646.35(3)(am)(am) If an insurer that is subject to this chapter is in liquidation, the fund shall, subject to s. 646.31 (2), do either of the following: 646.35(3)(am)1.1. Guarantee, assume, or reinsure, or cause to be guaranteed, assumed, or reinsured, the policies of the insolvent insurer within the scope of this section. 646.35(3)(am)2.2. Assure performance of the contractual obligations of the insurer on such policies. 646.35(3)(bm)(bm) Whether the fund’s duties under par. (am) are discharged by the fund under par. (am) 1. or 2. is at the fund’s discretion. The fund shall provide moneys, pledges, loans, notes, guarantees, or other means reasonably necessary to discharge the duties under par. (am) 1. or 2. 646.35(4)(4) Claims against liquidator. The fund has a claim against the liquidator for reasonable payments made to discharge its duties under this section. If the fund and the liquidator disagree regarding the reasonableness of such payments, either may apply to the court to determine the question. Such payments shall have the same priority as the class of claims under s. 645.68 (3). 646.35(5)(5) Rate increases. The fund may increase any rates or premiums on policies during continuation of coverage under sub. (3) (am) 2. to the extent the policies permit the insurer to increase the rates or premiums. If the fund determines that the rates or premiums on policies that do not permit an increase or the rates or premiums as increased to the extent permitted by the policies are inadequate under s. 625.11 (3), the fund may offer the policyholders the option of terminating the coverage or continuing the coverage at adequate rates or premiums as determined by the fund. 646.35(6)(6) Limitations. In performing its duties under this section: 646.35(6)(a)(a) In the case of an annuity contract, the fund may limit its performance to payment of the then current value of the loss claim under s. 645.68 (3) as of the date of the order of liquidation, with interest to the date of payment, in lieu of the requirements of sub. (3). 646.35(6)(b)(b) In the case of a disability insurance policy that is neither guaranteed renewable nor noncancelable, the fund is not obligated to continue the policy in force beyond 30 days after the date the order of liquidation is entered, or 30 days after the date established in the liquidation order of another state, but may continue the coverage under any disability insurance policy for up to 180 days after the date of the liquidation order. 646.35(6)(bm)(bm) For coverages continued pursuant to par. (b), the fund may substitute a comprehensive health insurance policy for a health maintenance organization policy that is subject to sub. (3), and increase rates or premiums for the substituted coverage as provided in sub. (5). 646.35(6)(c)(c) In the case of a life insurance or annuity contract, the fund is not obligated to perform the responsibilities set forth in sub. (3) with respect to either of the following: 646.35(6)(c)1.1. Any benefit payment liability, arising on or after the date of entry of the order of liquidation, to the extent that the rate of interest on which it is based or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract and employed in calculating returns or changes in value exceeds the rate of interest, which may not be less than zero, determined by subtracting 3 percentage points from the monthly corporate bond yield average, as most recently published by Moody’s investors service or its successor. 646.35(6)(c)2.2. Any benefit payment liability, arising before the date of entry of the order of liquidation, to the extent that the payment exceeds the rate of interest, which may not be less than zero, determined by subtracting 2 percentage points from the monthly corporate bond yield average, as published by Moody’s investors service or its successor, when averaged over the 4-year period ending on the date of entry of the order of liquidation or averaged over such lesser period if the contract was issued less than 4 years before that date. 646.35(7)(7) Exclusion for coverage under another fund. 646.35(7)(a)(a) Notwithstanding s. 646.31 (9), the fund shall not provide coverage under this section to any person who, directly or indirectly, has coverage under any other state’s security fund statutes. 646.35(7)(b)(b) In determining whether par. (a) applies in a situation in which a person could potentially be covered by security funds of more than one state, par. (a) shall be construed in conjunction with other states’ laws in such a manner as to result in coverage for the person by only one security fund. 646.35(8)(a)(a) In this subsection, “coverage date” means the date on which the fund becomes responsible for the obligations of an insolvent insurer. 646.35(8)(b)(b) At any time within one year after the coverage date, the fund may elect to succeed to the insolvent insurer’s rights and obligations that accrue on or after the coverage date and that relate to contracts covered, in whole or in part, by the fund under one or more indemnity reinsurance agreements entered into by the insolvent insurer as a ceding insurer and selected by the fund. The election shall be effected by a notice to the liquidator and to any affected reinsurer. The fund may not exercise an election under this paragraph with respect to a reinsurance agreement that the liquidator has expressly disaffirmed. 646.35(8)(c)(c) With respect to each indemnity reinsurance agreement for which the fund makes an election under par. (b): 646.35(8)(c)1.1. The fund shall be responsible for all unpaid premiums under the agreement, for periods both before and after the coverage date, and for the performance of all other obligations to be performed under the agreement after the coverage date, that relate in each case to contracts covered, in whole or in part, by the fund. The fund may charge contracts covered in part by the fund, through reasonable allocation methods, for the costs of reinsurance in excess of the obligations of the fund. 646.35(8)(c)2.2. The fund is entitled to any amounts payable by the reinsurer under the agreement with respect to losses or events that occur in periods after the coverage date and that relate to contracts or contractual obligations covered, in whole or in part, by the fund. Upon receipt of any such amounts, the fund must pay to the beneficiary under the policy or contract on account of which the amounts were paid, the amount by which the benefits paid by the fund on account of the policy or contract less the retention of the insolvent insurer applicable to the loss or event is exceeded by the amount received by the fund. 646.35(8)(c)3.3. Within 30 days after the election, the fund and the indemnity reinsurer must calculate the net balance due to or from the fund under the agreement as of the date of the election, giving full credit to all items paid by the insolvent insurer, the insurer’s liquidator, and the indemnity reinsurer between the coverage date and the date of the election. The fund or the indemnity reinsurer shall pay the net balance due to the other within 5 days after the calculation is completed. The liquidator shall remit to the fund as promptly as practicable any amounts received by the liquidator that are due the fund under subd. 2. 646.35(8)(c)4.4. If, within 60 days of the election, the fund pays all premiums due for periods both before and after the coverage date that relate to contracts covered, in whole or in part, by the fund, the reinsurer may not terminate the agreement insofar as it relates to contracts covered, in whole or in part, by the fund and may not set off against amounts due the fund any unpaid premium due for periods before the coverage date. 646.35(8)(d)(d) If the fund transfers its obligations to another insurer and the fund and other insurer agree, unless the fund has previously expressly determined in writing that it will not exercise an election under par. (b), the other insurer succeeds to the rights and obligations of the fund under pars. (b) and (c), regardless of whether the fund has exercised an election under par. (b). If the other insurer succeeds to the fund’s rights and obligations under pars. (b) and (c): 646.35(8)(d)1.1. The indemnity reinsurance agreements automatically terminate for new reinsurance, unless the indemnity reinsurer and the other insurer agree to the contrary. 646.35(8)(d)2.2. On and after the date on which an indemnity reinsurance agreement is transferred to the other insurer, the fund is no longer obligated to pay beneficiaries the amounts specified in par. (c) 2. with respect to that agreement. 646.35(8)(e)(e) This subsection supersedes s. 645.58 (1), any applicable rules of the commissioner, and the provisions of any affected reinsurance agreement that provide for or require payment of reinsurance proceeds to the liquidator of the insolvent insurer on account of losses or events that occur after the coverage date. The liquidator remains entitled to any amounts payable by the reinsurer under the reinsurance agreement with respect to losses or events that occur before the coverage date, subject to any applicable setoff provisions. 646.35(8)(f)(f) Nothing in this subsection, except as expressly provided in this subsection: 646.35(8)(f)1.1. Alters or modifies the terms or conditions of the indemnity reinsurance agreements of the insolvent insurer. 646.35(8)(f)2.2. Abrogates or limits any rights of any reinsurer to rescind a reinsurance agreement. 646.35(8)(f)3.3. Gives a policy owner or beneficiary an independent cause of action against an indemnity reinsurer that is not otherwise set forth in the indemnity reinsurance agreement. 646.35(9)(9) Coverage obligations. Notwithstanding sub. (3), in performing its obligations to provide coverage under this section, the fund is not required to guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed, reinsured, or performed, the contractual obligations of an insolvent insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract. 646.35(10)(10) Board determinations. The board shall have discretion to determine the means by which the fund may economically and efficiently provide benefits under this section. If the board has arranged or offered to provide benefits to a person under a plan or arrangement that fulfills the fund’s obligations under this section, the person is not entitled to any benefits from the fund in addition to or other than those provided under the plan or arrangement. 646.41646.41 Tax exemption. The fund is exempt from payment of all fees and taxes levied by this state or any of its subdivisions or instrumentalities, except for fees and taxes levied by virtue of employment under s. 646.12 (2) (d). 646.41 HistoryHistory: 1979 c. 109. 646.51(1c)(a)(a) “Authorize” means, with respect to assessments, to approve, by the adoption of a resolution by the board, that an assessment from insurers in a specified amount be called immediately or in the future. An assessment is authorized when the resolution is adopted by the board. 646.51(1c)(b)(b) “Call” means, with respect to assessments, to require payment, by the mailing of a notice to insurers by the fund, of an authorized assessment within the time set forth in the notice. An assessment is called when notice is mailed to insurers by the fund. 646.51(1c)(c)(c) “Premiums” means gross premiums and other considerations received for direct insurance and annuities, including considerations for a plan established under ss. 185.981 to 185.985, less return premiums and other considerations, dividends, and experience credits paid or credited to policyholders on such business. The term “premiums” does not include premiums or other considerations received for policies or contracts, or for portions of policies or contracts, for which coverage is not provided under this chapter, except that the amount of assessable premiums or other considerations shall not be reduced on account of limitations with respect to a single risk, loss, or life under s. 646.31 (4) or on account of interest limitations under s. 646.35 (6) (c). 646.51(1m)(1m) Duty to assess. To meet the board’s obligations under this chapter, after a liquidation order has been issued, the board shall estimate separately for each of the accounts of s. 646.11 (2) and separately for life insurance policies and for annuity contracts in the life insurance and annuities account, the amounts necessary to make the payments provided by this chapter. The board shall authorize assessments separately for each account and separately for life insurance policies and for annuity contracts in the life insurance and annuities account. 646.51(3)(am)(am) General. Except as provided in pars. (ar), (b), and (c), the board shall calculate the assessments as a percentage of premiums written in this state by each insurer in the classes protected by the accounts under s. 646.11 (2) for the year immediately preceding the year in which the board authorizes the assessment. 646.51(3)(ar)(ar) Disability. Except as provided in par. (c), with respect to the disability insurance account under s. 646.11 (2) and the health maintenance organization insurers account under s. 646.11 (2), the board shall calculate the assessments as a percentage of premiums written in this state by each insurer in the classes protected by the accounts for the year immediately preceding the year in which the board authorizes the assessment. If the assessment data for the year immediately preceding the year in which the board authorizes the assessment is not available when the assessment is called, the board may use the assessment data for the most recent year for which data is available. 646.51(3)(b)(b) Life and annuities. Except as provided in par. (c), with respect to the life insurance and annuities account under s. 646.11 (2), the board shall calculate the assessments separately for life insurance policies and for annuity contracts as a percentage of premiums received in this state by each insurer in the classes protected by the account for the year immediately preceding the year in which the board authorizes the assessment. If the assessment data for the year immediately preceding the year in which the board authorizes the assessment is not available when the assessment is called, the board may use the assessment data for the most recent year for which data is available. 646.51(3)(c)(c) Administrative assessments. The board may authorize assessments on a prorated or nonprorated basis to meet administrative costs and other expenses whether or not related to the liquidation or rehabilitation of a particular insurer. Nonprorated assessments may not exceed $500 per insurer in any year. 646.51(4)(a)(a) Subject to pars. (b) and (d), the total of all assessments for an amount authorized by the board under this section with respect to an insurer may not, in one calendar year, exceed 2 percent of the insurer’s assessable premiums under sub. (3) (am), (ar), or (b) on the types of policies and contracts that are covered by the account. 646.51(4)(b)(b) If the maximum assessment under par. (a), together with the other assets of the fund in an account, does not provide in one year in the account an amount that is sufficient for the fund to meet its obligations, the board shall assess additional amounts in each succeeding year until the amounts available enable the fund to meet its obligations. 646.51(4)(c)(c) Assessments to meet the obligations of the fund with respect to an insurer in liquidation may not be authorized or called unless the board makes a finding that it is necessary for implementing the purposes of this chapter. Recognizing that exact determinations may not always be possible, the board shall endeavor to classify and calculate assessments with a reasonable degree of accuracy. No authorized assessment may be called if the assets held in the appropriate account of the fund are sufficient to cover all estimated payments for liquidations in progress. 646.51(4)(d)(d) If 2 or more assessments are authorized in one calendar year with respect to insurers placed in liquidation in different calendar years, the average annual premiums for purposes of the limitation in par. (a) shall be equal and limited to the higher of the 3-year annual premium average for the applicable account. 646.51(5)(5) Collection. After the rate of assessment has been fixed, the fund shall send to each insurer a statement of the amount it is to pay. The fund shall designate whether the assessments shall be made payable in one sum or in installments. 646.51(6)(6) Appeal and review. Within 30 days after the fund sends the statement under sub. (5), an insurer, after paying the assessment under protest, may appeal the assessment to the board or a committee thereof. The decision of the board or committee on the appeal is subject to judicial review in the circuit court for Dane County. A petition for judicial review shall be filed within 60 days of the board’s or committee’s decision. 646.51(7)(a)(a) An insurer’s premium rates are not excessive because they contain an amount reasonably calculated to recoup assessments called under this chapter. 646.51(7)(b)(b) If the premium rates on a class of business are fixed, so that it is not possible for an insurer to recoup its assessments by increasing premium rates on the class of business, the insurer may offset 20 percent of the amount of the Wisconsin portion of the assessment against its tax liabilities to this state, other than real property taxes, in each of the 5 calendar years following the year in which the assessment was paid. 646.51(7)(c)(c) If an insurer ceases doing business in this state, all assessments not yet offset may be offset against its tax liabilities to this state for the year it ceases doing business. If the offset exceeds the tax liabilities, no refund will be made and there will be no carry-forward of the deficit to later years. 646.51(7)(d)(d) Any amount available for credit against future tax liabilities under this subsection may be regarded as an asset of the insurer under rules promulgated by the commissioner. 646.51(8)(8) Abatement and deferral. The board may abate or defer the assessment of an insurer in whole or part if payment of the assessment would endanger the ability of the insurer to fulfill its contractual obligations. The amount by which an assessment is abated or deferred may be assessed under this section against other insurers. When the conditions that prompted the board to defer assessment of an insurer no longer exist, the insurer shall pay all assessments that were deferred in accordance with a repayment plan approved by the board. 646.51(9)(9) Obligation to contribute ceases. 646.51(9)(a)(a) Except as provided in par. (b), if an insurer’s license or certificate of authority to do business in this state terminates, expires, or is surrendered, the insurer’s obligation to pay assessments under this section ceases beginning on the day after the insurer’s license or certificate of authority terminates, expires, or is surrendered. 646.51(9)(b)(b) An insurer whose license or certificate of authority to do business in this state terminates, expires, or is surrendered remains liable after the termination, expiration, or surrender to pay all of the following: 646.51(9)(b)1.1. Assessments authorized or called before the insurer’s license or certificate of authority terminated, expired, or was surrendered. 646.51(9)(b)2.2. Assessments authorized or called after the insurer’s license or certificate of authority terminated, expired, or was surrendered that relate to a liquidation order entered before the insurer’s license or certificate of authority terminated, expired, or was surrendered. 646.51(10)(10) Assessment of converting insurers. When an insurer converts to a different type of entity or license and the effect of the conversion is to subject the insurer to the liabilities of a different account or accounts of the fund, the converting insurer’s obligation to pay assessments is as follows: 646.51(10)(a)(a) Assessments authorized prior to or during the year of conversion. For assessments authorized by the board prior to or during the year in which the insurer’s conversion to a different type of entity or license is effective, the insurer is liable for assessments to cover the obligations of the account or accounts to which it was subject prior to conversion. 646.51(10)(b)(b) Assessments authorized after the year of conversion. For assessments authorized by the board after the year in which the insurer’s conversion to a different type of entity or license is effective, the insurer is liable for assessments to cover the obligations of the account or accounts to which it is subject after conversion. 646.51 AnnotationSub. (7) is applicable to franchise taxes, income taxes, and fire department dues. Only Wisconsin assessments are used for offsets against Wisconsin taxes. Section 76.66 applies. If assessments are reimbursed, tax credits should be recaptured. 72 Atty. Gen. 17. 646.60646.60 Claims by security funds. 646.60(1)(a)(a) Settlements by the fund. The liquidator is bound by determinations and settlements of covered loss claims, and by payments of claims, made by the fund under this chapter. 646.60(1)(b)(b) Settlements by comparable funds. The liquidator is bound by determinations and settlements of covered loss claims, and by payments of claims, made by funds or organizations of other states that are comparable to the fund under this chapter if all of the following apply: 646.60(1)(b)1.1. The laws of the other states give equivalent recognition to the determinations and settlements of loss claims, and to payments of claims, made by the fund. 646.60(1)(b)2.2. If the same claim is reported as paid by 2 or more funds, payment shall be to the fund with a prior obligation under s. 646.31 (9). 646.60(2)(2) Priorities. The subrogation claims of funds under sub. (1) for settlements of claims, including expenses in settling them, have the priority the claims would have under s. 645.68. 646.61646.61 Disposal and transfer of assets. 646.61(1)(1) After termination of all liquidations under any account of s. 646.11 (2), remaining assets in that account shall be redistributed among those who paid assessments under rules promulgated to ensure treatment that is as equitable to the contributing insurers as is practicable. Partial distributions may be made to insurers who were assessed after all claims against the fund arising from such liquidations have been paid. 646.61(2)(2) To meet the needs of the fund the fund may temporarily transfer assets from one account to another.
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statutes
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Chs. 600-655, Insurance
statutes/646.35(8)(e)
statutes/646.35(8)(e)
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