Ins 3.09(15)(a)(a) Subject to sub. (8), a mortgage guaranty insurer shall compute and maintain adequate loss reserves. The methodology used for computing the loss reserves shall accurately reflect loss frequency and loss severity and shall include components for claims reported and unpaid and for claims incurred but not reported. Ins 3.09(15)(b)(b) A mortgage guaranty insurer shall compute and maintain adequate case basis loss reserves which are based on an estimate of the liability for claims on individual insured loans in various stages of default as listed below. Case basis loss reserves may be calculated on either an individual case basis or a formula basis. Case basis loss reserves shall be established for individual insured loans or leases which: Ins 3.09(15)(b)1.1. Are in default and have resulted in the collateral real estate being acquired by the insured, the insurer, or the agent of either, and remaining unsold; or Ins 3.09(15)(c)(c) In computing the potential liability for which case basis reserves are required by par. (b), the following factors shall be considered together with the prospective adjustments reflecting historic data relative to prior claim settlements: Ins 3.09(15)(c)1.1. Prior to the exercise of the claim settlement option, the potential liability shall be either the amount at risk calculated using the coverage settlement option or the potential claim amount minus the value of the real estate. Ins 3.09(15)(c)2.2. If the claim settlement option exercised results in recording the claim amount as the cost of acquisition of the property, the potential liability is the claim amount minus the lesser of the market value of the real estate or the acquisition cost of the real estate. Ins 3.09(15)(c)3.3. If the claim settlement option exercised results in the payment of amounts equal to the monthly loan payments or lease rents, the potential liability is the present value, utilizing the insurer’s National Association of Insurance Commissioners’ (NAIC) financial ratio-investment yield, of the claim amounts minus the present value of either the real estate or the rental income stream. Ins 3.09(15)(d)(d) A mortgage guaranty insurer shall compute and maintain a loss adjustment expense reserve which is based on an estimate of the cost of adjusting and settling claims on insured loans in default. Ins 3.09(15)(e)(e) A mortgage guaranty insurer shall compute and maintain an incurred but not reported reserve which is based on an estimate of the liability for future claims on insured loans that are in default but of which the insurer has not been notified. Ins 3.09(16)(a)(a) Every mortgage guaranty insurer shall adopt, print and make available a schedule of premium charges for mortgage guaranty insurance coverages. The schedule shall show the entire amount of premium charge for each type of mortgage guaranty insurance coverage issued by the insurer. Ins 3.09(16)(b)(b) A mortgage guaranty insurer shall not knowingly pay, either directly or indirectly to an owner, purchaser, mortgagee of the real property or any interest therein or to any person who is acting as agent, representative, attorney or employee of such owner, purchaser, or mortgagee any commission, remuneration, dividend or any part of its premium charges or any other consideration as an inducement for or as compensation on any mortgage guaranty insurance business. Ins 3.09(16)(c)(c) In connection with the placement of any insurance, a mortgage guaranty insurer shall not cause or permit any commission, fee, remuneration, or other compensation to be paid to, or received by: any insured lender; any subsidiary or affiliate of any insured; any officer, director or employee of any insured; any member of their immediate family; any corporation, partnership, trust, trade association in which any insured is a member, or other entity in which any insured or any such officer, director, or employee or any member of their immediate family has a financial interest; or any designee, trustee, nominee, or other agent or representative of any of the foregoing. Ins 3.09(16)(d)(d) A mortgage guaranty insurer shall not make any rebate of any portion of the premium charge shown by the schedule required by par. (a). A mortgage guaranty insurer shall not quote any premium charge to any person which is different than that currently available to others for the same type of mortgage guaranty insurance coverage sold by the mortgage guaranty insurer. The amount by which any premium charge is less than that called for by the current schedule of premium charge is a rebate. Ins 3.09(16)(e)(e) A mortgage guaranty insurer shall not use compensating balances, special deposit accounts or engage in any practice which unduly delays its receipt of monies due or which involves the use of its financial resources for the benefit of any owner, mortgagee of the real property or any interest therein or any person who is acting as agent, representative, attorney or employee of such owner, purchaser or mortgagee as a means of circumventing any part of this rule. Except for commercial checking accounts and normal deposits in support of an active bank line of credit, any deposit account bearing interest at rates less than is currently being paid other depositors on similar deposits or any deposit in excess of amounts insured by an agency of the federal government shall be presumed to be an account in violation of this paragraph. Ins 3.09(16)(f)(f) A mortgage guaranty insurer shall make provision for prompt refund of any unearned premium in the event of termination of the insurance prior to its scheduled termination date. If the borrower paid or was charged for the premium, the refund shall be made to the borrower, or to the insured for the borrower’s benefit, otherwise refund may be paid to the insured. Ins 3.09(16)(g)(g) This subsection is not intended to prohibit payment of appropriate policy dividends to borrowers. Ins 3.09(17)(17) Minimum capital or permanent surplus. The minimum amount of capital or permanent surplus of a mortgage guaranty insurer shall be $2 million for an insurer first authorized to do business in Wisconsin on or after January 1, 1982, or the amount required by statute or administrative order before that date or other insurers. Ins 3.09(18)(18) Transition. Policyholders position, unearned premium reserves and contingency loss reserves shall be computed and maintained on risks insured after the effective date of this section as required by subs. (5), (13) and (14). Unearned premium reserves and contingency loss reserves on risks insured before the effective date of this rule may be computed and maintained either as required by subs. (13) and (14) or as required by this section as previously in effect. Ins 3.09(19)(a)(a) Except as described in par. (c), if a member of a holding company system as defined in s. Ins 40.01 (6), a mortgage guaranty insurer licensed to transact insurance in this state shall not, as a condition of its certificate of authority, knowingly underwrite mortgage guaranty insurance on mortgages originated by the holding company system or an affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly by the holding company system or affiliate. Ins 3.09(19)(b)(b) A mortgage guaranty insurer, the holding company system of which it is a part or any affiliate shall not as a condition of the mortgage guaranty insurer’s certificate of authority, pay any commissions, remuneration, rebates or engage in activities proscribed in sub. (15). Ins 3.09(19)(c)1.1. A mortgage guaranty insurer may underwrite mortgage guaranty insurance on mortgages originated by the holding company system or affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly by the holding company system or affiliate only if the insurance is underwritten on the same basis, for the same consideration and subject to the same insurability requirements as insurance provided to nonaffiliated lenders. Mortgage guaranty insurance underwritten on mortgages originated by the holding company system or affiliate or on mortgages originated by any mortgage lender to which credit is extended, directly or indirectly by the holding company system or affiliate shall be limited to 50% of the insurer’s direct premium written in any calendar year, or such higher percentage established in writing for the insurer in the commissioner’s discretion, based on the commissioner’s determination that a higher percentage is not likely to adversely affect the financial condition of the insurer. Ins 3.09(19)(c)2.2. A domestic mortgage guaranty insurer that offers coverage under subd. 1., shall annually file by March 1 a certification executed by a senior, responsible officer that the insurer has complied with subd. 1. in the previous calendar year. The commissioner may grant an extension to an insurer if the commissioner determines an extension is not likely to materially impede the office’s monitoring of the insurer’s compliance with this subsection. Ins 3.09(20)(20) Laws or regulations of other jurisdictions. Whenever the laws or regulations of another jurisdiction in which a mortgage guaranty insurer subject to the requirements of this rule is licensed, require a larger unearned premium reserve or a larger contingency reserve in the aggregate than that set forth in this rule, the establishment and maintenance of the larger unearned premium reserve or contingency reserve shall be deemed to be compliance with this rule. Ins 3.09 HistoryHistory: Cr. Register, March, 1957, No. 15, eff. 4-1-57; am. (2), (3), (4) and (5), Register, January, 1959, No. 37, eff. 2-1-59; am. (4) (c), Register, August, 1959, No. 44, eff. 9-1-59; cr. (4) (e), Register, January, 1961, No. 61, eff. 2-1-61; am. (2), Register, January, 1967, No. 133, eff. 2-1-67; am. (2), (3) (a) and (b), and (4) (a) and (b); r. and recr. (5), Register, December, 1970, No. 180, eff. 1-1-71. r. and recr. Register, March, 1975, No. 231, eff. 4-1-75; emerg. am. (1), (2) and (3) (a), eff. 6-22-76; am. (1), (2) and (3) (a), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), (2) and (3) (a), Register, March, 1979, No. 279, eff. 4-1-79; r. and recr. (1), (3), (5), (12) and (14), am. (2), (4), (8), (13) (a) and (16), renum. (7) to be (7) (a) and cr. (7) (b) and (7m), Register, October, 1982, No. 322, eff. 11-1-82; correction in (14) (d) made under s. 13.93 (2m) (b) 7., Stats., Register, December, 1984, No. 348; am. (3) (m), Register, October, 1985, No. 358, eff. 11-1-85; am. (1) and (5) (a), renum. (7m), (15) to (18) to be (17), (16) and (18) to (20); cr. (7m) and (15), r. and recr. (8), (12) to (14), Register, November, 1989, No. 407, eff. 12-1-89; correction in (7m) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517; corrections in (3) (b), (j) and (19) made under s. 13.93 (2m) (b) 7., Stats., Register, July, 1999, No. 523; am. (19) (a), cr. (19) (c), Register, July, 2000, No. 535, eff. 8-1-00; CR 05-023: am. (19) (c) and cr. (21) Register December 2005 No. 600, eff. 1-1-06. Ins 3.11Ins 3.11 Multiple peril insurance contracts. Ins 3.11(1)(a)(a) This rule implements and interprets s. Ins 6.70 and chs. 625 and 631, Stats., by enumerating the minimum requirements for the writing of multiple peril insurance contracts. Nothing herein contained is intended to prohibit insurers or groups of insurers from justifying rates or premiums in the manner provided for by the rating laws. Ins 3.11(1)(b)(b) This rule shall apply to multiple peril insurance contracts permitted by s. Ins 6.70, and which include a type or types of coverage or a kind or kinds of insurance subject to ch. 625, Stats. Ins 3.11(1)(c)(c) Types of coverage or kinds of insurance which are not subject to ch. 625, Stats., or to the filing requirement provisions thereof, may not be included in multiple peril insurance contracts otherwise subject to said sections unless such entire multiple peril insurance contract is filed as being subject to this rule and said sections and the filing requirements thereof. Ins 3.11(2)(2) Definition. Multiple peril insurance contracts are contracts combining 2 or more types of coverage or kinds of insurance included in any one or more than one paragraph of s. Ins 6.75. Such contracts may be on the divisible or single (indivisible) rate or premium basis. Ins 3.11(3)(a)(a) When underwriting experience is not available to support a filing, the information set forth in s. 625.12, Stats., may be furnished as supporting information. Ins 3.11(3)(b)(b) Premiums or rates may be modified for demonstrated, measurable, or anticipated variation from normal of the loss or expense experience resulting from the combination or types of coverage or kinds of insurance or other factors of the multiple peril insurance contract. Multiple peril contracts may be filed or revised on the basis of sufficient underwriting experience developed by the contract or such experience may be used in support of such filing. Ins 3.11(3)(c)(c) In the event that more than one rating organization cooperates in a single (indivisible) rate or premium multiple peril insurance filing, one of such cooperating rating organizations shall be designated as the sponsoring organization for such filing by each of the other cooperating rating organizations and evidence of such designation included with the filing. Ins 3.11(4)(4) Standard policy. The requirements of s. Ins 6.76 shall apply to any multiple peril insurance contract which includes insurance against loss or damage by fire. Ins 3.11 HistoryHistory: Cr. Register, July, 1958, No. 31, eff. 8-1-58; am. (3) (a), Register, November, 1960, No. 59, eff. 12-1-60; emerg. am. (1), (2), (3) (a) and (4), eff. 6-22-76; am. (1), (2), (3) (a) and (4), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) (a) and (b), (2) and (4), Register, March, 1979, No. 279, eff. 4-1-79. Ins 3.13Ins 3.13 Individual accident and sickness insurance. Ins 3.13(1)(1) Purpose. This section implements and interprets applicable statutes for the purpose of establishing procedures and requirements to expedite the review and approval of individual accident and sickness policies permitted by s. Ins 6.75 (1) (c) or (2) (c), and franchise type accident and sickness policies permitted by s. 600.03 (22), Stats., and s. Ins 6.75 (1) (c) and (2) (c). The requirements in subs. (2), (3), (4) and (6) are to be followed in substance, and wording other than that described may be used provided it is not less favorable to the insured or beneficiary. Ins 3.13(2)(a)(a) If a policy is not to insure against sickness losses resulting from conditions in existence prior to the effective date of coverage, or in existence prior to a specified period after such effective date, the policy by its terms shall indicate that it covers sickness contracted and commencing (or beginning, or originating, or first manifested or words of similar import) after such effective date or after such specified period. Wording shall not be used that requires the cause of the condition or sickness, as distinguished from the condition or sickness itself, to originate after such effective date or such specified period. Ins 3.13 NoteNote: It is understood that “sickness” as used herein means the condition or disease from which the disability or loss results. Paragraph (a) shall not apply to nor prohibit the exclusion from coverage of a disease or physical condition by name or specific description.
Ins 3.13(2)(b)(b) Where any “specified period” referred to in par. (a) exceeds 30 days, it shall apply to the occurrence of loss and not to the contracting or commencement of sickness after such period. Ins 3.13(2)(c)(c) A policy, other than a non-cancellable policy or a non-cancellable and guaranteed renewable policy or a guaranteed renewable policy, shall set forth the conditions under which the policy may be renewed, either by: A brief description of the policy’s renewal conditions, or a separate statement referring to the policy’s renewal conditions, or a separate appropriately captioned renewal provision appearing on or commencing on the first page. Ins 3.13(2)(c)1.1. The brief description, if used to meet the foregoing requirement, shall be printed, in type more prominent than that used in the policy’s text, at the top or bottom of the policy’s first page and on its filing back, if any, and shall describe its renewal conditions in one of the following ways: “Renewal Subject to Consent of Company,” “Renewal Subject to Company Consent,” “Renewal at Option of Company,” “Renewal at Option of Company as Stated in _________” (refer to appropriate policy provision), or “Renewal May be Refused as Stated in _________” (refer to appropriate policy provision). A company may submit other wording, subject to approval by the commissioner, which it believes is equally clear or more definite as to subject matter. Ins 3.13(2)(c)2.2. The separate statement, if used to meet the foregoing requirement, shall be printed, in type more prominent than that used in the policy’s text, at the top or bottom of the policy’s first page and on its filing back, if any, and shall describe its renewal conditions in one of the following ways: “Renewal Subject to Consent of Company,” “Renewal Subject to Company Consent,” “Renewal at Option of Company,” “Renewal at Option of Company as Stated in _________” (refer to appropriate policy provision), or “Renewal May be Refused as Stated in _________” (refer to appropriate policy provision). A company may submit other wording, subject to approval by the commissioner, which it believes is equally clear or more definite as to subject matter. Ins 3.13(2)(c)3.3. The renewal provision appearing on or commencing on the policy’s first page, if used to meet the foregoing requirement, shall be preceded by a caption which describes the policy’s renewal conditions in one of the following ways: “Renewal Subject to Consent of Company,” “Renewal Subject to Company Consent,” “Renewal at Option of Company,” “Renewal at Option of Company as Stated Below,” or “Renewal May be Refused as Stated Herein.” A company may submit other wording, subject to approval by the commissioner, which it believes is equally clear or more definite as to subject matter. The caption shall be in type more prominent than that used in the policy’s text. Ins 3.13(2)(d)(d) If the policy is not renewable, it shall be so described in the brief description or in a separate statement at the top or bottom of the first page and on the filing back, if any, or it shall be so described in a separate appropriately captioned provision on the first page. The brief description, or the separate statement, or the caption shall be printed in type more prominent than that used in the policy’s text. Ins 3.13(2)(e)1.1. The terms “non-cancellable” or “non-cancellable and guaranteed renewable” may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy: Ins 3.13(2)(e)1.b.b. In the case of a policy issued after age 44, for at least 5 years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. Ins 3.13(2)(e)2.2. A non-cancellable or non-cancellable and guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the terms “non-cancellable” or “non-cancellable and guaranteed renewable:” Ins 3.13(2)(e)2.a.a. The age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable, if other than lifetime, Ins 3.13(2)(e)2.b.b. The age or time at which the form’s benefits are reduced, if applicable, (The age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable.) and Ins 3.13(2)(e)2.c.c. That benefit payments are subject to an aggregate limit, if applicable. Ins 3.13(2)(e)3.3. Except as provided above, the term “guaranteed renewable” may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums: Ins 3.13(2)(e)3.b.b. In the case of a policy issued after age 44, for at least 5 years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes. Ins 3.13(2)(e)4.4. A guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the term “guaranteed renewable:” Ins 3.13(2)(e)4.a.a. The age to or term for which the form is guaranteed renewable, if other than lifetime, Ins 3.13(2)(e)4.b.b. The age or time at which the form’s benefits are reduced, if applicable, (The age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or term for which the form is guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is guaranteed renewable.) Ins 3.13(2)(e)4.c.c. That benefit payments are subject to an aggregate limit, if applicable, and Ins 3.13 NoteNote: “Prominent use” as referred to in subds. 2. and 4. is considered to include, but is not necessarily limited to, use in titles, brief descriptions, captions, bold-face type, or type larger than that used in the text of the form.
Ins 3.13(2)(e)5.5. The foregoing limitation on the use of the term “non-cancellable” shall also apply to any synonymous term such as “not cancellable” and the limitation on use of the term “guaranteed renewable” shall apply to any synonymous term such as “guaranteed continuable.” Ins 3.13(2)(e)6.6. Nothing herein contained is intended to restrict the development of policies having other guarantees of renewability, or to prevent the accurate description of their terms of renewability or the classification of such policies as guaranteed renewable or non-cancellable for any period during which they may actually be such, provided the terms used to describe them in policy contracts and advertising are not such as may readily be confused with the above terms. Ins 3.13(2)(e)7.7. The provisions of ss. 632.76 (1), 632.74 and 632.77 (3), Stats., are applicable to non-cancellable or non-cancellable and guaranteed renewable or guaranteed renewable policy forms as herein defined. Ins 3.13(2)(f)(f) Policies issued on a family basis shall clearly set forth the conditions relating to termination of coverage of any family member. Ins 3.13(2)(g)(g) Surgical benefit provisions or schedules shall provide that the benefit for any covered surgical procedure not specifically listed in the schedule and not excluded by the provisions of the policy shall be determined by the company on a basis consistent with the benefit provided for a comparable listed procedure. Ins 3.13(2)(h)(h) A limited policy is one that contains unusual exclusions, limitations, reductions, or conditions of such a restrictive nature that the payments of benefits under such policy are limited in frequency or in amounts. All limited policies shall be so identified by having the words “THIS IS A LIMITED POLICY—READ IT CAREFULLY” imprinted or stamped diagonally across the face of the policy and the filing back, if any, in contrasting color from the text of the policy and in outline type not smaller than 18-point. When appropriate, these words may be varied by the insurer in a manner to indicate the type of policy; as for example, “THIS POLICY IS LIMITED TO AUTOMOBILE ACCIDENTS—READ IT CAREFULLY.” Without limiting the general definition above, policies of the following types shall be defined as “limited:” 1. School Accident, 2. Aviation Accident, 3. Polio, 4. Specified Disease, 5. Automobile Accident. Ins 3.13(2)(i)(i) If the policy excepts coverage while the insured is in military or naval service, the policy must provide for a refund of pro rata unearned premium upon request of the insured for any period the insured is not covered. However, if coverage is excluded only for loss resulting from military or naval service or war, the refund provision will not be required. This section shall not apply to non-cancellable policies or non-cancellable and guaranteed renewable policies or guaranteed renewable policies. Ins 3.13(2)(j)2.2. Have a caption or title which refers at least to the right to examine or to return the policy such as: “Right to Return Policy Within 10 Days of Receipt,” “Notice: Right to Return Policy,” “Right of Policy Examination,” “Right to Examine Policy,” “Right to Examine Policy for 10 Days,” “10 Day Right to Examine Policy,” “10 Day Right to Return Policy,” or “Notice of 10 Day Right to Return Policy,” or other wording, subject to approval by the commissioner, which is believed to be equally clear or more definite as to subject matter, and Ins 3.13(2)(j)3.3. Provide an unrestricted right to return the policy, within 10 days from the date it is received by the policyholder, to the issuer at its home or branch office, if any, or to the agent through whom it was purchased; except it shall provide an unrestricted right to return the policy within 30 days of the date it is received by the policyholder in the case of a Medicare supplement policy subject to s. Ins 3.39 (4), (4m), (4t), (5), (5m), (5t), and (6), issued pursuant to a direct response solicitation. Provision shall not be made to require the policyholder to set out in writing the reasons for returning the policy, to require the policyholder to first consult with an agent of the issuer regarding the policy, or to limit the reasons for return. Ins 3.13 NoteNote: Paragraph (j) was adopted to assist in the application of s. 204.31 (2) (a), Stats., to the review of accident and sickness policy and other contract forms. Those statutory requirements are presently included in s. 632.73, Stats. The original statute required that the provision of notice regarding the right to return the policy must be appropriately captioned or titled. Since the important rights given the insured are to examine the policy and to return the policy, the rule requires that the caption or title must refer to at least one of these rights—examine or return. Without such reference, the caption or title is not considered appropriate. Ins 3.13 NoteThe original statute permitted the insured to return the policy for refund to the home office or branch office of the insurer or to the agency with whom it was purchased. In order to assure the refund is made promptly, some insurers prefer to instruct the insured to return the policy to a particular office or agent for a refund. Notices or provisions with such requirements will be approved on the basis that the insurer must recognize an insured’s right to receive a full refund if the policy is returned to any other office or agent mentioned in the statute.
Ins 3.13 NoteAlso, the statute permits the insured to return a policy for refund within 10 days from the date of receipt. Some insurers’ notices or provisions regarding such right, however, refer to delivery to the insured instead of receipt by the insured or do not specifically provide for the running of the 10 days from the date the insured receives the policy. Notices or provisions containing such wording will be approved on the basis that the insurer will not refuse refund if the insured returns the policy within 10 days from the date of receipt of the policy.
Ins 3.13 NoteSections 632.73 (2m) and 600.03 (35) (e), as created by Chapter 82, Laws of 1981, provide for the right of return provisions in certain certificates of group Medicare supplement policies. Therefore, for purposes of this subparagraph, the word policy includes a Medicare supplement certificate subject to s. Ins 3.39 (4), (4m), (4t), (5), (5m), (5t), and (6). Ins 3.13(2)(k)(k) A policy which contains any provision under which the claimant may elect one benefit in lieu of another shall not limit to a specified period the time within which election may be made.
