INSURANCE SECURITY FUND
Scope and purposes.
Organization and administration of fund.
Administration of the fund.
Special duties and powers of the fund related to loss claims.
Proceedings involving insurers.
Payment of deposits made for benefit of creditors.
Custody and investment of assets.
Appeal and review.
Recovery of amounts paid to 3rd parties.
Subrogation and cooperation.
Continuation of coverage.
Claims by security funds.
Disposal and transfer of assets.
Ch. 646 Cross-reference
See definitions in ss. 600.03
Ch. 646 Note
NOTE: Chapter 109, laws of 1979
, which repealed and recreated this chapter, contained notes explaining the revision.
Scope and purposes. 646.01(1)(a)1.
All kinds and lines of direct insurance, except as provided in par. (b)
All insurers authorized to do business in this state except:
Fraternals that are not health maintenance organization insurers.
Service insurance corporations that offer only dental or vision care.
Nondomestic insurers that have not obtained a certificate of authority to do business in this state and that are doing business under s. 618.41
This chapter does not apply to any of the following:
Any portion of a life insurance policy or annuity contract that is not guaranteed by the insurer or under which the risk is borne by the policy or policyholder.
Surety bonds, fidelity bonds and any other bonding obligations.
Mortgage guaranty, financial guaranty and other forms of insurance offering protection against investment risks.
Product liability or completed operations liability insurance, and comprehensive general liability including either of these coverages, provided to a risk purchasing group or a member of a risk purchasing group.
Any self-funded, self-insured, or partially or wholly uninsured plan of an employer or other person to provide life insurance, annuity, or disability benefits to its employees or members to the extent that the plan is self-funded, self-insured, or uninsured.
Any liability for dividends or experience rating credits payable after the date of entry of the order of liquidation under an insurance or annuity contract, and any fees or allowances due any person, including the policyholder, in connection with service to or administration of the contract.
Any contractual liability policy that is issued to a warrantor, warranty plan, warranty plan administrator, or service contract provider and that provides coverage of any liability or performance arising out of or in connection with a warranty or service contract.
Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of such insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk.
A policy issued by an insurer to, or a contract entered into by an insurer with, a care management organization, as defined in s. 46.2805 (1)
, or the department of health services or any other governmental entity under any state law to provide prepaid health care to medical assistance recipients.
A contractual agreement that obligates an insurer to provide a book value accounting guarantee for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, neither of which is an affiliate of the insurer.
Any liability under a policy or contract to the extent that it provides for interest or other changes in value that are to be determined by the use of an index or other external reference stated in the policy or contract and to the extent that the interest or other changes in value have not been credited to the policy or contract as of the date of the entry of the order of liquidation and are subject to forfeiture. If a policy's or contract's interest or other changes in value are credited less frequently than annually, for purposes of determining the values that have been credited and that are not subject to forfeiture, the interest or change in value determined by using the procedures specified in the policy or contract will be credited as if the contractual date of crediting interest or other changes in value was the date of entry of the order of liquidation and will not be subject to forfeiture.
The deductible, self-funded, or self-insured portion of a claim under a liability or worker's compensation insurance policy, regardless of the timing or method provided in the policy, endorsement, or any other agreement for payment of the deductible, self-funded, or self-insured amount by the insured. This subdivision does not apply to a worker's compensation insurance policy if the insured under the policy is a debtor under 11 USC 701
, et seq., as of the deadline set by the liquidator for filing claims against the insolvent insurer.
A policy issued by an insurer to an enrollee under Title XVIII of the federal social security act, 42 USC 1395
, or Title XIX of the federal social security act, 42 USC 1396
, or a contract entered into by an insurer with the federal government or an agency of the federal government under Title XVIII or Title XIX of the federal social security act, to provide health care or prescription drug benefits to persons enrolled in Title XVIII or Title XIX programs.
The purposes of this chapter are:
To maintain public confidence in the promises of insurers by providing a mechanism for protecting insureds from excessive delay and loss in the event of liquidation of insurers and by assessing the cost of such protection among insurers; and
To provide where appropriate for the continuation of protection under policies and supplementary contracts of life insurance, disability insurance and annuities.
The purpose of this chapter is to protect insureds against losses caused by insolvent insurers. Insureds of insolvent insurers are protected against subrogation claims to the extent of their policy limits. Fireman's Fund v. Pitco Frialator, 145 Wis. 2d 526
, 427 N.W.2d 417
(Ct. App. 1988).
In this chapter, unless the context indicates otherwise:
“Board" means the board of directors of the insurance security fund created by s. 646.12
“Direct insurance" does not include a policy or contract of reinsurance, except for the following:
Reinsurance for which the reinsurer has issued assumption certificates under the reinsurance policy or contract.
Reinsurance ceded by an assessable town mutual company.
“Fund" means the insurance security fund created by s. 646.11
“Insolvent insurer" means an insurer subject to this chapter that is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency.
“Liquidator" includes receiver or conservator.
With respect to a life or disability insurance policy or an annuity contract, “owner" or “policyholder" means the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the insurer. “Owner" or “policyholder" does not include a person with only a beneficial interest in a policy or contract.
“Retained asset account" means any mechanism in which the settlement of proceeds payable under a life insurance policy is accomplished by the insurer or an entity acting on behalf of the insurer depositing the proceeds into an account with check or draft writing privileges, where those proceeds are retained by the insurer, under a written supplementary contract not involving annuity benefits.
“Unallocated annuity contract" means an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.
Organization and administration of fund. 646.11(1)(1)
There is created an organization to be known as the “insurance security fund." All insurers subject to this chapter are contributors to the fund as a result of their authority to transact business in this state. The fund shall consist of all of the following:
The amounts recovered under s. 645.72 (2)
or a substantially similar law in the state of domicile of the insolvent insurer.