CHAPTER 633
EMPLOYEE BENEFIT PLAN ADMINISTRATORS AND PRINCIPALS
633.04 Written agreement required.
633.05 Payment to administrator.
633.06 Examination and inspection of books and records.
633.07 Approval of advertising.
633.08 Underwriting responsibilities.
633.10 Payment of claims.
633.11 Claim adjustment compensation.
633.12 Notification required.
633.14 Issuance of license.
633.15 License; renewal, suspension, limitation, revocation, penalty.
633.17 Rule-making authority.
Ch. 633 Cross-reference
Cross-reference: See definitions in ss.
600.03 and
628.02.
Ch. 633 Cross-reference
Cross-reference: See also s.
Ins 8.20, Wis. adm. code.
633.01
633.01
Definitions. In this chapter:
633.01(1)
(1) “Administrator" means a person who directly or indirectly solicits or collects premiums or charges or otherwise effects coverage or adjusts or settles claims for a plan, but does not include the following persons if they perform these acts under the circumstances specified for each:
633.01(1)(a)
(a) An employer on behalf of its employees or the employees of a subsidiary or affiliated employer.
633.01(1)(c)
(c) A creditor on behalf of its debtor, if to obtain payment, reimbursement or other method of satisfaction from a plan for any part of a debt owed to the creditor by the debtor.
633.01(1)(d)
(d) A financial institution that is subject to supervision or regulation in performing these acts by federal or other state authorities.
633.01(1)(e)
(e) A company that issues credit cards and provides advances for, or collects premiums or charges from, its credit card holders, if the company does not adjust or settle claims.
633.01(1)(f)
(f) An attorney who adjusts or settles claims in the normal course of practice or employment as an attorney, if the attorney does not collect charges or premiums.
633.01(1)(g)
(g) An agent licensed in this state whose activities are limited to the sale of insurance.
633.01(1)(h)
(h) An insurer authorized to do an insurance business in this state if the insurer performs these acts in the normal course of its insurance business.
633.01(2)
(2) “Employee" means any of the following or a family member or dependent of any of the following:
633.01(2)(a)
(a) An active or retired wage or salary earner whose services are or were used by an employer.
633.01(3)
(3) “Insured" means an employee who is a resident of this state and who is covered under a plan.
633.01(4)
(4) “Plan" means an insured or wholly or partially self-insured employee benefit plan which by means of direct payment, reimbursement or other arrangement provides to one or more employees who are residents of this state benefits or services that include, but are not limited to, benefits for medical, surgical or hospital care, benefits in the event of sickness, accident, disability or death, or benefits in the event of unemployment or retirement.
633.01(5)
(5) “Principal" means a person, including an insurer, that uses the services of an administrator to provide a plan.
633.01 History
History: 1991 a. 39.
633.04
633.04
Written agreement required. An administrator may not administer a plan in the absence of a written agreement between the administrator and a principal. The administrator and principal shall each retain a copy of the written agreement for the duration of the agreement and for 5 years thereafter. The written agreement shall contain the following terms:
633.04(1)
(1) That the administrator and principal shall each retain a copy of the written agreement as provided under this section.
633.04(2)
(2) If a policy is issued to a trust, that the administrator shall retain a copy of the trust agreement for the duration of the trust agreement and for 5 years thereafter.
633.04(3)
(3) If the principal is an insurer, that payments to an administrator shall be treated as provided in s.
633.05.
633.04(4)
(4) That the administrator shall maintain and retain books and records pertaining to a principal dating back 5 years at all times or until delivered to the principal by the administrator, with the right of examination and audit as provided in s.
633.06 (1), and the right of inspection and any restrictions on the right of inspection, as provided in s.
633.06 (2).
633.04(5)
(5) If the principal is an insurer, that advertising shall be approved as provided in s.
633.07.
633.04(6)
(6) If the principal is an insurer, that the terms, as required by s.
633.08, specify any underwriting responsibilities which the insurer has delegated to the administrator.
633.04(7)
(7) That funds shall be collected and received as provided in s.
633.09 (1), that funds shall be paid and deposited as provided in s.
633.09 (1), that fiduciary account records shall be maintained and provided as provided in s.
633.09 (2), that interest shall be treated as provided in s.
633.09 (3) or that other terms shall specify treatment of interest, that withdrawals for payments of claims are not permitted as provided in s.
633.09 (4) (a), and that other withdrawals are permitted only as provided under s.
633.09 (4) (b).
633.04(9)
(9) That compensation to an administrator shall be paid as provided in s.
633.11.
633.04 History
History: 1991 a. 39.
633.05
633.05
Payment to administrator. If a principal is an insurer, payment to the administrator of a premium or charge by or on behalf of an insured is payment to the insurer, but payment of a return premium or claim by the insurer to the administrator is not payment to an insured until the payment is received by the insured. This section does not limit any right of the insurer against the administrator for failure to make payments to the insurer or an insured.
633.05 History
History: 1991 a. 39.
633.06
633.06
Examination and inspection of books and records. 633.06(1)(1)
The commissioner may examine, audit or accept an audit of the books and records of an administrator as provided for examination of licensees under s.
601.43 (1),
(3),
(4) and
(5), to be conducted as provided in s.
601.44, and with costs to be paid as provided in s.
601.45.
633.06(2)
(2) A principal that uses an administrator may inspect the books and records of the administrator, subject to any restrictions set forth in ss.
146.81 to
146.835 and in the written agreement required under s.
633.04, for the purpose of enabling the principal to fulfill its contractual obligations to insureds.
633.06 History
History: 1991 a. 39.
633.07
633.07
Approval of advertising. An administrator may not use any advertising for a plan underwritten by an insurer unless the insurer approves the advertising in advance.
633.07 History
History: 1991 a. 39.
633.08
633.08
Underwriting responsibilities. If a principal is an insurer, any underwriting responsibilities regarding eligibility that the insurer has delegated to an administrator shall be set forth in the written agreement required under s.
633.04.
633.08 History
History: 1991 a. 39.
633.09(1)(1)
Moneys held in fiduciary capacity. An administrator shall hold in a fiduciary capacity all moneys that the administrator collects or receives on behalf of other persons. Within 2 business days after collection or receipt of such moneys, the administrator either shall pay the moneys to the persons entitled to them or shall deposit the moneys in a fiduciary account established and maintained by the administrator in a financial institution.
633.09(2)
(2) Fiduciary account records. An administrator shall maintain fiduciary account records in accordance with generally accepted accounting principles. The administrator shall retain the fiduciary account records pertaining to a principal for at least 5 years beginning on the date of creation of the records. If an administrator deposits in a fiduciary account moneys that the administrator has collected on behalf of more than one principal, the administrator shall keep records of the account that clearly indicate deposits made under sub.
(1) and withdrawals made under sub.
(4) on behalf of each principal. Upon request by a principal, the administrator shall provide the principal copies of those portions of the records pertaining to deposits and withdrawals made on behalf of the principal and shall otherwise permit inspection by the principal as provided under s.
633.06 (2).
633.09(3)
(3) Interest on deposits. Interest earned on moneys deposited in a fiduciary account is the property of the principal unless otherwise provided in the written agreement required under s.
633.04.
633.09(4)
(4) Withdrawals from fiduciary account. 633.09(4)(a)(a) An administrator may not pay any claim by withdrawal from a fiduciary account.
633.09(4)(b)
(b) An administrator may make the following payments from a fiduciary account:
633.09(4)(b)1.
1. To a principal, the funds belonging to the principal.
633.09(4)(b)2.
2. To a plan policyholder for payment to a principal, the funds belonging to the principal.
633.09(4)(b)4.
4. To another account maintained in the name of a principal, the funds belonging to the principal.
633.09(4)(b)5.
5. To a claims paying account, the funds belonging to a principal for payment of claims owed by the principal.
633.09(4)(b)6.
6. To the administrator, commissions, fees or charges owed the administrator by a principal.
633.09 History
History: 1991 a. 39.
633.10
633.10
Payment of claims. An administrator shall pay claims from funds paid to the claims paying account under s.
633.09 (4) (b) 5. on drafts or checks authorized in advance by the principal.
633.10 History
History: 1991 a. 39.
633.11
633.11
Claim adjustment compensation. If an administrator adjusts or settles claims under a plan, the commission, fees or charges that the principal pays the administrator may not be based on the plan's loss experience. This section does not prohibit compensation based on the number or amount of premiums or charges collected, or the number or amount of claims paid or processed by the administrator.
633.11 History
History: 1991 a. 39.
633.12
633.12
Notification required. 633.12(1)(1)
An administrator shall prepare sufficient copies of a written notice approved in advance by the principal for distribution to all insureds of the principal and either shall distribute the copies to the insureds or shall provide the copies to the principal for distribution to the insureds. The written notice shall contain all of the following:
633.12(1)(a)
(a) The names and addresses of the administrator and the principal.
633.12(1)(b)
(b) An explanation of the respective rights and responsibilities of the administrator, the principal and the insureds.
633.12(1)(c)
(c) A statement of the extent to which the plan is insured or self-insured, and an explanation of the terms “insured" and “self-insured".
633.12(2)
(2) If an administrator collects premiums or charges from a person on behalf of a principal, at least once in every year, prior to collecting the premiums or charges, the administrator shall provide written notice to the person stating the amount of the premiums or charges.
633.12 History
History: 1991 a. 39.
