Chapter Ins 6

Ins 6.60(3)(b)2. 2. That the person is an insurer as defined under s. 600.03 (27), Stats.

Ins 6.60(3)(b)3. 3. That the represented authorization or exemption under the federal employee retirement income security act is false (29 USCS 1001 et seq).

Ins 6.60(4) (4) The commissioner shall order, for any agent who violates s. 618.39, Stats., not less than revocation of the agent’s license and that the agent pay any claims not paid within 60 days by the unauthorized insurer. An agent may establish the basis for a lesser penalty for a violation of s. 618.39, Stats., only if the agent shows all of the following:

Ins 6.60(4)(a) (a) Substantial mitigating factors.

Ins 6.60(4)(b) (b) The agent made, and solicited to make, only a few sales of the coverage.

Ins 6.60(4)(c) (c) The agent did not serve as a general agent, was not eligible for override commissions, and was not responsible for recruiting, and did not recruit, other agents to sell the coverage.

Ins 6.60(5) (5) A violation of sub. (2) is a cause for denial of an agent license application under s. 628.04 (1), Stats., and a cause for agent license suspension, revocation or limitation under s. 628.10 (2) (b), Stats.

Ins 6.60 History History: CR 01-072: cr. Register January 2002 No. 553, eff. 2-1-02.

Ins 6.61 Ins 6.61 Intermediary records.

Ins 6.61(1) (1) Purpose. This section protects insurance policyholders by prescribing minimum standards and techniques of accounting and data handling of intermediaries to ensure that timely and reliable information will exist and be available to the commissioner. This section implements and interprets ss. 601.42 and 628.34, Stats., by establishing minimum records to be maintained by intermediaries.

Ins 6.61(2) (2) Scope. This section applies to all intermediaries transacting insurance business in this state and to Wisconsin insurance transactions of nonresident intermediaries unless the nonresident is required to maintain records in a similar specified manner by the intermediary’s state of domicile.

Ins 6.61(3) (3) Definitions. As used in this section:

Ins 6.61(3)(a) (a) “Business checking account” means any account utilized by an intermediary for insurance-related transactions.

Ins 6.61(3)(b) (b) “Cash disbursed record” means a record showing all monies paid out by the intermediary in connection with insurance.

Ins 6.61(3)(c) (c) “Cash receipts record” means a record showing all monies received by the intermediary in connection with insurance.

Ins 6.61(3)(d) (d) “Commission statements” means records or statements which show the commissions and fees allocated to the intermediary for insurance transactions.

Ins 6.61(3)(e) (e) “Formal administrative action” means consent decrees, cease and desist orders, stipulations, suspensions, revocations, license denials, fines, forfeitures, settlement agreements, license restrictions or actions limiting the intermediary’s method of conducting an insurance business but does not include administrative actions based solely on failing to comply with continuing education requirements or solely on failing to pay a regulation fee for licensing.

Ins 6.61(3)(f) (f) “Intermediary” means an agent, broker or producer and any person, partnership or corporation requiring a license under the provisions of ch. 628, Stats.

Ins 6.61(3)(g) (g) “Personnel records” means those records pertaining to anyone who is directly retained or employed by an intermediary in connection with insurance including subagents, secretaries, phone solicitors, and independent contractors.

Ins 6.61(3)(h) (h) “Policyholder records” means all records, applications, request for changes, claims, and complaints associated with a policy generated by or through the intermediary.

Ins 6.61(4) (4) Cash disbursed record. The cash disbursed record shall show the name of the party to whom the payment was made, date of payment, and reason for payment.

Ins 6.61(5) (5) Cash receipts record. The cash receipts record shall show the name of the party who remitted the money, date of receipt, and reason for payment.

Ins 6.61(6) (6) Commission statements. The commission statements shall show the insured name, policy number, premium, amount of commission, and date allocated or paid or both.

Ins 6.61(7) (7) Personnel records. Personnel records shall include dates of employment, position, description of principal duties, name of employee, and last known address and phone number of employee.

Ins 6.61(8) (8) Recordkeeping requirements. Beginning on January 1, 1988, each intermediary shall maintain, for a 3-year period, unless a specific period is provided elsewhere, the following records:

Ins 6.61(8)(a) (a) Cash receipts record.

Ins 6.61(8)(b) (b) Cash disbursed record.

Ins 6.61(8)(c) (c) Commission statements.

Ins 6.61(8)(d) (d) Policyholder records.

Ins 6.61(8)(e) (e) Business checking account.

Ins 6.61(8)(f) (f) Personnel records.

Ins 6.61(9) (9) Special requirements for newly issued contracts. Each intermediary shall maintain records for a 3-year period giving the effective date of the coverage on all newly issued contracts.

Ins 6.61(10) (10) Special requirements for individually-issued life and accident and health contracts. Each intermediary shall maintain records for a 3-year period indicating that the necessary suitability inquiry and replacement procedures required by ss. Ins 2.07, 2.14 (5) (f), 2.15 (9) (f), 3.27 (7), and 3.29 were followed for each individually-issued life and accident and health contract written or replaced or both.

Ins 6.61(11) (11) Special requirements for title insurance. Each intermediary who is employed by, or is, an affiliate of a producer of title insurance shall maintain records for 3 years for each application or order for title insurance accepted in this state. The records shall state whether the application or order was directly or indirectly referred as provided by s. Ins 3.32 (5) by a producer of title insurance which is an affiliate as defined by s. Ins 3.32 (3) (a), (bm) and (c) and the name of each producer of title insurance who is an affiliate and acts as broker, agent, lender, representative or attorney in the transaction which resulted in the application or order. Each intermediary who is an affiliate of a producer of title insurance shall maintain a record of gross revenue from operations in this state from title insurance by quarter calendar year which shall separately show gross revenue from operations in this state derived from applications or orders for title insurance directly or indirectly referred by the affiliate.

Ins 6.61(12) (12) Place of maintaining records. The intermediary shall maintain records required by subs. (8), (9), (10) and (11) at the business address of the intermediary or the insurer recorded with the commissioner of insurance, or at another location only if the intermediary provides written notice of the other location to the commissioner of insurance.

Ins 6.61(13) (13) Updating records. The intermediary shall update all intermediary records at reasonable intervals or as necessary and shall maintain all financial intermediary records according to accepted accounting principles.

Ins 6.61(14) (14) Maintaining policyholder records. The intermediary shall retain policyholder records for a period of at least 3 years after termination or lapse of the policy.

Ins 6.61(15) (15) Change of name or address. Each intermediary shall, within 30 days, notify the commissioner of insurance in writing in a manner prescribed by the commissioner of any change in the intermediary’s name, residence address, contact email address, business address or mailing address.

Ins 6.61(16) (16) Notification of formal administrative actions, criminal proceedings and lawsuits. Each intermediary shall notify the commissioner in writing of the following within 30 days:

Ins 6.61(16)(a) (a) Except for action taken by the Wisconsin office of the commissioner of insurance, any formal administrative action against the intermediary taken by any state’s insurance regulatory agency, commission or board or other regulatory agency which licenses the person for any occupational activity. The notification shall include a description of the basis for the administrative action and any action taken as a result of the proceeding, a copy of the notice of hearing and other documents describing the problem, a copy of the order, consent to order, stipulation, final resolution and other relevant documents.

Ins 6.61(16)(b) (b) Any initial pretrial hearing date related to any criminal prosecution of the intermediary taken in any jurisdiction, other than a misdemeanor charge related to the use of a motor vehicle or the violation of a fish and game regulation. The notification shall include a copy of the initial criminal complaint filed, the order resulting from the hearing and any other relevant legal documents.

Ins 6.61(16)(c) (c) Any felony conviction or misdemeanor conviction in any jurisdiction, other than a misdemeanor conviction related to the use of a motor vehicle or the violation of a fish and game regulation. The notification shall include a copy of the initial criminal complaint or criminal charging document filed, the judgement of conviction, the sentencing document, the intermediary’s explanation of what happened to cause criminal proceedings, the intermediary’s reasons why no action should be taken regarding the intermediary’s license and any other relevant legal documents.

Ins 6.61(16)(d) (d) Any lawsuit filed against the licensee or the licensee’s business in which there are allegations of misrepresentation, fraud, theft or embezzlement involving the licensee or the licensee’s business. The notification shall include a copy of the initial suit documents, the intermediary’s explanation of what happened to cause the civil proceedings, the intermediary’s reasons why no action should be taken regarding the intermediary’s license and any other relevant legal documents.

Ins 6.61(17) (17) Records maintained by insurers. An insurer shall inform its intermediaries in writing of the requirements of this section and may, by written agreement, assume the responsibility to maintain these records for an individual intermediary if the records can be made immediately available to the commissioner of insurance on demand.

Ins 6.61 History History: Cr. Register, March, 1977, No. 255, eff. 4-1-77; am., Register, March, 1979, No. 279, eff. 4-1-79; cr. (5), Register, September, 1981, No. 309, eff. 10-1-81; cr. (2m), Register, November, 1986, No. 371, eff. 12-1-86; r. and recr. Register, December, 1987, No. 384, eff. 1-1-88; am. (16), Register, August, 1988, No. 392, eff. 9-1-88; am. (16), Register, April, 1992, No. 436, eff. 5-1-92; am. (15), Register, January, 1999, No. 517, eff. 2-1-99; CR 01-074; am. (3) (e), r. and recr. (16), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (3) (f) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (15) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (15) Register August 2020 No. 776, eff. 9-1-20.

Ins 6.62 Ins 6.62 Filing requirements for multiple employer trusts and associations.

Ins 6.62(1) (1) In this section:

Ins 6.62(1)(a) (a) “Intermediary” has the meaning provided under s. 628.02 (1), Stats.

Ins 6.62(1)(b) (b)

Ins 6.62(1)(b)1. 1. “Multiple employer trust or association,” except as provided by subd. 2., means a trust, association or other person which provides or offers to provide health care benefits or coverage to employees of 2 or more employers and which is:

Ins 6.62(1)(b)1.a. a. A multiple employer welfare arrangement as defined by 29 USC 1002 (40);

Ins 6.62(1)(b)1.b. b. Represented as an employee welfare benefit plan which is subject to the Employee Retirement Income Security Act, 29 USC 1001 to 1461; or

Ins 6.62(1)(b)1.c. c. Located outside this state and is not organized and regulated as an insurer domiciled in the United States.

Ins 6.62(1)(b)2. 2. “Multiple employer trust or association” does not include a person which:

Ins 6.62(1)(b)2.a. a. Provides benefits or coverage under or pursuant to a collective bargaining agreement;

Ins 6.62(1)(b)2.b. b. Is, or which provides benefits or coverage which are fully insured by, an insurer licensed to do business in this state;

Ins 6.62(1)(b)2.c. c. Provides health care benefits or coverage solely to employees of governmental units;

Ins 6.62(1)(b)2.d. d. Is an individual; or

Ins 6.62(1)(b)2.e. e. The commissioner exempts in writing.

Ins 6.62(2) (2) No intermediary may solicit, advertise, or market in this state or accept an application or place coverage for a person who resides in this state with a multiple employer trust or association unless prior to solicitation, advertising, marketing, acceptance of the application, or placing the coverage:

Ins 6.62(2)(a) (a) The multiple employer trust or association files with the office the information required under sub. (5); or

Ins 6.62(2)(b) (b) The intermediary files the information required under sub. (5).

Ins 6.62(3) (3) No multiple employer trust or association may solicit, advertise, or market in this state or accept an application for coverage from a person who is a resident, or who has employees who are residents, of this state unless prior to soliciting, advertising, marketing, or accepting an application it files with the office the information required under sub. (5).

Ins 6.62(4) (4) If subsequent to a filing under sub. (2) or (3) changes occur so that the information contained in the filing is no longer accurate, the multiple employer trust or association or intermediary which made the filing shall within 15 days of the date the change is effective make a filing under sub. (5) with the correct information.

Ins 6.62(5) (5) A multiple employer trust or association or intermediary required to file information under sub. (2), (3), or (4) shall file a properly completed form prescribed by the commissioner and shall attach:

Ins 6.62(5)(a) (a) A copy of any insurance policy or contract covering benefits or coverage offered by the multiple employer trust or association;

Ins 6.62(5)(b) (b) A copy of the organizational documents of the multiple employer trust or association, including the articles of incorporation, bylaws or trust instrument; and

Ins 6.62(5)(c) (c) A statement that the benefits or coverage are fully insured or a description of the extent to which they are not fully insured.

Ins 6.62(6) (6) A violation of sub. (2), (3), or (4) is an unfair and deceptive trade practice under s. 628.34 (12), Stats., constitutes a method or practice in the conduct of business which endangers the legitimate interests of customers and the public under s. 628.10 (2), Stats., and, if the multiple employer trust or association is an unauthorized insurer, establishes that the person violating the rule should have known that the multiple employer trust or association is an unauthorized insurer for the purpose of ss. 618.39 and 618.44, Stats.

Ins 6.62(7) (7) This section is in addition to any provision of chs. 600 to 646, Stats.

Ins 6.62 Note Note: This rule requires use of a reporting form “Multiple Employer Trust Filing” which may be obtained from the Office of the Commissioner of Insurance, 121 E. Wilson Street, P.O. Box 7873, Madison, Wisconsin, 53707-7873.

Ins 6.62 History History: Emerg. cr. eff. 1-1-90; cr. Register, May, 1990, No. 413, eff. 6-1-90.

Ins 6.63 Ins 6.63 Regulation charge.

Ins 6.63(1) (1) The renewal fee to be paid biennially in a payment type prescribed by the commissioner, by each licensed individual intermediary-agent is:

Resident agent     $ 35.00

Nonresident agent   $ 70.00

Ins 6.63(2) (2) Renewal fees are due on the last day of the intermediary’s birth month every other year. OCI will send a renewal fee notice in a manner prescribed by the commissioner at least 60 days prior to the fee due date to each intermediary.

Ins 6.63(3) (3) Any resident individual intermediary whose license is terminated for failing to pay renewal fees or failing to complete required continuing education or revoked for failing to pay unemployment insurance contributions or failing to pay delinquent taxes may, within 12 months from the termination or revocation date, apply to be relicensed for the same license without completing prelicensing education or passing a written examination. Resident licensees who are required to complete continuing education must have all previous requirements met. The application fee shall be as specified in s. 628.10 (5) (a), Stats. If a resident license has been terminated or revoked for more than 12 months, the intermediary shall, in order to be relicensed, satisfy the examination and licensing requirements established by s. Ins 6.59.

Ins 6.63(4) (4) Intermediaries with a Surplus Lines license shall pay an annual renewal fee of $100.00 on or before the assigned expiration date each year. OCI will send a renewal fee notice in a manner prescribed by the commissioner at least 60 days prior to the fee due date to each intermediary surplus lines agent at the address on file with the office of the commissioner of insurance. Any resident individual intermediary whose surplus lines license is terminated for failing to pay renewal fees or revoked for failing to pay unemployment insurance contributions or failing to pay delinquent taxes must apply to be relicensed.

Ins 6.63 History History: Cr. Register, December, 1977, No. 264, eff. 1-1-78; am. (1) to (3), Register, September, 1981, No. 309, eff. 1-1-82; r. and recr. (4) to (6), Register, October, 1981, No. 310, eff. 11-1-81; am. (1), Register, November, 1995, No. 479, eff. 12-1-95; CR 01-074: am. (3) to (5), r. (2), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: r. and recr. Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (1) (a), (2) and (3), r. (1) (b) Register August 2009 No. 644, eff. 9-1-09; renumber of (1) (a) to (1) made under s. 13.92 (4) (b) 1., Stats., Register August 2009 No. 644; CR 19-025: am. (2) to (4) Register August 2020 No. 776, eff. 9-1-20.

Ins 6.66 Ins 6.66 Proper exchange of business.

Ins 6.66(1) (1) The purpose of this rule is to interpret s. 628.61, Stats., regarding the proper exchange of business between agent intermediaries.

Ins 6.66(2) (2) Proper exchange of business means the forwarding of insurance business from one agent who cannot, after due consideration, place the business with any of the insurers for which the agent is listed because of capacity problems, the refusal of the company to accept the risk or the onerous conditions it imposes on the insured, to another agent licensed for those lines of insurance whose insurers are able to accommodate the risk under conditions more favorable to the insured. The agent forwarding the business is entitled to split the commission involved. Proper exchange of business is not the regular course of business and such forwarding of business is thereby distinguished from brokerage by its occasional and exceptional nature.

Ins 6.66(3) (3) No agent may properly exchange business with another agent, unless:

Ins 6.66(3)(a) (a) The agent forwarding the business to a listed agent is licensed for the lines of business that are being exchanged;

Ins 6.66(3)(b) (b) The agent who receives the business and agrees to place it is licensed in the line or lines of insurance involved in the exchange; and

Ins 6.66(3)(c) (c) Both the agent forwarding the business and the agent who places the business with the insurer sign the insurance application, or if no application is completed, the names of the agents involved in the transaction appear on the policy issued.

Ins 6.66(4) (4) No agent shall accept business solicited by another intermediary-agent which he or she knows, or has reason to know, is not exchanged in compliance with the provisions of this rule.

Ins 6.66(5) (5)