Chapter 618

618.41   Surplus lines insurance.

618.415   Group liability insurance issued by an unauthorized insurer.

618.416   Qualification for placement of surplus lines insurance with an unauthorized insurer.

618.42   Direct procurement of insurance.

618.43   Taxation of insurance written by unauthorized insurers.

618.44   Effect of illegal contracts.

618.45   Servicing of contracts made out of state.

618.47   Defense of action by unauthorized person.

618.48   Attorney fees.

618.49   Investigation, disclosure and taxation of insurance contracts.

618.50   Reporting of illegal insurance.

618.61   Reciprocal enforcement of foreign decrees.

Ch. 618 Cross-reference Cross-reference: See definitions in ss. 600.03, 610.01 and 628.02.

Ch. 618 Cross-reference Cross-reference: See also ch. Ins 41, Wis. adm. code.

Ch. 618 Note NOTE: Chapter 260, laws of 1971, which created this chapter, contains explanatory notes.

subch. I of ch. 618 SUBCHAPTER I

GENERAL PROVISIONS

618.01 618.01 Purposes. The purposes of this chapter are:

618.01(1) (1) To protect insureds, creditors and the public in this state by providing adequate standards and an orderly procedure for the authorization of nondomestic insurers;

618.01(2) (2) To prevent evasion by unauthorized insurers of the regulatory and tax laws of this state and to protect this state and its residents against loss from such action;

618.01(3) (3) To subject unauthorized insurers and other persons doing an insurance business in this state to the jurisdiction of the commissioner and the courts of this state;

618.01(4) (4) To protect authorized insurers from unfair competition by unauthorized insurers; and

618.01(5) (5) To provide an orderly method, under reasonable and practical safeguards, for procuring insurance from unauthorized insurers.

618.01 History History: 1971 c. 260.

618.02 618.02 Definitions. For the purposes of this chapter, unless the context indicates otherwise:

618.02(1) (1) “Directly procured insurance” means insurance procured under s. 618.42.

618.02(2) (2) “Doing an insurance business” includes:

618.02(2)(a) (a) Soliciting, making, or proposing to make an insurance contract;

618.02(2)(b) (b) Taking or receiving an application for insurance;

618.02(2)(c) (c) Collecting or receiving, in full or in part, an insurance premium;

618.02(2)(d) (d) Issuing or delivering an insurance policy except as a messenger not employed by the insurer or by an insurance agent or broker;

618.02(2)(e) (e) Inspecting risks, setting rates, disseminating information or advising on risk management in connection with the solicitation, negotiating, procuring or effectuation of insurance coverage;

618.02(2)(f) (f) Investigating, settling, adjusting or litigating claims;

618.02(2)(g) (g) In any way representing or assisting any person to do an insurance business or to procure insurance; and

618.02(2)(h) (h) Any other act generally regarded as doing an insurance business.

618.02(3) (3) “Doing an insurance business” does not include:

618.02(3)(a) (a) Acting as an attorney for a client; and

618.02(3)(b) (b) Acting as a full-time salaried employee of an insured in the capacity of an insurance buyer or manager.

618.02 History History: 1971 c. 260; 1981 c. 314.

subch. II of ch. 618 SUBCHAPTER II

AUTHORIZATION OF NONDOMESTIC INSURERS

618.11 618.11 Application. Any person, including the United States branch of an alien insurer, authorized to transact the business of insurance as an insurer in another jurisdiction may apply for a certificate of authority to do an insurance business in this state, using the forms prescribed by the commissioner. The applicant shall include the information and documents the commissioner requests, including the following unless the commissioner excludes any of them:

618.11(1) (1) A copy of the insurer’s articles and bylaws;

618.11(2) (2) Financial statements for the most recent completed fiscal year, with an explanation of the bases of all valuations and computations, in such detail as the commissioner reasonably requires;

618.11(3) (3) A summary, as detailed as the commissioner reasonably requires, of the insurer’s financial history for the preceding 10 years;

618.11(4) (4) The names of its directors and principal officers and all their addresses and occupations for the preceding 10 years;

618.11(5) (5) In the case of an alien insurer, the name of its United States manager and for the preceding 10 years all the manager’s addresses and occupations; and if the manager is corporate the names, addresses and occupations of the manager’s directors and principal officers and detailed financial statements of the manager;

618.11(6) (6) A schedule listing:

618.11(6)(a) (a) All jurisdictions in which it has done or been authorized to do an insurance business during the preceding 10 years;

618.11(6)(b) (b) All jurisdictions to which it has applied for authorization to do an insurance business during the preceding 10 years, and the dates and results of such applications;

618.11(6)(c) (c) All jurisdictions from which it has withdrawn during the preceding 10 years, and the reasons for its withdrawals;

618.11(6)(d) (d) All administrative or criminal actions, orders or proceedings to which it or any of its directors or principal officers have been subjected on account of an alleged violation of any law governing insurance operations in any jurisdiction during the preceding 10 years, or not involving insurance operations if it is a felony;

618.11(7) (7) A description of its present business operations, including the coverages written and the territories in which it does business, and including a statement that it is in compliance with s. 620.05, with such documentary evidence of compliance as the commissioner requires;

618.11(8) (8) A list of any significant statements, reports or other documents that have been prepared during the preceding 10 years for any insurance regulatory authority or for general distribution among creditors, shareholders, members, subscribers or policyholders;

618.11(9) (9) If it has actually transacted an insurance business for less than 5 years, a detailed history of the past and projection of the anticipated operating results at the end of each of the first 5 years of operation, based where known on actual data and otherwise on reasonable assumptions of loss experience, premium and other income, operating expenses and acquisition costs;

618.11(10) (10) A statement showing to what extent organizational and promotional expenses have been paid, and to what extent organizational procedures are incomplete;

618.11(11) (11) A certificate from the domiciliary regulatory authority and the state of entry into the United States, if any, that so far as known the applicant is sound and that there are no legitimate objections to its proposed operations in this state;

618.11(12) (12) The plan for conducting an insurance business in this state, including:

618.11(12)(a) (a) The geographical area in which business is intended to be done;

618.11(12)(b) (b) The types of insurance intended to be written;

618.11(12)(c) (c) The proposed marketing methods;

618.11(12)(d) (d) The proposed method for the establishment of premium rates; and

618.11(12)(e) (e) Copies of the policy and application forms intended to be used in this state;

618.11(13) (13) Any other information the commissioner reasonably requires; and

618.11(14) (14) Authorization to the commissioner or office to make inquiry of any person about the applicant, its manager under a management contract, its attorney in fact, its general agents, and any of the officers, directors or shareholders of any of them designated by the commissioner or office, and agreement by the applicant and any other persons so designated that in the absence of actual malice, no communication made in response to any such inquiry will subject the persons making it to an action for damages for the communication brought by the applicant or the designated person or a legal representative of either. No such action shall lie whether such agreement is made or not.

618.11 History History: 1971 c. 260; 1977 c. 339; 1989 a. 332.

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

618.12 618.12 Certificate of authority.

618.12(1) (1) Issuance. The commissioner shall either issue a certificate of authority to an applicant under s. 618.11 or issue an order refusing the certificate which finds:

618.12(1)(a) (a) That not all requirements of the law have been met; or

618.12(1)(b) (b) That the applicant is either not sound, not reliable, not entitled to public confidence or cannot reasonably be expected to perform its obligations continuously in the future; or

618.12(1)(c) (c) That the applicant’s directors and officers or, in the case of an alien insurer, its United States manager, are not sufficiently trustworthy, competent, experienced and free from conflict of interest to engage in the proposed business in this state and to comply continuously with the laws of this state; or

618.12(1)(d) (d) That the methods and practices to be used in doing business are not consistent with the interests of the applicant’s insureds, creditors or the public in this state.

618.12(2) (2) Substitutes for legal requirements. If the commissioner finds that the applicant does not comply with all requirements of the law, the commissioner may after a hearing under s. 618.28 issue a certificate of authority if the purposes of each such requirement and the protection of insureds, creditors and the public in this state are otherwise achieved by:

618.12(2)(a) (a) A deposit in trust to be established and maintained under s. 601.13; or

618.12(2)(b) (b) A bond conditioned on the satisfaction of the purposes of the requirement and acceptable to the commissioner; or

618.12(2)(c) (c) Special limits on the applicant’s business or methods of operation in this state or elsewhere; or

618.12(2)(d) (d) Additional or alternative protective devices that the commissioner considers satisfactory.

618.12(3) (3) Limits. The certificate of authority shall specify the terms of any deposit or bond required as a condition for authorization, any special limits placed on the insurer’s business or methods of operation in this state, and any other restrictive terms imposed under sub. (2).

618.12(4) (4) Alteration of certificate. An insurer may at any time apply to the commissioner for a new certificate of authority, removing, altering or adding limits on its business or methods of operation. The application shall be accompanied by so much of the information under s. 618.11 as the commissioner reasonably requires. The commissioner shall issue the new certificate as requested if he or she would do so if an initial application were being made.

618.12 History History: 1971 c. 260; 1979 c. 102 s. 236 (5), (6).

618.14 618.14 Admission of nondomestic fraternals.

618.14(1) (1) Application. A nondomestic fraternal may apply for authorization to transact business in this state, by filing with the commissioner:

618.14(1)(a) (a) A certified copy of its articles and bylaws;

618.14(1)(b) (b) A power of attorney to the commissioner to receive service of process and other papers;

618.14(1)(c) (c) A certificate from the proper official in its home jurisdiction that the fraternal is authorized to transact business therein;

618.14(1)(d) (d) Each of its forms of contracts;

618.14(1)(e) (e) A statement of its business in the form required by the commissioner, showing that the business of the fraternal substantially complies with all the provisions of law relating to like domestic fraternals; and