Chapter 613

613.56(3)(c) (c) Amendment of the articles or bylaws;

613.56(3)(d) (d) Merger under s. 613.72, conversion under s. 613.75, voluntary dissolution under s. 613.74 or transfer of business or assets under s. 613.78;

613.56(3)(e) (e) Any other decision requiring member or policyholder approval;

613.56(3)(f) (f) Amendment or repeal of any action previously taken by the full board which by its terms is not subject to amendment or repeal by a committee;

613.56(3)(g) (g) Dividends or other distributions to members or policyholders, other than in the routine implementation of policy determinations of the full board;

613.56(3)(h) (h) Selection of principal officers; and

613.56(3)(i) (i) Filling of vacancies on the board or any committee created under sub. (1) except that the articles or bylaws may provide for temporary appointments to fill vacancies on the board or any committee, the appointments to last no longer than the end of the next board meeting.

613.56(4) (4) Subsequent review. The full board or a major committee of the board authorized to do so under sub. (2) shall specifically review any transaction in which an officer has a material financial interest adverse to the corporation, at the next meeting following action by any ordinary committee.

613.56(5) (5) Quorum and voting. Sections 181.0821 and 181.0824 apply to a committee of the board of a service insurance corporation, except that references to “board” shall be read as relating to “committee”, references to “majority” in s. 181.0824 (1) shall be read as referring to a majority of the members appointed to serve on the committee, and references to “majority” in s. 181.0824 (2) shall be read as referring to a majority of the members appointed to serve on the committee who are present at the meeting.

613.56 History History: 1975 c. 223, 421; 1979 c. 102; 1997 a. 79.

613.57 613.57 Interlocking directorates and other relationships. Section 611.57 applies to service insurance corporations.

613.57 History History: 1975 c. 223.

613.58 613.58 Policyholders’ committee. A service insurance corporation’s articles or bylaws may provide for a policyholders’ committee, to be selected in a manner that will make its membership representative of the interests of policyholders. The policyholders’ committee shall at the corporation’s expense prepare an annual report to be filed with the commissioner. The corporation shall inform all policyholders of the availability of the report in a manner approved by the commissioner and shall send copies of the report to policyholders upon their request. A summary of the report prepared or approved by the committee and not exceeding 2,000 words shall be included with any annual report issued by the corporation to members or policyholders.

613.58 History History: 1975 c. 223.

613.60 613.60 Transactions with affiliates in which directors and others are interested. Sections 611.60 and 611.61 apply to service insurance corporations.

613.60 History History: 1975 c. 223; 1979 c. 102.

613.62 613.62 Directors’ and officers’ liability and indemnification.

613.62(1) (1) Liability. Sections 181.0833 and 181.0850 to 181.0855 apply to service insurance corporations.

613.62(2) (2) Indemnification. Sections 181.0871 to 181.0881 apply to service insurance corporations but no indemnification may be made until at least 30 days after notice to the commissioner, containing full details about the proposed indemnification.

613.62(3) (3) Insurance. Section 181.0883 applies to service insurance corporations.

613.62 History History: 1975 c. 223, 421; 1987 a. 13; 1997 a. 79.

613.63 613.63 Executive compensation.

613.63(1) (1) Establishment of compensation. Section 181.0302 (11) to (14) applies to service insurance corporations, except as modified by ss. 613.60 and sub. (2).

613.63(2) (2) Restrictions. Subchapter XIII of ch. 181 and s. 611.63 (3) to (6) apply to service insurance corporations.

613.63 History History: 1975 c. 223; 1979 c. 102 s. 237; 1997 a. 79.

613.66 613.66 Exclusive agency contracts.

613.66(1) (1) General. Except under sub. (2), no service insurance corporation may enter into any contract whereby any person is granted the exclusive right or privilege of soliciting, producing or receiving a fee or commission on all or substantially all of the insurance business of the corporation in this state.

613.66(2) (2) Subsidiaries. Subsection (1) does not apply to contracts in which a corporation is the exclusive agent of its insurance subsidiary authorized under s. 611.26 (1) as applied to service insurance corporations by s. 613.26, or in which the subsidiary is the exclusive agent of the corporation.

613.66 History History: 1975 c. 223.

613.67 613.67 Management contracts. Section 611.67 applies to service insurance corporations.

613.67 History History: 1975 c. 223.

613.69 613.69 Distributions.

613.69(1) (1) General. Subchapter XIII of ch. 181 applies to service insurance corporations.

613.69(2) (2) Notice to commissioner. No payments, other than the contractual compensation for services rendered to policyholders or payments to policyholders, officers and employees in the ordinary course of business, may be made to the members until 30 days after the proposed action has been reported to the commissioner.

613.69 History History: 1975 c. 223; 1997 a. 79.

subch. V of ch. 613 SUBCHAPTER V

REORGANIZATION OF CORPORATIONS

613.72 613.72 Merger of service insurance corporations.

613.72(1) (1) Authorization. Any 2 or more domestic service insurance corporations may merge, if they provide services of the same or a related nature, or if the services complement one another or there are other reasons that make it reasonable for a single corporation to render both. A written plan of merger shall be prepared, setting forth all the terms of the proposed merger and its effect on policyholders and members of both corporations. The plan shall also contain the articles and bylaws of the proposed new corporation.

613.72(2) (2) Commissioner’s approval required. No proposed merger plan under this section may be submitted to the members until the commissioner approves it.

613.72(3) (3) Grounds for disapproval. The commissioner shall approve the plan unless the commissioner finds, after a hearing, that it is contrary to the law or to the interests of insureds or of the public of this state.

613.72(4) (4) Members’ approval required. The plan must be approved separately by two-thirds of the votes cast by the members of each corporation included in the plan.

613.72(5) (5) Application of ch. 181. Except as otherwise provided in this section, ss. 181.1101 to 181.1108 apply to service insurance corporations.

613.72 History History: 1975 c. 223, 421; 1979 c. 102; 1997 a. 79.

613.74 613.74 Voluntary dissolution of solvent service insurance corporations.

613.74(1) (1) General. Sections 181.1401 to 181.1407 apply to service insurance corporations, except as provided in subs. (2) to (4).

613.74(2) (2) Plan of dissolution. At least 60 days prior to the submission to a vote of the members of any proposed voluntary dissolution of a service insurance corporation under s. 181.1401, the plan shall be filed with the commissioner. The commissioner may require the submission of such additional information as will establish the financial condition of the corporation or other facts relevant to the proposed dissolution. If the members adopt the resolution to dissolve, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the corporation. The commissioner shall approve the dissolution unless the commissioner finds, after a hearing, that it is insolvent or may become insolvent in the process of dissolution. Upon approval, the corporation may dissolve under ss. 181.1401 to 181.1407. Upon disapproval, the commissioner shall petition the court for liquidation or for rehabilitation under ch. 645.

613.74(3) (3) Conversion to involuntary liquidation. The corporation may at any time during the liquidation under ss. 181.1401 to 181.1407 apply to the commissioner to have the liquidation continued under the commissioner’s supervision; thereupon the commissioner shall apply to the court for liquidation under s. 645.41 (10).

613.74(4) (4) Revocation of voluntary dissolution. If the corporation revokes the voluntary dissolution proceedings under s. 181.1404, a copy of the revocation of voluntary dissolution proceedings shall be filed with the commissioner.

613.74 History History: 1975 c. 223, 421; 1995 a. 417; 1997 a. 79.

613.75 613.75 Conversion of a service insurance corporation into a stock or mutual insurance corporation.

613.75(1) (1) Authorization. Any service insurance corporation may be converted into a stock insurance corporation under ch. 611 upon complying with sub. (2) and as much of s. 611.76 as is applicable, or into a mutual under ch. 611 upon complying with sub. (2) and s. 611.75.

613.75(2) (2) Approval by persons entitled to vote. The commissioner shall not issue an organization permit under s. 611.13 (3) or a certificate of authority under s. 611.22 (3) unless the conversion has been approved by a mail vote of at least two-thirds of those voting, including an affirmative vote of at least half of the members, or by a vote of at least two-thirds of the members present or represented by proxy at a special meeting called for that purpose.

613.75 History History: 1975 c. 223; 1979 c. 102.

613.78 613.78 Transfer of business or assets.

613.78(1) (1) General. Sections 181.1201 and 181.1202 apply to service insurance corporations except as modified by subs. (2) and (3).

613.78(2) (2) Report to commissioner. Any action by which a service insurance corporation proposes to transfer to another person or to reinsure any part of its insurance business, other than in the normal and usual course of business, or to sell, lease, exchange, mortgage, pledge or otherwise dispose of or encumber more than 25 percent of its assets, shall be reported to the commissioner not less than 30 days in advance of the proposed effective date. The commissioner may defer the effective date for an additional period not exceeding 30 days by written notice to the corporation before expiration of the initial 30-day period.

613.78(3) (3) Disapproval. The commissioner may, within the 30-day period or its extension under sub. (2), prohibit the proposed action if it is contrary to law, the interests of insureds or the public or if it will make possible the circumvention of any of the requirements of ss. 613.72 to 613.75.

613.78 History History: 1975 c. 223; 1997 a. 79.

subch. VI of ch. 613 SUBCHAPTER VI

SUPPLEMENTARY PROVISIONS

613.80 613.80 Hospital service insurance corporations.

613.80(1) (1) Statement of purpose. This subsection is a guide to the interpretation and application of sub. (2). Payment for adequate health care services is a problem of great social importance, with many ramifications. New and better methods of payment for and delivery of health care services are needed. It is hereby stated to be the public policy of this state to encourage the formation of nonprofit hospital service insurance corporations under this chapter, on an economically sound basis, in the hope that they may ease the burden of payment for hospital services and health care for large numbers of the population, without any burden on the public treasury and free from the profit motive. If such corporations can contribute to the solution of such serious social and economic problems, they merit the support of the state. It is the policy of this state that such corporations should develop without changing the status of voluntary hospitals and that, by enabling many citizens to procure adequate hospital services for themselves, they should leave the hospitals more able to provide subsidized services to those unable to pay.

613.80(2) (2) Authorization. Nonprofit hospital service insurance corporations may be organized under this chapter to establish, maintain and operate service plans to implement sub. (1).

613.80(3) (3) Continuation. Any corporation existing under s. 182.032, 1973 stats., prior to May 5, 1976 is deemed to have been organized under this section.

613.80 History History: 1975 c. 223.

613.90 613.90 Vicarious liability. No member of or other provider for a service insurance corporation is liable, solely by virtue of a relationship with the corporation or of the providers’ contract, for any act, omission or default of the corporation or of any other member of or provider for the corporation.

613.90 History History: 1975 c. 223, 421.

613.92 613.92 Administrative agent. Service insurance corporations organized pursuant to the authorization under ss. 148.03, 447.13 and 613.80 may act as administrative agent for a government instrumentality performing an insurance, public assistance or related function.

613.92 History History: 1975 c. 223.