The board shall authorize and direct the issuance of shares, bonds or notes subscribed to under the organization permit, and of insurance policies upon qualifying applications made under the organization permit; and
The commissioner shall authorize the release to the corporation of all funds held in escrow under s. 611.15
(4) Alteration of certificate of authority. 611.20(4)(a)(a)
A corporation may at any time apply to the commissioner for a new or amended certificate of authority, removing, altering or adding limits on its business or methods of operation. The application shall contain or be accompanied by so much of the information in s. 611.13 (2)
as the commissioner reasonably requires. The commissioner shall issue the new certificate as requested if he or she finds:
That the corporation's capital and surplus are adequate to support the proposed operations under the new certificate; and
That the proposed business would not be contrary to the law or to the interests of insureds or the public.
If the commissioner issues a summary order under s. 645.21
against a corporation, he or she may also revoke the corporation's certificate and issue a new one with the limits the commissioner deems necessary.
(5) Domestic surplus lines insurance.
The commissioner may issue to a domestic insurer a certificate of authority to do business in this state as a domestic surplus lines insurer, as defined in s. 618.40 (3m)
Accelerated organization procedure. 611.22(1)(1)
The incorporators may apply for determination of the minimum capital or minimum permanent surplus under s. 611.19
and for a certificate of authority without first obtaining an organization permit if:
They purchase for their own accounts all the shares proposed to be issued in the case of a stock corporation, or in the case of a mutual they supply all the minimum permanent surplus and initial expendable surplus by contribution notes or otherwise.
(2) Contents of application.
The application for a certificate of authority shall be accompanied by proof that the purchase price for the shares or the proceeds of contribution notes have been deposited on behalf of the proposed corporation or if other than money are held in trust for the proposed corporation and by so much of the information in s. 611.13 (2)
as the commissioner reasonably requires.
(3) Issuance of certificates of incorporation and authority.
The commissioner shall issue both a certificate of incorporation and a certificate of authority if:
The commissioner finds that all requirements of law have been met;
The commissioner is satisfied that all natural persons who are incorporators, the directors and principal officers of corporate incorporators, and the proposed directors and officers of the corporation being formed are trustworthy and competent and collectively have the competence and experience to engage in the particular insurance business proposed; and
The commissioner is satisfied that the business plan is consistent with the interests of the corporation's potential insureds and of the public.
(4) Legal existence.
Upon the issuance of the certificate of incorporation the legal existence of the corporation shall begin, the articles and bylaws shall become effective and the proposed directors and officers shall take office. The certificate shall be conclusive evidence of compliance with this section, except in a proceeding by the state against the corporation.
History: 1971 c. 260
; 1991 a. 316
Transfer of an insurer's place of domicile. 611.223(1)(1)
Foreign insurer becomes a domestic insurer. 611.223(1)(a)
A foreign insurer which desires to become a domestic insurer may submit to the commissioner an application for a certificate of incorporation and a certificate of authority. The application shall comply with par. (b)
and shall include or have attached any other relevant documents or information that the commissioner reasonably requires. Upon review of the application, the commissioner may issue a certificate of incorporation and certificate of authority if the commissioner determines that all of the following are satisfied:
The applicant is in compliance with the provisions of chs. 600
that apply to domestic insurers.
The directors and officers of the applicant are trustworthy and competent and collectively have the competence and experience to engage in the particular insurance business proposed.
The proposed business is consistent with the interests of insureds and the public.
The commissioner shall by rule specify the required contents and form of an application submitted under par. (a)
. In determining the required contents, the commissioner shall consider the information and documents which will permit the commissioner to determine whether the requirements of par. (a) 1.
The commissioner may by order relax one or more of the requirements of this subsection for a foreign insurer which desires to become a domestic insurer if, after a hearing conducted in accordance with ch. 227
, the commissioner determines that the requirements are unnecessary to protect policyholders and the public because of the developed status of the foreign insurer.
(2) Domestic insurer becomes a foreign insurer.
Upon approval by the commissioner, a domestic insurer may transfer its place of domicile to any other state in which it is admitted. As a condition of approving the transfer of domicile, the commissioner may require a special deposit, reinsurance or other protective measures by the insurer. After or simultaneous with the transfer of domicile, the insurer may apply under ch. 618
for authority to do business in this state as a foreign insurer.
(3) Effect on existing contracts.
The transfer of an insurer's place of domicile under sub. (1)
does not affect the obligations of the insurer under its existing insurance contracts or any other existing contracts.
History: 1987 a. 247
See also s. Ins 6.03
, Wis. adm. code.
Municipal insurance mutuals. 611.23(1)(1)
On application by the organizers of a municipal insurance mutual under s. 611.11 (4)
, the commissioner may by order, after a hearing, relax any requirements of this chapter to facilitate the formation, financing and governance of the mutual. In the same order, the commissioner shall impose substitute requirements designed to implement the purposes of s. 611.02 (2)
as elaborated in this chapter.
Except as provided in sub. (3)
, the provisions of chs. 600
that apply to other mutuals organized or operating under this chapter apply also to municipal insurance mutuals.
(3) Inapplicable provisions.
do not apply to such mutuals. The commissioner may by order, after a hearing, exempt such a mutual from any other provisions on a finding that they are unnecessary for the protection of the interests of the municipalities and their citizens.
Segregated accounts in general. 611.24(1)(1)
Mandatory segregated accounts.
A corporation shall establish segregated accounts for the following classes of insurance business, if it also does other classes of insurance business:
Unless the corporation is exempted by the commissioner by rule or order, financial guaranty insurance, if the corporation commences this class of insurance business on or after March 25, 1988, or if the corporation engages in this class of business on or after November 1, 1988; and
Life insurance including fixed and variable annuities. Disability insurance may be included in a life insurance account.
(2) Optional segregated accounts.
With the approval of the commissioner, a corporation may establish a segregated account for any part of its business. The commissioner shall approve unless he or she finds that the segregated account would be contrary to the law or to the interests of any class of insureds.
(3) Special provisions for segregated accounts. 611.24(3)(a)(a)
Capital and surplus.
The commissioner shall specify in the certificate of authority of a newly organized corporation the minimum capital or the minimum permanent surplus and the initial expendable surplus to be provided for each segregated account. If a segregated account is established after a certificate of authority has been issued, the commissioner shall require the corporation to have and maintain an adequate amount of capital and surplus in the segregated account.
The income and assets attributable to a segregated account shall always remain identifiable with the particular account but unless the commissioner so orders, the assets need not be kept physically separate from other assets of the corporation. The income, gains and losses, whether or not realized, from assets attributable to a segregated account shall be credited to or charged against the account without regard to other income, gains or losses of the corporation.
Except under par. (e)
, assets attributable to a segregated account shall not be chargeable with any liabilities arising out of any other business of the corporation, nor shall any assets not attributable to the account be chargeable with any liabilities arising out of it, except under par. (i)
Incidental business done by a corporation under s. 610.21
may be done under the general account or under any segregated account approved by the commissioner. Expenses and income for such business shall be allocated among the general account and all segregated accounts in accordance with generally accepted accounting principles.
Each segregated account shall be deemed an insurer within the meaning of s. 645.03 (1) (f)
. A liquidation order under s. 645.42
for the general account or for any segregated account shall have effect as a rehabilitation order under s. 645.32
for all other accounts of the corporation. Claims remaining unpaid after completion of the liquidation under ch. 645
shall have liens on the interests of shareholders, if any, in all of the corporation's assets that are not liquidated, and the rehabilitator may transform the liens into ownership interests under s. 645.33 (5)
Assets allocated to segregated accounts are the property of the corporation, which is not and shall not hold itself out to be a trustee of the assets.
A corporation may own a particular asset in determinate proportions for segregated accounts, for its general account or as a trustee when acting as such within its legal powers.
The corporation may by an identifiable act transfer assets for fair consideration among the segregated accounts, the general account and any trust accounts of the corporation.
Expenses, loans, and services.
The general account of the corporation, or any segregated account, may for a fair consideration provide loans or guarantees in connection with, perform services for, or reinsure other accounts, subject to rules promulgated by the commissioner. Generally accepted accounting principles and realistic actuarial tables may be considered to ascertain what is a fair consideration. Notwithstanding s. 645.68
, the commissioner may assign a general or segregated account obligation to a segregated account an order of distribution higher in priority than provided for under s. 645.68 (5)
Special provisions for separate accounts for variable contracts. 611.25(1)(1)
Separate accounts under this section form a special category of segregated accounts and may be designated by any appropriate name the corporation wishes to use.
With the approval of the commissioner, any corporation may establish one or more separate accounts and allocate to them any amounts paid or remitted to or held by the corporation under designated contracts or classes of contracts which amounts are to be applied to provide benefits payable partly or wholly in variable dollar amounts. Such amounts may also be applied to provide benefits in fixed and guaranteed dollar amounts and other incidental benefits.
(3) Special rights and procedures.
To the extent necessary to comply with the federal investment company act of 1940, as now or later amended, or any rules issued thereunder, the corporation may adopt special procedures for the conduct of the business and affairs of a separate account, and may, for persons having beneficial interests therein, provide special voting and other rights, including special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee, the members of which need not be otherwise affiliated with the corporation, to manage the business and affairs of the account.
(4) Applicable general provisions.
Separate accounts under this section are subject to s. 611.24 (3)
History: 1971 c. 260
An insurance corporation may form or acquire subsidiaries to do any lawful insurance business. There is no limit on the amount of investment in such subsidiaries except that the commissioner may by order or rule establish a limit and, for purposes of ss. 623.11
, the total value of the outstanding shares of such a subsidiary shall be deemed to equal the amount of surplus possessed by the subsidiary in excess of its security surplus, as determined by the commissioner under s. 623.12
(2) Investment subsidiaries.
An insurance corporation may form or acquire subsidiaries to hold or manage any assets that it might hold or manage directly. There is no limit on investment in such subsidiaries except that imposed by s. 620.23 (3)
An insurance corporation may form or acquire subsidiaries to perform functions or provide services that are ancillary to its insurance operations. It may have up to 10 percent of its assets invested in such subsidiaries, unless the commissioner by order or rule provides otherwise.
Subsidiaries are ancillary subsidiaries if they are engaged principally in one or more of the following:
Investing, reinvesting or trading in securities, or acting as a securities broker, dealer or marketing representative, for its own account or for the account of any affiliate.
Managing of investment companies registered under the federal investment company act of 1940, as amended, including related sales and services.
Acting as administrative agent for a government instrumentality performing an insurance, public assistance or related function.
Providing services related to insurance operations, including accounting, actuarial, appraisal, auditing, claims adjusting, collection, data processing, loss prevention, premium financing, safety engineering and underwriting services.
Holding or managing property used by the corporation alone or with its affiliates for the convenient transaction of its business.
Providing such other services or performing such other activities as the commissioner may declare ancillary by rule.
Owning corporations which would be authorized as subsidiaries under subds. 1.
and under subs. (1)
(4) Other subsidiaries.
An insurance corporation may form or acquire other subsidiaries than those under subs. (1)
. The investment in such subsidiaries may be counted toward satisfaction of the compulsory surplus requirement of s. 623.11
and the security surplus standard of s. 623.12
to the extent that the investment is a part of the leeway investments of s. 620.22 (9)
for the first $200,000,000 of assets or to the extent that the investment is within the limitations under s. 620.23 (2) (a)
for other assets. The commissioner may limit investment in subsidiaries under this subsection by rule or order. Unless approved by the commissioner, an insurance corporation may not do any of the following:
Invest in one or more subsidiaries more than 10 percent of its assets or 50 percent of its capital and surplus, whichever is less.
Invest in one or more subsidiaries to the extent that the insurer's capital and surplus with regard to policyholders will not be reasonable in relation to the insurer's outstanding liabilities or adequate to meet the insurer's financial needs.
(5) Notice to commissioner.
An insurance corporation shall notify the commissioner promptly of the formation or acquisition of any subsidiary under this section.
Changes in business plan. 611.28(1)(1)
Within 5 years after the initial issuance of a certificate of authority no substantial change, alteration or amendment may be made in the business plan and the insurer may not substantially deviate from it unless notice of the proposed change is filed with the commissioner 30 days in advance of the proposed effective date. The commissioner may defer the effective date for an additional period not exceeding 30 days by written notice to the corporation before expiration of the initial 30-day period. The commissioner may, within the 30-day period or its extension, prohibit the proposed action if it is contrary to law or to the interests of insureds, creditors or the public in this state.
(2) Continuing control.
The commissioner may by rule or order specify portions of the business plan to which the requirement of sub. (1)
shall apply even after the initial 5-year period, if he or she finds after a hearing that it is required to protect the interests of insureds, creditors or the public in this state.
Amendment of articles. 611.29(1)(1)
Right to amend articles.
A stock corporation may amend its articles under ss. 180.0726
and 180.1708 (4)
and a mutual may amend its articles under ss. 181.1001
, 181.1002 (1)
, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner. Subject to sub. (3)
, the stock corporation or mutual may amend its articles in any desired respect including substantial changes of its original purposes. No amendment may be made contrary to s. 611.12 (1)
For 5 years after the initial issuance of a certificate of authority, proposed amendments of the articles which are not changes in the business plan shall be filed with the commissioner at least 30 days before the amendment is submitted to the shareholders or policyholders for approval, or if such approval is not required, at least 30 days before the effective date.
(3) Articles of amendment; mutuals.
In addition to the requirements of s. 181.1005
, the articles of amendment of a mutual shall, if mail voting is used, state the number of policyholders voting by mail and the number of such policyholders voting for and against the amendment.