628.34(8)
(8) Use of official position. No person holding an elective, appointive or civil service position in federal, state or local government may use decision-making power or influence in that position to coerce the placement of insurance for any prospective policyholder through any particular intermediary or with any particular insurer.
628.34(9)
(9) Refusal to return indicia of agency. No agent may refuse or fail to return promptly all indicia of agency to the principal on demand.
628.34(10)
(10) Insurance security fund. No insurer or insurance intermediary may make use in any manner of the protection given policyholders by
ch. 646 as a reason for buying insurance from the insurer or intermediary.
628.34(11)
(11) Other unfair trade practices. No person may engage in any other unfair method of competition or any other unfair or deceptive act or practice in the business of insurance, as defined under
sub. (12).
628.34(12)
(12) Rules defining unfair trade practices. The commissioner may define specific unfair trade practices by rule, after a finding that they are misleading, deceptive, unfairly discriminatory, provide an unfair inducement, or restrain competition unreasonably.
628.34 Cross-reference
Cross Reference: See also ss.
Ins 3.27,
6.67, and
6.68, Wis. adm. code.
628.34 Annotation
Any administrative rule requiring dissemination of cost disclosure information that is misleading due to incompleteness is beyond the scope of the insurance commissioner's authority in that it violates sub. (1) (a). Aetna Life Insurance Co. v. Mitchell,
101 Wis. 2d 90,
303 N.W.2d 639 (1981).
628.34 Annotation
There is no private right of action to enforce sub. (3). NAACP v. American Family Mutual Insurance Co.
978 F.2d 287 (1992).
628.345
628.345
Prohibited practices during license revocation or surrender. 628.345(1)(a)
(a) "Disciplinary period" means the period of time beginning on the effective date of the termination of the license of an intermediary under
par. (b) 1. and ending on the date on which a new license is issued to the intermediary. The "disciplinary period" of a person under
par. (b) 2.,
3. or
4. is the disciplinary period of the intermediary under
par. (b) 1. through which the person attains the status of "disciplined person".
628.345(1)(b)
(b) "Disciplined person" means any of the following:
628.345(1)(b)3.
3. A person in which an intermediary under
subd. 1. has, directly or indirectly, more than a 10% ownership interest.
628.345(2)
(2) During the disciplinary period of a disciplined person, the disciplined person may not be employed by, act as agent for, or be affiliated with, a person engaged in the business of an insurance intermediary.
628.345(3)
(3) No person may do any of the following with respect to activities performed in this state:
628.345(3)(a)
(a) Pay consideration to, or expenses of, a disciplined person that directly or indirectly relate to services performed as an intermediary by the disciplined person during the disciplinary period of the disciplined person.
628.345(3)(b)
(b) Pay consideration to, or expenses of, a disciplined person that directly or indirectly relate to services performed as an intermediary by the person making the payment, or by an agent, employee or affiliate of that person, during the disciplinary period of the disciplined person.
628.345(3)(c)
(c) Pay consideration to, or expenses of, a disciplined person for information directly or indirectly provided by the disciplined person during the disciplinary period of the disciplined person for the purpose of assisting in the sale of insurance.
628.345(3)(d)
(d) Seek to obtain information from, or use information directly or indirectly provided by, a disciplined person during the disciplinary period of the disciplined person for the purpose of assisting in the sale of insurance.
628.345(3)(e)
(e) During the disciplinary period of a disciplined person, permit the disciplined person to be present during solicitation of the sale of insurance, or knowingly solicit the sale of insurance with the assistance of the disciplined person, regardless of whether the disciplined person acts as an intermediary.
628.345(3)(f)
(f) During the disciplinary period of a disciplined person, use or refer to an endorsement or referral by the disciplined person for the purpose of soliciting the sale of insurance.
628.345(4)(a)(a) Except as provided in
par. (b), this section applies to all of the following:
628.345(4)(a)1.
1. A disciplined person for whom the disciplinary period is in effect on or after January 1, 1997.
628.345(4)(a)2.
2. That portion of a disciplinary period in effect on or after January 1, 1997, that occurs on and after January 1, 1997.
628.345(4)(b)
(b) This section does not apply to an obligation incurred before January 1, 1997, for the payment of consideration to, or expenses of, a disciplined person related to services performed or information provided during the disciplinary period of the disciplined person but before January 1, 1997.
628.345 History
History: 1995 a. 396.
628.347
628.347
Suitability of annuity sales to consumers. 628.347(1)(a)
(a) "Annuity" means a fixed or variable annuity that is individually solicited, whether the product is classified as individual or group.
628.347(1)(b)
(b) "Recommendation" means advice provided by an insurance intermediary, or an insurer if no intermediary is involved, to an individual consumer that results in the purchase or exchange of an annuity in accordance with that advice.
628.347(2)
(2) Duties of insurers and insurance intermediaries with regard to recommendations. 628.347(2)(a)(a) Except as provided in
par. (c), an insurance intermediary, or insurer if no intermediary is involved, may not recommend to a consumer the purchase or exchange of an annuity if the recommendation results in an insurance transaction or series of insurance transactions unless the intermediary or insurer has reasonable grounds to believe that the recommendation is suitable for the consumer on the basis of facts disclosed by the consumer as to his or her investments, other insurance products, and financial situation and needs.
628.347(2)(b)
(b) Before making a recommendation described in
par. (a), an insurance intermediary, or insurer if no intermediary is involved, shall make reasonable efforts to obtain information concerning all of the following:
628.347(2)(b)4.
4. Any other information that is reasonably appropriate for determining the suitability of a recommendation to the consumer.
628.347(2)(c)
(c) An insurance intermediary, or insurer if no intermediary is involved, has no obligation under
par. (a) to a consumer related to a recommendation if the consumer does any of the following:
628.347(2)(c)1.
1. Refuses to provide relevant information requested by the insurer or insurance intermediary.
628.347(2)(c)3.
3. Decides to enter into an insurance transaction that is not based on a recommendation of the insurer or insurance intermediary.
628.347(2)(d)
(d) Any recommendation of an insurer or insurance intermediary that, under
par. (c), is not subject to the obligation under
par. (a) shall be reasonable under all circumstances actually known to the insurer or insurance intermediary at the time the recommendation is made.
628.347(3)
(3) Insurer's supervisory responsibility. 628.347(3)(a)(a) An insurer either shall ensure that a system to supervise recommendations that is reasonably designed to achieve compliance with this section is established and maintained by complying with
pars. (c) to
(e), or shall establish and maintain such a system, which shall include at least all of the following:
628.347(3)(a)2.
2. Conducting periodic reviews of its records that are reasonably designed to assist in detecting and preventing violations of this section.
628.347(3)(b)
(b) A general agent or independent agency either shall adopt a system established by an insurer to supervise recommendations of its insurance intermediaries that is reasonably designed to achieve compliance with this section, or shall establish and maintain such a system, which shall include at least all of the following:
628.347(3)(b)2.
2. Conducting periodic reviews of records that are reasonably designed to assist in detecting and preventing violations of this section.
628.347(3)(c)
(c) An insurer may contract with a 3rd party, which may be a general agent or independent agency, to establish and maintain a system of supervision as required under
par. (a) with respect to insurance intermediaries under contract with or employed by the 3rd party.
628.347(3)(d)
(d) An insurer shall make reasonable inquiry to ensure that any 3rd party with which the insurer contracts under
par. (c) is performing the functions required under
par. (a) and shall take such action as is reasonable under the circumstances to enforce the contractual obligation to perform the functions. An insurer may comply with its obligation to make reasonable inquiry in all of the following ways:
628.347(3)(d)1.
1. The insurer annually obtains from a senior manager of the 3rd party who has responsibility for the delegated functions a representation that the 3rd party is performing the required functions and that the senior manager has a reasonable basis for making the representation.
628.347(3)(d)2.
2. The insurer, based on reasonable selection criteria, periodically selects 3rd parties contracting under
par. (c) for reviews to determine whether the 3rd parties are performing the required functions. The insurer shall perform those procedures to conduct the reviews that are reasonable under the circumstances.
628.347(3)(e)
(e) An insurer that contracts with a 3rd party under
par. (c) and that complies with the supervisory requirement under
par. (d) satisfies its responsibilities under
par. (a) as to insurance intermediaries under contract with or employed by the 3rd party.
628.347(3)(f)
(f) An insurer is not required under
par. (a), and a general agent or independent agency is not required under
par. (b), to do any of the following:
628.347(3)(f)1.
1. Review, or provide for the review of, all insurance intermediary solicited transactions.
628.347(3)(f)2.
2. Include in its system of supervision an insurance intermediary's recommendations made to consumers of products other than annuities offered by the insurer, general agent, or independent agency.
628.347(3)(g)
(g) A general agent or independent agency contracting with an insurer under
par. (c) shall promptly, upon request by the insurer under
par. (d), provide a representation as described in
par. (d) 1. or give a clear statement that it is unable to meet the representation criteria.
628.347(3)(h)
(h) No person may provide a representation under
par. (d) 1. unless the person satisfies all of the following:
628.347(3)(h)1.
1. The person is a senior manager with responsibility for the delegated functions.
628.347(3)(h)2.
2. The person has a reasonable basis for making the representation.
628.347(4)
(4) National Association of Securities Dealers Conduct Rules. Compliance with the National Association of Securities Dealers Conduct Rules pertaining to suitability satisfies the requirements under
sub. (2) for the recommendation of variable annuities. Nothing in this subsection, however, limits the commissioner's ability to enforce this section.
628.347(5)
(5) Remedial measures. The commissioner may do any of the following:
628.347(5)(a)
(a) Order an insurer to take reasonably appropriate corrective action for any consumer harmed by a violation of this section by the insurer or the insurer's insurance intermediary.
628.347(5)(b)
(b) Order an insurance intermediary to take reasonably appropriate corrective action for any consumer harmed by a violation of this section by the insurance intermediary.
628.347(5)(c)
(c) Order a general agent or independent agency that employs or contracts with an insurance intermediary to sell, or solicit the sale of, annuities to consumers to take reasonably appropriate corrective action for any consumer harmed by a violation of this section by the insurance intermediary.
628.347(6)(a)(a) Any person who violates this section is subject to the penalties provided under
s. 601.64, suspension or revocation of a license or certificate of authority, and an order under
s. 601.41 (4).
628.347(6)(b)
(b) A penalty under
par. (a) for a violation of
sub. (2) (a),
(b), or
(d), including a forfeiture, may be reduced or eliminated to the extent provided by rule of the commissioner if corrective action is taken for the consumer promptly after the violation is discovered.
628.347(6)(c)
(c) The commissioner may promulgate rules related to the reduction or elimination of penalties for violations of this section on the basis of prompt action taken to correct any harm caused to consumers by the violations.
628.347(7)
(7) Record keeping. An insurer and an insurance intermediary, including a general agent and an independent agency, shall maintain, or be able to make available to the commissioner, records of the information collected from a consumer and other information used in making a recommendation that was the basis for an insurance transaction for 6 years after the insurance transaction is completed by the insurer, except as otherwise permitted by the commissioner by rule. An insurer may, but is not required to, maintain records on behalf of an insurance intermediary, including a general agent and an independent agency.
628.347(8)
(8) Exemptions. This section does not apply to any of the following:
628.347(8)(a)
(a) Direct response solicitations in which no recommendation is made based on information collected from the consumer.
628.347(8)(b)
(b) Recommendations related to contracts used to fund any of the following:
628.347(8)(b)1.
1. An employee pension or welfare benefit plan that is covered by the federal Employee Retirement and Income Security Act.
628.347(8)(b)2.
2. A plan described in section
401 (a) or (k),
403 (b), or
408 (k) or (p) of the Internal Revenue Code, if the plan is established or maintained by an employer.
628.347(8)(b)3.
3. A government or church plan as defined in section
414 of the Internal Revenue Code, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under section
457 of the Internal Revenue Code.
628.347(8)(b)4.
4. A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor.
628.347(8)(b)5.
5. A settlement or assumption of liability associated with personal injury litigation or any dispute or claim resolution process.
628.347 History
History: 2003 a. 261;
2007 a. 168.
628.348
628.348
Sale of long-term care insurance. 628.348(1)
(1)
Training requirement. On and after January 1, 2009, no person may solicit, negotiate, or sell long-term care insurance unless the person is a licensed intermediary and he or she has completed the initial training portion of the training program under
s. 49.45 (31) (c) and completes the ongoing training under
s. 49.45 (31) (c) every 24 months after completing the initial training.
628.348(2)
(2) Insurer verification. Insurers providing long-term care insurance shall do all of the following:
