AB701: Bill Text

AB701,16,15 646.13 (2) (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 impaired or 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 impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations.

AB701, s. 39 Section 39. 646.13 (4) of the statutes is amended to read:

AB701,16,21 646.13 (4) When duty to defend terminates. Any obligation of the fund to defend an insured ceases upon the fund's payment, by settlement releasing the insured 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.

AB701, s. 40 Section 40. 646.31 (1) (b) of the statutes is renumbered 646.31 (1) (b) 1.

AB701, s. 41 Section 41. 646.31 (1) (b) 2. of the statutes is created to read:

AB701,16,25 646.31 (1) (b) 2. The claim does not arise out of business against which assessments are prohibited under any federal or state law.

AB701, s. 42 Section 42. 646.31 (4) (a) of the statutes is amended to read:

AB701,17,4 646.31 (4) (a) Except in regard to worker's compensation insurance and except as provided in par. (b), the obligation of the fund on a single risk, loss or life may not exceed $300,000, regardless of the number of policies or contracts.

AB701, s. 43 Section 43. 646.31 (12) of the statutes is amended to read:

AB701,17,11 646.31 (12) Net worth of insured. Except for claims under s. 646.35, payment of a first-party claim under this chapter to an insured whose net worth, as defined in s. 646.325 (1), exceeds $10,000,000 $25,000,000 is limited to the amount by which the aggregate of the insured's claims that satisfy subs. (1) to (7), (9) and (9m) plus the amount, if any, recovered from the insured under s. 646.325 exceeds 10% of the insured's net worth.

AB701, s. 44 Section 44. 646.32 (1) of the statutes is amended to read:

AB701,17,18 646.32 (1) Appeal. A claimant whose claim is reduced or declared ineligible shall promptly be given notice of the determination and of the right to object under this section. The claimant may appeal to the board within 30 days after the mailing of the notice. The board may appoint a committee of the board or a hearing examiner to decide any such appeal. The claimant may not pursue the claim in court except as provided in sub. (2).

AB701, s. 45 Section 45. 646.32 (2) of the statutes is amended to read:

AB701,17,22 646.32 (2) Review. Decisions of the board or its appointed committee or hearing examiner under sub. (1) are subject to judicial review in the circuit court for Dane County. A petition for judicial review shall be filed within 60 days of the decision.

AB701, s. 46 Section 46. 646.325 (1) of the statutes is amended to read:

AB701,18,10 646.325 (1) Definition. In this section, "net worth" means the amount of an insured's total assets less the insured's total liabilities at the end of the insured's fiscal year immediately preceding the date the liquidation order was entered, as shown on the insured's audited financial statement, and or other substantiated financial information acceptable to the fund in its sole discretion. "Net worth" includes the consolidated net worth of all of the corporate affiliates, subsidiaries, operating divisions, holding companies, and parent entities that are, and, if the insured is privately owned, natural persons who have an ownership interest, shown as insureds or additional insureds on the policy issued by the insurer. If the insured is a natural person, "net worth" means the insured's total assets less the insured's total liabilities on December 31 immediately preceding the date the liquidation order was entered.

AB701, s. 47 Section 47. 646.325 (2) (a) 1. of the statutes is amended to read:

AB701,18,13 646.325 (2) (a) 1. An insured whose net worth exceeds $10,000,000 $25,000,000.

AB701, s. 48 Section 48. 646.325 (4) of the statutes is created to read:

AB701,18,19 646.325 (4) Costs and fees. In addition to recovery under sub. (2), the fund may recover reasonable attorney fees, disbursements, and all other actual costs expended in pursuing recovery under sub. (2), plus interest calculated at the legal rate under s. 138.04, which shall begin to accrue on all amounts not paid within 30 days after the date of the fund's written notification to the insured of the amount due.

AB701, s. 49 Section 49. 646.51 (3) (c) of the statutes is amended to read:

AB701,18,25 646.51 (3) (c) Administrative assessments. The board may authorize assessments on a prorated or nonprorated basis to meet administrative costs and other expenses whether or not related to the liquidation or rehabilitation of a particular insurer. Nonprorated assessments may not exceed $200 $500 per insurer in any year.

AB701, s. 50 Section 50. 646.51 (5) of the statutes is amended to read:

AB701,19,6 646.51 (5) Collection. After the rate of assessment has been fixed, the fund shall send to each insurer a statement of the amount it is to pay. The fund shall designate whether the assessments shall be made payable in one sum or in installments. Assessments shall be collected by the same procedures as premium taxes or license fees under ch. 76.

AB701, s. 51 Section 51. 646.51 (6) of the statutes is amended to read:

AB701,19,13 646.51 (6) Appeal and review. Within 30 days after the fund sends the statement under sub. (5), an insurer, after paying the assessment under protest, may appeal the assessment to the board or a committee thereof. The decision of the board or committee on the appeal is subject to judicial review in the circuit court for Dane County. A petition for judicial review shall be filed within 60 days of the board's or committee's decision.

AB701, s. 52 Section 52. Initial applicability.

AB701,19,18 (1) The treatment of sections 646.32 (2) and 646.51 (6) of the statutes first applies to decisions of the board of directors of the insurance security fund or its appointed committee or hearing examiner that are issued on the effective date of this subsection.

AB701,19,21 (2) The treatment of sections 646.31 (12) and 646.325 (2) (a) 1. of the statutes first applies to liquidations for which an order of liquidation is issued on the effective date of this subsection.

AB701,20,4 (3) If a motor vehicle insurance policy or an umbrella or excess liability policy that is in effect on the effective date of this subsection contains a provision that is inconsistent with the treatment of section 632.32 (2) (ag), (at), (be), (e) (intro.), 2., or 3., (g) (intro.) or 1., (4) (a) (intro.) or (d), or (4r) (a) or (c) of the statutes, the treatment of section 632.32 (2) (ag), (at), (be), (e) (intro.), 2., or 3., (g) (intro.) or 1., (4) (a) (intro.) or (d), or (4r) (a) or (c) of the statutes, whichever is applicable, first applies to that motor vehicle insurance policy or umbrella or excess liability policy on the date on which it is renewed.

AB701,20,5 (End)