Chapter 631

631.20(1m)(a) (a) Except as exempted under sub. (1g) or s. 631.01 (2), (3), (4), or (5) or by a rule promulgated by the commissioner, an insurer may not, on or after August 1, 2008, use a form that is exempt from sub. (1) (a) under sub. (1) (c) unless the insurer does all of the following:

631.20(1m)(a)1. 1. Files the form with the commissioner 30 days before its use.

631.20(1m)(a)2. 2. Files the form in the manner and format, and with the attachments, prescribed by the commissioner.

631.20(1m)(a)3. 3. Certifies as required under par. (b) that the form complies with chs. 600 to 655 and rules promulgated under chs. 600 to 655. The commissioner may require an insurer to include specific compliance certifications.

631.20(1m)(b) (b) An insurer shall provide the certification under par. (a) 3. in the form prescribed by the commissioner. The certification shall be executed by a person who is an officer of the insurer and who is responsible for the form that is the subject of the filing. No insurer may file, and no insurer’s officer may execute, a false certification.

631.20(2) (2) Grounds for disapproval. The commissioner may disapprove a form under sub. (1) (a) or (3) upon a finding:

631.20(2)(a) (a) That it is inequitable, unfairly discriminatory, misleading, deceptive, obscure or encourages misrepresentation, including cases where the form:

631.20(2)(a)1. 1. Is misleading because its benefits are too restricted to achieve the purposes for which the policy is sold;

631.20(2)(a)2. 2. Contains provisions whose natural consequence is to obscure or lessen competition;

631.20(2)(a)3. 3. Is unnecessarily verbose or complex in language; or

631.20(2)(a)4. 4. Is misleading, deceptive or obscure because of such physical aspects as format, typography, style, color, material or organization;

631.20(2)(b) (b) That it provides benefits or contains other provisions that endanger the solidity of the insurer;

631.20(2)(c) (c) That in the case of the policy, though not of riders and endorsements, it fails to provide the exact name of the insurer and the full address of its home office; or

631.20(2)(d) (d) That it violates a statute or a rule promulgated by the commissioner, or is otherwise contrary to law.

631.20(2)(e) (e) That its use would violate s. 631.22.

631.20(3) (3) Subsequent disapproval. Whenever the commissioner finds, after a hearing, that a form approved or deemed to be approved under sub. (1) (a), a form filed under sub. (1m), or a form subject to subsequent disapproval under s. 601.58 (14) should be disapproved under sub. (2), the commissioner may order that on or before a date not less than 30 nor more than 90 days after the order the use of the form shall be discontinued or appropriate changes shall be made.

631.20(4) (4) Contents of order of disapproval. The commissioner’s disapproval must be in writing and constitutes an order. It must state the reasons for disapproval sufficiently explicitly that the insurer is provided reasonable guidance in reformulating its proposals.

631.20(5) (5) Explicit approval of certain clauses. General approval of a form under this section, or failure to disapprove, does not constitute approval of clauses specified in s. 631.21.

631.20(6) (6) Form that violates statute or rule.

631.20(6)(a) (a) The penalties under s. 601.64 (3) to (5) may not be imposed against an insurer for any of the following:

631.20(6)(a)1. 1. Using a form that does not comply with a statute or rule, including a rule or uniform standard adopted by the Interstate Insurance Product Regulation Commission, if the statute or rule was in effect on the date the form was approved or deemed to be approved under sub. (1) (a) or s. 601.58.

631.20(6)(a)2. 2. The use of a form solely based on a finding of the commissioner that the content of the form is misleading under s. 628.34 (1).

631.20(6)(b) (b) An insurer’s use of a form that does not comply with a statute or rule, including a rule or uniform standard adopted by the Interstate Insurance Product Regulation Commission, that takes effect after the date the form was approved or deemed to be approved under sub. (1) (a) or s. 601.58 is a violation of the statute or rule, and the penalties under s. 601.64 may be imposed against the insurer using the form.

631.20(6)(c) (c) Except as provided in par. (a) 2., an insurer’s use of a form filed under sub. (1m) that violates chs. 600 to 655 or rules promulgated under chs. 600 to 655 is a violation of the statute or rule, regardless of whether the form has been subsequently disapproved under sub. (3). The insurer is subject to the penalties and remedial orders provided under chs. 600 to 655, including ss. 601.41 (4) and 601.64.

631.20(7) (7) Surplus lines insurance. Except as provided in sub. (1) (c) 9. and s. 618.41 (6m), this section does not apply to a surplus lines insurance form issued under s. 618.41 before, on, or after April 20, 2012.

631.20 History History: 1975 c. 375, 421; 1979 c. 218; 1987 a. 247; 1999 a. 9; 2005 a. 74; 2007 a. 168; 2011 a. 224; 2013 a. 20.

631.20 Cross-reference Cross-reference: See also ss. Ins 6.05, 6.07, and 6.76, Wis. adm. code.

631.21 631.21 Explicit approval required.

631.21(1) (1) Required approval. Despite filing or general approval of a form under s. 631.20, the following clauses may not be used even if contained in the form unless the commissioner gives explicit approval to them:

631.21(1)(a) (a) Expeditious notice. Clauses requiring more expeditious notice than 1st class mail, as provided in s. 631.81 (2).

631.21(1)(c) (c) Reinstatement fees. A schedule of reinstatement fees under s. 632.74, if made a part of the policy. Such a schedule need not be included in the contract but may be given approval as a separate document specifically made applicable to particular classes of policies.

631.21(2) (2) Effect of failure to obtain explicit approval. If an insurer fails to obtain explicit approval from the commissioner for the clauses under sub. (1), the clauses shall be null and void.

631.21 History History: 1975 c. 375; 1985 a. 280; 2007 a. 168.

631.21 Cross-reference Cross-reference: See also ss. Ins 6.05 and 6.07, Wis. adm. code.

631.22 631.22 Consumer insurance policy readability.

631.22(1) (1) In this section “consumer insurance policy” means a life, disability, property or casualty insurance policy, or a certificate or a substitute for a certificate for group life, disability, property or casualty insurance coverage, which is issued to a person for a personal, family or household purpose and a copy of which is customarily, in the insurance industry, delivered or is required by law, rule or agreement to be delivered to the person obtaining insurance coverage.

631.22(2) (2) An insurer may provide a consumer insurance policy which is delivered to a person obtaining insurance coverage and is not exempt under sub. (5) only if the consumer insurance policy is coherent, written in commonly understood language, legible, appropriately divided and captioned by its various sections and presented in a meaningful sequence. The commissioner shall promulgate rules establishing standards for the determination of compliance with this subsection.

631.22(3) (3) This section does not apply to specific language or format required by state or federal law, rule or regulation.

631.22(4) (4) This section applies only to consumer insurance policies delivered on or after the date which is 6 months after May 8, 1980 except the commissioner may provide by rule that this section will not apply to specific types of consumer insurance policies until a later date which is not later than the date which is 2 years after May 8, 1980 if the commissioner determines that delayed application is necessary to prevent an unreasonable burden upon insurers issuing those types of consumer insurance policies.

631.22(5) (5) The commissioner may by rule exempt a type of consumer insurance policy from the application of this section if the commissioner finds that type of consumer insurance policy is generally understood by persons to whom it is delivered or that those persons are otherwise adequately protected.

631.22(6) (6) A violation of this section does not void or render voidable any portion of an insurance policy and is not a defense to an action under the insurance policy.

631.22 History History: 1979 c. 218.

631.23 631.23 Authorized clauses for insurance forms.

631.23(1) (1) Promulgation of clauses. The commissioner may not promulgate mandatory uniform clauses that preclude an insurer from filing its own forms under s. 631.20; the commissioner may only disapprove such forms on the basis of the criteria stated in that section. Subject thereto, the commissioner may promulgate authorized clauses by rule upon a finding that:

631.23(1)(a) (a) Price or coverage competition is ineffective because diversity in language or content makes comparison difficult;

631.23(1)(b) (b) Provision of language, content or form of specific clauses is necessary to provide certainty of meaning of those clauses;

631.23(1)(c) (c) Regulation of contract forms would be more effective or litigation would be substantially reduced if there were increased standardization of certain clauses; or

631.23(1)(d) (d) Reasonable minimum standards of insurance protection are needed for policies to serve a useful purpose.

631.23(2) (2) Degree of specificity. Any rule creating an authorized clause may prescribe that to be treated as an authorized clause there must be verbatim or substantial adherence to prescribed language, that certain standards or criteria must be met, or that certain drafting principles must be followed. The rules may also permit liberalization of prescribed language. If the proposed rule prescribed verbatim adherence, the commissioner shall make a finding that substantial adherence to the prescribed language is not sufficient and that liberalization of prescribed language will frustrate the purposes of the prescription. If an insurer uses authorized clauses as part of filed forms the commissioner may only disapprove those clauses under s. 631.20 upon a finding that improper combination of clauses makes them violate the criteria of s. 631.20.

631.23 History History: 1975 c. 375, 421; 1979 c. 221; 2007 a. 168.

631.23 Cross-reference Cross-reference: See also s. Ins 6.76, Wis. adm. code.

631.24 631.24 Credit life and disability insurance. Section 631.20 does not apply to credit life and disability insurance forms which are subject to approval under s. 424.209.

631.24 History History: 1979 c. 102.

631.27 631.27 Rules of law as provisions of contracts. By rule, the commissioner may require an insurer to insert in a policy any rule of law stated in chs. 600 to 646 and 655 that is applicable to the contents or interpretation of an insurance contract.

631.27 History History: 1975 c. 375; 1979 c. 89; 1989 a. 187 s. 29.

631.28 631.28 Notice of right to file complaint.

631.28(1) (1) Requirement to provide notice. Every insurer shall provide notice to its policyholders and its insureds of the right to file a complaint with the office in the manner prescribed by rule under sub. (2).

631.28(2) (2) Contents by rule. The commissioner shall promulgate rules specifying the contents of a notice that insurers must disseminate under sub. (1), and when and in what manner the notice must be provided. The rules shall describe how a policyholder, insured or other person may make a complaint with the office about an insurer, an intermediary or other insurance matter. The rules may also specify the form, including the type size, in which insurers must present the notice.

631.28 History History: 1991 a. 154.

631.28 Cross-reference Cross-reference: See also s. Ins 6.85, Wis. adm. code.

subch. III of ch. 631 SUBCHAPTER III

SPECIFIC CLAUSES IN CONTRACTS

631.31 631.31 Clauses required to be on first page.

631.31(1) (1) List of clauses. The following clauses of insurance policies shall appear on the first page of the policy:

631.31(1)(a) (a) Corporate name. The name of the insurer as required by s. 631.64;

631.31(1)(b) (b) Several liability. Information that 2 or more insurers undertake only several liability, as required by s. 631.41;

631.31(1)(c) (c) Assessability. That the policy is assessable as required by s. 631.65;

631.31(1)(d) (d) Variable benefits. A statement that benefits are variable, as required by s. 632.45 (1); and

631.31(1)(e) (e) Right to return policy. The right to return a disability insurance policy under s. 632.73, except that this clause may be conspicuously attached to the first page rather than printed on it.

631.31(2) (2) Manner of display. Clauses listed in sub. (1) shall be displayed conspicuously and separately from any other clauses.

631.31 History History: 1975 c. 375; 1981 c. 218.

631.36 631.36 Termination of insurance contracts by insurers.

631.36(1) (1) Scope of application.

631.36(1)(a) (a) General. Except as otherwise provided in this section or in other statutes or by rule under par. (c), this section applies to all contracts of insurance based on forms that are subject to filing under s. 601.58 or 631.20.

631.36(1)(b) (b) Contracts more favorable to policyholder. The contract may provide terms more favorable to policyholders than are required by this section.

631.36(1)(c) (c) Exemption by rule. The commissioner may by rule totally or partially exempt from this section classes or parts of classes of insurance contracts if the policyholders do not need protection against arbitrary or unannounced termination.

631.36(1)(d) (d) Other rights. The rights provided by this section are in addition to and do not prejudice any other rights the policyholder may have at common law or under other statutes.

631.36(1)(e) (e) Rescission or reformation. This section does not apply to the rescission or reformation of any insurance contract.

631.36(2) (2) Midterm cancellation.

631.36(2)(a) (a) Permissible grounds. Except as provided by par. (c) and sub. (3) and s. 655.24 (2) (b), no insurance policy may be canceled by the insurer prior to the expiration of the agreed term except for failure to pay a premium when due or on grounds stated in the policy, which must be comprehended within one of the following classes:

631.36(2)(a)1. 1. Material misrepresentation;

631.36(2)(a)2. 2. Substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract;

631.36(2)(a)3. 3. Substantial breaches of contractual duties, conditions or warranties; or

631.36(2)(a)4. 4. Attainment of the age specified as the terminal age for coverage, in which case the insurer may cancel by notice under par. (b) accompanied by a tender of a proportional return of premium.

631.36(2)(b) (b) Notice. No cancellation under par. (a) is effective until at least 10 days after the 1st class mailing or delivery of a written notice to the policyholder.

631.36(2)(c) (c) New policies. Paragraphs (a) and (b) do not apply to any insurance policy that has not been previously renewed if the policy has been in effect less than 60 days at the time the notice of cancellation is mailed or delivered. No cancellation under this paragraph is effective until at least 10 days after the 1st class mailing or delivery of a written notice to the policyholder. Subsections (6) and (7) do not apply to such a policy.

631.36(3) (3) Anniversary cancellation or alteration. A policy may be issued for a term longer than one year or for an indefinite term with a clause providing for cancellation by the insurer in the manner provided in sub. (4) (a) for nonrenewals, except the notice must be given at least 60 days prior to any anniversary date and an insurer may not cancel a policy solely because of the termination of an insurance marketing intermediary’s contract with the insurer unless the insurer complies with sub. (4m). The clause may also provide for alteration of the terms or premium by the insurer as provided in sub. (5) (c), except the clause must then permit cancellation by the policyholders as provided in sub. (5) (c).

631.36(4) (4) Nonrenewal.

631.36(4)(a) (a) Notice required. Subject to subs. (2) and (3), a policyholder has a right to have the policy renewed, on the terms then being applied by the insurer to similar risks, for an additional period of time equivalent to the expiring term if the agreed term is one year or less, or for one year if the agreed term is longer than one year, unless at least 60 days prior to the date of expiration provided in the policy a notice of intention not to renew the policy beyond the agreed expiration date is mailed or delivered to the policyholder, or with respect to failure timely to pay a renewal premium a notice is given, not more than 75 days nor less than 10 days prior to the due date of the premium, which states clearly the effect of nonpayment of premium by the due date.