646.11(1)(b) (b) The earnings resulting from investments under s. 646.21 (2).
646.11(1)(c) (c) The amounts recovered under s. 645.72 (2) or a substantially similar law in the state of domicile of the insolvent insurer.
646.11(1)(d) (d) Amounts reimbursed to the fund through its subrogation and assignment rights.
646.11(1)(e) (e) Any other moneys received by the fund from time to time.
646.11(2) (2) Accounts. The fund shall be composed of 6 segregated accounts, one for life insurance, one for annuities, one for disability insurance other than policies issued or coverage provided by a health maintenance organization insurer, one for health maintenance organization insurers, one for all other kinds of insurance subject to this chapter and an administrative account.
646.11(3) (3) Expenses of fund. Necessary expenses of administration of the fund incurred in connection with actual liquidations or with continuation of contracts under s. 646.35 shall be charged to the appropriate account of the fund. All other expenses shall be charged to the administrative account.
646.11(4) (4) Liability. No contributor to the fund, person acting on the fund's behalf, insurer representative on the board, or alternate representative designated under s. 646.12 (1) (a) 3. is personally liable for any obligations of the fund. The rights of creditors are solely against the assets of the fund.
646.11(5) (5) Immunity. No cause of action of any nature may arise against and no liability may be imposed upon the fund or its agents, employees, directors, including alternate representatives designated under s. 646.12 (1) (a) 3., or contributor insurers, or the commissioner or the commissioner's agents, employees, or representatives, for any act or omission by any of them in the performance of their powers and duties under this chapter.
646.12 646.12 Administration of the fund.
646.12(1)(1)Composition of board.
646.12(1)(a)(a) Members.
646.12(1)(a)1.1. The fund shall be administered by a board of directors that shall consist of the attorney general, the state treasurer, and the commissioner, each of whom shall have full voting rights, and at least 9 but not more than 11 insurer representatives of domestic, foreign, and alien insurers subject to this chapter.
646.12(1)(a)2. 2. The commissioner shall appoint the insurer representative members for 3-year terms, after considering recommendations of the other board members currently serving terms. In recommending candidates to fill the positions, the board shall consider whether all insurers subject to this chapter are fairly represented, including property and casualty insurers, life and health insurers, health maintenance organizations and service insurance corporations, and domestic and nondomestic insurers.
646.12(1)(a)3. 3. Each appointed insurer representative may designate an alternate representative to represent the insurer at any meeting of the board. Any person serving as an alternate representative shall, while serving, have all of the powers and responsibilities of the appointed insurer representative.
646.12(1)(b) (b) Chairperson. The person to chair the board shall be elected by the members of the board annually at the first meeting after June 1.
646.12(2) (2) General powers and duties. The board shall:
646.12(2)(a) (a) Adopt rules for the administration of this chapter, including delegation of any part of its powers and its own procedures.
646.12(2)(b) (b) Create standing or special committees as needed. A minority of the members of any committee may be persons not members of the board.
646.12(2)(c) (c) Delegate to the committees any of its powers and duties under this chapter, subject to review and reconsideration by the board.
646.12(2)(d) (d) Employ or retain the personnel necessary to carry out the fund's duties and set compensation for the personnel. Personnel employed under this paragraph are not employees of the state and are not subject to s. 20.922 or ch. 230.
646.12(2)(e) (e) Advise and make recommendations to the commissioner on any matter related to the possible insolvency of an insurer covered by this chapter, and respond to any reasonable questions presented by the commissioner. Information, recommendations and advice under this subsection are privileged and confidential and are not open to public inspection under s. 19.35 (1).
646.12(2)(f)1.1. Keep records of all meetings of the fund and of its subcommittees that involve discussions of the activities of the fund in carrying out its powers and duties under this chapter.
646.12(2)(f)2. 2. Keep confidential the records under subd. 1. pertaining to specific liquidation proceedings involving an insurer until the termination of the liquidation proceedings or until sooner ordered to make the records public by a court of competent jurisdiction.
646.12(2)(f)3. 3. Keep confidential the records under subd. 1. pertaining to specific rehabilitation proceedings involving an insurer unless ordered to make the records public by a court of competent jurisdiction.
646.12(2)(g) (g) Negotiate and contract with any liquidator to achieve the purposes of this chapter.
646.12(2)(h) (h) Perform other acts necessary to achieve the purposes of this chapter.
646.12(3) (3) Compensation. Members of the board and other committee members shall receive no compensation for services but may receive reimbursement for all reasonable and necessary expenses incurred in the performance of their respective duties as directors or as committee members.
646.12(4) (4) Other powers. The fund may join an organization consisting of one or more entities of other states performing comparable functions, in order to assist the fund in carrying out its powers and duties under this chapter and otherwise further the purposes of this chapter.
646.12 Cross-reference Cross-reference: See also ch. Ins 11, Wis. adm. code.
646.13 646.13 Special duties and powers of the fund related to loss claims.
646.13(1)(1)Duties. The fund shall:
646.13(1)(a) (a) Establish procedures and acceptable forms of proof for eligible claims, which shall correspond as closely as practicable with the corresponding rules under ch. 645.
646.13(1)(b) (b) Stand in the position of the insurer in the investigation, compromise, settlement, denial, and payment of claims under s. 646.31 and the defense of 3rd-party claims against insureds, subject to the limitations of s. 645.43. The fund shall consult and cooperate with the liquidator in carrying out these duties.
646.13(2) (2) Powers. The fund may:
646.13(2)(a) (a) Review settlements, releases and judgments to which the insurer or its insureds were parties to determine the extent to which they may be properly contested.
646.13(2)(b) (b) Exercise with respect to loss claims the powers that the liquidator has with respect to other claims under ch. 645 or a substantially similar law in the state of domicile of the insolvent insurer.
646.13(2)(c) (c) With respect to any action against an insurer which is in liquidation, exercise the powers of the liquidator under s. 645.49 (1) or a substantially similar law in the state of domicile of the insolvent insurer.
646.13(2)(d) (d) Have standing to appear in any liquidation proceedings in this state involving an insurer in liquidation, and have authority to appear or intervene before a court or agency of any other state having jurisdiction over an insolvent insurer, in accordance with the laws of that state, with respect to which the fund is or may become obligated or that has jurisdiction over any person or property against which the fund may have subrogation or other rights. Standing shall extend to all matters germane to the powers and duties of the fund, including proposals for reinsuring, modifying, or guaranteeing the policies or contracts of the insolvent insurer and the determination of the policies or contracts and contractual obligations.
646.13(2)(e) (e) Pursue salvage and subrogation with respect to paid covered claim obligations and retain any amounts recovered.
646.13(2)(f) (f) Appoint and direct legal counsel for the defense of covered claims under insurance policies.
646.13(2)(g) (g) Sue and be sued, make contracts, including a contract with an insured for administration and payment of claims for which the insured is responsible, and borrow money necessary to carry out its duties, including money with which to pay claims under s. 646.31 or to continue coverage under s. 646.35. The fund may offer as security for such loans its claims against the liquidator or its power to levy assessments under this chapter.
646.13(3) (3) No duty or liability. The fund has no duty or liability with respect to any claim filed as follows:
646.13(3)(a) (a) With the liquidator under s. 645.61 after the original date for filing specified by the liquidator under s. 645.47 (2), unless the liquidator determines that the claim is considered to have been timely filed under s. 645.61 (2) and the claim participates fully in every distribution to the same extent as other timely filed claims in the same class.
646.13(3)(b) (b) With a liquidator or court under the laws of any other state after the original date for filing specified by the liquidator or court, unless the liquidator or court determines that the claim is considered to have been timely filed under a law substantially similar to s. 645.61 (2) and the claim participates fully in every distribution to the same extent as other timely filed claims in the same class.
646.13(3)(c) (c) Except for claims under life insurance policies, annuities, or noncancelable or guaranteed renewable disability insurance policies, and except for claims determined to be excused late filings as provided in pars. (a) and (b), if the original date for filing is extended by the liquidator or court, with a liquidator or court after the earlier of the following:
646.13(3)(c)1. 1. Eighteen months after the order of liquidation is entered.
646.13(3)(c)2. 2. The extended date for filing specified by the liquidator or court.
646.13(3)(d) (d) Except for claims under life insurance policies, annuities, or noncancelable or guaranteed renewable disability insurance policies, and except for claims determined to be excused late filings as provided in pars. (a) and (b), if no date for filing is set by the liquidator or court, with a liquidator or court after 18 months after the order of liquidation is entered.
646.13(4) (4) When duty to defend terminates. Any obligation of the fund to defend an insured ceases upon the fund's payment, by settlement or on a judgment, of an amount equal to the lesser of the fund's covered claim obligation limit or the applicable policy limit, subject to any express policy terms regarding tender of limits.
646.15 646.15 Proceedings involving insurers.
646.15(1)(1)Injunctions and orders.
646.15(1)(a) (a) If an insurer is in liquidation, the fund may apply to the circuit court for Dane County for, and the court may grant, restraining orders, temporary and permanent injunctions, and other orders considered necessary and proper to prevent any of the following:
646.15(1)(a)1. 1. Interference with the fund or with its administrative proceedings.
646.15(1)(a)2. 2. The institution or further prosecution of any action or proceeding involving the insurer or in which the fund is obligated to defend a party.
646.15(1)(a)3. 3. The obtaining of a preference, judgment, garnishment or lien against the insurer or its assets.
646.15(1)(a)4. 4. Any other threatened or contemplated action that might prejudice the rights of policyholders or the administration of the liquidation or fund proceedings.
646.15(1)(b) (b) Upon granting an application under par. (a), the court may retain jurisdiction of any further proceeding or relief, as the court considers necessary and proper, involving the insurer.
646.15(2) (2) Exclusive proceedings. A court of this state does not have jurisdiction to entertain, hear or determine a proceeding or to grant relief if the proceeding or relief involves or is related to a nondomestic insurer which is in liquidation unless the court is so authorized under this chapter or ch. 645.
646.15 History History: 1987 a. 325; 1999 a. 30; 2003 a. 261.
646.16 646.16 Payment of deposits made for benefit of creditors.
646.16(1)(1)The commissioner shall promptly pay to the fund any deposit held in this state that was paid, as required by law or the commissioner, by the insolvent insurer for the benefit of creditors, including policyholders, and not turned over to the domiciliary liquidator upon the entry of a final order of liquidation of an insurer domiciled in this state or in a reciprocal state, as defined in s. 645.03 (1) (i). Of the amount paid to the fund under this subsection, the fund may retain the percentage determined by dividing the aggregate amount of policyholders' claims that are related to the insolvency and for which the fund has provided benefits under this chapter by the aggregate amount of all policyholders' claims in this state that are related to the insolvency. The fund shall remit the balance to the domiciliary liquidator.
646.16(2) (2)Any amount retained by the fund under sub. (1) shall be treated as a distribution of estate assets under s. 645.72 or a similar provision of the state of domicile of the insolvent insurer. Deposits subject to this section shall not be treated as deposits as security, escrow, or other security under s. 645.03 (1) (j).
646.16 History History: 2003 a. 261.
646.21 646.21 Custody and investment of assets.
646.21(1)(1)Custody. Except as provided in sub. (2), the board controls the assets of the fund. The board shall select regulated financial institutions in this state which receive deposits in which to establish and maintain accounts for assets needed on a current basis. If practicable, the accounts shall earn interest.
646.21(2) (2) Investment of assets. The board may request that assets of the fund not needed currently be invested by the investment board under s. 25.17. If so requested, the investment board shall invest those assets in investments with maturities and liquidity appropriate to the probable needs of the fund for money to perform its duties. All income attributable to the investments shall be credited to the fund, and both income and principal shall be transferred to the fund on request of the board. Assets held by the fund shall be invested in a similar manner.
646.21 History History: 1979 c. 109; 1983 a. 120; 2003 a. 261.
subch. II of ch. 646 SUBCHAPTER II
CLAIMS PROCEDURES
646.31 646.31 Eligible claims.
646.31(1)(1)Conditions of eligibility. A claim is not eligible for payment from the fund unless it is an unpaid claim for a loss insured under the policy or annuity, or an unpaid claim under a supplementary contract providing for a retained asset account, and all of the following conditions are met:
646.31(1)(a) (a) Issued by authorized insurer. The claim arises out of an insurance policy or annuity issued by an insurer which was authorized to do business in this state either at the time the policy or annuity was issued or when the insured event occurred, and against which an order of liquidation, which is not stayed, has been entered by a court of competent jurisdiction in the insurer's domiciliary state.
646.31(1)(b) (b) Assessability of insurer.
646.31(1)(b)1.1. The claim arises out of business not exempt from assessment under s. 646.01 (1).
646.31(1)(b)2. 2. The claim does not arise out of business against which assessments are prohibited under any federal or state law.
646.31(1)(c) (c) Contact with state. The claim is a member of one of the classes of claims under sub. (2).
646.31(1)(cm) (cm) Termination of coverage. Except for claims under life insurance policies, annuities or noncancelable or guaranteed renewable disability insurance policies, the claim arises within 30 days after the order of liquidation is entered or before any of the following occur:
646.31(1)(cm)1. 1. The policy expires, if the expiration date is less than 30 days after the order of liquidation is entered.
646.31(1)(cm)2. 2. The insured replaces or cancels the policy, if either action is taken within 30 days after the order of liquidation is entered.
646.31(1)(d) (d) Exceptions. The claim is not any of the following:
646.31(1)(d)1. 1. Based solely on a judgment.
646.31(1)(d)2. 2. Made for interest on any claim.
646.31(1)(d)3. 3. Made under s. 645.63 (2).
646.31(1)(d)4. 4. Subordinated under s. 645.90.
646.31(1)(d)5. 5. An indemnification recovered as a voidable preference under s. 645.54 (1) (c).
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2021-22 Wisconsin Statutes updated through 2023 Wis. Act 93 and through all Supreme Court and Controlled Substances Board Orders filed before and in effect on March 22, 2024. Published and certified under s. 35.18. Changes effective after March 22, 2024, are designated by NOTES. (Published 3-22-24)