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LRB-2221/1
AJM:jld&kjf
2017 - 2018 LEGISLATURE
March 1, 2017 - Introduced by Representatives Steffen, Allen, Berceau, Doyle,
Duchow, Gannon, Genrich, Horlacher, Kessler, Kooyenga, Murphy,
Nygren and Skowronski, cosponsored by Senators Lasee, Bewley, Craig,
Olsen and L. Taylor. Referred to Committee on Insurance.
AB110,1,3 1An Act to amend 618.41 (5); and to create 618.40 (3m), 618.41 (9) (c), 618.41
2(13) and 646.01 (1) (b) 20. of the statutes; relating to: surplus lines insurance
3policies issued by domestic insurers.
Analysis by the Legislative Reference Bureau
This bill allows an insurer that is domiciled in this state to provide surplus lines
insurance in this state if the insurer meets certain requirements. Under current law,
only an unauthorized insurer that is not domiciled in this state may provide surplus
lines insurance in this state, subject to certain requirements and limitations. Under
this bill, an insurer domiciled in this state may apply to the commissioner of
insurance for a certificate allowing the insurer to provide surplus lines insurance in
this state as a domestic surplus lines insurer. In order to receive the certificate, the
insurer must have a resolution to become a domestic surplus lines insurer adopted
by its board of directors; have at least $15,000,000 in capital and surplus; and be
eligible to provide surplus lines insurance in at least one other state. The bill
specifies that an insurance policy issued by a domestic surplus lines insurer is not
protected by the Wisconsin insurance security fund and is subject to the same
taxation under current law as a surplus lines insurance policy. The bill also specifies
that a domestic surplus lines insurer may only offer surplus lines insurance.

For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB110,1 1Section 1. 618.40 (3m) of the statutes is created to read:
AB110,2,32 618.40 (3m) “Domestic surplus lines insurer" means an insurer that has a
3certificate to do business as a domestic surplus lines insurer under s. 618.41 (13).
AB110,2 4Section 2. 618.41 (5) of the statutes is amended to read:
AB110,2,75 618.41 (5) Trade practices. With respect to contracts made under this section,
6nondomestic insurers and domestic surplus lines insurers are subject to s. 628.34
7and rules promulgated thereunder.
AB110,3 8Section 3. 618.41 (9) (c) of the statutes is created to read:
AB110,2,189 618.41 (9) (c) Surplus lines policies issued by domestic surplus lines insurers.
10Notwithstanding par. (a), every new or renewal insurance policy procured and
11delivered under this section by a domestic surplus lines insurer shall bear the name
12and address of the insurance agent or broker who procured it and shall have stamped
13or affixed upon it the following: “This insurance contract is issued and delivered as
14a surplus line coverage pursuant to s. 618.41 of the Wisconsin Statutes. Section
15618.43 (1), Wisconsin Statutes, requires payment by the policyholder of 3 percent tax
16on gross premium. If the insurer that issued and delivered this policy becomes
17insolvent, insureds or claimants will not be eligible for Wisconsin Insurance Security
18Fund protection under chapter 646 of the Wisconsin Statutes."
AB110,4 19Section 4. 618.41 (13) of the statutes is created to read:
AB110,3,320 618.41 (13) Domestic surplus lines insurers. (a) An insurer domiciled in this
21state may submit to the commissioner an application for a certificate that permits

1the insurer to provide surplus lines insurance as a domestic surplus lines insurer.
2The commissioner shall issue the certificate to the insurer if the insurer satisfies all
3of the following requirements:
AB110,3,54 1. The insurer's board of directors has adopted a resolution requesting to be
5certified as a domestic surplus lines insurer.
AB110,3,76 2. The insurer is eligible to provide surplus lines insurance in a state other than
7this state.
AB110,3,88 3. The insurer has capital and surplus of no less than $15,000,000.
AB110,3,119 (b) A surplus lines insurance policy issued in this state by a domestic surplus
10lines insurer is only subject to the requirements of this section in the same manner
11as a surplus lines insurance policy issued by a nondomestic unauthorized insurer.
AB110,3,1412 (c) A domestic surplus lines insurer shall be considered a nonadmitted insurer
13as defined in 15 USC 8206 with respect to surplus lines insurance the domestic
14surplus lines insurer issues in this state.
AB110,3,1615 (d) Insurance transacted by a domestic surplus lines insurer under this section
16is subject to taxation as specified under s. 618.43.
AB110,3,1917 (e) A surplus lines insurance policy issued in this state by a domestic surplus
18lines insurer under this section is not subject to the Wisconsin insurance security
19fund under ch. 646.
AB110,3,2120 (f) No domestic surplus lines insurer may offer insurance other than under this
21section.
AB110,5 22Section 5. 646.01 (1) (b) 20. of the statutes is created to read:
AB110,3,2423 646.01 (1) (b) 20. A surplus lines insurance policy written by a domestic surplus
24lines insurer under s. 618.41 (1).
AB110,3,2525 (End)
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