Chapter 424

424.203   Conditions applying to insurance to be provided by creditor.

424.204   Maximum charge by creditor for insurance.

424.205   Refund or credit required.

424.206   Deferral, refinancing and consolidation agreements.

424.207   Term of insurance.

424.208   Amount of insurance.

424.209   Filing and approval of rates and forms.

SUBCHAPTER III

PROPERTY INSURANCE

424.301   Restrictions on property insurance.

424.302   Insurance on creditor’s interest only.

424.303   Cancellation by creditor.

424.304   Cancellation by customer.

SUBCHAPTER IV

OTHER INSURANCE PRODUCTS

424.401   Cancellation by customer.

424.402   Insurance cancellation credit or payment.

SUBCHAPTER V

INSURANCE PRACTICES

424.501   False, misleading or deceptive insurance solicitation.

424.502   Insurance commissions; limitations.

SUBCHAPTER VI

ADMINISTRATION

424.601   Cooperation between administrator and commissioner of insurance.

424.602   Administrative action of commissioner of insurance.

Ch. 424 Cross-reference Cross-reference: See definitions in s. 421.301.

subch. I of ch. 424 SUBCHAPTER I

GENERAL PROVISIONS

424.101 424.101 Short title. This chapter shall be known and may be cited as Wisconsin consumer act—insurance.

424.101 History History: 1971 c. 239.

424.102 424.102 Scope. This chapter applies to agreements between a creditor and a debtor under which insurance is provided or is to be provided in relation to consumer credit transactions.

424.102 History History: 1971 c. 239; 1973 c. 3.

424.103 424.103 Application of general definitions. The definitions in s. 421.301 shall apply to this chapter.

424.103 History History: 1973 c. 3; 1981 c. 390 s. 252.

subch. II of ch. 424 SUBCHAPTER II

CONSUMER CREDIT INSURANCE

424.201 424.201 Definition “consumer credit insurance”. “Consumer credit insurance” means insurance, other than insurance on property, by which the satisfaction of debt in whole or in part is a benefit provided, but does not include:

424.201(1) (1) Insurance issued as an isolated transaction on the part of the insurer not related to an agreement or plan for insuring customers of the creditor;

424.201(2) (2) Insurance indemnifying the creditor against loss due to the customer’s default; or

424.201(3) (3) A guaranteed asset protection waiver, as defined in s. 218.0148 (1) (e).

424.201 History History: 1971 c. 239; 1973 c. 3; 1985 a. 256; 1995 a. 329; 2017 a. 161.

424.202 424.202 Charge for insurance.

424.202(1) (1) Except as otherwise provided in this chapter and subject to the provisions on additional charges (s. 422.202), and maximum charges (s. 422.201) a creditor may agree to provide insurance, and may contract for and receive a charge for insurance separate from and in addition to other charges. A creditor need not make a separate charge for insurance provided or required by the creditor.

424.202(2) (2) This chapter does not authorize the issuance of any insurance prohibited under any statute, or rule thereunder, governing the business of insurance.

424.202 History History: 1971 c. 239; 1991 a. 316.

424.203 424.203 Conditions applying to insurance to be provided by creditor.

424.203(1) (1) When the parties agree that consumer credit insurance shall be provided, at the time the indebtedness is incurred there shall be delivered to the customer the individual policy, a group certificate of insurance, a copy of the application for such insurance or a notice of proposed insurance.

424.203(2) (2) The evidence of insurance provided pursuant to sub. (1) shall set forth the name and home office address of the insurer, the name or names of the customers, the premium or amount of payment by the customer, if any, separately for credit life insurance and credit accident and sickness insurance, the amount, term and a brief description of the coverage provided, including all exclusions and exceptions.

424.203(3) (3) Within 30 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the customer if it is not delivered at the time the indebtedness is incurred.

424.203(4) (4) Within 10 days from the date the indebtedness is incurred, the customer shall be permitted to return the policy, certificate of insurance or the notice of proposed insurance to the creditor and to receive a refund of any premium paid for the insurance if the customer is not satisfied with the insurance for any reason. Such insurance shall then be void and the parties will be in the same position as if no certificate, policy or notice of proposed insurance had been issued. Conspicuous notice of the right to return the policy, certificate of insurance or notice of proposed insurance shall be furnished with or in the policy, certificate or notice of proposed insurance.

424.203(5) (5) A violation of this section is subject to s. 425.303.

424.203 History History: 1971 c. 239; 1973 c. 3 ss. 59, 69; 1991 a. 316.

424.204 424.204 Maximum charge by creditor for insurance.

424.204(1) (1) Except as provided in sub. (2), if a creditor contracts for or receives a charge for insurance, the amount charged for the insurance may not exceed the premium to be charged by the insurer, as computed at the time the charge to the customer is determined, conforming to any rate filings required by law and made by the insurer with the commissioner of insurance.

424.204(2) (2) A creditor who provides consumer credit insurance in relation to an open-end credit plan may calculate the charge to the customer in each billing cycle by applying the current premium rate to either:

424.204(2)(a) (a) The average daily unpaid balance of the obligation in the cycle;

424.204(2)(b) (b) The unpaid balance of the obligation or a median amount within a specified range of unpaid balances of the obligation on approximately the same day of the cycle. The day of the cycle need not be the day used in calculating the finance charge (s. 422.201), but the specified range shall be the range used for that purpose; or

424.204(2)(c) (c) The unpaid balances of principal calculated according to the actuarial method.

424.204(3) (3) A violation of this section is subject to s. 425.304.

424.204 History History: 1971 c. 239.

424.205 424.205 Refund or credit required.

424.205(1) (1) Upon prepayment in full of a consumer credit transaction by the proceeds of consumer credit insurance, the customer or the customer’s estate is entitled to a refund of any portion of a separate charge for insurance which by reason of prepayment is retained by the original creditor or any assignee or returned to either of them by the insurer.

424.205(2) (2) This chapter does not require the creditor to grant a refund or credit if all the refunds and credits due to the customer under chs. 421 to 427 amount to less than $1 and, except as provided in sub. (1), does not require the creditor to account to the debtor for any portion of a separate charge for insurance because:

424.205(2)(a) (a) The insurance is terminated by performance of the insurer’s obligation;

424.205(2)(b) (b) The creditor pays or accounts for premiums to the insurer in amounts and at times determined by the agreement between them; or

424.205(2)(c) (c) The creditor receives directly or indirectly under any policy of insurance a gain or advantage not prohibited by law.

424.205(3) (3) Except as provided in sub. (2), the creditor shall promptly make or cause to be made an appropriate refund or credit to the customer with respect to any separate charge made to the customer for insurance if:

424.205(3)(a) (a) The insurance is not provided or is provided for a shorter term than that for which the charge to the debtor for insurance was computed; or

424.205(3)(b) (b) The insurance terminates prior to the end of the term for which it was written because of prepayment in full or otherwise.

424.205(4) (4) A refund or credit required by sub. (3) is appropriate as to amount if it is computed according to either s. 422.209 or a method prescribed or approved by the commissioner of insurance.

424.205 History History: 1971 c. 239; 1979 c. 89; 1991 a. 316.

424.206 424.206 Deferral, refinancing and consolidation agreements.

424.206(1) (1) The creditor may not receive a separate charge for insurance in connection with a deferral (s. 422.204), a refinancing (s. 422.205) or a consolidation (s. 422.206) unless:

424.206(1)(a) (a) The customer agrees in writing at the time of deferral, refinancing or consolidation that a specific charge may be made;

424.206(1)(b) (b) The customer is to be provided with insurance for an amount or a term, or insurance of a kind, in addition to that to which the customer would have been entitled had there been no deferral, refinancing or consolidation;

424.206(1)(c) (c) The customer receives a refund or credit on account of any unexpired term of existing insurance in the amount that would be required if the insurance were terminated (s. 424.205); and

424.206(1)(d) (d) The charge does not exceed the amount permitted by this chapter (s. 424.204).

424.206(2) (2) A creditor may not contract for or receive a separate charge for insurance which duplicates insurance with respect to which the creditor has previously contracted for or received a separate charge.

424.206(3) (3) A violation of this section is subject to the provisions of s. 425.303.

424.206 History History: 1971 c. 239; 1991 a. 316.

424.207 424.207 Term of insurance.

424.207(1) (1) Consumer credit insurance provided by a creditor may be subject to the furnishing of evidence of insurability satisfactory to the insurer. Whether or not such evidence is required, the term of the insurance shall commence no later than when the customer becomes obligated to the creditor or when the customer applies for the insurance, whichever is later except as follows:

424.207(1)(a) (a) If any required evidence of insurability is not furnished until more than 30 days after the term would otherwise commence, the term may commence on the date when the insurer determines the evidence to be satisfactory; or

424.207(1)(b) (b) If the creditor provides insurance not previously provided covering debts previously created, the term may commence on the effective date of the policy.

424.207(2) (2) In the case where the commencement of the insurance is delayed, the customer to the extent the customer has paid a premium charge for any period of time before the insurance became effective, shall be entitled to a rebate or credit of such premium according to s. 424.205.

424.207(3) (3) The originally scheduled term of the insurance shall extend at least until the due date of the last scheduled payment of the obligation, except as follows:

424.207(3)(a) (a) If the insurance relates to an open-end credit plan, the term need extend only until the payment of the account and may be sooner terminated after at least 30 days’ notice to the customer; or

424.207(3)(b) (b) If the customer is advised in writing in a clear and conspicuous manner that the insurance will be written for a specified shorter time, the term need extend only until the end of the specified time.