Annuities exempt from regulation. 632.65(1)(1)
In this section, “qualified charitable gift annuity" means an annuity that satisfies all of the following:
The annuity is established under a transaction that, for federal income tax purposes, is treated partly as a charitable contribution under section 170
of the Internal Revenue Code and partly as an investment in an annuity contract under section 72
of the Internal Revenue Code.
The annuity meets the requirements of an annuity for which the obligation to pay is excluded from the definition of “acquisition indebtedness" under section 514
(c) (5) of the Internal Revenue Code.
Notwithstanding any provision of chs. 600
to the contrary and except as provided in this section, a qualified charitable gift annuity is not subject to regulation under chs. 600
A charitable organization may not issue a qualified charitable gift annuity unless the charitable organization has been in continuous existence for at least 3 years, or is a successor or affiliate of a charitable organization that has been in continuous existence for at least 3 years.
A qualified charitable gift annuity contract must include the following disclosure statement: “A qualified charitable gift annuity is not insurance under the laws of this state and is not subject to regulation by the commissioner of insurance of this state or protected by an insurance guaranty fund or an insurance guaranty association."
This section applies to qualified charitable gift annuities in existence on or after April 18, 2014. A person that issued before April 18, 2014, a qualified charitable gift annuity that is in existence on April 18, 2014, shall provide notice of the provisions of this section to the policy owner or beneficiary, whichever is appropriate, of the qualified charitable gift annuity.
History: 2013 a. 271
; 2015 a. 195
Annuity contracts without life contingencies. 632.66(1)(1)
The commissioner may by rule authorize insurers to issue annuity contracts which are without life contingencies. If the commissioner authorizes insurers to issue annuity contracts without life contingencies, the commissioner shall promulgate rules regulating those contracts.
In this subsection, “funding agreement” means an annuity without life contingencies that is an agreement for an insurer to accept and accumulate funds and to make one or more payments at future dates in fixed or variable amounts, or both, that are not based on mortality or morbidity contingencies.
A domestic insurer that holds a valid certificate of authority to transact the business of life insurance and annuities in this state may issue a funding agreement if all of the following conditions are met:
The domestic insurer's board of directors, or an authorized committee of the board, approves the domestic insurer's plan relating to funding agreements.
The commissioner determines that the issuance of funding agreements by the domestic insurer is not adverse to the interests of the policyholders of the domestic insurer, except that no determination from the commissioner is required if the domestic insurer has more than $200 billion in admitted assets. In making a determination under this subdivision, the commissioner shall consider the domestic insurer's specific policy objective and strategies, investment and risk management guidelines, and aggregate maximum limits on the funding agreement business.
No amounts may be guaranteed or credited under the funding agreement except upon reasonable assumptions as to investment income and expenses and on a basis equitable to all holders of a given class of the funding agreement.
The domestic insurer complies with the form filing requirements under s. 631.20
with respect to the funding agreement.
The issuance or delivery of a funding agreement by an insurer in this state shall constitute doing an insurance business herein.
A domestic insurer may offer funding agreements directly through the domestic insurer and is not required to use licensed intermediaries when marketing funding agreements.
Amounts paid to the domestic insurer, and proceeds applied under optional modes of settlement, under funding agreements may be allocated to one or more separate accounts pursuant to s. 611.24
Notwithstanding ch. 551
, the commissioner has sole authority to regulate the issuance and sale of funding agreements, including the persons selling funding agreements on behalf of insurers.
Notwithstanding s. 601.465 (1m)
and subch. II of ch. 19
, any materials submitted to the commissioner pursuant to an approval under par. (b) 2.
or pursuant to a request from the commissioner related to a funding agreement shall be held confidential pursuant to s. 601.465 (1n)
The commissioner may promulgate rules as necessary for the implementation of this subsection.
History: 1987 a. 247
; 2021 a. 114
See also s. Ins 6.75
, Wis. adm. code.
Effect of power of attorney for health care.
Executing a power of attorney for health care under ch. 155
may not be used to impair in any manner the procurement of a life insurance policy or to modify the terms of an existing life insurance policy. A life insurance policy may not be impaired or invalidated in any manner by the exercise of a health care decision by a health care agent on behalf of a person whose life is insured under the policy and who has authorized the health care agent under ch. 155
History: 1989 a. 200
Life settlements. 632.69(1)(a)
“Advertisement" means any written, electronic, or printed communication or any communication made by means of recorded telephone messages or transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures, and videos, published, disseminated, circulated, or placed, directly or indirectly, before the public in this state for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequeath, or transfer the death benefit or ownership of a policy or an interest in a policy pursuant to a life settlement contract.
“Broker" means a person who, on behalf of an owner and for a fee, commission, or other valuable consideration, offers or attempts to negotiate life settlement contracts between an owner and one or more providers, or one or more brokers. “Broker" does not include an attorney or certified public accountant who is retained to represent the owner and whose compensation is not paid directly or indirectly by the provider or purchaser.
“Business of life settlements" means an activity involved in the offering soliciting, negotiating, procuring, effectuating, purchasing, investing in, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothicating, or in any other manner, acquiring an interest in a policy by means of a life settlement contract.
“Chronically ill" means any of the following:
Being unable to perform at least 2 activities of daily living, including eating, toileting, transferring, bathing, dressing, or continence.
Requiring substantial supervision to monitor the health and safety of the individual due to his or her severe cognitive impairment.
Having a level of disability similar to that described in subd. 1.
, as defined by the U.S. department of health and human services.
“Financing entity" means a person whose principal activity related to a life settlement is providing funds to effect the life settlement contract or purchase of one or more policies and who has an agreement in writing with one or more providers to finance the acquisition of life settlement contracts, including an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy from a life settlement provider, credit enhancer, or any entity that has a direct ownership in a policy that is the subject of a life settlement contract. “Financing entity" does not include an investor that is not an accredited investor, as defined in 17 CFR 230.501
(a), or a purchaser.
“Financing transaction" means a transaction in which a licensed provider obtains financing from a financing entity including any secured or unsecured financing, any securitization transaction, or any securities offering which is either registered or exempt from registration under federal and state securities law.
“Fraudulent life settlement act" includes all of the following:
Acts or omissions that are committed by any person, or that a person permits its employees or its agents to engage in, for the purpose of pecuniary gain, including any of the following:
Presenting, causing to be presented, or preparing with the knowledge or belief that it will be presented to or by a provider, broker, purchaser, financing entity, insurer, insurance producer, or any other person, false material information, or concealing material information, as part of, in support of, or concerning a fact material to an application for the issuance of a life settlement contract or a policy; the underwriting of a life settlement contract or a policy; a claim for payment or benefit under a life settlement contract or a policy; premiums paid on an insurance policy; payments and changes in ownership or beneficiary made in accordance with the terms of a life settlement contract or a policy; the reinstatement or conversion of a policy; the solicitation, offer, effectuation, or sale of a life settlement contract or a policy; the issuance of written evidence of a life settlement contract or a policy; or a financing transaction.
Employing any plan, device, scheme, or artifice to defraud in the business of life settlements.
Failing to disclose to an insurer, if the request for such disclosure has been made by the insurer, that the prospective owner has undergone a life expectancy evaluation by any person or entity other than the insurer or its authorized representatives in connection with the issuance of the policy.
Any of the following acts that any person does, or permits its employees or agents to do, in the furtherance of a fraud or to prevent the detection of a fraud:
Removing, concealing, altering, destroying, or sequestering from the commissioner the assets or records of a licensee or other person engaged in the business of life settlements.
Misrepresenting or concealing the financial condition of a licensee, financing entity, insurer, or other person.
Transacting the business of life settlements in violation of laws requiring a license, certificate of authority, or other legal authority for the transaction of the business of life settlements.
Filing with the commissioner or the chief insurance regulatory official of another jurisdiction a document containing false information or otherwise concealing information about a material fact from the commissioner or official.
Embezzlement, theft, misappropriation, or conversion of monies, funds, premiums, credits, or other property of a life settlement provider, insurer, insured, owner, or any other person engaged in the business of life settlements or insurance.
Recklessly entering into, negotiating, brokering, or otherwise dealing in a life settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing for the purpose of misleading another information concerning any fact material to the policy, where the person or persons intended to defraud the policy's issuer, the provider, or the owner.
Attempting to commit; assisting, aiding, or abetting in the commission of; or conspiring to commit the acts or omissions specified in this paragraph.
Misrepresenting the state of residence of an owner to be a state that does not have a law substantially similar to this section for the purpose of evading or avoiding the provisions of this section.
“Licensee" means a provider or broker that holds a license under sub. (2)
“Life expectancy" means the arithmetic mean, considering medical records and appropriate experiential data, of the number of months an insured under the policy to be settled can be expected to live.
“Life settlement" means an agreement regarding the terms under which compensation or any thing of value will be paid, which compensation or thing of value is less than the expected death benefit of the policy but greater than the cash surrender value or accelerated death benefit available under the policy at the time of the application for the life settlement, in return for the owner's present or future assignment, transfer, sale, devise, or bequest of the death benefit or any interest in a policy. “Life settlement" includes all of the following:
The transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns a policy that insures the life of a person residing in this state, if the trust or other entity was formed or availed of for the principal purpose of acquiring one or more policies or certificates of insurance.
A written agreement for a loan or other lending transaction, secured primarily by an individual or group policy.
A premium finance loan made for a policy on, before, or after the date of issuance of the policy but only if the loan proceeds are not used solely to pay premiums for the policy and any costs or expenses incurred by the lender or the borrower in connection with the financing, or if the owner receives on the date of the premium finance loan a guarantee of the future life settlement value of the policy, or if the owner agrees on the date of the premium finance loan to sell the policy or any interest in its death benefit on any date following the issuance of the policy.
“Life settlement" does not include any of the following:
A policy loan by a life insurance company pursuant to the terms of the policy or accelerated death provisions contained in the policy, whether issued with the original policy or as a rider.
Except as provided in subd. 1. c.
, a premium finance loan or any loan made by a bank or other licensed financial institution, provided that neither default on such loan nor the transfer of the policy in connection with such default is pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this section.
A loan made by a lender that does not violate s. 138.12
, if the loan is not described in subd. 1. c.
and is not otherwise a life settlement contract.
An agreement where all the parties are closely related to the insured by blood or law, or have a lawful substantial economic interest in the continued life, health, and bodily safety of the person insured, or are trusts or other entities established primarily for the benefit of such parties.
Any designation, consent, or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee.
A bona fide business succession planning arrangement between one or more shareholders in a corporation or between a corporation and one or more of its shareholders or one or more trusts established by or for the benefit of its shareholders; between one or more partners in a partnership or between a partnership and one or more of its partners or one or more trusts established by or for the benefit of its partners; or between one or more members in a limited liability company or between a limited liability company and one or more of its members or one or more trusts established by or for the benefit of its members.
An agreement, contract, or transaction that the commissioner excludes by rule under sub. (20) (a)
after determining that the agreement, contract, or transaction is not intended to be regulated by this section.
“Life settlement contract" means a written document providing for and establishing the terms of a life settlement.
“Owner" means the owner of a policy or a certificate holder under a group policy who resides in this state, unless the context requires otherwise, and enters or seeks to enter into a life settlement contract. “Owner" does not include any of the following:
A licensee under this section, including a producer acting as a broker under this section.
“Policy" means an individual or group policy, certificate, contract, or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state.
“Premium finance loan" means a loan made primarily for the purpose of making premium payments on a policy that is secured by an interest in the policy.
“Producer" means any person licensed in this state as a resident or nonresident insurance intermediary or agent who has received qualification or authority for life insurance coverage or a life line of coverage pursuant to s. 628.04
“Provider" means a person, other than an owner, that enters into or effectuates a life settlement contract with an owner. “Provider" does not include:
A bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a policy solely as collateral for a loan.
A premium finance company making premium finance loans and exempted by the commissioner from the licensing requirement under the premium finance law under s. 138.12
that takes an assignment of a policy solely as collateral for a loan.
An authorized or eligible insurer that provides stop loss coverage or financial guaranty insurance to a provider, purchaser, financing entity, special purpose entity, or related provider trust.
Any natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of a policy for any value less than the expected death benefit.