Chapter 618

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618.11(6)(c) (c) All jurisdictions from which it has withdrawn during the preceding 10 years, and the reasons for its withdrawals;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

618.14(1)(f) (f) Such other information as the commissioner may deem necessary.

618.14(2) (2) Examination. The commissioner shall examine the applicant fraternal.

618.14(3) (3) Certificate of authority. The commissioner shall grant a certificate of authority to do business in this state if the fraternal’s condition and practices protect the interests of potential insureds, creditors and the public.

618.14 History History: 1975 c. 373.

618.21 618.21 Corporation law requirements from chs. 180, 610, 611 and 623 applicable to nondomestic corporations.

618.21(1) (1) Strict compliance. No nondomestic corporation may be authorized to do business in this state unless it complies strictly with the following requirements:

618.21(1)(a) (a) Financial requirements. The financial requirements of ss. 611.19 and 623.11;

618.21(1)(b) (b) Other requirements. The requirements of s. 180.1506, the requirements of s. 611.41 (1) as modified by s. 611.41 (3), s. 611.54 (1) (a), the reporting requirement of s. 611.54 (2) whenever removal is made involuntarily under the law of the domicile, and s. 611.57; and

618.21(1)(c) (c) Requirements applicable to new corporations. For 5 years after the initial issuance of a certificate of authority in its domiciliary jurisdiction, the requirements of s. 611.29 (2); and if the corporation has transacted an insurance business for less than 5 years or has not paid in full all organizational and promotional expenses, it must still have initial expendable surplus considered by the commissioner to be adequate, subject to the limits of s. 611.19.

618.21(2) (2) Substantial compliance.

618.21(2)(a) (a) General. No nondomestic insurance corporation may be authorized to do business in this state unless it everywhere complies substantially with ss. 611.12 (2) (d), 611.24 and 611.25 except that the approval requirement of s. 611.25 (1) does not apply, and s. 611.26.

618.21(2)(b) (b) Corporate reorganization or transformation. When any corporate reorganization, transformation or liquidation of a nondomestic insurer is proposed by it or approved by the domiciliary commissioner or by another official act, notice shall be given to the commissioner promptly.

618.21(3) (3) Orders imposing and eliminating restrictions. The commissioner may issue orders under s. 611.03 that are applicable to nondomestic corporations.

618.21(4) (4) Other requirements. After a hearing, the commissioner may by order apply any provision of ch. 611 to a nondomestic corporation if the commissioner finds that it is necessary for the protection of the interests of its insureds, creditors or the public in this state.

618.21(5) (5) Fraternals. This section does not apply to fraternals.

618.21 History History: 1971 c. 260; 1973 c. 184; 1975 c. 373; 1983 a. 192; 1989 a. 303; 1991 a. 316; 1997 a. 79.

618.21 Annotation Legislative Council Note to sub. (5), 1975: A special section applies to fraternals. See s. 618.26. In contrast, s. 618.22 does not apply to fraternals. [Bill 643-S]

618.22 618.22 Exclusive agency and management contracts of nondomestic corporations.

618.22(1) (1) Filing of contract. No nondomestic insurer may be a party to any exclusive agency contract or management contract as defined in ss. 611.66 and 611.67 respectively, unless the contract is filed with the commissioner and not disapproved under this section within 30 days after filing, or such reasonable extended period as the commissioner may specify by notice given within the 30 days.

618.22(2) (2) Disapproval. The commissioner shall disapprove a contract under sub. (1) or s. 611.67 if he or she finds that:

618.22(2)(a) (a) It subjects the insurer to excessive charges; or

618.22(2)(b) (b) The contract extends for an unreasonable period of time; or

618.22(2)(c) (c) The contract does not contain fair and adequate standards of performance; or

618.22(2)(d) (d) The persons empowered under the contract to manage the company are not sufficiently trustworthy, competent, experienced and free from conflict of interest to manage the company with due regard for the interests of its insureds, creditors or the public; or

618.22(2)(e) (e) The contract contains provisions which impair the interests of its insureds, creditors or the public in this state.

618.22 History History: 1971 c. 260; 1979 c. 102 s. 236 (5); 1985 a. 29.

618.22 Cross-reference Cross-reference: See also s. Ins 42.07, Wis. adm. code.

618.23 618.23 Requirements for nondomestic reciprocals.

618.23(1) (1) Conditions of authorization. No nondomestic reciprocal may be authorized to do business in this state unless under the laws of its domicile or the provisions of its power of attorney or otherwise it can sue and be sued in its own name, and the assets resulting from the exchange of insurance contracts can be reached by its creditors; and either:

618.23(1)(a) (a) Nonassessable reciprocals. If it issues only nonassessable policies, it meets all the financial requirements for a mutual corporation in like circumstances including surplus, whether unallocated or in subscribers’ accounts, that is at least as great as the level specified by s. 623.11; or

618.23(1)(b) (b) Assessable reciprocals. If it issues any assessable policies, it meets all the requirements for a mutual corporation issuing assessable policies in like circumstances and its subscribers are liable to the exchange to the limit of their assessability without regard to the validity or collectibility of any assessment levied against other subscribers.

618.23(2) (2) Substitute for the liability under sub. (1) (b). Where the liability of subscribers does not satisfy sub. (1) (b), the commissioner may nevertheless authorize an assessable reciprocal if he or she is satisfied that practices are actually followed by the attorney in fact which ensure the capacity and willingness of all subscribers to pay assessments if called upon to do so, or which otherwise ensure the solidity of the operation.

618.23(3) (3) Corporation provisions applicable. To the extent consistent with the nature of a reciprocal, the provisions of ch. 611 that are made applicable to nondomestic mutual corporations by s. 618.21 apply to nondomestic reciprocals and the provisions and requirements applicable to principal officers of corporations apply to the attorneys in fact of reciprocal insurers.

618.23 History History: 1971 c. 260; 1979 c. 102 s. 236 (5).

618.24 618.24 Requirements for incorporated alien insurers.

618.24(1) (1) Conditions for authorization. No incorporated alien insurer may be authorized to do business in this state unless:

618.24(1)(a) (a) It has operated for 5 years in its domicile or the commissioner finds other grounds for being confident that it will be solid during its formative period;

618.24(1)(b) (b) It supplies and commits itself to maintain in the United States a deposit or bond in an amount the commissioner deems sufficient to protect the interests of insureds, creditors and the public in this state; and

618.24(1)(c) (c) It files with the commissioner such agreement as the commissioner requires with respect to records, reports and submission to examinations, including an undertaking to keep its records, reports and other documents constantly available in full in the English language so far as they are relevant to its United States business, and an undertaking to keep records and make reports on United States business in a form satisfactory to the commissioner.

618.24(2) (2) Deposits. A deposit under sub. (1) (b) may be made as specified in s. 601.13 or with another trustee in this or another state approved by the commissioner. The deposit shall be in trust for such persons as the commissioner deems appropriate to achieve the purposes of sub. (1) (b). The trustees shall supply a certificate of the deposit in whatever form and at whatever intervals the commissioner reasonably requires.

618.24(3) (3) Bonds. A bond satisfies sub. (1) (b) if it is issued by an insurer authorized to do a surety business in this state and is conditioned on nonperformance of any obligation to such persons as the commissioner considers appropriate to achieve the purposes of sub. (1) (b). Each such bond shall cover any claims that arise out of occurrences prior to termination of the bond, and shall not be terminable on any ground without at least 30 days’ notice to the commissioner. Each such bond shall be in such form and be renewed at such intervals as the commissioner reasonably requires.