Ch. Ins 15 Note Note: Chapter Ins 15 as it existed on May 31, 1991 was repealed and a new chapter Ins 15 was created effective June 1, 1991.

Ins 15.01 Ins 15.01 Warranty plans.

Ins 15.01(1) (1) Purpose. This section interprets ss. 600.01 (1) (b) 5., 601.04 (2), (3) and (4) and 600.03 (25) (a), Stats., by substituting requirements more specifically appropriate to the characteristics of the business of the issuance of warranties in lieu of the full application of chs. 600 to 646, Stats. The commissioner finds that the making of a contract relating to repair, replacement or restoration to a prescribed condition of any good, product or object is the transaction of insurance, subject to full application of chs. 600 to 646, Stats., unless the person making the contract submits to the jurisdiction of the commissioner and to the provisions of this section.

Ins 15.01(2) (2) Scope.

Ins 15.01(2)(a) (a) Subject to sub. (3), this section applies to all warrantors operating or offering to operate a warranty plan in this state.

Ins 15.01(2)(b) (b) This section does not apply to licensed insurers who operate or offer to operate a warranty plan pursuant to an authorization to transact insurance in this state or who issue mechanical breakdown coverage insurance policies in this state.

Ins 15.01(3) (3) Exemption. This section and chs. 600 to 646, Stats., do not apply to:

Ins 15.01(3)(a) (a) The provision of services under a maintenance services contract which may include some repairs and replacements as a part of the maintenance program if the services are provided by the entity issuing the contract and claiming the exemption and are not, except on limited occasions, performed by outside organizations and do not involve the creation of obligations including acting as a warranty plan administrator by a third party; or

Ins 15.01(3)(b) (b) Warranties by manufacturers of products which relate to the quality, merchantability or characteristics of the products manufactured by the entity claiming exemption; or

Ins 15.01(3)(c) (c) Warranties by a seller of services which relate to the quality or characteristics of such services performed by the entity claiming exemption.

Ins 15.01(3)(d) (d) Any vehicle protection product warranty properly registered under Chapter Ins 14.

Ins 15.01(4) (4) Definitions. In this section:

Ins 15.01(4)(a) (a) “Certificate of authority” means a limited certificate of insurance authority issued by the commissioner to operate a warranty business in this state.

Ins 15.01(4)(b) (b) “Consumer” means any person who has purchased a warranty contract to whom or for whose benefit the warranty is given.

Ins 15.01(4)(c) (c) “Warrantor” means a person, other than an insurer authorized to do business in this state under chs. 611 and 618, Stats., who operates a warranty business as principal. “Warrantor” includes a warranty plan administrator who operates a warranty business as a principal.

Ins 15.01(4)(d) (d) “Warranty contract” means the written agreement setting forth the obligations of the warranty plan.

Ins 15.01(4)(e) (e) “Warranty plan” means a program or business, however denominated, involving the sale and issuance of a warranty contract wherein a warrantor assumes responsibility to repair, replace or restore to a prescribed condition a good, product or object purchased or owned by a consumer.

Ins 15.01(4)(f) (f) “Warranty plan administrator” means a person, other than an insurer authorized to do business in this state under chs. 611 and 618, Stats., who operates a warranty business as a principal or who functions in a fiduciary capacity by:

Ins 15.01(4)(f)1. 1. Receiving, holding, channelling or otherwise controlling monies connected with the warranty plan, including premium dollars collected from providers of services or sellers of products; or

Ins 15.01(4)(f)2. 2. Approving or disapproving claims, paying claims or controlling the claim adjustment process; or

Ins 15.01(4)(f)3. 3. Arranging for or the controlling of the purchase of insurance associated with warranty plan coverages.

Ins 15.01(5) (5) Authorization for transaction of warranty business.

Ins 15.01(5)(a) (a) No warrantor or warranty plan administrator may transact a warranty business or function in a fiduciary capacity as defined in sub. (4) (f) without having been issued a valid limited certificate of insurance authority from the commissioner pursuant to sub. (10).

Ins 15.01(5)(b) (b) In the event that identical warranty plans are offered or sold by warrantors, which plans are prepared and administered by a common warranty plan administrator, the commissioner may authorize the warranty plan administrator to apply for and may issue a group limited certificate of insurance authority covering the warranty plan administrator and each warrantor named as offering or selling such warranty plan. The application for such authorization and the acceptance of the authorization by the warranty plan administrator constitutes an agreement by the administrator to assume the obligations of the warrantor under subs. (6), (7), (8), (9), and (11).

Ins 15.01(6) (6) Application.

Ins 15.01(6)(a) (a) An applicant for a limited certificate of insurance authority shall submit a warranty plan or warranty plan administrator application form prescribed by the commissioner. The warrantor, another person on the warrantor’s behalf, or warranty plan administrator shall sign and acknowledge the application. The commissioner may request any additional relevant information in order to make a determination of the applicant’s eligibility for a certificate of authority. An applicant shall pay the fee required by s. 601.31 (1) (a) 1., Stats.

Ins 15.01(6)(b) (b) The application shall include a statement that the warrantor or warranty plan administrator is subject to the terms and conditions of this section and a statement naming the commissioner as agent for service of process on the warrantor or warranty plan administrator in actions related to the warrantor’s or warranty plan administrator’s transaction of a warranty business in this state.

Ins 15.01(7) (7) Financial security requirements.

Ins 15.01(7)(a) (a) The commissioner shall condition the issuance of a limited certificate of insurance authority and its continuation upon the warrantor or warranty plan administrator providing security to compensate any consumer in this state who sustains loss due to the failure of such warrantor or warranty plan administrator to perform its obligations under a warranty contract as a result of insolvency or other financial impairment. The commissioner shall approve the amount and form of the security. The security shall be in one or a combination of the following: