Chapter 628

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.

628.48(2) (2) Notice in policies. A risk retention group may not issue an insurance policy unless the following notice, in 10-point type, is included on the front page and declarations page of the policy:

Notice

This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.

628.48 History History: 1987 a. 247.

628.49 628.49 Regulation of managing general agents, reinsurance brokers and managers and controlling producers. After considering the applicable model acts adopted by the National Association of Insurance Commissioners, the commissioner may promulgate rules that are reasonably necessary to regulate the business practices and transactions of the following:

628.49(1) (1) Managing general agents.

628.49(2) (2) Reinsurance brokers.

628.49(3) (3) Reinsurance managers.

628.49(4) (4) Intermediaries that control an insurer.

628.49 History History: 1991 a. 269.

subch. IV of ch. 628 SUBCHAPTER IV

COMPENSATION OF INTERMEDIARIES

628.51 628.51 Controlled business. No intermediary may receive any compensation from an insurer for effecting insurance upon the intermediary’s property, life or other risk unless during the preceding 12 months the intermediary had effected other insurance with the same insurer with aggregate premiums exceeding the premiums on the intermediary’s risks.

628.51 History History: 1975 c. 371, 421.

628.61 628.61 Sharing commissions.

628.61(1) (1) Prohibition. No intermediary or insurer may pay any consideration, nor reimburse out-of-pocket expenses, to any natural person for services performed within this state as an intermediary if he or she knows or should know that the payee is not licensed under s. 628.04 or 628.09. No natural person may accept compensation for service performed as an intermediary unless the natural person is licensed under s. 628.04 or 628.09.

628.61(2) (2) Exceptions. This section does not prohibit:

628.61(2)(a) (a) The payment of deferred commissions to formerly licensed agent and broker intermediaries or their assignees; or

628.61(2)(b) (b) The proper exchange of business between agent and broker intermediaries lawfully licensed in this state.

628.61 History History: 1975 c. 371, 421; 1979 c. 102; 1981 c. 38.

628.61 Cross-reference Cross-reference: See also s. Ins 6.66, Wis. adm. code.

628.78 628.78 Benefit plans for agents. A domestic insurer may establish retirement, insurance and other benefit plans for agents on an actuarial basis approved by the commissioner.

628.78 History History: 1975 c. 371.

subch. V of ch. 628 SUBCHAPTER V

REGULATION OF NAVIGATORS

628.90 628.90 Definitions. In this subchapter:

628.90(1) (1) “Exchange” means the American health benefit exchange, as described in 42 USC 18031.

628.90(2) (2) “Health benefit plan” has the meaning given in s. 632.745 (11).

628.90(3) (3) 

628.90(3)(a) (a) Except as provided in par. (b), “navigator” means a natural person, or an entity that supervises or employs a natural person, who does all of the following:

628.90(3)(a)1. 1. Performs any of the activities and duties identified in 42 USC 18031 (i) and 45 CFR 155.210 on behalf of the exchange.

628.90(3)(a)2. 2. Receives funding to perform any of the activities and duties identified in 42 USC 18031 (i) and 45 CFR 155.210 on behalf of the exchange.

628.90(3)(b) (b) “Navigator” does not include a person acting as an insurance intermediary licensed under subch. II, but an insurance intermediary may apply to be licensed as a navigator under this subchapter.

628.90(4) (4) “Nonnavigator assister” means a natural person who has been designated by the exchange, or could reasonably be described as working at the behest of the exchange, as a nonnavigator assister, including an in-person assister, enrollment assister, application assister, or certified application counselor.

628.90 History History: 2013 a. 20.

628.91 628.91 Requirement of licensure or registration. No natural person or entity may act as a navigator in this state unless licensed or registered as a navigator under s. 628.92.

628.91 History History: 2013 a. 20.

628.92 628.92 Issuance of license and registration.

628.92(1) (1) Individual license. A natural person applying for a navigator license shall make application to the commissioner on a form developed by the commissioner and shall declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual’s knowledge and belief. Before approving the application, the commissioner shall find that the person satisfies all of the following:

628.92(1)(a) (a) Is at least 18 years of age.

628.92(1)(b) (b) Resides in this state or maintains his or her principal place of business in this state.

628.92(1)(c) (c) Has completed the training and course of study requirements under sub. (7) and any training and course of study requirements mandated by the exchange.

628.92(1)(d) (d) Has successfully passed a written examination approved by the commissioner under sub. (7) that tests the applicant’s knowledge concerning the duties and responsibilities of a navigator, the insurance laws and regulations of this state, and state public assistance programs and eligibility.

628.92(1)(e) (e) Has submitted a full set of fingerprints to the commissioner and successfully completed a regulatory and criminal history background investigation in a manner prescribed by the commissioner under sub. (6).

628.92(1)(f) (f) Possesses the requisite character, integrity, competency, and trustworthiness as determined in accordance with the criteria under the rules promulgated under s. 628.04.

628.92(1)(g) (g) Has not committed any act that the commissioner finds would warrant the denial, suspension, or revocation of a license under this subchapter.

628.92(1)(h) (h) Has identified the entity with which he or she is, or will be, affiliated and by which he or she is, or will be, supervised, if any.

628.92(1)(i) (i) Has paid the applicable licensing fee as set forth in s. 601.31 (1) (nm).

628.92(2) (2) Entity registration. An entity that acts or intends to operate as a navigator, supervises the activities of individual navigators, or receives funding to perform such activities shall first register as a navigator entity with the commissioner. This registration shall be on an application form developed by the commissioner, which shall include such documentation as the commissioner determines is necessary and appropriate. Before the commissioner may register the entity, the entity must establish to the satisfaction of the commissioner that it satisfies all of the following:

628.92(2)(a) (a) The entity has policies and procedures in place to ensure that all acts that may be performed only by a navigator or licensed intermediary are performed by persons who are appropriately licensed under this subchapter or subch. II, or both.