Chapter 628

628.348(1) (1) Training requirement. On and after January 1, 2009, no person may solicit, negotiate, or sell long-term care insurance unless the person is a licensed intermediary and he or she has completed the initial training portion of the training program under s. 49.45 (31) (c) and completes the ongoing training under s. 49.45 (31) (c) every 24 months after completing the initial training.

628.348(2) (2) Insurer verification. Insurers providing long-term care insurance shall do all of the following:

628.348(2)(a) (a) Obtain from intermediaries selling long-term care insurance on behalf of the insurer verification that the intermediary is in compliance with the training requirements under sub. (1).

628.348(2)(b) (b) Maintain records related to the verifications obtained under par. (a).

628.348(2)(c) (c) Make the records under par. (b) available to the commissioner upon request.

628.348 History History: 2007 a. 20, 226.

628.35 628.35 Prohibition of exclusive contracts. No insurer may make, enforce or participate in any contract or other arrangement for exclusive services of a health care provider that prevents or materially inhibits any other insurer authorized to do business in this state from entering into a contract or other arrangement with any health care provider of services that the other insurer has contracted to supply or for which it has promised indemnity under its insurance contracts, unless:

628.35(1) (1) The health care provider is an individual who is an employee of the insurer;

628.35(2) (2) The health care provider is a corporation owned by the insurer;

628.35(3) (3) The health care provider uses the insurer’s name under a franchise arrangement; or

628.35(4) (4) The case is within a class for which the commissioner by rule establishes an exception after a finding that the contract or other arrangement does not seriously impede the effective operation of a legitimate insurance business by other insurers.

628.35 History History: 1975 c. 223, 371, 422.

628.36 628.36 Limitations on corporations supplying health care services.

628.36(1) (1) Payment methods. Any corporation operating a voluntary health care plan may pay health care professionals on a salary, per patient or fee-for-service basis to provide health care to policyholders or beneficiaries of the corporation.

628.36(2) (2) Discrimination against professionals.

628.36(2)(a) (a) In this section:

628.36(2)(a)1. 1. “Health care plan” means an insurance contract providing coverage of health care expenses.

628.36(2)(a)2. 2. “Provider” means a health care professional, a health care facility or a health care service or organization.

628.36(2)(b) (b)

628.36(2)(b)1. 1. Except for health maintenance organizations, preferred provider plans and limited service health organizations, no health care plan may prevent any person covered under the plan from choosing freely among providers who have agreed to participate in the plan and abide by its terms, except by requiring the person covered to select primary providers to be used when reasonably possible.

628.36(2)(b)2. 2. No provider may be required to participate exclusively in a health care plan as a condition of participation in it.

628.36(2)(b)3. 3. Except as provided in subd. 4., no provider may be denied the opportunity to participate in a health care plan, other than a health maintenance organization, a limited service health organization or a preferred provider plan, under the terms of the plan.

628.36(2)(b)4. 4. Any health care plan may exclude a provider from participation in the health care plan for cause related to the practice of his or her profession.

628.36(2)(b)5. 5. All health care plans, including health maintenance organizations, limited service health organizations and preferred provider plans are subject to s. 632.87 (3).

628.36(2m) (2m) Pharmaceutical services.

628.36(2m)(a) (a) In this subsection:

628.36(2m)(a)1. 1. “Health maintenance organization” has the meaning given in s. 609.01 (2).

628.36(2m)(a)2. 2. “Limited service health organization” has the meaning given in s. 609.01 (3).

628.36(2m)(a)2m. 2m. “Pharmaceutical services” do not include the administration of a drug product or device or vaccine under s. 450.035.

628.36(2m)(a)3. 3. “Preferred provider plan” has the meaning given in s. 609.01 (4).

628.36(2m)(e) (e)

628.36(2m)(e)1. 1. A health maintenance organization, limited service health organization or preferred provider plan that provides coverage of pharmaceutical services when performed by one or more pharmacists who are selected by the organization or plan but who are not full-time salaried employees or partners of the organization or plan shall provide an annual period of at least 30 days during which any pharmacist registered under ch. 450 may elect to participate in the health maintenance organization, limited service health organization or preferred provider plan under its terms as a selected provider for at least one year.

628.36(2m)(e)2. 2. Except as provided in subd. 3., subd. 1. applies to health maintenance organizations on and after May 10, 1984. Except as provided in subd. 4., subd. 1. applies to limited service health organizations and preferred provider plans on or after April 28, 1990.

628.36(2m)(e)3. 3. If compliance with the requirements of subd. 1. during the period specified in subd. 2. would impair any provision of a contract between a health maintenance organization and any other person, and if the contract provision was in existence prior to May 10, 1984, then immediately after the expiration of all such contract provisions the health maintenance organization shall comply with the requirements of subd. 1.

628.36(2m)(e)4. 4. If compliance with the requirements of subd. 1. during the period specified in subd. 2. would impair any provision of a contract between a limited service health organization or preferred provider plan and any other person, and if the contract was in existence prior to April 28, 1990, then immediately after the expiration of all such contract provisions the limited service health organization or preferred provider plan shall comply with the requirements of subd. 1.

628.36(3) (3) Exemption by rule. By rule the commissioner may exempt from the application of any part of subs. (1) to (2m) plans which provide innovative approaches to the delivery of health care or which are designed to contain health care costs, and which cannot operate successfully consistent with all of the provisions in subs. (1) to (2m). The commissioner may promulgate such a rule only if on a finding that the interests of the public require such plans as an experiment, to supply health care services that are not otherwise available in adequate quantity or quality, or to contain health care costs. The promulgated rule shall be as narrow as is compatible with the success of the plans.

628.36(4) (4) Facilitating cost-effective provision of health care services.

628.36(4)(a) (a) The commissioner shall provide information and assistance to the department of employee trust funds, employers and their employees, providers of health care services and members of the public, as provided in par. (b), for the following purposes:

628.36(4)(a)1. 1. To facilitate the development and implementation of health care plans that provide innovative approaches to the delivery of health care services or that are designed to contain health care costs.

628.36(4)(a)2. 2. To increase the awareness and understanding among employers and their employees, providers of health care services and members of the public regarding the availability and nature of innovative or cost-effective health care plans.

628.36(4)(b) (b) The commissioner’s responsibilities in accomplishing the purposes set forth in par. (a) shall include all of the following:

628.36(4)(b)1. 1. Assisting the department of employee trust funds in the development of health care plans under s. 40.51 (7).

628.36(4)(b)2. 2. Providing employers and their employees with information regarding the availability and nature of health care coverage that may be obtained under s. 40.51 (7).

628.36(4)(b)3. 3. Providing information to employers regarding how to proceed under s. 40.51 (7) to obtain health care coverage for their employees.

628.36(4)(b)4. 4. Providing information to employers and their employees and members of the public regarding the availability and nature of various kinds of health care plans, including their distinct and contrasting characteristics.

628.36(4)(b)5. 5. Providing information to employers and their employees, providers of health care services and members of the public regarding the relative effectiveness of various kinds of health care plans in containing health care costs.

628.36 History History: 1975 c. 223, 371, 422; 1983 a. 27, 192, 321, 396; 1985 a. 29; 1987 a. 27; 1989 a. 31, 215; 1991 a. 250; 1997 a. 27, 68; 1997 a. 237 s. 727m.

628.37 628.37 Preservation of professional relationships in professional services. No insurance plan related to or providing health care, legal or other professional services may alter the direct relationship and responsibility of professional persons to their patients or clients for the professional services rendered. All professional relationships are subject to the same rules of contract and tort law and professional ethics as if no insurance plan were involved.

628.37 History History: 1975 c. 223, 371, 422.

628.38 628.38 Disclosure requirements. The commissioner may by rule require insurers to deliver to prospective buyers of life or disability insurance, at a time specified in the rule, information consistent with ss. 601.01 and 628.34 that will improve their ability to select appropriate coverage.

628.38 History History: 1981 c. 82.

628.39 628.39 Extension of credit on premiums. The extension of credit to the insured upon a premium without interest for not exceeding 60 days from the effective date of the policy, or after that time with interest at not less than the legal rate nor more than 18 percent per year on the unpaid balance, is permissible. The payment of premiums on policies issued under a mass marketing program on an installment basis through payroll deductions is not an extension of credit.

628.39 History History: 1975 c. 371; 1979 c. 110 s. 60 (13); 1983 a. 215.

628.40 628.40 Effect of agent’s appointment on insurer. Every insurer is bound by any act of its agent performed in this state that is within the scope of the agent’s apparent authority, while the agency contract remains in force and after that time until the insurer has made reasonable efforts to recover from the agent its policy forms and other indicia of agency. Reasonable efforts shall include a formal demand in writing for return of the indicia, and notice to the commissioner if the agent does not comply with the demand promptly.

628.40 History History: 1975 c. 371, 421.

628.46 628.46 Timely payment of claims.

628.46(1) (1) Unless otherwise provided by law, an insurer shall promptly pay every insurance claim. A claim shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of the loss. If such written notice is not furnished to the insurer as to the entire claim, any partial amount supported by written notice is overdue if not paid within 30 days after such written notice is furnished to the insurer. Any part or all of the remainder of the claim that is subsequently supported by written notice is overdue if not paid within 30 days after written notice is furnished to the insurer. Any payment shall not be deemed overdue when the insurer has reasonable proof to establish that the insurer is not responsible for the payment, notwithstanding that written notice has been furnished to the insurer. For the purpose of calculating the extent to which any claim is overdue, payment shall be treated as being made on the date a draft or other valid instrument which is equivalent to payment was placed in the U.S. mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery. All overdue payments shall bear simple interest at the rate of 7.5 percent per year.

628.46(2) (2) Notwithstanding sub. (1), the payment of a claim shall not be overdue until 30 days after the insurer receives the proof of loss required under the policy or equivalent evidence of such loss. The payment of a claim shall not be overdue during any period in which the insurer is unable to pay such claim because there is no recipient who is legally able to give a valid release for such payment, or in which the insurer is unable to determine who is entitled to receive such payment, if the insurer has promptly notified the claimant of such inability and has offered in good faith to promptly pay said claim upon determination of who is entitled to receive such payment.

628.46(2m) (2m) 

628.46(2m)(a) (a) Notwithstanding subs. (1) and (2) and except as provided in par. (b), a claim for payment for chiropractic services is overdue if not paid within 30 days after the insurer receives clinical documentation from the chiropractor that the services were provided unless, within those 30 days, the insurer provides to the insured and to the chiropractor the written statement under s. 632.875 (2).

628.46(2m)(b) (b) Paragraph (a) does not apply to any of the following:

628.46(2m)(b)1. 1. Worker’s compensation insurance.

628.46(2m)(b)2. 2. Any line of property and casualty insurance except disability insurance. In this subdivision, “disability insurance” does not include uninsured motorist coverage, underinsured motorist coverage, or medical payment coverage.

628.46(3) (3) This section applies only to the classes of claims enumerated in s. 646.31 (2).

628.46 History History: 1975 c. 375; 1979 c. 109 s. 16; 1979 c. 110 s. 60 (13); 1981 c. 38 s. 24; Stats. 1981 s. 628.46; 2001 a. 16, 65; 2017 a. 235.

628.46 Annotation Receipt of a legally binding offer to settle a claim against the insured is not required for the insured to have a claim against the insurer for bad-faith failure to settle. Alt v. American Family Mutual Insurance Co., 71 Wis. 2d 340, 237 N.W.2d 706 (1976).

628.46 Annotation An insured may bring a tort action against an insurer for failure to exercise good faith in settling the insured’s claim. This section is unrelated to such a tort action. Anderson v. Continental Insurance Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978).

628.46 Annotation Discussing the tort of bad faith handling of a claim. Davis v. Allstate Insurance Co., 101 Wis. 2d 1, 303 N.W.2d 596 (1981).

628.46 Annotation A third-party claimant cannot assert a bad faith claim against an insurer. Kranzush v. Badger State Mutual Casualty Co., 103 Wis. 2d 56, 307 N.W.2d 256 (1981).

628.46 Annotation This section applies to service insurance corporations. Wisconsin Physicians Service Insurance Corp. v. Mitchell, 114 Wis. 2d 338, 338 N.W.2d 326 (Ct. App. 1983).

628.46 Annotation A jury’s imposition of punitive damages and finding of bad faith is adequate to show that the insurer did not have reasonable proof that it was not responsible for a claim and supports an award of prejudgment interest under sub. (1). Upthegrove Hardware, Inc. v. Pennsylvania Lumbermans Mutual Insurance Co., 146 Wis. 2d 470, 431 N.W.2d 689 (Ct. App. 1988).

628.46 Annotation Interest under s. 807.01 (4) is not in addition to interest under sub. (1). Upthegrove Hardware, Inc. v. Pennsylvania Lumbermans Insurance Co., 152 Wis. 2d 7, 447 N.W.2d 367 (Ct. App. 1989).

628.46 Annotation This section makes no distinction between the payment of claims based on judgments and all other claims; a claim may be due under sub. (2) far in advance of a judgment or award. Fritsche v. Ford Motor Credit Co., 171 Wis. 2d 280, 491 N.W.2d 119 (Ct. App. 1992).

628.46 Annotation Whether to assess 12 percent [now 7.5 percent] interest is dependent on whether the insurer had reasonable proof establishing that it was not responsible for payment. U.S. Fire Insurance Co. v. Good Humor Corp., 173 Wis. 2d 804, 496 N.W.2d 730 (Ct. App. 1993).

628.46 Annotation This section applies to the insurance company of a negligent tortfeasor and, thus, allows the recovery of interest by a third-party claimant. When there is clear liability, a sum certain owed, and written notice of both, the plain language of this section, incorporating by reference s. 646.31 (2), imposes 12 percent [now 7.5 percent] simple interest on overdue payments to third-party claimants. Kontowicz v. American Standard Insurance Co. of Wisconsin, 2006 WI 48, 290 Wis. 2d 302, 714 N.W.2d 105, 03-2177.

628.46 Annotation An insurer’s subrogation interest did not permit it to step into the insured’s shoes to assert a 12 percent [now 7.5 percent] interest claim under the facts and circumstances of the case. Legal subrogation gives indemnity only, and an insurer who possesses a cause of action for subrogation cannot recover beyond the amount actually dispersed by it. Zurich American Insurance Co. v. Wisconsin Physicians Services Insurance Corp., 2007 WI App 259, 306 Wis. 2d 617, 743 N.W.2d 710, 06-2320.

628.46 Annotation “Reasonable proof” in sub. (1) means that amount of information that is sufficient to allow a reasonable insurer to conclude that it may not be responsible for payment of a claim. Generally, reasonable proof is equated with whether coverage is considered “fairly debatable.” An insurer should not have been penalized for exercising its right to litigate when policy language was ambiguous, the court of appeals was divided on the question of coverage, the issue of coverage was one of first impression in this state, and administrative rules were subsequently modified to clarify required coverage. Froedtert Memorial Lutheran Hospital, Inc. v. National States Insurance Co., 2009 WI 33, 317 Wis. 2d 54, 765 N.W.2d 251, 07-0934.

628.46 Annotation This section is limited to situations in which an insurer fails to pay an insurance claim within 30 days. In this case, an insurer failed to pay a contractual settlement of an insurance claim within 30 days. There is no authority for the proposition that this section can apply when an insurer fails to pay an amount required by a settlement agreement resolving a disputed claim. Singler v. Zurich American Insurance Co., 2014 WI App 108, 357 Wis. 2d 604, 855 N.W.2d 707, 14-0391.

628.46 Annotation The purpose of this section is to discourage insurance companies from creating unnecessary delays in paying claims and to compensate claimants for the value of the use of their money. If the insurer has “reasonable proof” that it is not responsible, the statute does not apply. Reasonable proof of nonresponsibility is equated with whether the “coverage issue was fairly debatable.” Dilger v. Metropolitan Property & Casualty Insurance Co., 2015 WI App 54, 364 Wis. 2d 410, 868 N.W.2d 177, 14-1851.

628.46 Annotation When damages are high and policy limits are low by comparison, the potential for contributory negligence by a party is not, in itself, sufficient to constitute “reasonable proof” that will defeat an award of interest. The “reasonable proof” exception is satisfied when there is evidence sufficient to make a “reasonable insurer” conclude that it may not be responsible for payment. In this case there was no reasonable view that any contributory negligence by actors other than the defendant would have reduced the defendant insurer’s liability below its policy limits. Casper v. American International South Insurance Co., 2017 WI App 36, 376 Wis. 2d 381, 897 N.W.2d 429, 15-2412.

628.46 Annotation The policy behind this section is equally applicable to single or multiple-insured situations. It is not to punish insurance companies, but to compensate claimants for the time value of their money. Casper v. American International South Insurance Co., 2017 WI App 36, 376 Wis. 2d 381, 897 N.W.2d 429, 15-2412.

628.46 Annotation Under Kontowicz, 2006 WI 48, a third-party claimant is entitled to prejudgment interest under this section when the amount of the damages is in a sum certain amount. The sum certain condition is not satisfied when a third-party claimant relies upon an assertion of general damages to support a demand that an excess insurer pay a specific amount, and the insurer reasonably concludes it is not certain the amount demanded is the amount the insurer may actually owe the claimant. Although, in this case, the plaintiff clearly demanded that the insurer pay a sum certain—the insurer’s $1,000,000 policy limit—that sum was not reasonably demonstrated to be owed to the plaintiff by the insurer. Estate of Payette v. Marx, 2020 WI App 2, 390 Wis. 2d 356, 938 N.W.2d 628, 18-0627.

628.46 Annotation The third condition imposed under Kontowicz, 2006 WI 48, is that the claimant must provide written notice of liability and the sum certain amount owed. In this case, the itemization of damages that the plaintiff included in her discovery response satisfied that condition even though there was no accompanying demand that the insurer pay its policy limits. Thom v. 1st Auto & Casualty Insurance Co., 2021 WI App 33, 398 Wis. 2d 273, 961 N.W.2d 79, 20-0285.

628.46 Annotation This section applies to all insurers. Allison v. Ticor Title Insurance Co., 979 F.2d 1187 (1992).

628.46 Annotation Excess Liability Insurance. Griffin. 62 MLR 375 (1979).

628.48 628.48 Risk retention groups.

628.48(1) (1) Prohibited marketing. A risk retention group may not do any of the following:

628.48(1)(a) (a) Solicit or sell insurance to any person who is not eligible for membership in the risk retention group.

628.48(1)(b) (b) Solicit or sell insurance or otherwise operate if the risk retention group is in a hazardous financial condition or is financially impaired.