Ins 6.17(3)(d)
(d) The record required by par.
(d) shall be open at all times to examination by the commissioner without notice, and shall be so kept available and open to the commissioner for 3 years (5 years for notice required by par.
(b)) next following the expiration or cancellation of the contract.
Ins 6.17(4)
(4) Advertising by surplus lines agent. A surplus lines agent may advertise the availability of services in procuring, on behalf of persons seeking insurance, contracts with insurers not holding a certificate of authority in Wisconsin, but such advertisements shall not refer to any particular unauthorized insurer or insurers.
Ins 6.17(5)
(5) Report and payment of tax-surplus lines insurance. All premium tax collected by the surplus lines agent shall be reported and forwarded to the commissioner on or before March 1, for all insurance procured, renewed or continued during the preceding calendar year with unauthorized insurers. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office's website.
Ins 6.17(6)
(6) Penalty. Any violation of this rule shall subject the agent to immediate revocation of the agent's surplus lines license and to other forfeitures and penalties provided by s.
601.64, Stats.
Ins 6.17 History
History: Cr.
Register, December, 1973, No. 216, eff. 1-1-74; am. (1),
Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (2) (a) and (b), eff. 6-22-76; am. (2) (a) and (b),
Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (a) and (b),
Register, March, 1979, No. 279, eff. 4-1-79; r. (3) (c), renum. (3) (d) and (e) to be (3) (c) and (d), am. (4), (6) and appendix 1,
Register, August, 1982, No. 320, eff. 9-1-82; corrections in (3) (c) (intro.) made under s. 13.93 (2m) (b) 5., Stats.,
Register, April, 1992, No. 436, eff. 5-1-92;
CR 22-076: am. (5), r. appendix 2 Register July 2023 No. 811, eff. 8-1-23.
Ins 6.17 Appendix 1
SURPLUS LINES INSURANCE PROPOSAL
Name and address of applicant Date
Dear: Proposal No.
You have asked that I procure the following insurance coverage on your behalf:
Type of Insurance Limits of Coverage
I can procure the coverage desired from the following insurer(s) at the premium listed:
Insurer(s) — Name and Address % of Total Risk
Premium Quoted
This insurance is with an insurer which has not obtained a certificate of authority to transact a regular insurance business in the state of Wisconsin, and will be issued and delivered as a surplus lines coverage pursuant to s.
618.41, Stats. The insurance is regulated by the Commissioner of Insurance only as provided in ss.
618.41 and
618.43, Stats. Section
618.43 (1), Stats., requires payment by the policyholder of a 3% tax on gross premium (except for Ocean Marine Insurance on which the tax is one-half of 1%). The tax in this instance amounts to $
. If the above transaction is not satisfactory, please advise immediately.
Sincerely yours,
______________________________________________
Name and address of licensed surplus lines agent
Ins 6.17 Note
Note: 2011 Wisconsin Act 224 changed the tax rate for surplus lines insurance which is ocean marine insurance to the same 3% rate for all other surplus lines insurance. Any previous reference to a
½ of 1% rate for ocean marine insurance in this rule is not enforceable as that insurance is now taxed at the same 3% rate for all surplus lines insurance.
Ins 6.18
Ins 6.18
Reporting and payment of tax by unauthorized insurers transacting business in violation of law. Ins 6.18(1)(1)
Purpose. This rule implements and interprets ss.
601.42,
610.11 and
618.43, Stats., for the purpose of facilitating the reporting and collection of tax due the state of Wisconsin from unauthorized insurers transacting business in violation of Wisconsin law.
Ins 6.18(2)
(2) Reporting and payment of tax by unauthorized insurers transacting business in violation of law. All premium tax shall be reported and forwarded to the commissioner on or before March 1, for all insurance which applies to exposures located wholly or partially within this state written, renewed or continued during the preceding calendar year by an unauthorized insurer. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office's website.
Ins 6.18(3)
(3) Penalty. Any violation of this rule shall subject the person violating the same to s.
601.64, Stats.
Ins 6.18 History
History: Cr.
Register, December, 1973, No. 216, eff.1-1-74;
CR 22-076: am. (2), r. appendix 1 Register July 2023 No. 811, eff. 8-1-23.
Ins 6.19
Ins 6.19
Reporting and taxation of directly placed unauthorized insurance. Ins 6.19(1)(1)
Purpose. This rule implements and interprets ss.
601.42,
618.42 and
618.43, Stats., for the purpose of facilitating the reporting and collection of tax due the state of Wisconsin from persons who directly procure or renew insurance in an unauthorized insurer.
Ins 6.19(2)
(2) Reporting directly placed unauthorized insurance. The procurement or renewal of insurance from any unauthorized insurer shall be reported within 60 days to the commissioner on a form substantially the same as Appendix 1 to this rule.
Ins 6.19(3)
(3) Reporting and payment of tax for directly placed unauthorized insurance. All premium tax shall be reported and forwarded to the commissioner on or before March 1, for all insurance which applies to exposures located wholly or partially within this state procured, renewed or continued during the preceding calendar year in an unauthorized insurer. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office's website.
Ins 6.19(4)
(4) Penalty. Any violation of this rule shall subject the person violating the same to s.
601.64, Stats.
Ins 6.19 History
History: Cr.
Register, December, 1973, No. 216, eff. 1-1-74;
CR 22-076: am. (3), r. appendix 2 Register July 2023 No. 811, eff. 8-1-23.
Ins 6.19 Appendix 1
NOTICE OF DIRECTLY PLACED UNAUTHORIZED INSURANCE
To: Commissioner of Insurance
State of Wisconsin
P.O. Box 7873
Madison, WI 53707-7873
1. Name of Person or Organization Insured
2. Address of Insured
3. Contract Number
4. Effective Date
5. Expiration Date
6. Name and Address of Insurance Company
7. Description or Type of Coverage
8. Premium Charged
The undersigned certifies that this report is true and correct according to the best of his or her information, knowledge, and belief.
, 2
Ins 6.19 Note
Note: This report, pursuant to s.
618.42 (2), Stats., must be filed with the Commissioner of Insurance within 60 days after effectuation of any new or renewal insurance contract independently procured from an unauthorized insurer. A separate report is required for each new or renewal insurance contract. A 3% Tax on the premiums charged for such contracts during the calendar year ending December 31 must be paid to the Commissioner on or before March 1 next succeeding.
Ins 6.20
Ins 6.20
Investments of insurance companies. Ins 6.20(1)(1)
Purpose. The purpose of this rule is to implement and interpret ch.
620, Stats., for the purpose of establishing procedures and requirements for investments of insurance companies.
Ins 6.20(2)
(2) Scope. This rule shall apply to all insurers subject to ch.
620, Stats.
Ins 6.20(3)(am)
(am) “Derivative instrument” has the meaning contained in the accounting practices and procedures manual of the national association of insurance commissioners. “Derivative instrument” includes derivatives embedded within an investment.
Ins 6.20(3)(c)
(c) “Financial instrument" means a security, currency, or index of a group of securities or currencies.
Ins 6.20(3)(e)
(e) “Fixed charges" includes interest on all debt, and amortization of debt discount.
Ins 6.20(3)(ee)
(ee) “Foreign country” means any country other than the United States and Canada.
Ins 6.20(3)(em)
(em) “Foreign government” means any governmental unit or instrumentality that is not in the United States or Canada.
Ins 6.20(3)(es)
(es) “Foreign issuer” means any issuer that is not domiciled in the United States or Canada and is not a foreign government. An issuer domiciled in the United States or Canada shall be deemed a foreign issuer when the issuer is a shell business entity or special purpose vehicle, unless the investment is assumed, accepted, guaranteed, insured or otherwise backed by an entity domiciled in the United States or Canada that is not a shell business entity or special purpose vehicle.
Ins 6.20(3)(f)
(f) “Money market mutual fund" means a fund that meets the conditions of 17 Code of Federal Regulations Par. 270.2a-7, under the Investment Company Act of 1940 (
15 USC 80a-1 et seq.), as amended or renumbered.
Ins 6.20(3)(g)
(g) “Net earnings available for fixed charges" means income after allowance for operating and maintenance expenses, depreciation and depletion, and taxes other than federal and state income taxes, but without allowance for extraordinary nonrecurring items of income or expense appearing in the regular financial statements of the issuing company. If the issuing company has acquired, prior to the date of investment, substantially all the assets of another company by purchase, merger, consolidation or otherwise, the net earnings available for fixed charges of the other company for the portion of the test period that preceded acquisition may be included in accordance with a consolidated earnings statement covering the period.
Ins 6.20(3)(h)
(h) “Net earnings available for fixed charges and dividends" shall be determined in the same manner as “net earnings available for fixed charges" but after allowance for federal and state income taxes.
Ins 6.20(3)(hg)
(hg) “Nationally Recognized Statistical Rating Organization” or “NRSRO” means a credit rating agency registered with the U.S. securities and exchange commission, pursuant to the Credit Rating Agency Reform Act of 2006, as amended.
Ins 6.20(3)(hr)
(hr) “No-load mutual fund” means a mutual fund whose shares are sold without any sales charges, or commissions, including sales compensation that is on an immediate or deferred basis or in some combination of immediate and deferred compensation. No-load mutual funds may impose fees for redemption, exchange, distribution, marketing, or other purposes unrelated to sales charges or commissions.
Ins 6.20(3)(i)
(i) “Preferred dividend requirements" include dividends at the maximum prescribed rate on all stock ranking as to dividends on parity with or prior to that being acquired, whether or not the dividends are cumulative.
Ins 6.20(3)(k)
(k) “Real estate" or “real property" includes leaseholds.
Ins 6.20(3)(L)
(L) “Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity which is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period or upon demand.
Ins 6.20(4)
(4) General limitations on restricted insurers. No insurer restricted under s.
620.03, Stats., may invest in any of the following classes of assets, unless prior permission is granted by the commissioner:
Ins 6.20(4)(a)
(a) Any securities of an issuer who has defaulted on any payment on any debt security within the previous 5 years.
Ins 6.20(5)
(5) Special limitations pertaining to a restricted insurer other than a town mutual insurer. An insurer that is restricted under s.
620.03, Stats., and is not a town mutual insurer shall not invest in any of the following investments:
Ins 6.20(5)(a)
(a) Bonds or evidences of indebtedness. An insurer shall not invest in bonds or evidences of indebtedness described in s.
620.22 (1), Stats., unless the bonds or evidences of indebtedness are lawfully authorized and have at least one of the following characteristics:
Ins 6.20(5)(a)1.
1. At the time of purchase have a 1 or 2 designation by the national association of insurance commissioners, or an equivalent rating by a NRSRO.
Ins 6.20(5)(a)2.
2. The bonds or evidences of indebtedness are of a municipally owned public utility of this state created pursuant to
section 3 of
article XI of the constitution, and the net book value of the property pledged as security for the bonds has been established or approved by the public service commission, and the total issue of the bonds does not exceed 50% of the net book value of such property.
Ins 6.20(5)(a)3.
3. Principal and interest are payable from revenues of a public utility or railroad owned by or held for the benefit of any governmental unit in the United States or Canada, if they are adequately secured by mortgage or lien on property or by specific pledge or revenues, and lawful authorizing resolutions or ordinance of the governing body of the unit require that during the life of the bond or evidence of indebtedness the rates, fees, tolls or charges together with any other revenues pledged shall at all times produce revenues sufficient to pay all expenses of operation and maintenance, interest as promised and the principal sum when due.
Ins 6.20(5)(a)4.
4. The bonds or evidences of indebtedness are of public utilities in the United States or Canada and are either adequately secured by mortgage, pledge or other collateral, or have had net earnings available for fixed charges that for the previous 3 fiscal years have averaged per year not less than 1 1/2 times the average annual fixed charges.
Ins 6.20(5)(a)5.
5. The bonds or evidences of indebtedness are of a United States or Canadian private corporation, and they are either adequately secured by mortgage, pledge or other collateral, or are issued by a corporation which has had net earnings available for fixed charges that have averaged for the previous 5 years, and equaled for each of the previous 2 years an annual amount which exceeded average annual fixed charges by at least 50%, or 25% in the case of corporations engaged primarily in wholesale or retail merchandising, installment, commercial and consumer financing, factoring or small loan business.
Ins 6.20(5)(b)
(b) Equipment securities. In equipment securities or in certificates of an equipment trust under sub.
(8) (b) unless the obligor's net earnings have averaged at least 2 times its average annual fixed charges for the previous 3 years.
Ins 6.20(5)(c)1.
1. On the security of encumbered property, but property shall not be deemed encumbered because of unpaid but not delinquent assessments and taxes, mineral, oil or timber rights, easements for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, with or without a reversionary clause, or leases under which rents or profits are reserved to the owner;
Ins 6.20(5)(c)2.
2. In excess of 2/3 of the fair market value, including buildings covered by the mortgage. If the value of buildings constitute part of the security, the buildings must be insured adequately to protect the insurer's security interest. The 2/3 limitation shall not apply to any loan fully insured by a federal insurance corporation; nor
Ins 6.20(5)(c)3.
3. On the security of a leasehold interest in real property unless it is unencumbered except by rentals owed to the owner of the fee, has at least 25 years yet to run, and then for no more than 50% of the fair market value of the leasehold less the present value of all rentals due upon it to the owner of the fee.
Ins 6.20(5)(d)
(d) Preferred shares. In preferred shares unless the issuing company has had, disregarding fixed charges on indebtedness and dividend requirements on preferred stock for the retirement of which provision has been made at the date of the investment, net earnings:
Ins 6.20(5)(d)1.
1. Available for fixed charges and dividends that during the previous 5 fiscal years have averaged not less than twice the sum of the fixed charges, maximum contingent interest and preferred dividend requirements of the issuing company; or
Ins 6.20(5)(d)2.
2. Available for fixed charges and dividends that for each of the previous 3 fiscal years have been not less than 1 1/2 times the sum of the fixed charges, maximum contingent interest and preferred dividend requirements of the issuing company; or
Ins 6.20(5)(d)3.
3. Available to meet preferred dividend requirements of the previous 5 years, after allowance for fixed charges and federal and state income taxes, that have averaged not less than 3 times the preferred dividend requirements.
Ins 6.20(5)(e)1.
1. In accordance with a plan of acquisition proposed by the insurer and approved by the commissioner; and
Ins 6.20(5)(e)2.
2. In common stocks which are authorized securities for NASDAQ, the automated quotation system of the National Association of Securities Dealers.
Ins 6.20(5)(f)
(f) Real property. In any investment under s.
620.22 (4) or
(5), Stats., except with prior written approval of the commissioner.
Ins 6.20(5)(g)1.1. Except as permitted under subd.
2., more than 3% of assets in securities of any single issuer unless it obtains the prior written permission of the commissioner or unless the investment is in securities of the government of the United States or its instrumentalities or in securities guaranteed by the full faith and credit of the United States; or
Ins 6.20(5)(g)2.
2. More than 10% of assets in the securities of one state, of one instrumentality of a state, or of one governmental unit of a state.
Ins 6.20(6)(a)(a)
Status as a restricted insurer. Town mutual insurance companies authorized to operate under the provisions of ch.
612, Stats., are restricted insurers and are subject to the restrictions of ss.
612.36 and
620.03 (1), Stats., sub.
(4) and other applicable provisions of this section. The commissioner may grant exemptions under s.
620.03 (2), Stats.
Ins 6.20(6)(b)
(b)
Permitted investments. Except as permitted by pars.
(c),
(d) and
(e), a town mutual insurer may only invest in one or more of the following:
