Chapter 601

601.43(1)(b)3. 3. A person who is under the control of the examinee, or a person who is under the control of a person who controls or has a right to control the examinee whether exclusively or with others.

601.43(1)(b)4. 4. An individual practice association which contracts with the examinee to provide health care services.

601.43(1)(c) (c) Availability of records. On demand every examinee under par. (a) shall make available to the commissioner for examination any of its own accounts, records, documents or evidences of transactions and any of those of the persons listed in par. (b). Failure to do so shall be deemed to be concealment of records under s. 645.41 (8), except that if the examinee is unable to obtain accounts, records, documents or evidences of transactions, failure shall not be deemed concealment if the examinee terminates immediately the relationship with the other person.

601.43(1)(d) (d) Delivery of records to the office. On order of the commissioner any licensee, registrant, or permittee under chs. 600 to 647 shall bring to the office for examination such records as the order reasonably requires.

601.43(2) (2) Duty to examine.

601.43(2)(a) (a) Insurers and rate service organizations. The commissioner shall examine every domestic insurer and every licensed rate service organization.

601.43(2)(b) (b) On request. Whenever the commissioner is requested by verified petition signed by 25 persons interested as shareholders, policyholders or creditors of an insurer alleging that there are grounds for formal delinquency proceedings, the commissioner shall forthwith examine the insurer as to any matter alleged in the petition. Whenever the commissioner is requested to do so by the board of directors of a domestic insurer, the commissioner shall examine the insurer as soon as reasonably possible.

601.43(2)(c) (c) Specific requirements. The commissioner shall examine insurers as otherwise required by law.

601.43(3) (3) Audits or actuarial or other evaluations. In lieu of all or part of an examination under subs. (1) and (2), or in addition to it, the commissioner may order an independent audit by certified public accountants or an actuarial or other evaluation by actuaries or other experts approved by the commissioner of any person subject to the examination requirement. Any accountant, actuary or other expert selected is subject to rules respecting conflicts of interest promulgated by the commissioner. Any audit or evaluation under this section is subject to s. 601.44, so far as appropriate.

601.43(4) (4) Alternatives to examination. In lieu of all or part of an examination under this section, the commissioner may accept the report of an audit already made by certified public accountants or of an actuarial or other evaluation already made by actuaries or other experts approved by the commissioner, or the report of an examination made by the insurance department of another state or of the examination by another government agency in this state, the federal government or another state.

601.43(5) (5) Purpose and scope of examination. An examination may but need not cover comprehensively all aspects of the examinee’s affairs and condition. The commissioner shall determine the exact nature and scope of each examination, and in doing so shall take into account all relevant factors, including but not limited to the length of time the examinee has been doing business, the length of time the examinee has been licensed in this state, the nature of the business being examined, the nature of the accounting records available and the nature of examinations performed elsewhere. The examination of an alien insurer shall be limited to insurance transactions and assets in the United States unless the commissioner orders otherwise after finding that extraordinary circumstances necessitate a broader examination.

601.43 History History: 1977 c. 203; 1977 c. 339 s. 43; 1979 c. 89; 1979 c. 102 ss. 70, 71, 236 (6), (9); 1979 c. 177; 1981 c. 20; 1983 a. 358; 1985 a. 29; 1987 a. 247; 1989 a. 23; 1999 a. 30; 2019 a. 129.

601.44 601.44 Conducting examinations.

601.44(1) (1) Order of examination. For each examination under s. 601.43, the commissioner shall issue an order stating the scope of the examination and designating the examiner in charge. Upon demand a copy of the order shall be exhibited to the examinee.

601.44(2) (2) Access to examinee. Any examiner authorized by the commissioner shall, so far as necessary to the purposes of the examination, have access at all reasonable hours to the premises and to any books, records, files, securities, documents or property of the examinee and to those of persons under s. 601.43 (1) (b) so far as they relate to the affairs of the examinee.

601.44(3) (3) Cooperation. The officers, employees and agents of the examinee and of persons under s. 601.43 (1) (b) shall comply with every reasonable request of the examiners for assistance in any matter relating to the examination. No person may obstruct or interfere with the examination in any way other than by legal process.

601.44(4) (4) Correction of books. If the commissioner finds the accounts or records to be inadequate for proper examination of the condition and affairs of the examinee or improperly kept or posted, the commissioner may employ experts to rewrite, post or balance them at the expense of the examinee.

601.44(5) (5) Report on examination. The examiner in charge of an examination shall make a proposed report of the examination which shall include such information and analysis as is ordered in sub. (1), together with the examiner’s recommendations. Preparation of the proposed report may include conferences with the examinee or the examinee’s representatives at the option of the examiner in charge. The proposed report shall remain confidential until filed under sub. (6).

601.44(6) (6) Adoption and filing of examination report. The commissioner shall serve a copy of the proposed report upon the examinee. Within 20 days after service, the examinee may serve upon the commissioner a written demand for a hearing on the contents of the report. If a hearing is demanded, the commissioner shall give notice and hold a hearing under ch. 227, except that on demand by the examinee the hearing shall be private. Within 60 days after the hearing or if no hearing is demanded then within 60 days after the last day on which the examinee might have demanded a hearing, the commissioner shall adopt the report with any necessary modifications and file it for public inspection, or the commissioner shall order a new examination.

601.44(7) (7) Copy for examinee. The commissioner shall forward a copy of the examination report to the examinee immediately upon adoption, except that if the proposed report is adopted without change, the commissioner need only so notify the examinee.

601.44(8) (8) Copies for board. The examinee shall forthwith furnish copies of the adopted report to each member of its board.

601.44(9) (9) Copies for other persons. The commissioner may furnish, without cost or at a price to be determined by the commissioner, a copy of the adopted report to the insurance commissioner of each state in the United States and of each foreign jurisdiction in which the examinee is authorized to do business, and to any other interested person in this state or elsewhere.

601.44(10) (10) Report as evidence. In any proceeding by or against the examinee or any officer or agent thereof the examination report as adopted by the commissioner shall be admissible as evidence of the facts stated therein. In any proceeding commenced under ch. 645, the examination report whether adopted by the commissioner or not shall be admissible as evidence of the facts stated therein. In any proceeding by or against the examinee, the facts asserted in any report properly admitted in evidence shall be presumed to be true in the absence of contrary evidence.

601.44 History History: 1977 c. 203 s. 102; 1979 c. 102 ss. 72, 236 (6), (17); 1991 a. 316.

601.44 Cross-reference Cross-reference: See also ch. Ins 5, Wis. adm. code.

601.45 601.45 Examination costs.

601.45(1) (1) Costs to be paid by examinees. The reasonable costs of examinations and audits under ss. 601.43, 601.44, and 601.83 (5) (f) shall be paid by examinees except as provided in sub. (4), either on the basis of a system of billing for actual salaries and expenses of examiners and other apportionable expenses, including office overhead, or by a system of regular annual billings to cover the costs relating to a group of companies, or a combination of such systems, as the commissioner may by rule prescribe. Additional funding, if any, shall be governed by s. 601.32. The commissioner shall schedule annual hearings under s. 601.41 (5) to review current problems in the area of examinations.

601.45(2) (2) Duty to pay. The amount payable under sub. (1) shall become due 10 days after the examinee has been served a detailed account of the costs.

601.45(3) (3) Deposit. The commissioner may require any examinee, before or from time to time during an examination, to deposit with the secretary of administration such deposits as the commissioner deems necessary to pay the costs of the examination. Any deposit and any payment made under subs. (1) and (2) shall be credited to the appropriation account under s. 20.145 (1) (g) 1.

601.45(4) (4) Exemptions. On the examinee’s request or on the commissioner’s own motion, the commissioner may pay all or part of the costs of an examination from the appropriation under s. 20.145 (1) (g) 1., whenever the commissioner finds that because of the frequency of examinations or other factors, imposition of the costs would place an unreasonable burden on the examinee. The commissioner shall include in his or her annual report information about any instance in which the commissioner applied this subsection.

601.45(5) (5) Retaliation. Deposits and payments under this section shall not be deemed to be a tax or license fee within the meaning of any statute. If any other state charges a per diem fee for examination of examinees domiciled in this state, any examinee domiciled in that other state shall be required to pay the same fee when examined by the insurance office of this state.

601.45 History History: 1977 c. 29; 1979 c. 102; 1981 c. 20; 2003 a. 33; 2007 a. 20; 2011 a. 32; 2017 a. 138.

601.45 Cross-reference Cross-reference: See also s. Ins 16.01, Wis. adm. code.

601.46 601.46 Commissioner’s records and reports.

601.46(1) (1) Record maintenance. The commissioner shall maintain the records required by law and those necessary to provide for the continued effective operation of the office, to constitute an adequate and proper recording of its activities and to protect the rights of the people of this state. The records shall be preserved in the office except as provided in s. 16.61.

601.46(2) (2) Record of proceedings and activities. The commissioner shall maintain a permanent record of proceedings and important activities, including a concise statement of the condition of each insurer visited or examined, and including a record of all certificates of authority and licenses issued.

601.46(3) (3) Annual reports. Prior to September 1 of each year, the commissioner shall submit a report to the governor and to the chief clerk of each house of the legislature, for distribution to the legislature under s. 13.172 (2), which shall include, for the preceding calendar year:

601.46(3)(a) (a) The chart and explanation prepared under s. 601.19;

601.46(3)(b) (b) A general review of the insurance business in this state, including a report on emerging regulatory problems, developments and trends, including trends related to prescription drugs;

601.46(3)(c) (c) A summary of the complaints made to or processed by the office about insurers, agents and others connected with insurance, and information about their disposition;

601.46(3)(d) (d) A summary of rules promulgated and circular letters distributed;

601.46(3)(e) (e) A list of all insurers authorized to do business in this state during the year, with appropriate and useful information concerning them; including a list of insurers organized, admitted, merged or withdrawn;

601.46(3)(f) (f) A list of all revocations of licenses or certificates of authority and the reasons therefor;

601.46(3)(g) (g) The changes made in chs. 600 to 655;

601.46(3)(h) (h) A summary of receipts and expenses, including the information required to be included by s. 601.45 (4);

601.46(3)(i) (i) The kind and amount of insurance carried in all state insurance funds under chs. 604 to 607 together with the amount of premiums collected, the source and nature of any other income, and the disbursements made. The report shall state separately the premiums, losses, the kind and amount of insurance carried on state property, and on other than state property; and

601.46(3)(j) (j) Such other information on the general conduct and condition of insurers doing business in this state as the commissioner or the governor deems necessary or as is prescribed by law.

601.46(4) (4) Public inspection. All records and reports shall be open to public inspection unless specifically otherwise provided by statute or by rule.

601.46(5) (5) Copies of records. The commissioner shall provide to any person on request certified or uncertified copies of any record in the department that is open to public inspection.

601.46(6) (6) Audits. The commissioner shall reimburse the legislative audit bureau for the cost of audits required to be performed under s. 13.94 (1) (de).

601.46 History History: 1971 c. 40 ss. 82, 93; 1973 c. 117; 1975 c. 41 s. 52; 1977 c. 339 s. 43; 1979 c. 89, 102, 221; 1981 c. 20 s. 2202 (26) (c); 1983 a. 358 s. 14; 1987 a. 186; 1989 a. 187 s. 29; 1993 a. 16; 2021 a. 9.

601.465 601.465 Nondisclosure of information.

601.465(1m) (1m) Types of information. The office may refuse to disclose and may prevent any other person from disclosing any of the following:

601.465(1m)(a) (a) Testimony, reports, records and information that are obtained, produced or created in the course of an inquiry under s. 601.42.

601.465(1m)(b) (b) Except as provided in s. 601.44 (6) to (10), testimony, reports, records and information that are obtained, produced or created in the course of an examination under s. 601.43.

601.465(1m)(c) (c) Testimony, reports, records, communications, and information that are obtained by the office from, or provided by the office to, any of the following, under a pledge of confidentiality or for the purpose of assisting or participating in monitoring activities or in the conduct of an inquiry, investigation, or examination:

601.465(1m)(c)1. 1. The National Association of Insurance Commissioners.

601.465(1m)(c)2. 2. An agent or employee of the National Association of Insurance Commissioners.

601.465(1m)(c)3. 3. The insurance commissioner of another state.

601.465(1m)(c)4. 4. An agent or employee of the insurance commissioner of another state.

601.465(1m)(c)5. 5. An international, federal, state or local regulatory or law enforcement agency.

601.465(1m)(c)6. 6. An agent or employee of an agency described in subd. 5.

601.465(1m)(c)7. 7. Members of a supervisory college described in s. 617.215.

601.465(1m)(c)8. 8. The International Association of Insurance Supervisors.

601.465(1m)(c)9. 9. An agent or employee of the International Association of Insurance Supervisors.

601.465(1m)(c)9m. 9m. The security fund created under ch. 646.

601.465(1m)(c)10. 10. A fund or other entity in another state, or an association acting on behalf of the fund or other entity, that is organized for the same purpose as the security fund created under ch. 646.

601.465(1m)(d) (d) Biographical data reported under s. 611.54 (1) relating to directors or principal officers of a corporation.

601.465(1n) (1n) Presumption of confidentiality.

601.465(1n)(a) (a) Notwithstanding sub. (1m) and subch. II of ch. 19, it is presumed that nonpublic documents and information provided by an insurer to the office under s. 601.42 or 601.43 are proprietary and confidential and that the potential for harm and competitive disadvantage to the insurer if the documents and information are made public by the office outweighs the public interest in the disclosure of the documents and information.

601.465(1n)(b) (b) With notice to the insurer, the presumption under par. (a) may be rebutted by the requesting party presenting clear and convincing evidence to a court of competent jurisdiction that the public interest in the disclosure of the documents and information substantially outweighs the potential for harm or competitive disadvantage to the insurer if the documents and information are disclosed and that the public interest concerns cannot be addressed without the disclosure of the documents and information. If the presumption under par. (a) is successfully rebutted, disclosure of the documents and information shall be made only to the extent necessary to protect the public interest.

601.465(1n)(c) (c) Paragraph (a) does not apply to the commissioner’s discretion to disclose documents and information provided by an insurer to the office under s. 601.42 or 601.43 as a part of an enforcement proceeding the commissioner brings under s. 601.64.

601.465(2m) (2m) Waiver and applicability of the privilege. All of the following apply to the privilege under this section:

601.465(2m)(a) (a) The privilege may be waived only by the affirmative written and specific consent of the commissioner.

601.465(2m)(b) (b) The privilege may not be constructively waived.

601.465(2m)(c) (c) The privilege applies to testimony, reports, records, communications, and information obtained, created, or provided by any official, employee, or agent of the office for the purpose of assisting or participating in monitoring activities or in the conduct of an inquiry, investigation, or examination by, or coordinated through, the National Association of Insurance Commissioners.

601.465(2m)(d) (d) The privilege applies to testimony, reports, records, communications, and information in existence on or after April 9, 2008.

601.465(2m)(e) (e) Privileged information is not subject to inspection or copying under s. 19.35 (1).

601.465(2m)(f) (f) Privileged information is not subject to subpoena or discovery and is not admissible as evidence in any private civil action.

601.465(2m)(g) (g) The commissioner may not be compelled to testify concerning privileged information in any private civil action.

601.465(2m)(h) (h) No person, while acting under the authority of the commissioner, may testify concerning privileged information in any private civil action.

601.465(2m)(i) (i) The privilege is not waived as a result of the commissioner sharing information as authorized under sub. (1m).

601.465(3) (3) Exceptions. This section does not apply to any of the following:

601.465(3)(a) (a) Own risk and solvency assessment reports and related information provided by an insurer under ch. 622, which are subject only to the confidentiality provisions in ch. 622.

601.465(3)(b) (b) Enterprise risk filing and any related information provided by an insurer under rules promulgated under s. 617.12, which are not subject to subch. II of ch. 19 and are subject only to any confidentiality provisions of rules promulgated under s. 617.12.

601.465(3)(c) (c) Reports of internal control over financial reporting and any related information provided by an insurer under s. Ins 50.17, Wis. Adm. Code, which are not subject to subch. II of ch. 19 and are subject only to the confidentiality provisions of s. Ins 50.17 (6) (b), Wis. Adm. Code.

601.465(3)(d) (d) Any information defined as confidential information under s. 623.06 (12) (am), which is subject only to the confidentiality provisions in s. 623.06 (12).

601.465(3)(e) (e) All information protected under s. 610.80 (4), including the corporate governance annual disclosures and related information, which is subject only to the confidentiality provisions in s. 610.80 (4).

601.465(3)(f) (f) All information protected under s. 601.955, which is subject only to the confidentiality provisions in s. 601.955.