Chapter Ins 6

Ins 6.07(5)(a) (a) Any policy that is a security subject to federal jurisdiction;

Ins 6.07(5)(b) (b) Any group policy; however, this shall not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;

Ins 6.07(5)(c) (c) Any group annuity contract that serves as a funding vehicle for pension, profit-sharing or deferred compensation plans;

Ins 6.07(5)(d) (d) Renewal policies whose terms are not altered in any way. Changes in premium, monetary limits or language required by federal and state laws and regulations adopted after the effective date of this rule are not alterations under this section.

Ins 6.07(5)(e) (e) Any form used in exchange, pursuant to a contractual provision, for an individual life policy delivered or issued for delivery on a form approved prior to the date that the form must be approved under this section.

Ins 6.07(6) (6) Certification. Filings subject to this section shall be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score or stating that the score is lower than the minimum required but should be approved in accordance with sub. (7). The actual readability score for each form shall be stated in the cover letter or as a data element in an electronic filing and the insurer shall fully identify the method or computer program used to determine the readability score. To confirm the accuracy of any certification, the commissioner may require the submission of further information to verify the certification in question.

Ins 6.07(7) (7) Powers of the commissioner. The commissioner may authorize a lower score than the Flesch reading ease score required in sub. (4) (a) 1., whenever, at the sole discretion of the commissioner, it is found that a lower score: will provide a more accurate reflection of the understandability of a consumer insurance policy; is warranted by the nature of a particular form or type or class of such forms; or is caused by certain language which is drafted to conform to the requirements of any state law, rule or commissioner’s interpretation.

Ins 6.07(8) (8) Effective date.

Ins 6.07(8)(a) (a) This section shall apply to the following consumer insurance policies no later than 6 months after December 1, 1980:

Ins 6.07(8)(a)1. 1. Private passenger automobile.

Ins 6.07(8)(a)2. 2. Homeowners,

Ins 6.07(8)(a)3. 3. Dwelling fire,

Ins 6.07(8)(a)4. 4. Individual disability excluding disability income,

Ins 6.07(8)(a)5. 5. Medicare supplement,

Ins 6.07(8)(a)6. 6. Individual life and annuity.

Ins 6.07(8)(b) (b) This section shall apply to the following consumer insurance policies no later than 12 months after December 1, 1980.

Ins 6.07(8)(b)1. 1. Renewal policies with altered terms,

Ins 6.07(8)(b)2. 2. Group disability certificates,

Ins 6.07(8)(b)3. 3. Disability income,

Ins 6.07(8)(b)4. 4. All consumer insurance policies not included under pars. (a) and (c) of this subsection.

Ins 6.07(8)(c) (c) This section shall apply to all Town Mutual insurers and also other insurers whose written premiums for the most recent calendar year did not exceed $500,000 statewide, no later than 18 months after December 1, 1980, regardless of the requirements under pars. (a) and (b).

Ins 6.07(8)(d) (d) Any consumer insurance policy that has been approved prior to the effective date of this rule and meets the standards set by this rule need not be refiled for approval but may continue to be lawfully delivered or issued for delivery in this state upon the filing with the commissioner of a list of the forms and accompanied by a certificate for each form in the manner provided in sub. (6).

Ins 6.07(8)(e) (e) The dates in pars. (a), (b), (c) and (d) may be extended at the commissioner’s sole discretion, but not beyond May 8th, 1982.

Ins 6.07 History History: Cr. Register, November, 1980, No. 299, eff. 12-1-80; CR 10-076: am. (3) (b) (intro.), 2., (4) (a) 5., (5) (a), (c), (6), (8) (d), r. and recr. (4) (a) 1., 2., cr. (4) (a) 8., (b) 6., (d), (9) Register January 2011 No. 661, eff. 2-1-11; EmR1101: eff. 2-9-11; CR 11-021: r. and recr. (4) (a) (intro.), 1., 2., 5., r. (4) (a) 8., (d), (9) Register August 2011 No. 668, eff. 9-1-11.

Ins 6.07 Note Note: The treatment of s. Ins 6.07 by CR 10-076 first apply to policies issued or renewed eight months following February 1, 2011.

Ins 6.08 Ins 6.08 Claimant representatives.

Ins 6.08(1) (1) Purpose. This section provides limited regulatory guidelines concerning the activities of claimant representatives. This section also protects insurance consumers from practices that the commissioner finds to be unfair trade practices. The commissioner finds as unfair trade practices those practices in which a claimant representative requires property to be repaired by a specified repair facility or contractor for repairs, receives compensation for the referral of business to a repair facility or contractor for repairs, operates as a repair facility or contractor for repairs, participates in the insurance claim payments to a repair facility or contractor for repairs, fails to disclose to the consumer the method of compensation and fails to provide the consumer with copies of contracts entered into between the claimant representative and consumer. This section requires a claimant representative to disclose his or her method and manner of compensation to the consumer and prohibits a claimant representative from engaging in practices that create potential conflicts of interest. This section implements and interprets s. 628.34 (11) and (12), Stats. This section is in addition to, and does not affect, s. 757.30, Stats.

Ins 6.08(2) (2) Scope. This section applies to all claimant representatives transacting business in this state.

Ins 6.08(3) (3) Definitions. As used in this section:

Ins 6.08(3)(a) (a) “Contractor for repairs” means the person, firm or corporation performing the repair work or furnishing the materials for the repair work, or both, for a building, dwelling or structure.

Ins 6.08(3)(b) (b) “Claimant representative” means any person, except an attorney licensed to practice law in the state, who receives compensation from a claimant in exchange for representing or advising the claimant in negotiations for the settlement of a claim against an insurer arising out of the coverage provided by an insurance policy. A claimant representative does not include a person whose sole service to the claimant is to provide to the claimant an estimate or appraisal for repairs.

Ins 6.08(3)(c) (c) “Repair facility” means the person, firm or corporation performing the repair work or furnishing the materials for the repair work, or both, for tangible personal property other than a building, dwelling or structure.

Ins 6.08(4) (4) Disclosure requirements.

Ins 6.08(4)(a) (a) No claimant representative may accept compensation for performing services for or otherwise assisting a claimant with an insurance claim unless, prior to performing any services and prior to the claimant’s assuming any obligation to pay for adjusting services, the claimant representative clearly and conspicuously discloses and explains to the claimant in writing the method and manner of receiving and accounting for compensation for services performed.

Ins 6.08(4)(b) (b) A claimant representative shall submit to the claimant a copy of any written contract entered into between the claimant representative and claimant within 5 working days after the contract is signed by the claimant. A claimant representative shall commit to writing any oral agreement entered into between the claimant representative and claimant and shall submit a copy of the writing to the claimant within 10 working days after the agreement is made.

Ins 6.08(5) (5) Prohibited practices.

Ins 6.08(5)(a) (a) No claimant representative may require that repairs of property be performed by a specific repair facility or contractor for repairs.

Ins 6.08(5)(b) (b) No claimant representative may receive any compensation from a repair facility or contractor for repairs for referring business to the repair facility or contractor for repairs.

Ins 6.08(5)(c) (c) No claimant representative may operate as a repair facility or contractor for repairs or participate in any manner in the insurance claim payments to a repair facility or contractor for repairs.

Ins 6.08 History History: Cr. Register, October, 1988, No. 394, eff. 11-1-88.

Ins 6.09 Ins 6.09 Prohibited acts by captive agents of lending institutions and others.

Ins 6.09(1) (1) Purpose. This rule implements and interprets applicable statutes, including but not limited to ch. 628, Stats., prohibiting concerted acts of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance as unfair methods of competition and as unfair or deceptive acts or practices in the business of insurance.

Ins 6.09(2) (2) Definitions.

Ins 6.09(2)(a) (a) Agent. A natural person, other than a captive agent, holding a valid and current certificate of registration as an insurance agent and one or more valid and current licenses to represent one or more admitted insurers in the solicitation and sale of policies of insurance in this state.

Ins 6.09(2)(b) (b) Borrower. Any person, firm, association, or corporation which obtains, other than in the regular course of its trade or business, a loan of money or credit from a lending institution on the security of real or personal property in return for a promise to repay the consideration at a time subsequent.

Ins 6.09(2)(c) (c) Captive agent. An agent who is a director, officer, or employee of the lending institution which, in connection with a loan transaction, holds or acquires a security interest in real or personal property of a borrower.

Ins 6.09(2)(d) (d) Lending institution. Any person, firm, association, or corporation, whether or not licensed or chartered by any agency of government, which in the regular course of business lends money or credit to a borrower on the security of real or personal property in return for the borrower’s promise to repay the consideration at a time subsequent.

Ins 6.09(2)(e) (e) Policy of insurance. Any policy, certificate or memorandum of insurance affording in whole or in part any one or more of the kinds of insurance described, respectively, in any paragraph of s. Ins 6.75 (2).

Ins 6.09(3) (3) Declaration of policy.

Ins 6.09(3)(a) (a) Every borrower in this state should be afforded a reasonable opportunity to purchase any policy of insurance, the form, content, and provisions of which have previously been approved by the office of the commissioner of insurance for use in this state, for the purpose of providing insurance coverage on real or personal property required by a lending institution to be placed in force by the borrower at the borrower’s expense to protect its security interest in such real or personal property.

Ins 6.09(3)(b) (b) Every borrower in this state should be afforded a reasonable opportunity to purchase a policy of insurance, from any insurer and through any agent currently licensed by the office of the commissioner of insurance to issue or sell in this state, which is designed to protect and which affords protection for security interests in real or personal property and which is required by a lending institution to be placed in force by the borrower at the borrower’s expense for such purpose.

Ins 6.09(3)(c) (c) At the minimum, every borrower in this state should be afforded the opportunity at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy affording adequate limits of insurance with respect to such property provided that such replacement policy has been approved for use in this state, and the insurer currently licensed by the office of the commissioner of insurance.

Ins 6.09(4) (4) Prohibited acts. Each of the following acts is declared to constitute the commission, by concerted action, of an act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of the business of insurance and is prohibited:

Ins 6.09(4)(a) (a) Refusal to accept policy.

Ins 6.09(4)(a)1. 1. The solicitation or sale by a captive agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of such captive agent’s lending institution in real or personal property of the borrower if such lending institution has refused or then refuses to accept for such purpose the policy of any insurer licensed in this state, the form, content, and provisions of which have previously been approved as appropriate for the insurance of such security interest on the property of such borrower by the office of the commissioner of insurance for use in this state.

Ins 6.09(4)(a)2. 2. The solicitation or sale by an agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of any lending institution in real or personal property of such borrower if such agent knows or in the exercise of reasonable care should have known that such lending institution has refused or then refuses to accept for such purpose the policy of any insurer licensed in this state, the form, content, and provisions of which have previously been approved as appropriate for the insurance of such security interest on the property of such borrower by the office of the commissioner of insurance for use in this state.

Ins 6.09(4)(b) (b) Restriction on replacement of existing policy.

Ins 6.09(4)(b)1. 1. The solicitation or sale by a captive agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of such captive agent’s lending institution in real or personal property of the borrower if such lending institution then imposes or enforces any requirement or condition, whether or not assented thereto by a borrower, which abrogates or otherwise penalizes or restricts the right of any borrower, exercisable at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy effectively to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy approved by the office of the commissioner of insurance which affords adequate limits of insurance with respect to such property.

Ins 6.09(4)(b)2. 2. The solicitation or sale by an agent of any policy of insurance to a borrower or to a lending institution for the account of any borrower under which coverage is afforded for the security interest of any lending institution in real or personal property of such borrower if such agent knows or in the exercise of reasonable care should have known that such lending institution then imposes or enforces any requirement or condition, whether or not assented to by a borrower, which abrogates or otherwise penalizes or restricts the right of any borrower, exercisable at any time within 30 days following initial inception of coverage and at any time within 30 days prior to any annual anniversary date of any existing policy effectively to substitute for an existing policy insuring real or personal property of the borrower in which the lending institution has a security interest any other policy approved by the office of the commissioner of insurance which affords adequate limits of insurance with respect to such property.

Ins 6.09(5) (5) Free choice of insurance; town mutual insurers.

Ins 6.09(5)(a) (a) A person may not disapprove, under s. 628.34 (5), Stats., a policy of insurance issued by a town mutual insurer licensed in this state based wholly or partially on the ground that:

Ins 6.09(5)(a)1. 1. The insurer does not have an acceptable rating with a rating service or publication;

Ins 6.09(5)(a)2. 2. The policy of insurance is assessable; or

Ins 6.09(5)(a)3. 3. The financial condition of the insurer is unacceptable, unless the condition constitutes a violation of s. Ins 13.06 or 13.09.

Ins 6.09(5)(b) (b) A person may disapprove a policy issued by a town mutual insurer based wholly or partially on the ground that it does not have a mortgagee clause in the form permitted under s. Ins 13.04 (7) (b).

Ins 6.09(6) (6) Nonapplication. The provisions of this rule shall not apply to renewal of any policy of insurance where the obligation of the borrower to procure insurance for the security interest of the lending institution accrued prior to the effective date of this rule.

Ins 6.09 History History: Cr. Register, December, 1968, No. 156, eff. 1-1-69; am. (1), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (1) and (2) (e), eff. 6-22-76; am. (1) and (2) (e), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (e), Register, March, 1979, No. 279, eff. 4-1-79; renum. (5) to be (6), cr. (5), Register, May, 1986, No. 365, eff. 6-1-86.

Ins 6.10 Ins 6.10 Property and casualty premium restrictions.

Ins 6.10(1) (1) Purpose. This section requires insurers who may return a premium that is less than the pro rata unearned premium to disclose this to the insured. This section also establishes prohibitions concerning specified practices relating to premiums. This section implements and interprets ss. 227.10 (1), 601.01 (2), 625.13 (1), 628.34 (1), (3), (11), and (12), 631.20 and 631.36 (2), Stats.

Ins 6.10(2) (2) Scope. This section applies to all lines or classes of insurance classified as property and casualty insurance in s. Ins 6.75 (2), except lines or classes of insurance providing disability insurance under s. Ins 6.75 (2) (c) and (k).

Ins 6.10(3) (3) Definitions. In this section:

Ins 6.10(3)(a) (a) “Pro rata unearned premium” means the pro rata portion of the written premium covering the unexpired portion of the policy term for which the written premium has been charged by the insurer to the policyholder.

Ins 6.10(3)(b) (b) “Written premium” means the entire amount of premium charged a policyholder for the term of the policy.

Ins 6.10(4) (4) Premium in excess of pro rata earned premium: filing, restrictions, disclosures.

Ins 6.10(4)(a) (a) An insurer shall file with the commissioner in accordance with s. 625.13, Stats., and s. Ins 6.06 any schedule of return premium applicable in the event of policy cancellation wherein the return of premium is less than the pro rata unearned premium for that policy form. The rate filing shall include the basis of the premium calculation in the event of a policy cancellation.

Ins 6.10(4)(b) (b) Subject to par. (c), in any policy under which an insurer may return a premium that is less than the pro rata unearned premium, the insurer shall provide the policyholder with a separate written notice that the policyholder may pay a substantial penalty if the policyholder cancels the policy prior to its expiration date. No insurer may return a premium that is less than the pro rata unearned premium until at least 10 days after the insurer mails or delivers this written notice to the policyholder.

Ins 6.10(4)(c) (c) Notwithstanding pars. (a) and (b), no insurer may return to the policyholder a premium that is less than the pro rata unearned premium if the insurer initiates cancellation or for a cancellation due to the nonpayment of premium.

Ins 6.10(5) (5) Miscellaneous premium prohibition. No insurer may initiate cancellation of one policy solely to apply the pro rata unearned premium of that policy to the balance due on another policy.

Ins 6.10 History History: Cr. Register, August, 1989, No. 404, eff. 10-1-89; am. (2), Register, April, 1992, No. 436, eff. 5-1-92.

Ins 6.11 Ins 6.11 Insurance claim settlement practices.

Ins 6.11(1) (1) Purpose. This rule is to promote the fair and equitable treatment of policyholders, claimants and insurers by defining certain claim adjustment practices which are considered to be unfair methods and practices in the business of insurance. The rule implements and interprets applicable statutes including but not limited to ss. 601.04 (3), 601.01 (2), and 645.41 (3), Stats.

Ins 6.11(2) (2) Scope. This rule applies to the kinds of insurance identified in s. Ins 6.75, transacted by insurers as defined in s. 600.03 (27), Stats., and nonprofit service plans subject to ch. 613, Stats.

Ins 6.11(3) (3) Unfair claim settlement practices.

Ins 6.11(3)(a) (a) Any of the following acts, if committed by any person without just cause and performed with such frequency as to indicate general business practice, shall constitute unfair methods and practices in the business of insurance:

Ins 6.11(3)(a)1. 1. Failure to promptly acknowledge pertinent communications with respect to claims arising under insurance policies.

Ins 6.11(3)(a)2. 2. Failure to initiate and conclude a claims investigation with all reasonable dispatch.

Ins 6.11(3)(a)3. 3. Failure to promptly provide necessary claims forms, instructions and reasonable assistance to insureds and claimants under its insurance policies.

Ins 6.11(3)(a)4. 4. Failure to attempt in good faith to effectuate fair and equitable settlement of claims submitted in which liability has become reasonably clear.

Ins 6.11(3)(a)5. 5. Failure upon request of a claimant, to promptly provide a reasonable explanation of the basis in the policy contract or applicable law for denial of a claim or for the offer of a compromise settlement.