Ins 2.09 History History: Cr. Register, October, 1963, No. 94, eff. 11-1-63; emerg. am. (1) and (2), eff. 6-22-76; am. (1) and (2), Register, September, 1976, No. 249, eff. 10-1-76; am. (1) and (2), Register, March, 1979, No. 279, eff. 4-1-79; r. (9) under s. 13.93 (2m) (b) 16, Stats., Register, December, 1984, No. 348.

Ins 2.12 Ins 2.12 Exceptions to unfair discrimination. The following practices, without being all-inclusive, shall not be considered unfairly discriminatory as considered by s. 628.34, Stats.:

Ins 2.12(1) (1) Issuing life insurance policies or life annuity contracts on a salary savings, salary allotment, bank draft, pre-authorized check, or payroll deduction plan or other similar plan at a reduced rate or with special underwriting considerations reasonably related to the savings made by use of such plan.

Ins 2.12(2) (2) Issuing life insurance policies or annuity contracts at premiums determined by rating plans which provide for modification of premiums based on the amount of insurance; but any such rating plans shall not result in reduction in premiums in excess of the savings reasonably related to the savings made by use of the plan. All cost factors must be given proper recognition in order to preserve equity between various classes of policyholders.

Ins 2.12(3) (3) Issuing so-called “family plan’ life insurance policies which include insured, spouse, and their children with the premium calculated on the basis of the family unit. The rating plan must give recognition to all cost factors in order to preserve equity between various classes of policyholders.

Ins 2.12(4) (4) Issuing policies under the authority of s. Ins 6.75 (1) (a), with the premium calculated on the basis of the average age of those insured or calculated in some other manner which is appropriate for the coverage offered, provided that the rate must be reasonably related to the coverage provided and to the savings made by use of the rating procedure.

Ins 2.12(5) (5) Issuing life insurance policies or life annuity contracts at special rates or with special underwriting considerations, reasonably related to the savings made, in connection with:

Ins 2.12(5)(a) (a) Employee benefit trusts or plans conforming to the requirements of s. 815.18 (3) (j), Stats.

Ins 2.12(5)(b) (b) Plans used to fund retirement benefits under the Federal Self-Employed Individuals Tax Retirement Act of 1962.

Ins 2.12(5)(c) (c) Plans used to fund retirement benefits for employees of certain organizations exempt from Federal income tax and public schools (so-called tax sheltered annuity plans).

Ins 2.12 History History: Cr. Register, May, 1964, No. 101, eff. 6-1-64; emerg. am. (intro.), (4) and (5) (d), eff. 6-22-76; am. (intro.), (4) and (5) (d), Register, September, 1976, No. 249, eff. 10-1-76; am. (4) and (5) (a), Register, March, 1979, No. 279, eff. 4-1-79; r. (5) (d), Register, June, 1982, No. 318, eff. 7-1-82; reprinted to correct error in (5), Register, August, 1982, No. 320; correction in (5) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436.

Ins 2.13 Ins 2.13 Separate accounts and variable contracts.

Ins 2.13(1) (1) Purpose. This section creates standards for establishing separate accounts and for issuing contracts on a variable basis, both as provided by ss. 611.25 and 632.45 (1), Stats.

Ins 2.13(2) (2) Definitions. In this section:

Ins 2.13(2)(a) (a) “Agent” means a person who sells or offers to sell any contract on a variable basis.

Ins 2.13(2)(b) (b) “Contract on a variable basis” or “variable contract”means a policy or contract which provides for insurance or annuity benefits which may vary according to the investment experience of any separate account maintained by the insurer as to the policy or contract, as provided for in s. 632.45 (1), Stats., including contracts defined in pars. (e) and (f).

Ins 2.13(2)(c) (c) “Interest credits” means all interest that is credited to a policy or contract.

Ins 2.13(2)(d) (d) “Issue” means to issue for delivery or deliver.

Ins 2.13(2)(e) (e) “Modified guaranteed annuity” means a deferred annuity contract, the underlying assets of which are held in a separate account and the values of which are guaranteed if held for specified periods, containing nonforfeiture values based on a market-value adjustment formula if held for shorter periods, which formula may or may not reflect the value of assets held in the separate account.

Ins 2.13(2)(f) (f) “Modified guaranteed life insurance policy” means an individual policy of life insurance, the underlying assets of which are held in a separate account and the values of which are guaranteed if held for specified periods, containing nonforfeiture values based on a market-value adjustment formula if held for shorter periods, which formula may or may not reflect the value of assets held in the separate account.

Ins 2.13(2)(g) (g) “Policy processing day” means the day on which charges authorized in the policy are deducted from the policy’s cash value.

Ins 2.13(3) (3) Qualification of insurer to issue variable contracts.

Ins 2.13(3)(a) (a) No insurer may issue variable contracts in this state unless:

Ins 2.13(3)(a)1. 1. It is licensed or organized to do a life insurance or annuity business in this state; and

Ins 2.13(3)(a)2. 2. The commissioner is satisfied that its condition or method of operation in connection with the issuance of variable contracts will not render its operation hazardous to the public or its policyholders in this state. In determining the qualification of an insurer requesting authority to issue variable contracts in this state, the commissioner shall consider among other things:

Ins 2.13(3)(a)2.a. a. The history and financial condition of the insurer;

Ins 2.13(3)(a)2.b. b. The character, responsibility and fitness of the officers and directors of the insurer; and

Ins 2.13(3)(a)2.c. c. The law and regulation under which the insurer is authorized in the state of domicile to issue variable contracts.

Ins 2.13(3)(b) (b) If the insurer is a subsidiary of an admitted life insurance company, or affiliated with an admitted life insurance company by common management or ownership, the commissioner may deem it to have satisfied par. (a) 2. if either it or the admitted life insurance company satisfies the provisions of par. (a) 2. The commissioner may deem any licensed insurer which has a satisfactory record of doing business in this state for a period of at least 3 years to have satisfied the provisions of par. (a) 2.