Chapter 613

613.72   Merger of service insurance corporations.

613.74   Voluntary dissolution of solvent service insurance corporations.

613.75   Conversion of a service insurance corporation into a stock or mutual insurance corporation.

613.78   Transfer of business or assets.

SUBCHAPTER VI

SUPPLEMENTARY PROVISIONS

613.80   Hospital service insurance corporations.

613.90   Vicarious liability.

613.92   Administrative agent.

Ch. 613 Cross-reference Cross-reference: See definitions in ss. 600.03, 610.01 and 628.02.

Ch. 613 Note NOTE: Chapter 223, laws of 1975, which created this chapter, contains explanatory notes.

subch. I of ch. 613 SUBCHAPTER I

GENERAL PROVISIONS

613.01 613.01 Definitions. In this chapter, unless the context requires otherwise:

613.01(1) (1) Articles of incorporation. “Articles of incorporation” has the meaning designated under s. 181.0103 (1).

613.01(2) (2) Board of directors. “Board of directors” has the meaning designated for “board” under s. 181.0103 (2).

613.01(3) (3) Bylaws. “Bylaws” has the meaning designated under s. 181.0103 (3).

613.01(4) (4) Director. “Director” includes “trustee”.

613.01(4m) (4m) Insurer. In any provision of the statutes made applicable to service insurance corporations by this chapter, “insurer” includes service insurance corporations, and the technical terms used in those statutes shall be applicable to service insurance corporations despite the customary use of other parallel terms by service insurance corporations.

613.01(5) (5) Nonprofit corporation. “Nonprofit corporation” has the meaning designated under s. 181.0103 (17).

613.01(6) (6) Nonstock corporation. “Nonstock corporation” has the meaning designated under s. 181.0103 (18).

613.01(7) (7) Officer. “Officer” does not include “director”.

613.01(8) (8) Department of financial institutions. In any provision of ch. 180 or 181 made applicable to service insurance corporations in this chapter, “department” means commissioner of insurance.

613.01 History History: 1975 c. 223; 1979 c. 102; 1983 a. 189 ss. 295, 296, 329 (22); 1995 a. 27; 1997 a. 79.

613.02 613.02 Scope and purposes.

613.02(1) (1) Scope. This chapter applies only to corporations incorporated under the laws of this state. Corporations not incorporated under the laws of this state may not do business in this state under this chapter.

613.02(2) (2) Purposes. The purposes of this chapter are:

613.02(2)(a) (a) To create an effective and flexible legal framework within which insured service benefits may be provided with adequate protection to consumers;

613.02(2)(b) (b) To encourage innovation in insurance organization and marketing and the development of more economical and effective ways of providing services or combinations of indemnity and services;

613.02(2)(c) (c) To meet the special needs of service insurance corporations consistent so far as possible with the general framework of the corporation law of insurance; and

613.02(2)(d) (d) To ease the burden of payment for health care and other essential services by providing a method for creating alternative vehicles for providing them.

613.02 History History: 1975 c. 223; 1975 c. 224 s. 148m; 1975 c. 375, 422; 1977 c. 339; 1979 c. 102; 2021 a. 238 s. 44.

613.03 613.03 Applicability of other laws to service insurance corporations.

613.03(1) (1) Chapter 181 generally inapplicable to service insurance corporations. Chapter 181 does not apply to service insurance corporations except as specifically made applicable by this chapter.

613.03(2) (2) Insurance corporation law. Whenever in this chapter a section, subsection or paragraph of ch. 611 is made applicable to service insurance corporations the application shall be of those portions of the section, subsection or paragraph of ch. 611 that apply to mutual corporations.

613.03(3) (3) Applicability of insurance laws. Except as otherwise specifically provided, service insurance corporations organized or operating under this chapter are subject to ss. 610.01, 610.11, 610.21, 610.23 and 610.24 and chs. 600, 601, 609, 617, 620, 623, 625, 627, 628, 631, 632, 635, 644 and 645 and to no other insurance laws.

613.03 History History: 1975 c. 223; 1979 c. 102 ss. 125, 126; 1979 c. 313; 1981 c. 38 s. 26; 1983 a. 215 s. 17; 1989 a. 23; 1991 a. 250; 1997 a. 27, 227; 2005 a. 74; 2013 a. 20.

613.04 613.04 Orders imposing and eliminating restrictions.

613.04(1) (1) Orders imposing restrictions. The commissioner may subject an individual corporation not otherwise subject thereto to some or all of the restrictions of ss. 613.28, 613.33 (1) (a) and (b) and 611.54 (1) (b) as incorporated by s. 613.54, if the commissioner finds that its financial condition, management or other circumstance requires such additional regulation for the protection of the interests of insureds or the public.

613.04(2) (2) Orders eliminating restrictions. The commissioner may free a new corporation from any of the restrictions generally applicable only to new corporations under ss. 613.28, 613.33 (1) (a) and (b) and 611.54 (1) (b) as incorporated by s. 613.54, if the commissioner is satisfied that its financial condition, management or other circumstance gives assurance that the interests of insureds and the public will not be endangered thereby.

613.04 History History: 1975 c. 223, 421.

613.07 613.07 General corporate powers and procedures.

613.07(1) (1) Powers. Service insurance corporations have the powers specified under s. 181.0302.

613.07(2) (2) Effect of unauthorized corporate acts. Section 181.0304 applies to service insurance corporations.

613.07(4) (4) Waiver of notice and informal action by members or directors. Sections 181.0704 and 181.0706 apply to members of service insurance corporations and ss. 181.0821 and 181.0823 apply to the board of directors and committees of the board of directors of service insurance corporations.

613.07 History History: 1975 c. 223; 1979 c. 110; 1987 a. 13; 1997 a. 79.

subch. II of ch. 613 SUBCHAPTER II

ORGANIZATION OF CORPORATIONS

613.10 613.10 Reserved and registered names. A service insurance corporation may reserve or register a corporate name as provided in ss. 181.0402 and 181.0403 (2), (3) and (3m).

613.10 History History: 1975 c. 223; 1997 a. 79.

613.11 613.11 Incorporators. Any number of corporate or adult natural persons may organize a service insurance corporation under s. 613.13.

613.11 History History: 1975 c. 223.

613.12 613.12 Articles and bylaws.

613.12(1) (1) Contents of articles. The articles of a service insurance corporation shall conform to s. 181.0202, except that:

613.12(1)(a) (a) The name of the corporation shall include descriptive terms to indicate the general nature of the services or care to be provided, or a trade name that is generally understood as indicating such service or care, and shall comply with s. 181.0401 (2) to (4);

613.12(1)(am) (am) The articles shall include a statement that the corporation is a service insurance corporation organized under this chapter;

613.12(1)(b) (b) The purposes of the corporation shall be limited to those permitted in s. 610.21;

613.12(1)(c) (c) The services to be provided or for which indemnity is to be paid shall be generally described and shall be of the same kind as the services ordinarily provided by any members of the corporation in their profession or business, or of the persons entitled to designate members, and services ancillary thereto;

613.12(1)(d) (d) The articles shall state whether members or other providers of services are subject to assessments for the purpose of paying operating costs or financial deficits, the general conditions and procedures for levying such assessments and any limitations on the assessments that may be levied;

613.12(1)(e) (e) The articles shall state, for corporations having members, how persons may become members and that only members may vote; and

613.12(1)(f) (f) The articles of a corporation not having members shall state how the directors of the corporation shall be selected.

613.12(2) (2) Bylaws. The bylaws of a service insurance corporation shall comply with this chapter, and with ss. 181.0206, 181.0207 and 181.1020 to 181.1022. A copy of any amendments to the bylaws shall be filed with the commissioner within 60 days after adoption.

613.12(3) (3) Principal officers. The articles or bylaws shall specifically designate 3 or more offices, the holders of which shall be the principal officers of the corporation. The principal offices shall be held by at least 3 separate natural persons.

613.12(4) (4) Forum selection provisions. The articles or bylaws of a service insurance corporation may require, consistent with applicable jurisdictional requirements, that any or all claims pertaining to the internal affairs of the service insurance corporation shall be brought solely and exclusively in the courts in this state.

613.12 History History: 1975 c. 223; 1997 a. 79; 2015 a. 197 s. 51; 2023 a. 212.

613.13 613.13 Certificate of incorporation and authority.

613.13(1) (1) Application. The application for a certificate of incorporation and authority shall be signed and acknowledged by or on behalf of each incorporator, and shall include or have attached:

613.13(1)(a) (a) The names, and for the preceding 10 years, all addresses and all occupations of all incorporators and proposed directors and officers.

613.13(1)(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.

613.13(1)(c) (c) The proposed articles which shall be signed and acknowledged by or on behalf of each incorporator, and the proposed bylaws.

613.13(1)(d) (d) All agreements relating to the corporation to which any incorporator or proposed director or officer is a party.

613.13(1)(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.

613.13(1)(f) (f) The proposed compensation of directors and officers.

613.13(1)(g) (g) The forms to be used for any contracts between the corporation and its members or other persons concerning the provision of services to insureds.

613.13(1)(h) (h) The proposed minimum permanent surplus, and the proposed initial expendable surplus.

613.13(1)(i) (i) The plan for conducting the insurance business, including:

613.13(1)(i)1. 1. The geographical area in which business is intended to be done in the first 5 years.

613.13(1)(i)2. 2. The types of insurance intended to be written in the first 5 years including specification whether and to what extent indemnity rather than services are to be provided.

613.13(1)(i)3. 3. The proposed marketing methods.

613.13(1)(i)4. 4. To the extent requested by the commissioner, the proposed method for the establishment of premium rates and other charges to policyholders.

613.13(1)(j) (j) 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.

613.13(1)(k) (k) Such other relevant documents or information as the commissioner reasonably requires.

613.13(2) (2) Issuance of certificate of incorporation. The commissioner shall issue a certificate of incorporation if:

613.13(2)(a) (a) The commissioner finds that all requirements of law have been met;

613.13(2)(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

613.13(2)(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.

613.13(3) (3) Issuance of certificate of authority.

613.13(3)(a) (a) The commissioner shall issue a certificate of authority if all of the following apply: