Chapter Ins 6

Ins 6.59(5)(d)5. 5. Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance.

Ins 6.59(5)(d)6. 6. Having been convicted of a felony or misdemeanor substantially related to the circumstances of holding an insurance license.

Ins 6.59(5)(d)7. 7. Having admitted or been found to have committed any insurance unfair trade practice or fraud.

Ins 6.59(5)(d)8. 8. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere.

Ins 6.59(5)(d)9. 9. Having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory.

Ins 6.59(5)(d)10. 10. Forging another’s name to an application for insurance or to any document related to an insurance transaction.

Ins 6.59(5)(d)11. 11. Improperly using notes or any other reference material to complete an examination for an insurance license.

Ins 6.59(5)(d)12. 12. Knowingly accepting insurance business from an individual who is not licensed.

Ins 6.59(5)(d)13. 13. Failing to comply with an administrative or court order imposing a child support obligation.

Ins 6.59(5)(d)14. 14. Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax.

Ins 6.59(5)(e) (e) Age. Is at least eighteen (18) years of age.

Ins 6.59(6) (6) Frequency and location. Examinations for each kind of agent authority will be administered at least once a month in accordance with a schedule adopted by the commissioner.

Ins 6.59(8) (8) Change in residency status.

Ins 6.59(8)(a) (a) A licensed nonresident agent, after becoming a Wisconsin resident, may retain authority under the nonresident agent license for a maximum of 60 days, at which time all authority granted under the nonresident license shall cease.

Ins 6.59(8)(b) (b) A licensed resident agent after becoming a resident of another state, may retain authority under the resident license for a maximum of 60 days, at which time all authority granted under the resident license shall cease.

Ins 6.59(8)(c) (c) If an agent changes residency status and becomes licensed under the new status, all authority granted by the license issued under the former status shall terminate on the date the new license is issued.

Ins 6.59(8)(d) (d) Criteria used by the insurance commissioner to establish residency shall include, but not be limited to:

Ins 6.59(8)(d)1. 1. Jurisdiction for payment of state taxes.

Ins 6.59(8)(d)2. 2. Jurisdiction for automobile driver’s license and motor vehicle registration.

Ins 6.59(8)(d)3. 3. Location of voter registration.

Ins 6.59(8)(d)4. 4. Location of principal residence, such as owned or rented dwelling, condominium or apartment.

Ins 6.59(8)(e) (e) A licensed nonresident agent, after becoming a resident of a state other than Wisconsin, may retain licensing authority under the nonresident license for a maximum of 60 days, at which time all authority granted under the nonresident license shall terminate if licensure in the new home state, as defined by s. Ins 28.03 (3m), cannot be verified by the commissioner, unless a letter of certification or other comparable evidence from the new home state is provided to the commissioner.

Ins 6.59 History History: Cr. Register, March, 1977, No. 255, eff. 4-1-77; am. (8), Register, June, 1978, No. 270, eff. 7-1-78; cr. (10), Register, September, 1978, No. 273, eff. 10-1-78; am. (3) and (7), Register, February, 1980, No. 290, eff. 3-1-80; r. (6) and (9), renum. (7), (8) and (10) to be (6), (7) and (8), Register, August, 1980, No. 296, eff. 9-1-80; r. and recr. Register, September, 1981, No. 309, eff. 10-1-81; am. (4), cr. (8), Register, December, 1984, No. 348, eff. 1-1-85; am. (2), (3), (4) (a) and (b) and (6), Register, May, 1987, No. 377, eff. 7-1-87; am. (4) (a) and (5) (b), Register, January, 1992, No. 433, eff. 2-1-92; cr. (8) (e), Register, April, 1992, No. 436, eff. 5-1-92; am. (4) (a) and (c), Register, June, 1992, No. 438, eff. 7-1-92; emerg. am. (1), (2), (4) (a), (c), (5) (a), (8) (a) to (c) and (e), cr. (9), eff. 3-12-93; emerg. am. (3), (4) (b), (c) and (6), r. and recr. (4) (a), cr. (4) (am) and (as), eff. 7-1-93; am. (1), (2), (3), (c), (5) (a), (8) (a) to (c) and (e), cr. (4) (am), (as), (9), r. and recr. (4) (a), Register, July, 1993, No. 451, eff. 8-1-93; emerg. am. (4) (a), eff. 10-9-95; am. (4) (a) and (am), Register, February, 1996, No. 482, eff. 3-1-96; am. (4) (a), (am) and (as), Register, January, 1999, No. 517, eff. 2-1-99; cr. (4) (av), Register, October, 2000, No. 538, eff. 11-1-00; CR 01-074: am. (4) (am), (5) (a), (c) and (d), cr. (5) (d) 1. to 14. and (5) (e), r. (7) and (9), Register January 2002 No. 553, eff. 2-1-02; CR 05-111: am. (3) and (4) (a) to (av), cr. (4) (ax) Register October 2006 No. 610, eff. 11-1-06; CR 07-096: am. (2) and (4) (a) Register March 2008 No. 627, eff. 4-1-08; CR 09-022: am. (2), (3), (4) (a), (b), (c), (8) (a), (b), (c) and (e), cr. (4) (an) and (ap) Register August 2009 No. 644, eff. 9-1-09; CR 19-025: am. (4) (a), (am), (an), (ap), (as), (av), (ax), r. (4) (b.), am. (4) (c), (5) (a), (8) (e) Register August 2020 No. 776, eff. 9-1-20.

Ins 6.595 Ins 6.595 Exemption of licensing of individuals as intermediaries.

Ins 6.595(1) (1) Definitions. In this section:

Ins 6.595(1)(a) (a) “Negotiate” means to confer directly with or offer advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, provided that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers.

Ins 6.595(1)(am) (am) “Producer” means an insurance marketing intermediary as defined in s. 628.02, Stats.

Ins 6.595(1)(b) (b) “Sell” or “Place” means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company.

Ins 6.595(1)(c) (c) “Solicit” means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company.

Ins 6.595(2) (2) Exemptions. The following persons are not required to obtain an intermediary license:

Ins 6.595(2)(a) (a) A town mutual agent exempt from licensing under s. 628.03 (1), Stats., by s. 628.05 (1), Stats., includes an agent for a town mutual not authorized to insure members against loss to property by windstorm or hail insurance as provided in ss. 612.31 (2) (a) 3. and 612.33 (2) (a), Stats., who provides windstorm or hail insurance to the town mutual’s members through an insurance policy issued by another authorized insurer operating on an assessment plan. The town mutual agent need not be licensed but the other insurer must list the agent and pay the listing fee in accordance with s. Ins 6.57.

Ins 6.595(2)(b) (b) An officer, director or employee of an insurer or of an insurance producer, provided that the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in this state and any of the following apply:

Ins 6.595(2)(b)1. 1. The officer, director or employee’s activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance.

Ins 6.595(2)(b)2. 2. The officer, director or employee’s function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance.

Ins 6.595(2)(b)3. 3. The officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person’s activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance.

Ins 6.595(2)(c) (c) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans or otherwise assisting in administering plans; or performs administrative services related to mass marketed property and casualty insurance; where no commission is paid to the person for the service;

Ins 6.595(2)(d) (d) An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director or trustees are engaged in the administration or operation of a program of employee benefits for the employer’s or association’s own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;

Ins 6.595(2)(e) (e) Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance;

Ins 6.595(2)(f) (f) A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state, provided that the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state;

Ins 6.595(2)(g) (g) A person who is not a resident of this state who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, provided that that person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state; or

Ins 6.595(2)(h) (h) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer provided that the employee does not sell or solicit insurance or receive a commission.

Ins 6.595(2)(i) (i) Persons selling rental car insurance which is provided in connection with and incidental to the lease or rental of a motor vehicle which do not require a commercial license to operate for a total period of 90 consecutive days or less and not exceeding the lease or rental period. This exemption does not relieve the person of the requirement to reply to the commissioner under s. 601.42, Stats.

Ins 6.595 History History: CR 01-074: cr. Register January 2002 No. 553, eff. 2-1-02; CR 19-025: cr. (1) (am) Register August 2020 No. 776, eff. 9-1-20; correction in (1) (am) made under s. 35.17, Stats., Register August 2020 No. 776.

Ins 6.60 Ins 6.60 Prohibited business practices.

Ins 6.60(1) (1) In this section:

Ins 6.60(1)(a) (a) “Affiliate” means any person who is under the control of or acts at the direction of the agent.

Ins 6.60(1)(b) (b) “Agent” means an intermediary as defined in s. 628.02, Stats.

Ins 6.60(1)(c) (c) “Customer” means a natural person with whom the agent or affiliate is doing or has, within 3 years from the act or transaction regulated by this section, done an insurance business as that term is defined in s. 618.02 (2) and (3), Stats.

Ins 6.60(1)(d) (d) “Personal financial transaction” includes a transaction in which the agent or an affiliate of the agent borrows money, property or securities from a customer; loans money, property or securities to a customer; acts as custodian for money, property or securities of a customer; obtains power of attorney over money, property or securities of a customer; obtains a guarantee of any loan from a customer; shares directly or indirectly in profits or losses with a customer; or without furnishing equal consideration obtains title to or ownership of any property of a customer. In this section “personal financial transaction” does not include transactions conducted by an agent or affiliate in the normal course of doing an insurance business such as holding an insurance policy for analysis or servicing, or receiving an insurance premium from a customer provided the transaction is properly recorded on the records of the agent or affiliate as required by s. Ins 6.61, including the name of the insurer for whom the premium was received, and the agent or affiliate immediately issues a written receipt to the customer for the policy or premium.

Ins 6.60(2) (2) The following are deemed to be unfair trade practices by an agent or affiliate pursuant to s. 628.34 (12), Stats., without limiting those terms to the practices specified in this section:

Ins 6.60(2)(a) (a) Effecting or attempting to effect a personal financial transaction with a customer unless any of the following apply:

Ins 6.60(2)(a)1. 1. The customer is a relative of the agent or affiliate as defined in s. 13.62 (12g), Stats.

Ins 6.60(2)(a)2. 2. The customer is a person residing in the household of the agent or affiliate at the time of the transaction.

Ins 6.60(2)(a)3. 3. The transaction is a bona fide arm’s length business transaction where the customer is either qualified to understand and assess the transaction or has been advised or represented in the transaction by a qualified individual who is not the agent or affiliate.

Ins 6.60(2)(a)4. 4. The agent or affiliate is acting lawfully pursuant to authority given under federal or state law governing the securities or investment advisory business.

Ins 6.60(2)(b) (b) Knowingly being listed as a beneficiary of any proceeds of a life insurance policy or annuity issued to a customer unless the agent or affiliate has an insurable interest in the life of the customer.

Ins 6.60(2)(c) (c) Engaging in transactions with a customer in violation of ch. 551, Stats., the Wisconsin uniform securities law, ch. 553, Stats., the Wisconsin franchise investment law, the U.S. securities act of 1933 (15 USCS 77a et seq), the U. S. securities exchange act of 1934 (15 USCS 78a-78kk), the U. S. investment company act of 1940 (15 USCS 80 a-1 – 80a-52), or any rules or regulations promulgated under any of such laws.

Ins 6.60(2)(d) (d) Making misleading statements to a customer regarding or otherwise misrepresenting one’s qualifications or services. This includes using terms such as “financial”, “investment” or “retirement” in conjunction with terms such as “planner”, “planning” or “consulting” when, under the circumstances, the statements, representations or use of these terms do not accurately describe the nature of the services offered or the qualifications of the person offering the services.

Ins 6.60(2)(e) (e) Selling, soliciting the sale, or assisting the sale, of health coverage that is:

Ins 6.60(2)(e)1. 1. Provided by a person who is not licensed as an insurer in this state; and

Ins 6.60(2)(e)2. 2. Represented to be authorized under, or exempt from state insurance regulation under, the federal employee retirement income security act (29 USCS 1001 et seq).

Ins 6.60(3) (3) 

Ins 6.60(3)(a) (a) For the purpose of s. 618.39 (1), Stats., an agent should know that placement of insurance is illegal if the agent:

Ins 6.60(3)(a)1. 1. Sells, solicits the sale, or assists in the sale, of health coverage offered by a person not licensed as an insurer in this state; and

Ins 6.60(3)(a)2. 2. Knows that the health coverage is represented to be authorized, or exempt from state insurance regulation, under the federal employee retirement income security act (29 USCS 1001 et seq).

Ins 6.60(3)(b) (b) An agent’s lack of knowledge of any of the following is not a defense to a violation of s. 618.39 (1), Stats.:

Ins 6.60(3)(b)1. 1. That the person providing the coverage is not licensed in this state.

Ins 6.60(3)(b)2. 2. That the person is an insurer as defined under s. 600.03 (27), Stats.

Ins 6.60(3)(b)3. 3. That the represented authorization or exemption under the federal employee retirement income security act is false (29 USCS 1001 et seq).

Ins 6.60(4) (4) The commissioner shall order, for any agent who violates s. 618.39, Stats., not less than revocation of the agent’s license and that the agent pay any claims not paid within 60 days by the unauthorized insurer. An agent may establish the basis for a lesser penalty for a violation of s. 618.39, Stats., only if the agent shows all of the following:

Ins 6.60(4)(a) (a) Substantial mitigating factors.

Ins 6.60(4)(b) (b) The agent made, and solicited to make, only a few sales of the coverage.

Ins 6.60(4)(c) (c) The agent did not serve as a general agent, was not eligible for override commissions, and was not responsible for recruiting, and did not recruit, other agents to sell the coverage.

Ins 6.60(5) (5) A violation of sub. (2) is a cause for denial of an agent license application under s. 628.04 (1), Stats., and a cause for agent license suspension, revocation or limitation under s. 628.10 (2) (b), Stats.

Ins 6.60 History History: CR 01-072: cr. Register January 2002 No. 553, eff. 2-1-02.

Ins 6.61 Ins 6.61 Intermediary records.

Ins 6.61(1) (1) Purpose. This section protects insurance policyholders by prescribing minimum standards and techniques of accounting and data handling of intermediaries to ensure that timely and reliable information will exist and be available to the commissioner. This section implements and interprets ss. 601.42 and 628.34, Stats., by establishing minimum records to be maintained by intermediaries.

Ins 6.61(2) (2) Scope. This section applies to all intermediaries transacting insurance business in this state and to Wisconsin insurance transactions of nonresident intermediaries unless the nonresident is required to maintain records in a similar specified manner by the intermediary’s state of domicile.

Ins 6.61(3) (3) Definitions. As used in this section:

Ins 6.61(3)(a) (a) “Business checking account” means any account utilized by an intermediary for insurance-related transactions.

Ins 6.61(3)(b) (b) “Cash disbursed record” means a record showing all monies paid out by the intermediary in connection with insurance.

Ins 6.61(3)(c) (c) “Cash receipts record” means a record showing all monies received by the intermediary in connection with insurance.

Ins 6.61(3)(d) (d) “Commission statements” means records or statements which show the commissions and fees allocated to the intermediary for insurance transactions.

Ins 6.61(3)(e) (e) “Formal administrative action” means consent decrees, cease and desist orders, stipulations, suspensions, revocations, license denials, fines, forfeitures, settlement agreements, license restrictions or actions limiting the intermediary’s method of conducting an insurance business but does not include administrative actions based solely on failing to comply with continuing education requirements or solely on failing to pay a regulation fee for licensing.

Ins 6.61(3)(f) (f) “Intermediary” means an agent, broker or producer and any person, partnership or corporation requiring a license under the provisions of ch. 628, Stats.

Ins 6.61(3)(g) (g) “Personnel records” means those records pertaining to anyone who is directly retained or employed by an intermediary in connection with insurance including subagents, secretaries, phone solicitors, and independent contractors.

Ins 6.61(3)(h) (h) “Policyholder records” means all records, applications, request for changes, claims, and complaints associated with a policy generated by or through the intermediary.

Ins 6.61(4) (4) Cash disbursed record. The cash disbursed record shall show the name of the party to whom the payment was made, date of payment, and reason for payment.

Ins 6.61(5) (5) Cash receipts record. The cash receipts record shall show the name of the party who remitted the money, date of receipt, and reason for payment.