Chapter 611

611.11(4) (4) Municipalities.

611.11(4)(a) (a) In this subsection, “municipality” has the meaning given in s. 345.05 (1) (c).

611.11(4)(b) (b) Any number of municipalities or associations of municipalities or both may organize a municipal insurance mutual under s. 611.13, subject to s. 611.23, to provide any of the following for its members:

611.11(4)(b)1. 1. Worker’s compensation insurance.

611.11(4)(b)2. 2. Liability insurance.

611.11(4)(b)3. 3. Risk management services.

611.11(4)(b)4. 4. Property insurance.

611.11 History History: 1971 c. 260; 1973 c. 243; 1977 c. 346; 1979 c. 102 ss. 236 (6), 237; 1981 c. 390 s. 252; 1995 a. 197; 2003 a. 78; 2009 a. 28; 2011 a. 32.

611.12 611.12 Articles and bylaws.

611.12(1) (1) Stock corporations. Section 180.0202 applies to the articles of a stock corporation, except that:

611.12(1)(a) (a) The name of the corporation shall include the word “insurance” or a term of equivalent meaning, and shall comply with s. 180.0401 (2) to (4);

611.12(1)(am) (am) The articles shall include a statement that the corporation is organized under this chapter;

611.12(1)(b) (b) Authorized shares shall conform to s. 611.33 (1); and

611.12(1)(c) (c) The purposes of the corporation shall be limited to those permitted by s. 610.21.

611.12(2) (2) Mutuals. Section 181.0202 applies to the articles of a mutual, except that:

611.12(2)(a) (a) The name of the corporation shall include the words “mutual” and “insurance” or terms of equivalent meaning and shall comply with s. 181.0401 (2) to (4);

611.12(2)(am) (am) The articles shall include a statement that the corporation is organized under this chapter;

611.12(2)(b) (b) The articles shall include provision for mutual bonds if any are to be authorized, which shall conform to s. 611.33 (2) (a);

611.12(2)(c) (c) The purposes of the corporation shall be limited to those permitted in s. 610.21;

611.12(2)(d) (d) If assessable policies are permitted, the articles shall contain general provisions respecting assessment liabilities and procedures, including a provision specifying the classes of business on which assessment may be separately levied; and

611.12(2)(e) (e) The articles may specify those classes of persons who may be policyholders, or prescribe the procedure for establishing or removing restrictions on the classes of persons who may be policyholders, and the articles shall state that each policyholder is a member of the corporation.

611.12(3) (3) Principal officers. Sections 180.0840 and 180.0841 apply to stock corporations and ss. 181.0840 and 181.0841 apply to mutuals. Notwithstanding s. 180.0840 (1) or 181.0840 (1), the articles or bylaws shall specifically designate 3 or more offices, the holders of which shall be the principal officers of the corporation. Notwithstanding s. 180.0840 (3) or 181.0840 (3), the principal offices shall be held by at least 3 separate individuals.

611.12(4) (4) Bylaws. The bylaws of a domestic corporation shall comply with this chapter, and a copy of the bylaws and any amendments thereto shall be filed with the commissioner within 60 days after adoption. Subject to this subsection, to ss. 611.13 (2) (d) and (5) and 611.22 (4), ss. 180.0206 and 180.1020 to 180.1022 apply to stock corporations and ss. 181.0206, 181.0207 and 181.1021 apply to mutuals.

611.12(5) (5) Forum selection provisions. Section 180.0145 applies to stock corporations, and s. 181.0163 applies to mutuals.

611.12 History History: 1971 c. 260; 1989 a. 303; 1997 a. 79; 1999 a. 85; 2023 a. 212.

611.13 611.13 Organization permit and certificate of incorporation.

611.13(1) (1) Permit required. No person may, in the case of a stock corporation, solicit subscriptions for its securities, or in the case of a mutual, solicit applications for qualifying insurance policies or subscriptions for mutual bonds or contribution notes, until the commissioner has issued an organization permit.

611.13(2) (2) Application for permit. The application for an organization permit shall be signed and acknowledged by or on behalf of each incorporator, and shall include or have attached:

611.13(2)(a) (a) The names, and for the preceding 10 years all addresses and all occupations of all incorporators and proposed directors and officers;

611.13(2)(b) (b) For all corporate incorporators, their articles and bylaws, a list of the names, addresses and occupations of all directors and principal officers, and for the 3 most recent years their annual financial statements and reports;

611.13(2)(c) (c) The proposed articles which shall be signed and acknowledged by or on behalf of each incorporator, and the proposed bylaws;

611.13(2)(d) (d) All agreements relating to the corporation to which any incorporator or proposed director or officer is a party;

611.13(2)(e) (e) The amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement and compensation of incorporators or other persons;

611.13(2)(f) (f) The proposed compensation of directors and officers;

611.13(2)(g) (g) The plan for solicitation of applications for qualifying insurance policies and for the corporation’s securities;

611.13(2)(h) (h) The forms to be used for stock subscriptions, certificates for shares, applications for qualifying insurance policies, subscriptions for mutual bonds and contribution notes, and the forms for bonds and notes;

611.13(2)(i) (i) The proposed capital, or the proposed minimum permanent surplus, and the proposed initial surplus;

611.13(2)(j) (j) The plan for conducting the insurance business, including:

611.13(2)(j)1. 1. The geographical area in which business is intended to be done in the first 5 years;

611.13(2)(j)2. 2. The types of insurance intended to be written in the first 5 years;

611.13(2)(j)3. 3. The proposed marketing methods;

611.13(2)(j)4. 4. To the extent requested by the commissioner, the proposed method for the establishment of premium rates;

611.13(2)(k) (k) A projection of the anticipated operating results of the corporation at the end of each of the first 5 years of operation, based on reasonable assumptions of loss experience, premium and other income, operating expenses and acquisition costs; and

611.13(2)(L) (L) Such other relevant documents or information as the commissioner reasonably requires.

611.13(3) (3) Issuance of organization permit and of certificate of incorporation. The commissioner shall issue an organization permit and a certificate of incorporation if:

611.13(3)(a) (a) The commissioner finds that all requirements of law have been met;

611.13(3)(b) (b) The commissioner is satisfied that all natural persons who are incorporators, the directors and principal officers of corporate incorporators, and the proposed directors and officers of the corporation being formed are trustworthy and competent and collectively have the competence and experience to engage in the particular insurance business proposed; and

611.13(3)(c) (c) The commissioner is satisfied that the business plan is consistent with the interests of the corporation’s potential insureds and of the public.

611.13(4) (4) Contents of permit. The organization permit shall specify the minimum capital or minimum permanent surplus required under s. 611.19, and may contain such other information as the commissioner deems necessary.

611.13(5) (5) Legal existence. Upon the issuance of the certificate of incorporation the legal existence of the corporation shall begin, the articles and bylaws shall become effective and the proposed directors and officers shall take office. The certificate shall be conclusive evidence of compliance with this section, except in a proceeding by the state against the corporation.

611.13 History History: 1971 c. 260; 1991 a. 316.

611.13 Cross-reference Cross-reference: See also s. Ins 6.52, Wis. adm. code.

611.14 611.14 Powers under organization permit.

611.14(1) (1) Stock corporations. While its organization permit is in effect a stock corporation may:

611.14(1)(a) (a) Register stock under s. 611.31, solicit subscriptions subject to s. 180.0620 (1) (a) and receive payment therefor in cash or, with the approval of the commissioner, in other property constituting a permitted investment under ch. 620, and issue receipts for such payment at values approved by the commissioner, but no shares may be issued until a certificate of authority is issued; and

611.14(1)(b) (b) Transact all other business necessary and appropriate for the organization of the planned insurance enterprise.

611.14(2) (2) Mutuals. While its organization permit is in effect a mutual may:

611.14(2)(a) (a) Register mutual bonds under s. 611.31, solicit applications for qualifying insurance policies under s. 611.19 (4) (c) and subscriptions for mutual bonds and contribution notes and receive payment therefor in cash or, with the approval of the commissioner, in property constituting a permitted investment under ch. 620, and issue receipts for such payment at values approved by the commissioner, but no policies or bonds may be issued until a certificate of authority is issued; and

611.14(2)(b) (b) Transact all other business necessary and appropriate in the organization of the planned insurance enterprise.

611.14 History History: 1971 c. 260, 307; 1989 a. 303.

611.15 611.15 Deposit of proceeds of subscriptions. All funds, and the securities and documents representing interests in property, received by a stock corporation for stock subscriptions or by a mutual for applications for insurance policies or for mutual bond or contribution note subscriptions shall be deposited in the name of the corporation with a depository approved by the commissioner, subject to an escrow agreement approved by the commissioner under which withdrawals may be made only with the commissioner’s approval.

611.15 History History: 1971 c. 260; 1979 c. 102 s. 236 (14).

611.16 611.16 Termination of organization permit and payment of organization expenses.

611.16(1) (1) Termination. The organization permit shall terminate upon:

611.16(1)(a) (a) Issuance of a certificate of authority under s. 611.20;

611.16(1)(b) (b) Revocation under sub. (2); or

611.16(1)(c) (c) Expiration of one year after issuance unless a good faith application for a certificate of authority has been filed with the commissioner. The commissioner may grant a reasonable extension if the commissioner reasonably expects that the corporation will be able to satisfy the requirements for a certificate of authority within the extended period.

611.16(2) (2) Revocation. The commissioner may revoke an organization permit if:

611.16(2)(a) (a) The commissioner finds, after a hearing, that because of changes in circumstances, or because the facts were not as represented in the application, the conditions for issuance of a permit are no longer satisfied; or

611.16(2)(b) (b) The commissioner denies an application for a certificate of authority and finds that the corporation cannot reasonably be expected to satisfy the requirements for a certificate of authority within the remaining term of the organization permit or any extension thereof under sub. (1) (c).

611.16(3) (3) Reimbursements and refunds.

611.16(3)(a) (a) General. Except in cases under pars. (b) and (c), if the organization permit is revoked or expires before a certificate of authority is granted, incorporators who have advanced money for the reasonable and authorized expenses of organization, including underwriting expenses, may be reimbursed in cash from the proceeds of shares or mutual bond or contribution note subscriptions under the organization permit, on itemized receipts audited by the commissioner. The total reimbursement shall not exceed 5 percent of the amount received from such sources. The remainder in the escrow account shall thereupon be distributed among such subscribers in proportion to their contributions, valued as of the time the contributions were made.

611.16(3)(b) (b) Violation of law. Reimbursement may be refused to any incorporator under par. (a) if the commissioner finds that in connection with the organization of the corporation the incorporator has willfully or negligently violated in a material way any provision of this chapter.

611.16(3)(c) (c) Assessable mutuals. No reimbursement may be made to any incorporator of a mutual under par. (a) until all advanced premiums collected under s. 611.19 (4) (c) have been repaid in full.

611.16(4) (4) End of legal existence. The legal existence of the corporation shall terminate upon completion of the payments under sub. (3).

611.16 History History: 1971 c. 260, 307; 1991 a. 316.

611.18 611.18 Incorporators’ liability and organization expenses.

611.18(1) (1) Liability. The incorporators shall be jointly and severally liable for all organizational and promotional expenses and liabilities incurred prior to the issuance of the certificate of authority.

611.18(2) (2) Reimbursement and compensation.

611.18(2)(a) (a) Stock corporations.

611.18(2)(a)1. 1. ‘Expenses.’ After issuance of the certificate of authority, incorporators of a stock corporation who have advanced money or incurred obligations for the reasonable and authorized expenses of organization including underwriting may be reimbursed in cash from the proceeds of shares subscribed to under the organization permit, on itemized receipts audited by the commissioner. Their total reimbursement may not exceed 10 percent of the amount received from subscribers.

611.18(2)(a)2. 2. ‘Personal services.’ Incorporators may be compensated for the reasonable value of personal services actually performed by the issuance to them of shares not exceeding in value in the aggregate 10 percent of the amount received from the subscription for shares under the organization permit.

611.18(2)(a)3. 3. ‘Aggregate expenses and remuneration.’ The aggregate payment under subds. 1. and 2. may not exceed 15 percent of the amount received for shares subscribed to under the organization permit, including the shares purchased under s. 611.32 (1) or (2), and shall conform to the statement made under s. 611.13 (2) (e).

611.18(2)(b) (b) Mutuals. After issuance of the certificate of authority, incorporators of a mutual who have advanced money or incurred obligations for the reasonable and authorized expenses of organization may be reimbursed in cash from the proceeds of subscriptions for mutual bonds and contribution notes, on itemized receipts audited by the commissioner. The total reimbursement may not exceed 15 percent of the amount received for the bonds and notes.

611.18 History History: 1971 c. 260.

611.19 611.19 Initial capital and surplus requirements.

611.19(1) (1) Minimum capital and permanent surplus. The commissioner may by rule establish the minimum capital for a stock corporation or the minimum permanent surplus for a nonassessable mutual organized under this chapter. In the absence of such a rule, the minimum capital or minimum permanent surplus shall be $2,000,000 or such greater amount as the commissioner specifies by order.

611.19(2) (2) Initial expendable surplus. A corporation organized under this chapter shall have an initial expendable surplus, after payment of all organizational expenses, of at least 50 percent of the minimum capital or minimum permanent surplus specified under sub. (1), or such other percentage as the commissioner specifies by order.

611.19(4) (4) Assessable mutuals.