exist at the time the former s. 645.76 was created. [Bill 20-S]
645.77
645.77
External audit of receiver's books. The court in which the proceeding is pending may, as it deems desirable, cause audits to be made of the books of the commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the commissioner and with the court. The books, records and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership.
INTERSTATE RELATIONS
645.81
645.81
Conservation of property of foreign or alien insurers found in this state. 645.81(1)
(1)
Grounds for petition. If a domiciliary liquidator has not been appointed, the commissioner may apply to the circuit court for Dane County by verified petition for an order directing him or her to conserve the property of an alien insurer not domiciled in this state or a foreign insurer on any one or more of the following grounds:
645.81(1)(c)
(c) That any of its property has been sequestered by official action in its domiciliary state, or in any other state;
645.81(1)(d)
(d) That enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent;
645.81(1)(e)
(e) That its certificate of authority to do business in this state has been revoked or that none was ever issued, and that there are residents of this state with outstanding claims or outstanding policies.
645.81(2)
(2) Terms of order. The court may issue the order in whatever terms it considers appropriate. The recording of the order with any register of deeds in this state imparts the same notice as a deed, bill of sale or other evidence of title recorded with that register of deeds.
645.81(3)
(3) Transformation to liquidation or ancillary receivership. The conservator may at any time petition for and the court may grant an order under
s. 645.82 to liquidate the assets of a foreign or alien insurer under conservation or, if appropriate, for an order under
s. 645.84 to be appointed ancillary receiver.
645.81(4)
(4) Order to return to company. The conservator may at any time petition the court for an order terminating conservation of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make such finding and issue such order at any time upon its own motion.
645.82
645.82
Liquidation of property of foreign or alien insurers found in this state. 645.82(1)
(1)
Grounds for petition. If no domiciliary receiver has been appointed, the commissioner may apply to the circuit court for Dane County by verified petition for an order directing the commissioner to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled in this state, on any of the following grounds:
645.82(2)
(2) Terms of order. If it appears to the court that the best interests of creditors, policyholders and the public so require, the court may issue an order to liquidate in whatever terms it considers appropriate. The recording of the order with any register of deeds in this state imparts the same notice as a deed, bill of sale or other evidence of title filed or recorded with that register of deeds.
645.82(3)
(3) Conversion to ancillary proceeding. If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under
s. 645.84. If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under
s. 645.84.
645.82(4)
(4) Federal receivership. On the same grounds as are specified in
sub. (1), the commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction, or any lesser part thereof that the commissioner deems desirable for the protection of the policyholders and creditors in this state. The commissioner may accept appointment as federal receiver if another person files a petition.
645.82 History
History: 1979 c. 102 s.
236 (21);
1993 a. 301.
