Ins 6.12(5)(5) Level of competency. No member of the American academy of actuaries or a person who has otherwise demonstrated actuarial competence to the commissioner shall use the word actuary or actuarial in any presentation subject to this rule unless he or she is qualified to give the actuarial advice required or requested. Ins 6.12(6)(6) Penalty. Violations of this rule or any order issued thereunder shall subject the person to s. 601.64, Stats., or other applicable statute. Ins 6.12 HistoryHistory: Cr. Register, October, 1971, No. 190, eff. 11-1-71; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76; am. (1), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (3) to (5) made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; corrections in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register October 2006 No. 610. Ins 6.13Ins 6.13 Open records; privileged or confidential records. Ins 6.13(1)(1) Records of the office of the commissioner of insurance are subject to subch. II of ch. 19, Stats., and are open to inspection as required under subch. II of ch. 19, Stats. Ins 6.13(2)(2) The office of the commissioner may withhold and retain as confidential any record which may be withheld and retained as confidential under subch. II of ch. 19, Stats., including, but not limited to, a record which may be withheld or which is privileged under any law or the rules of evidence, as attorney-work product under the rules of civil procedure, as attorney-client privileged material under s. 905.03, Stats., as a medical record under ss. 146.81 to 146.84, Stats., or as privileged under s. 601.465, Stats. Ins 6.13(3)(3) The office, under s. 601.465, Stats., may refuse to disclose and prevent any person from disclosing, in response to a request for production, deposition, subpoena, or otherwise, information obtained from the National Association of Insurance Commissioners or another state’s insurance department under pledge of confidentiality or for the purpose of conducting an investigation or examination or obtained, produced or created in the course of an inquiry under s. 601.42, Stats., or examination under s. 601.43, Stats. This privilege applies to information obtained, produced or created before or after the effective date of s. 601.465, Stats., and regardless of whether an inquiry, investigation or examination has been concluded, except it does not apply to a document which is an adopted examination report. Ins 6.13 HistoryHistory: Cr. Register, June, 1973, No. 210, eff. 7-1-73; am. (3) (b), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (2) (a), (4) and (5), made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; r. and recr. Register, July, 1993, No. 451, eff. 8-1-93. Ins 6.17Ins 6.17 Regulation of surplus lines insurance. Ins 6.17(1)(1) Purpose. This rule implements and interprets ss. 601.42, 601.72, 601.73, 618.41 and 618.43, Stats., for the purpose of facilitating the regulation of surplus lines insurance business in this state. Ins 6.17(2)(2) Prohibited placement. No licensed surplus lines agent may place contracts of insurance with any unauthorized insurer: Ins 6.17(2)(b)(b) For any kind of insurance not specifically authorized by any of the other paragraphs of s. Ins 6.75. Ins 6.17(3)(3) Responsibilities of surplus lines agent. Every licensed surplus lines agent who procures surplus lines insurance shall: Ins 6.17(3)(a)(a) Forward promptly to the policyholder a completed copy of a Surplus Lines Insurance Proposal in a form substantially as in Appendix 1 to this rule. Ins 6.17(3)(b)(b) When applicable, forward promptly to the policyholder a notice that the unauthorized insurer with which the insurance is to be placed is not on the list of unauthorized nondomestic insurers which the commissioner believes to be reliable and solid, along with notice of any other deficiencies of the insurer of which the agent has knowledge. Ins 6.17(3)(c)(c) Keep in his or her office in this state a full and true record of each surplus lines insurance contract procured by him or her, evidenced by a copy of the daily report or other documents to show at least the following information: Ins 6.17(3)(c)2.2. Brief general description of property insured and where located; Ins 6.17(3)(d)(d) The record required by par. (d) shall be open at all times to examination by the commissioner without notice, and shall be so kept available and open to the commissioner for 3 years (5 years for notice required by par. (b)) next following the expiration or cancellation of the contract. Ins 6.17(4)(4) Advertising by surplus lines agent. A surplus lines agent may advertise the availability of services in procuring, on behalf of persons seeking insurance, contracts with insurers not holding a certificate of authority in Wisconsin, but such advertisements shall not refer to any particular unauthorized insurer or insurers. Ins 6.17(5)(5) Report and payment of tax-surplus lines insurance. All premium tax collected by the surplus lines agent shall be reported and forwarded to the commissioner on or before March 1, for all insurance procured, renewed or continued during the preceding calendar year with unauthorized insurers. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office’s website. Ins 6.17(6)(6) Penalty. Any violation of this rule shall subject the agent to immediate revocation of the agent’s surplus lines license and to other forfeitures and penalties provided by s. 601.64, Stats. Ins 6.17 HistoryHistory: Cr. Register, December, 1973, No. 216, eff. 1-1-74; am. (1), Register, May, 1975, No. 233, eff. 6-1-75; emerg. am. (2) (a) and (b), eff. 6-22-76; am. (2) (a) and (b), Register, September, 1976, No. 249, eff. 10-1-76; am. (2) (a) and (b), Register, March, 1979, No. 279, eff. 4-1-79; r. (3) (c), renum. (3) (d) and (e) to be (3) (c) and (d), am. (4), (6) and appendix 1, Register, August, 1982, No. 320, eff. 9-1-82; corrections in (3) (c) (intro.) made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436, eff. 5-1-92; CR 22-076: am. (5), r. appendix 2 Register July 2023 No. 811, eff. 8-1-23. Ins 6.17 Appendix 1
SURPLUS LINES INSURANCE PROPOSAL
Name and address of applicant Date
Dear: Proposal No.
You have asked that I procure the following insurance coverage on your behalf:
Type of Insurance Limits of Coverage
I can procure the coverage desired from the following insurer(s) at the premium listed:
Insurer(s) — Name and Address % of Total Risk
Premium Quoted
This insurance is with an insurer which has not obtained a certificate of authority to transact a regular insurance business in the state of Wisconsin, and will be issued and delivered as a surplus lines coverage pursuant to s. 618.41, Stats. The insurance is regulated by the Commissioner of Insurance only as provided in ss. 618.41 and 618.43, Stats. Section 618.43 (1), Stats., requires payment by the policyholder of a 3% tax on gross premium (except for Ocean Marine Insurance on which the tax is one-half of 1%). The tax in this instance amounts to $ . If the above transaction is not satisfactory, please advise immediately. Sincerely yours,
______________________________________________
Name and address of licensed surplus lines agent
Ins 6.17 NoteNote: 2011 Wisconsin Act 224 changed the tax rate for surplus lines insurance which is ocean marine insurance to the same 3% rate for all other surplus lines insurance. Any previous reference to a ½ of 1% rate for ocean marine insurance in this rule is not enforceable as that insurance is now taxed at the same 3% rate for all surplus lines insurance. Ins 6.18Ins 6.18 Reporting and payment of tax by unauthorized insurers transacting business in violation of law. Ins 6.18(1)(1) Purpose. This rule implements and interprets ss. 601.42, 610.11 and 618.43, Stats., for the purpose of facilitating the reporting and collection of tax due the state of Wisconsin from unauthorized insurers transacting business in violation of Wisconsin law. Ins 6.18(2)(2) Reporting and payment of tax by unauthorized insurers transacting business in violation of law. All premium tax shall be reported and forwarded to the commissioner on or before March 1, for all insurance which applies to exposures located wholly or partially within this state written, renewed or continued during the preceding calendar year by an unauthorized insurer. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office’s website. Ins 6.18(3)(3) Penalty. Any violation of this rule shall subject the person violating the same to s. 601.64, Stats. Ins 6.18 HistoryHistory: Cr. Register, December, 1973, No. 216, eff.1-1-74; CR 22-076: am. (2), r. appendix 1 Register July 2023 No. 811, eff. 8-1-23. Ins 6.19Ins 6.19 Reporting and taxation of directly placed unauthorized insurance. Ins 6.19(1)(1) Purpose. This rule implements and interprets ss. 601.42, 618.42 and 618.43, Stats., for the purpose of facilitating the reporting and collection of tax due the state of Wisconsin from persons who directly procure or renew insurance in an unauthorized insurer. Ins 6.19(2)(2) Reporting directly placed unauthorized insurance. The procurement or renewal of insurance from any unauthorized insurer shall be reported within 60 days to the commissioner on a form substantially the same as Appendix 1 to this rule. Ins 6.19(3)(3) Reporting and payment of tax for directly placed unauthorized insurance. All premium tax shall be reported and forwarded to the commissioner on or before March 1, for all insurance which applies to exposures located wholly or partially within this state procured, renewed or continued during the preceding calendar year in an unauthorized insurer. The report and the premium taxes owed shall be submitted through an electronic filing system, a link to which may be found on the office’s website. Ins 6.19(4)(4) Penalty. Any violation of this rule shall subject the person violating the same to s. 601.64, Stats. Ins 6.19 HistoryHistory: Cr. Register, December, 1973, No. 216, eff. 1-1-74; CR 22-076: am. (3), r. appendix 2 Register July 2023 No. 811, eff. 8-1-23. Ins 6.19 Appendix 1
NOTICE OF DIRECTLY PLACED UNAUTHORIZED INSURANCE
To: Commissioner of Insurance
State of Wisconsin
P.O. Box 7873
Madison, WI 53707-7873
1. Name of Person or Organization Insured
2. Address of Insured
3. Contract Number
4. Effective Date
5. Expiration Date
6. Name and Address of Insurance Company
7. Description or Type of Coverage
8. Premium Charged
The undersigned certifies that this report is true and correct according to the best of his or her information, knowledge, and belief.
, 2
Ins 6.19 NoteNote: This report, pursuant to s. 618.42 (2), Stats., must be filed with the Commissioner of Insurance within 60 days after effectuation of any new or renewal insurance contract independently procured from an unauthorized insurer. A separate report is required for each new or renewal insurance contract. A 3% Tax on the premiums charged for such contracts during the calendar year ending December 31 must be paid to the Commissioner on or before March 1 next succeeding. Ins 6.20Ins 6.20 Investments of insurance companies. Ins 6.20(1)(1) Purpose. The purpose of this rule is to implement and interpret ch. 620, Stats., for the purpose of establishing procedures and requirements for investments of insurance companies. Ins 6.20(2)(2) Scope. This rule shall apply to all insurers subject to ch. 620, Stats. Ins 6.20(3)(am)(am) “Derivative instrument” has the meaning contained in the accounting practices and procedures manual of the national association of insurance commissioners. “Derivative instrument” includes derivatives embedded within an investment. Ins 6.20(3)(c)(c) “Financial instrument” means a security, currency, or index of a group of securities or currencies. Ins 6.20(3)(e)(e) “Fixed charges” includes interest on all debt, and amortization of debt discount. Ins 6.20(3)(ee)(ee) “Foreign country” means any country other than the United States and Canada. Ins 6.20(3)(em)(em) “Foreign government” means any governmental unit or instrumentality that is not in the United States or Canada. Ins 6.20(3)(es)(es) “Foreign issuer” means any issuer that is not domiciled in the United States or Canada and is not a foreign government. An issuer domiciled in the United States or Canada shall be deemed a foreign issuer when the issuer is a shell business entity or special purpose vehicle, unless the investment is assumed, accepted, guaranteed, insured or otherwise backed by an entity domiciled in the United States or Canada that is not a shell business entity or special purpose vehicle. Ins 6.20(3)(f)(f) “Money market mutual fund” means a fund that meets the conditions of 17 Code of Federal Regulations Par. 270.2a-7, under the Investment Company Act of 1940 (15 USC 80a-1 et seq.), as amended or renumbered. Ins 6.20(3)(g)(g) “Net earnings available for fixed charges” means income after allowance for operating and maintenance expenses, depreciation and depletion, and taxes other than federal and state income taxes, but without allowance for extraordinary nonrecurring items of income or expense appearing in the regular financial statements of the issuing company. If the issuing company has acquired, prior to the date of investment, substantially all the assets of another company by purchase, merger, consolidation or otherwise, the net earnings available for fixed charges of the other company for the portion of the test period that preceded acquisition may be included in accordance with a consolidated earnings statement covering the period. Ins 6.20(3)(h)(h) “Net earnings available for fixed charges and dividends” shall be determined in the same manner as “net earnings available for fixed charges” but after allowance for federal and state income taxes. Ins 6.20(3)(hg)(hg) “Nationally Recognized Statistical Rating Organization” or “NRSRO” means a credit rating agency registered with the U.S. securities and exchange commission, pursuant to the Credit Rating Agency Reform Act of 2006, as amended. Ins 6.20(3)(hr)(hr) “No-load mutual fund” means a mutual fund whose shares are sold without any sales charges, or commissions, including sales compensation that is on an immediate or deferred basis or in some combination of immediate and deferred compensation. No-load mutual funds may impose fees for redemption, exchange, distribution, marketing, or other purposes unrelated to sales charges or commissions. Ins 6.20(3)(i)(i) “Preferred dividend requirements” include dividends at the maximum prescribed rate on all stock ranking as to dividends on parity with or prior to that being acquired, whether or not the dividends are cumulative. Ins 6.20(3)(k)(k) “Real estate” or “real property” includes leaseholds. Ins 6.20(3)(L)(L) “Repurchase transaction” means a transaction in which an insurer purchases securities from a business entity which is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period or upon demand. Ins 6.20(4)(4) General limitations on restricted insurers. No insurer restricted under s. 620.03, Stats., may invest in any of the following classes of assets, unless prior permission is granted by the commissioner: Ins 6.20(4)(a)(a) Any securities of an issuer who has defaulted on any payment on any debt security within the previous 5 years.
