Chapter Ins 13

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Ins 13.06(4) (4) Surplus requirements. A town mutual insurer shall maintain a surplus of the greater of $200,000 or 20% of the net written premiums and assessments in the 12-month period ending on or not more than 60 days before the date as of which the calculation is made. Every town mutual shall achieve and maintain this minimum surplus by December 31, 2001.

Ins 13.06(5) (5) Individual circumstances. The commissioner may take into consideration the experience, management and any other significant information about an individual town mutual insurer in determining whether to approve or disapprove town mutual property and nonproperty reinsurance and in setting of minimum surplus requirements.

Ins 13.06 History History: Cr. Register, December, 1974, No. 228, eff. 1-1-75; cr. (4) to (6), Register, July, 1984, No. 343, eff. 8-1-84; am. (3) and (5), r. and recr. (6), cr. (3) (b) and (c), Register, December, 1984, No. 348, eff. 1-1-85; r. (3) (a) and (5), renum. (3) (b) and (c) to be (3) (a) and (b), and (6) to be (5), and am. (4), Register, June, 2001, No. 546, eff. 1-1-02; except (4), eff. 7-1-01.

Ins 13.08 Ins 13.08 Valuation of liabilities.

Ins 13.08(1) (1) Purpose. This rule implements and interprets s. 623.04, Stats., for the purpose of determining liabilities for financial statements filed with the commissioner.

Ins 13.08(2) (2) Scope. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.

Ins 13.08(3) (3) Unearned premium reserve. The financial statements of town mutuals which charge advance premiums shall show as a liability an unearned premium reserve. The unearned premium reserve must be calculated on all advance premiums, on the original or full-term premium basis, less advance premiums on risks assumed by other insurers under reinsurance contract. The minimum unearned premium reserves shall be calculated on the premiums in force as follows:

Ins 13.08(3)(a) (a) One year policies or policies on which premiums are paid annually.

Ins 13.08(3)(a)1. 1. 50% of the net advanced premium.

Ins 13.08(3)(b) (b) Two year policies on which the entire premium is paid in advance.

Ins 13.08(3)(b)1. 1. 75% on policies in first year of term.

Ins 13.08(3)(b)2. 2. 25% on policies in second year of term.

Ins 13.08(3)(c) (c) Three year policies on which entire premium is paid in advance.

Ins 13.08(3)(c)1. 1. 83% on policies in first year of term.

Ins 13.08(3)(c)2. 2. 50% on policies in second year of term.

Ins 13.08(3)(c)3. 3. 17% on policies in third year of term.

Ins 13.08(4) (4) The unearned premium reserve shall be the sum of the amounts as calculated above. Any other method of calculating the unearned premium reserve must be approved by the commissioner.

Ins 13.08 History History: Cr. Register, December, 1974, No. 228, eff. 1-1-75; am. (3) (intro.), Register, April, 1982, No. 316, eff. 5-1-82; r. (3) (d) and (e), Register, June, 2001, No. 546, eff. 1-1-02; CR 22-076: am. (3) (intro.) Register July 2023 No. 811, eff. 8-1-23.

Ins 13.09 Ins 13.09 Reinsurance.

Ins 13.09(1) (1) Purpose. This rule implements and interprets s. 612.33, Stats., for the purpose of setting rules or guidelines for permitted and prohibited reinsurance and required reinsurance.

Ins 13.09(2) (2) Scope. This rule shall apply to all town mutual insurers subject to ch. 612, Stats.

Ins 13.09(3) (3) Definitions. For the purpose of this section only:

Ins 13.09(3)(a) (a) ‘‘Maximum attachment point” means the amount of losses, expressed as a percentage of net premiums written, which constitutes the limit of the town mutual’s retention under the aggregate excess of loss reinsurance required by sub. (4).

Ins 13.09(3)(b) (b) ‘‘Net premiums written” means gross premiums written less premiums ceded for reinsurance inuring to the benefit of an aggregate excess of loss reinsurance contract. Reinsurance premiums ceded for aggregate excess of loss reinsurance, reinsurance premiums paid or recovered related to coverage for other years, and dividends paid to policyholders shall not be considered in determining net premiums written.

Ins 13.09(4) (4) Required reinsurance.

Ins 13.09(4)(a) (a) Aggregate excess of loss reinsurance. Every town mutual shall obtain and continuously maintain unlimited aggregate excess of loss reinsurance for all risks covered by property and nonproperty insurance that is not otherwise ceded under another reinsurance contract. The aggregate excess of loss reinsurance shall provide a maximum attachment point expressed as a percentage of net premiums written, which is based on the relationship of the town mutual’s prior year-end surplus to prior year-end gross premiums written, as set forth in the following schedule:

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Ins 13.09(4)(a)2. 2. For purposes of this section 13.09, all calculations shall be based on the final annual statement filed with the commissioner.

Ins 13.09(4)(a)3. 3. The aggregate excess of loss reinsurance contract shall warrant by specific reference that it complies with this section.

Ins 13.09(4)(a)4. 4. Any town mutual that fails to comply, or has reason to believe that it is in imminent risk of failure to comply, with this section after its effective date shall notify the commissioner within 5 days of such failure or awareness.

Ins 13.09(4)(b) (b) Reinsurance of nonproperty insurance. Any town mutual which provides nonproperty insurance coverage shall obtain reinsurance as required by s. 612.33 (2) (b), Stats.

Ins 13.09 History History: Cr. Register, December, 1974, No. 228, eff. 1-1-75; r. and recr., Register, June, 2001, No. 546, eff. 1-1-02.