Chapter Ins 6

Ins 6.54 Ins 6.54 Prohibited classification of risks for rating purposes.

Ins 6.54(1) (1) Purpose. This rule interprets and implements ss. 601.01 (2), 625.02, 625.11, 625.12 (2), 625.13, and 625.21 (2), Stats., and ch. 628, Stats., for the purpose of prohibiting certain practices.

Ins 6.54(2) (2) Scope. This rule applies to all contracts issued, renewed or amended in Wisconsin affording automobile insurance coverage and all contracts issued, renewed or amended in Wisconsin affording coverage for loss or damage to real property used for residential purposes for not more than 4 living units or affording coverage for loss or damage to personal property used for residential purposes.

Ins 6.54(3) (3) Prohibited practices.

Ins 6.54(3)(a) (a) No insurance company shall refuse, cancel or deny insurance coverage to a class of risks solely on the basis of any of the following factors (taken individually or in combination), nor shall it place a risk in a rating classification on the basis of any of the following factors without credible information supporting such a classification and demonstrating that it equitably reflects differences in past or expected losses and expenses and unless such information is filed in accordance with ss. 625.12, 625.13 and 625.21 (2), Stats.:

Ins 6.54(3)(a)1. 1. The applicant’s or insured’s past criminal record;

Ins 6.54(3)(a)2. 2. The applicant’s or insured’s physical condition or developmental disability as defined in s. 51.01 (5) (a), Stats.;

Ins 6.54(3)(a)3. 3. The applicant’s or insured’s past mental disability;

Ins 6.54(3)(a)4. 4. The applicant’s or insured’s age;

Ins 6.54(3)(a)5. 5. The applicant’s or insured’s marital status;

Ins 6.54(3)(a)6. 6. The applicant’s or insured’s sexual preference;

Ins 6.54(3)(a)7. 7. The applicant’s or insured’s “moral” character.

Ins 6.54(3)(b) (b) Nothing in par. (a) shall be construed as including within the definition of prohibited practices any of the following:

Ins 6.54(3)(b)1. 1. Denying, cancelling or non-renewing the automobile or property insurance of a person convicted of an offense if the offense which resulted in the conviction is directly related to the risk to be insured;

Ins 6.54(3)(b)2. 2. Establishing a classification system merely for the purpose of developing statistical data;

Ins 6.54(3)(b)3. 3. Underwriting only the class of risks which are specified in the insurer’s articles of incorporation;

Ins 6.54(3)(b)4. 4. Establishing a rate based on the record of all drivers of an insured automobile;

Ins 6.54(3)(b)5. 5. Establishing a rate based on the number of people residing in a household.

Ins 6.54(3)(c) (c) Nothing in par. (a) or (b) shall be interpreted in any way as limiting the prohibitions contained in ss. 106.52 (3) (a) 4. and 632.35, Stats.

Ins 6.54(3)(d) (d) No insurer shall require an applicant or insured to undergo a physical examination to obtain or continue coverage unless the cost of such physical examination is borne by the insurer.

Ins 6.54(4) (4) Penalty. Violation of this rule may subject the insurer to the penalties set forth in s. 601.64, Stats.

Ins 6.54 History History: Cr. Register, March, 1976, No. 243, eff. 4-1-76; emerg. am. (1) and (3) (c), eff. 6-22-76; am. (1) and (3) (c), Register, September, 1976, No. 249, eff. 10-1-76; am. (3) (a) 2., Register, April, 1977, No. 256, eff. 5-1-77; am. (3) (a) 2., and cr. (3) (d), Register, March, 1979, No. 279, eff. 4-1-79; corrections in (1) and (3) (c) made under s. 13.93 (2m) (b) 7., Stats., Register, February, 2000, No. 530; correction in (3) (c) made under s. 13.93 (2m) (b) 7., Stats., Register January 2002 No. 553.

Ins 6.55 Ins 6.55 Discrimination based on sex, unfair trade practice.

Ins 6.55(1) (1) Purpose. The purpose of this rule is to eliminate the act of denying benefits or refusing coverage on the basis of sex, to eliminate unfair discrimination in underwriting criteria based on sex, and to eliminate any differences in rates based on sex which cannot be justified by credible supporting information. This rule interprets and implements s. 601.01 (3), Stats., and ch. 628, Stats.

Ins 6.55(2) (2) Definitions.

Ins 6.55(2)(a) (a) Insurer has the meaning defined in s. 600.03 (27), Stats., and in addition includes nonprofit service plans or service insurance corporations.

Ins 6.55(2)(b) (b) Contract means any insurance policy, plan, certificate, subscriber agreement, statement of coverage, binder, rider or endorsement offered by an insurer subject to Wisconsin insurance law.

Ins 6.55(3) (3) Applicability and scope.

Ins 6.55(3)(a) (a) This rule shall apply to all contracts delivered in Wisconsin, or issued for delivery in Wisconsin on or after the effective date of this rule and to all existing group contracts subject to Wisconsin insurance law which are amended or renewed on or after the effective date of this rule.

Ins 6.55(3)(b) (b) This rule shall not affect the right of fraternal benefit societies to determine eligibility requirements for membership.

Ins 6.55(4) (4) Availability requirements.

Ins 6.55(4)(a) (a) It is an unfair trade practice for an insurer to:

Ins 6.55(4)(a)1. 1. Refuse or cancel coverage or deny benefits on the basis of the sex of the applicant or insured;

Ins 6.55(4)(a)2. 2. Restrict, modify, or reduce the benefits, term, or coverage on the basis of the sex of the applicant or insured.

Ins 6.55(4)(b) (b) Examples of unfair trade practices defined by par. (a) and prohibited by this rule are:

Ins 6.55(4)(b)1. 1. Denying coverage to females gainfully employed at home, employed part-time, or employed by relatives when coverage is offered to males similarly employed;

Ins 6.55(4)(b)2. 2. Denying benefits offered by policy riders to females when the riders are available to males;

Ins 6.55(4)(b)3. 3. Denying, under group contracts, dependent coverage to husbands of female employees, when dependent coverage is available to wives of male employees;

Ins 6.55(4)(b)4. 4. Denying disability income coverage to employed women when coverage is offered to men similarly employed;

Ins 6.55(4)(b)5. 5. Treating complications of pregnancy differently from any other illness or sickness under a contract;

Ins 6.55(4)(b)6. 6. Restricting, reducing, modifying, or excluding benefits payable for treatment of the genital organs of only one sex;

Ins 6.55(4)(b)7. 7. Offering lower maximum monthly benefits to women than to men who are in the same underwriting, earnings or occupational classification under a disability income contract;

Ins 6.55(4)(b)8. 8. Offering more restrictive benefit periods and more restrictive definitions of disability to women than to men in the same underwriting, earnings or occupational classification under a disability income contract;

Ins 6.55(4)(b)9. 9. Establishing different conditions by sex under which the policyholder may exercise benefit options contained in the contract.

Ins 6.55(5) (5) Rates. When rates are differentiated on the basis of sex, the insurer must:

Ins 6.55(5)(a) (a) File a brief letter of explanation along with a rate filing.

Ins 6.55(5)(b) (b) Maintain written substantiation of such rate differentials in its home office.

Ins 6.55(5)(c) (c) Justify in writing to the satisfaction of the commissioner the rate differential upon request.

Ins 6.55(5)(d) (d) Base all such rates on sound actuarial principles or a valid classification system and actual experience statistics.

Ins 6.55(6) (6) Penalty. Violation of this rule shall subject the insurer to the penalties set forth in s. 601.64, Stats.

Ins 6.55 History History: Cr. Register, May, 1976, No. 245, eff. 6-1-76; emerg. am. (1), eff. 6-22-76; am. (1), Register, September, 1976, No. 249, eff. 10-1-76.

Ins 6.57 Ins 6.57 Appointment of insurance agents by insurers.

Ins 6.57(1) (1) Submission of an intermediary-agent appointment request shall initiate the appointment of an agent in accordance with s. 628.11, Stats. The appointment request shall be made in a manner prescribed by the commissioner within 15 days of the date the agent contract is executed or the date the first insurance application is submitted and shall show the lines of authority being requested for that agent. An appointment is valid only for the lines of insurance requested. The effective date of a valid appointment is the date on which the appointment request is submitted electronically in the format specified by the commissioner. Billing for the initial appointment shall be done at the time of appointment.

Ins 6.57(2) (2) Notice of termination of appointment of an individual intermediary in accordance with s. 628.11, Stats., shall be filed prior to or within 30 calendar days of the termination date in a manner prescribed by the commissioner. Prior to or within 15 days of filing this termination notice, the insurer shall provide the agent written notice that the agent is no longer appointed as a representative of the company and that he or she may not act as its representative. This notice shall also include a formal demand for the return of all indicia of agency. “Termination date” means the date on which the insurer effectively severs the agency relationship with its intermediary-agent and withdraws the agent’s authority to represent the insurer in any capacity.

Ins 6.57(2)(a) (a) If the reason for termination is one of the reasons listed as other criteria in s. Ins 6.59 (5) (d) or if the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities listed in s. Ins 6.59 (5) (d), the insurer must submit complete explanations and documentation in writing to OCI within 30 days of the termination.

Ins 6.57(2)(b) (b) If the insurer has knowledge of complaints received or problems experienced by the intermediary or the intermediary’s agency involving indebtedness, forgery, altering policies, fraud, misappropriation, misrepresentation, failure to promptly submit applications or premiums, or poor policyholder service that involved the intermediary being terminated, the insurer must submit complete explanations and documentation in writing to OCI within 30 days of the termination. This documentation need not prove violations, but should include any situation where possible violations exist. The Office of the Commissioner of Insurance will investigate these situations and take appropriate action based upon the investigation.

Ins 6.57(2)(c) (c) The insurer or the authorized representative of the insurer shall promptly notify the insurance commissioner in writing if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the insurance commissioner under par. (a) or (b) had the insurer then known of its existence.

Ins 6.57(3) (3) In addition each insurer shall pay once each year, in accordance with an assigned billing schedule and in a payment type prescribed by the commissioner, the annual appointment fee defined in sub. (4). A billing schedule shall be adopted by the commissioner under which appointment invoices shall be available to insurers.

Ins 6.57(4) (4) Fees applicable for listing of insurance agents under s. 628.11, Stats., are set forth by statute in s. 601.31 (1) (n), Stats.

Ins 6.57(5) (5) No insurer shall accept business directly from any intermediary or enter into an agency contract with an intermediary unless that intermediary is a licensed agent appointed with that insurer within 15 days of the date the agent contract is executed or the first insurance application is submitted, and the appointment shall show the lines of authority being requested for that agent.

Ins 6.57(6) (6) No intermediary shall submit an application for insurance directly to an insurer or solicit insurance on behalf of a particular insurer or enter into an agency contract unless the agent is appointed with that insurer within 15 days of the date the agent contract is executed or the first insurance application is submitted, and the appointment shall show the lines of authority being requested for that agent.

Ins 6.57 History History: Cr. Register, December, 1976, No. 252, eff. 1-1-77; r. and recr. Register, March, 1978, No. 267, eff. 4-1-78; cr., (5) and (6), Register, March, 1979, No. 279, eff. 4-1-79; am. (1) and (3), Register, September, 1981, No. 309, eff. 1-1-82; am. (5), Register, December, 1984, No. 348, eff. 1-1-85; am. (1), Register, April, 1986, No. 364, eff. 5-1-86; am. (1) and (2), Register, January, 1992, No. 433, eff. 2-1-92; emerg. am. (4), eff. 10-9-95; am. (4), Register, February, 1996, No. 482, eff. 3-1-96; am. (4), Register, June, 2000, No. 534, eff. 7-1-00; CR 01-074: am. (1), (2), (5) and (6), cr. (2) (a) to (c), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (1), (2) (intro.) and (3) Register October 2006 No. 610, eff. 11-1-06; CR 09-022: am. (3), (5) and (6) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (1), (2) (intro.), (a), (b), (3) to (6) Register August 2020 No. 776, eff. 9-1-20.

Ins 6.58 Ins 6.58 Licensing of insurance intermediary firms as insurance agents.

Ins 6.58(1) (1) Purpose. The purpose of this rule is to establish procedures for licensure of insurance intermediary firms as insurance intermediaries, reinsurance intermediaries, travel insurance agents or managing general agents.

Ins 6.58(1m) (1m) Definition. In this section “firm” means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.

Ins 6.58(2) (2) License. Any firm may obtain an insurance intermediary firm license under this section.

Ins 6.58(3) (3) Procedure.

Ins 6.58(3)(a) (a) Application for a permanent intermediary license, reinsurance intermediary license, travel insurance agent license or managing general agent license for a corporation or partnership shall be filed in a manner prescribed by the commissioner using the NAIC Uniform Application. The application shall include:

Ins 6.58(3)(a)1. 1. A licensing fee of $100.00;

Ins 6.58(3)(a)2. 2. A completed NAIC Uniform Application;

Ins 6.58(3)(a)3. 3. Certification that the insurance intermediary firm will transact business in such a way that all acts that may only be performed by a licensed intermediary are performed exclusively by natural persons who are licensed under s. 628.04, Stats., and functioning within the scope of the license, and a list of such persons;

Ins 6.58(3)(a)4. 4. If the insurance intermediary firm is domiciled outside of Wisconsin, an agreement to be subject to the jurisdiction of the commissioner and the courts of this state on any matter related to the insurance intermediary firm’s insurance activities in this state, on the basis of service of process under ss. 601.72 and 601.73, Stats.; and

Ins 6.58(3)(a)5. 5. A list of all partners, directors or principal officers or persons in fact having comparable power.

Ins 6.58(3)(a)6. 6. In the case of a corporation, the application must be signed or submitted by an officer. In the case of a partnership, the application must be signed or submitted by a partner.

Ins 6.58(3)(a)7. 7. Any bond, policy, designation or information required under s. Ins 47.02 (3) or (5).

Ins 6.58(3)(a)8. 8. A Designated Responsible Licensed Producer, DRLP, assigned by the intermediary firm.

Ins 6.58(3)(b) (b) Determination of the acceptance or rejection of a completed application shall be made within 90 days.

Ins 6.58(4) (4) Standards of competence and trustworthiness.

Ins 6.58(4)(a) (a) For partners, directors or principal officers who are licensed at the time of application under sub. (4) as insurance intermediaries, reinsurance intermediaries, travel insurance agents or managing general agents, those standards as set forth in s. Ins 6.59 (5) shall apply in lieu of the standards set forth in this section.

Ins 6.58(4)(b) (b) For partners, directors or principal officers who are not licensed at the time of application under sub. (4) as insurance intermediaries, reinsurance intermediaries, travel insurance agents or managing general agents, the following criteria may be used in assessing trustworthiness and competence:

Ins 6.58(4)(b)1. 1. ‘Criminal record.’ The conviction for crimes which are substantially related to insurance. “Conviction” includes having been found guilty by judge or jury, having entered a plea of guilty or nolo contendere or no contest, or having been given probation, a suspended sentence, or a fine.

Ins 6.58(4)(b)2. 2. ‘Accuracy of information.’ Any material misrepresentation in the information submitted in the application.

Ins 6.58(4)(b)3. 3. ‘Regulatory action.’ Any regulatory action taken with regard to any license held, such as insurance licenses in other states, real estate licenses and security licenses.

Ins 6.58(4)(b)4. 4. Other criteria which the commissioner considers evidence of untrustworthiness or incompetence.

Ins 6.58(5) (5) Fees.

Ins 6.58(5)(a) (a) Biennially, at least 60 days prior to February 15 of each even numbered year, a regulation fee notice of $35.00 for resident and $70.00 for nonresident insurance intermediary firms, reinsurance intermediaries, travel insurance firms, and managing general agents will be issued in a manner prescribed by the commissioner.

Ins 6.58(5)(b) (b) If payment of the biennial regulation fee is not made prior to February 15 of the year in which it is due, in a payment type prescribed by the commissioner, the license shall terminate.

Ins 6.58(6) (6) Notification of changes. Each insurance intermediary firm licensed or applying for a license shall, within 30 days, notify the commissioner of insurance in writing of any change in its business mailing address, business address, contact email address, location of the business records, or a change in the name or address of the designated representative.

Ins 6.58 Note Note: Intermediary corporations and partnerships are subject to the recordkeeping requirements as set forth in s. Ins 6.61 (1).