628.34
628.34
Unfair marketing practices. 628.34(1)(a)(a)
Conduct forbidden. No person who is or should be licensed under
chs. 600 to
646, no employee or agent of any such person, no person whose primary interest is as a competitor of a person licensed under
chs. 600 to
646, and no person on behalf of any of the foregoing persons may make or cause to be made any communication relating to an insurance contract, the insurance business, any insurer, or any intermediary that contains false or misleading information, including information that is misleading because of incompleteness. Filing a report and, with intent to deceive a person examining it, making a false entry in a record or willfully refraining from making a proper entry, are “communications" within the meaning of this paragraph. No intermediary or insurer may use any business name, slogan, emblem, or related device that is misleading or likely to cause the intermediary or insurer to be mistaken for another insurer or intermediary already in business. No intermediary may provide a misleading certificate of insurance.
628.34(1)(b)
(b)
Presumption of insurer's violation. If an insurance agent distributes cards or documents, exhibits a sign or publishes an advertisement which violates
par. (a), having reference to a particular insurer that the agent represents, the agent's violation creates a rebuttable presumption that the violation was also committed by the insurer.
628.34(2)(a)(a)
General. No insurer, no employee of an insurer, and no insurance intermediary may seek to induce any person to enter into an insurance contract or to terminate an existing insurance contract by offering benefits not specified in the policy, nor may any insurer make any agreement of insurance that is not clearly expressed in the policy to be issued. This subsection does not preclude the reduction of premiums by reason of expense savings, including commission reductions, resulting from any form of mass marketing.
628.34(3)(a)(a) No insurer may unfairly discriminate among policyholders by charging different premiums or by offering different terms of coverage except on the basis of classifications related to the nature and the degree of the risk covered or the expenses involved, subject to
ss. 632.365,
632.746 and
632.748. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, blanket or franchise policy, and terms are not unfairly discriminatory merely because they are more favorable than in a similar individual policy.
628.34(3)(b)
(b) No insurer may refuse to insure or refuse to continue to insure, or limit the amount, extent or kind of coverage available to an individual, or charge an individual a different rate for the same coverage because of a mental or physical disability except when the refusal, limitation or rate differential is based on either sound actuarial principles supported by reliable data or actual or reasonably anticipated experience, subject to
ss. 632.746 to
632.7495.
628.34(4)
(4) Restraint of competition. No person who is or should be licensed under
chs. 600 to
646, no employee or agent of any such person, no person whose primary interest is as a competitor of a person licensed under
chs. 600 to
646, and no one acting on behalf of any of the foregoing persons, may commit or enter into any agreement to participate in any act of boycott, coercion or intimidation tending to unreasonable restraint of the business of insurance or to monopoly in that business.
628.34(5)
(5) Free choice of insurer. No person may restrict in the choice of an insurer or insurance intermediary another person required to pay the cost of insurance coverage whenever the procurement of insurance coverage is required as a condition for the conclusion of a contract or other transaction or for the exercise of any right under a contract. However, the person requiring the coverage may reserve the right to disapprove on reasonable grounds the insurer or the coverage selected. The form of corporate organization of an insurer authorized to do business in this state is not a reasonable ground for disapproval, and the commissioner may by rule specify that additional grounds are not reasonable.
628.34(6)
(6) Extra charges. No person may make any charge other than premiums and premium financing charges for the protection of property or of a security interest in property, as a condition for obtaining, renewing or continuing the financing of a purchase of the property or the lending of money on the security of an interest in the property.
628.34(7)
(7) Influencing employers. No insurer or insurance intermediary or employee or agent of either may, in connection with an insurance transaction, encourage, persuade or attempt to influence any employer to refuse employment to or to discharge any person arbitrarily or unreasonably.
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(13)(a)(a) In this subsection, “wellness program" means a program that is designed to promote health or prevent disease through a reward to insured individuals and that meets the qualifications of
45 CFR 146.121 (f) (1) or (2).
628.34(13)(b)
(b) Notwithstanding
subs. (2) (a),
(3),
(7), and
(11) and any rules promulgated under
sub. (12), it is not a violation of this section for an insurer to advertise, market, offer, or operate a wellness program.
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 percent 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 in annuity transactions. 628.347(1)(a)
(a) “Annuity" means an annuity that is an insurance product that is individually solicited, whether the product is classified as an individual or group annuity.
628.347(1)(am)
(am) “FINRA" means the Financial Industry Regulatory Authority or a succeeding agency.
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, exchange, or replacement of an annuity in accordance with that advice.
628.347(1)(d)
(d) “Replacement" means a transaction in which a new annuity is to be purchased and it is known, or should be known to the proposing insurance intermediary, or to the proposing insurer if no intermediary is involved, that by reason of the transaction an existing policy or contract has been or is to be any of the following:
628.347(1)(d)1.
1. Lapsed, forfeited, surrendered or partially surrendered, assigned to the replacing insurer, or otherwise terminated.
628.347(1)(d)2.
2. Converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or other policy values.
628.347(1)(d)3.
3. Amended so as to effect either a reduction in benefits or a reduction in the term for which coverage would otherwise remain in force or for which benefits would otherwise be paid.
628.347(1)(e)
(e) “Suitability information" means information that is reasonably appropriate to determine the suitability of a recommendation, including all of the following:
628.347(1)(e)3.
3. Financial situation and needs, including the financial resources used for the funding of the annuity.
628.347(1)(e)8.
8. Existing assets, including investment and life insurance holdings.
628.347(2)
(2) Duties of insurers and insurance intermediaries with regard to recommendations and issuance of annuities. 628.347(2)(a)(a) In recommending to a consumer the purchase of an annuity, or the exchange of an annuity that results in an insurance transaction or series of insurance transactions, an insurance intermediary, or insurer if no intermediary is involved, shall have 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, including the consumer's suitability information, and that all of the following are true:
628.347(2)(a)1.
1. The consumer has been reasonably informed of various features of the annuity, such as the potential surrender period and surrender charge, potential tax penalty if the consumer sells, exchanges, surrenders, or annuitizes the annuity, mortality and expense fees, investment advisory fees, potential charges for and features of riders, limitations on interest returns, insurance and investment components, and market risk.
628.347(2)(a)2.
2. The consumer would benefit from certain features of the annuity, such as tax-deferred growth, annuitization, or death or living benefit.
628.347(2)(a)3.
3. The particular annuity as a whole, the underlying subaccounts to which funds are allocated at the time of purchase or exchange of the annuity, and riders and similar product enhancements, if any, are suitable, and in the case of an exchange or replacement, the transaction as a whole is suitable, for the particular consumer based on his or her suitability information.
628.347(2)(a)4.
4. In the case of an exchange or replacement of an annuity, the exchange or replacement is suitable, including taking into consideration all of the following:
628.347(2)(a)4.a.
a. Whether the consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits, such as death, living, or other contractual benefits, or be subject to increased fees, investment advisory fees, or charges for riders and similar product enhancements.
628.347(2)(a)4.b.
b. Whether the consumer would benefit from product enhancements and improvements.
628.347(2)(a)4.c.
c. Whether the consumer has had another annuity exchange or replacement and, in particular, an exchange or replacement within the preceding 36 months.
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 the consumer's suitability information.
628.347(2)(bm)
(bm) Except as permitted under
par. (c), an insurer may not issue an annuity that is recommended by the insurer or its insurance intermediary to a consumer unless it is reasonable to believe that the annuity is suitable based on the consumer's suitability information.
628.347(2)(c)1.1. Subject to
subd. 2., neither an insurance intermediary nor an insurer has any obligation to a consumer under
par. (a) or
(bm) related to any annuity transaction if any of the following applies:
628.347(2)(c)1.a.
a. Neither the insurance intermediary nor the insurer made a recommendation.
628.347(2)(c)1.b.
b. The insurance intermediary or insurer made a recommendation but the recommendation was later found to have been prepared based on inaccurate material information provided by the consumer.
628.347(2)(c)1.c.
c. The consumer refuses to provide relevant suitability information and the annuity transaction is not recommended.
